Solana protocol went down entirely this morning, arbitrum L2 stopped working more briefly (seems to be back and operational). Everything in crypto is an early stage experiment. Some earlier stage than others.
2/ disclosures, BlockTower is long SOL and long arbitrum indirectly via defi and ETH.
A lot of schadenfreude. IMO - we can be honest about the bugs, limitations, and earlyness of projects, while also being optimistic about continued innovation. If you waited to invest in BTC till network was fully stable, you got in 2014 and missed the first 1000x.
2/ with that said, the dollars at stake for early projects are indeed insane. As all crypto market caps have risen, we now routinely have billions of dollars entrusted to protocols with a high probability of critical bugs.

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More from @AriDavidPaul

14 Sep
A lot of people comparing BTC's nearly perfect uptime, with PoS networks like Solana halting. Worth noting that some protocols are built for "liveness", others for "safety", by design. Fundamental tradeoff here. /1
2/ Here's a really simple example to explain the difference. Imagine if the internet in some regions became unstable, like if US and Chinese messages weren't reaching each other. For bitcoin, you might get two separate chains, both accepted as valid.
3/ miners and nodes in China would be mining and validating one chain, miners and nodes in the US would be working on another. Each group would think their chain is legitimate. When the connection resumes you'd get a devastating block reorganization.
Read 8 tweets
10 Sep
Pre-product "unicorns" are becoming increasingly commonplace. Companies getting $1b+ valuations before launching a product. That would've been almost unimaginable a decade ago. Three reasons for this, 2 bearish, 1 bullish. /1
2/ A. Money printing is forcing investors down the risk curve. Sovereign debt investors forced into corporate debt->blue chip public equity->growth public equity->growth private equity->VC and crypto. Basically everyone moves down a rung or two on the risk curve.
3/ B. Recency bias. Spectacular gains in basically everything has made people much more risk seeking. Basically any investment strategy looks amazing over the last 4 years, so people are happy to cough up far more capital into the riskiest ideas.
Read 5 tweets
10 Sep
The decoupling cycle: this is the cycle where crypto use cases unrelated to bitcoin's were finally validated and achieved meaningful adoption. Millions of people are engaging with gaming and NFTs without ever touching or associating that activity with bitcoin (or even ETH).
2/ the need to go through unrelated and unnecessary crypto paths to get to the consumer's desired asset is currently a giant paint point and obstacle to growth (but of course very good for the intermediary assets and tools). Tx fees getting abstracted out.
3/ We don't have great data on this, but I'd wager that the median crypto owner (defined as owning any crypto asset) doesn't own any bitcoin, and by the end of this cycle, likely won't own any ethereum (or solana or any other specific coin.)
Read 13 tweets
9 Sep
Bitcoin was initially dismissed by many as too new, too risky, too challenging to elites or governments, too buggy, too centralized - to be taken seriously. Those nocoiner arguments then got recycled by bitcoiners against ethereum, now recycled by ethereans against solana. /1
2/ some of this is just natural partisan rationalization - we adopt "useful" arguments against competitors even if we railed against those exact same arguments as illogical when used against us. We see the same, with say, GOP and Dem stances on filibuster changing conveniently.
3/ same happens with the metrics people demand we use to value these assets. 4 years ago, a lot of maxis said on-chain security spend was the key metric. Nocoiners dismissed on-chain metrics as "bad" spending on silly things like darknet markets or speculation.
Read 7 tweets
7 Sep
Shana Tova to the jews (and everyone else). I grew up in a culturally jewish home and attended an orthodox jewish elementary/middle school; no longer practice and am philosophically an atheist. But, I still get a lot of value out of some traditions. Thoughts on holidays /1
2/ a "weird" thing about the pair of jewish holidays Rosh Hashana (new year) and Yom Kippur (day of atonement), is that the order is reversed from what we usually see. Typically we "cleanse" ourselves at the end of a period to be renewed and refreshed for a new one.
3/ In judaism this is reversed. We celebrate the new year joyously, which kicks off a 10 day period of somber self-reflection culminating in a day of atonement. The message I take from this is that self-reflection isn't something you do as a last minute cleanse,
Read 10 tweets
3 Sep
Thoughts on Uniswap SEC investigation: first the caveats - I'm not a lawyer and have no special knowledge of the investigation. Unless the political climate changes sharply, I'm fairly confident there will be some sort of enforcement action, but likely very mild. /1
2/ Regulators (and the SEC in particular) have a pretty consistent approach: they bring serious enforcement against the worst actors (outright criminals), and give "slaps on the wrist" to a few high profile good actors to put everyone on notice.
3/ uniswap's airdrop was likely an unregistered security sale, even though it wasn't a sale. Like it or not, courts have ruled that giving away free securities is a "sale" if the provider is getting value, including usage and adoption in exchange.
Read 9 tweets

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