The DeFi workshop is on and it kickstarts with @danrobinson giving a keynote about Uniswap V3 :) Uniswap is a decentralised exchange built using smart contracts. Sort of like the functionality of exchange like a coinbase to allow counter parties to trade assets.

You can trade it directly with the counterparty and everyone maintains custody.

Satoshi Nakamoto's goal was to remove all the that's required to make it work with cryptographic proofs

Yet, insolvency-ridden exchanges have replicated the trusted model

Rollups are a solution to fix the woes of FTX and carry on Satoshi's vision:

stonecoldpat.substack.com/p/rollups-cent…
🧵👇 Off-chain scalability has helped us scale for the past ~12 years.

For many users, it is the representative experience of using crypto as they only transact on trusted platforms.

Unfortunately, the design of fully trusted off-chain systems are fraught with dangers including:

Ethereum was successful because it solved a fundamental problem in Bitcoin and a community was hungry for it.

They didn't perfect the code for X years before making it public. It was open from the get-go and anyone could participate.

Open & public ethos == winning strategy They did not set out to build an empire based on a software moat. It was obvious then, and it is obvious today, that is a failing strategy.

The goal was to build a developer moat. Get everyone building towards the same goal. It was then followed by an asset and user moat.

The Merge is HERE

A thread about PoS Ethereum 🧵👇 Energy consumption is reduced by 99.8%

It is publicly verifiable, and beyond all reasonable doubt, there is NO environmental impact to use/run Ethereum.

NONE NONE NONE.

This is one less problem to help convince newcomers to try, adopt and use crypto.

I’m hoping to tweet some of the talks at Advances of Blockchain Technology today.

🧵 👇 First talk is a comparison of layer-2 techniques for scaling blockchains by Adria Torralbla-Agell

Rollups have empirically demonstrated how to bring down the cost of transacting by 10x-100x.

This is because computation is now local to the rollup and only the data is publicly posted to world.

EIP-4844 can bring down the cost of data, saving us all more on fees.

🧵👇 Data is the single most important resource for any blockchain system including rollups.

The sole purpose of data is to allow anyone to compute a copy of the database that contains:
- Account balances,
- Smart contract code,
- Smart contract state.

Why is that important?

EIP-1559 is one of the most important upgrades, ever.

- It guarantees a security budget for block producers (no instability at the tip)

- It makes gas prices predictable for the user

- Allows the network to temporarily handle burst traffic and not always run at max capacity The insight of EIP-1559 was to explicitly define the role of a transaction fee:

1) A way to prioritise transactions for inclusion
2) To rate-limit consumption of the network via financial means
3) To reward the block producer

Both 1) and 2) is at the heart of EIP-1559.

In a side chain, validators have the authority to inform the bridge to accept an update for the database.

In a rollup, the validators must convince Ethereum why an update to the database is correct.

The “inform vs convince" is the simple, yet powerful difference. There are three categories to consider when convincing ethereum:

- Data availability. Can anyone independently download the database?
- State transition integrity. Are all proposed updates to the database valid?
- Censorship resistance. Can anyone transact on the system?

Crypto 101:

A blockchain is a transaction log to recompute a copy of the public database

A consensus protocol reaches agreement on a new block of transactions that update the database

A verifier enforces database integrity by checking all transactions adhere to a set of rules A leadership election protocol defines how someone can become a member of the consensus protocol

A block reward policy entices someone to partake in a leadership election protocol

A smart contract decides the rules for updating a section of the database's key-value store

We have already deployed scaling solutions:

-> Most transactions occur on custodial & private exchanges.

-> BTC/ETH is an interoperability solution amongst exchanges.

A rollup-centric roadmap will replace exchanges with self-custody, open & public systems.

Web3 replacing Web2 Another way to look at it.

Anywhere USDT is available, BTC/LTC/TRON, has for the longest time acted as an interoperability solution amongst exchanges.

Ethereum "broke out" from just being an interoperability solution and became a glimpse into the Web3 future.

"I believe there will be another cryptocurrency that will be as large as bitcoin someday."

Crowd boos.

"It is no different than Uber and Lyft".

wow. genuinely mind blown he said that on the main-stage.

51 - 0 KO Live stream of Bitcoin2021 can be found here:

My twitter feed has been filled with Arbitrum hype the past few weeks. This is pretty nice as the team / technology is getting the recognition it deserves.

I am looking forward to seeing the hype around Optimism when it is deployed alongside the zk-evm-compatible approaches. I'm a long-term believer that L2 bridges will eat up CeFi, sidechains, and anything else that fails to meet its security guarantees.

It'll become the 'norm' to expect layer-1 security. Not just because of trust-issues, but it'll simply be a more seamless experience.

elephant in the room:

flashbot bundles that pay miners via contracts will significantly undermine eip-1559

https://twitter.com/hasufl/status/1399834485429051393

why?

reward from 1 flashbot tx > including transactions that exceed the block size limit

flashbot tx can enforce that with low tx fee... (e.g. it'll become invalidated if you increase base fee over time).

We should take care not to over-promise the scalability boost from rollups.

- Bandwidth becomes the bottleneck for L1 / ETH (post data)
- Compute and state growth is moved to another blockchain network (rollup)

Rollups will still have fees for compute / state growth. The current assumption is that:

Layer-1 transaction gas price > Layer-2 transaction + posting data to layer-1

If rollups fork Geth (or roll their own node), they are still facing the same scalability bottleneck as Geth.

BSC is a good example of when Geth lags behind.

Proof of investment X, where that is work or stake, does not necessarily secure the blockchain.

It rate-limits who can participate in the block production process.

A mechanism to enforce a long-term game for long-term players, where wealth comes from compound interest. One theoretical threat for blockchain networks was the "Goldfinger attack" where a player can earn excessive rewards by attacking the system.

Typical example was winning a huge short by attacking the system.

It is theoretical as long-term players aren't incentivised to do it.

What's annoying about bitcoin is that you need to deposit coins into a custodial exchange to sell them.*

What is good about Ethereum is that you can just swap them into tether/usdc/dai via uniswap.

*Ignoring any BTC to ETH bridges. This is one example where I do really like Ethereum for upholding self custody of funds.

Sure, tether is on bitcoin, but there isn't a straight forward website I can go to just to swap within a single transaction.

One of the best insights this year is the bandit attack (and more generally, miner extractable value) by @phildaian that may prove to undermine all DeFi.

It won't be exchanges stealing arbtitage moments, but miners who re-order tip of chain (or tx in their block) Why is that a problem? Unlike exchanges where an authority can hold them accountable / eventually prosecute. Miners are distributed, pseudonymous and can just claim code is law. 🤷‍♂️🤷

And the financial incentives are very likely for them to do it, especially with GPU mining

Markets engineering with blockchain by @roman_beck

This talk is more to do with the application of blockchains to change institutions. He means like banks, settle banks, invoice (used in daily tx).

We must consider path dependency with lots of legacy systems. We like to have a top down system with strategy and accountable, if we look at blockchain, a peer to peer technology, we can fault someone if it goes wrong. Hard concept to grasp for many.

next up is Ronan Oliynykov to tell us more about DAGS.

Looks like he'll talk about Ghost, Spectre, Pahntom, Graphchain, <not be named cuz trolls>, Avalanche

#onthechain
Live stream: facebook.com/BDTechCommunit… He is part of @InputOutputHK yay

He is going to talk about dencetralized consensus protocols.

No trusted parties, peer-to-peet flat network, each connected node can faily arbitrary. No list of malicious of faculty nodes available to honest parties, that list is dynamic too.

. @sr_gi is presenting his analysis of the UTXO set.

What comes to mind when you think of scalability?

Number of transactions we can process? How much data do we have to keep around? With bitcoin is 200gb for the blockchain.

Link: facebook.com/BDTechCommunit… So what is a "dust" transaction? What are fees?

Fees - difference between the sum of all input / outputs, and they are claimed by the miners as a reward.

All nodes keep transactions in the "memory pool" before it gets in a block

Last up is @hkalodner telling us about his work on Artbitum :) #offthechain (on 5% let’s hope I last) How can we scale smart contracts? We could try snarks, but slow. We can tried incentivised verification (truebit), no privacy. What about state channels? Dispute resolution can be problem. One component though!