Editor's Note: The original title was "Shingen Satoshi's Notes | Capturing Protocol Value in an Effective Way, Less Hype and More Logic"
Today's content includes:
1. Token economics: capture the value of the agreement in an effective way;
- Introduction to Blockchain: Shenzhen Stock Exchange 50 Index
- Fintech giants hunt for blockchain: different landing postures
- Babbitt column | Before the release of dividends and opportunities, the blockchain industry will usher in a strong supervision
- Former Director of the Central Bank on Digital Currency, Blockchain Application and Fintech Development
- The voters of Baihuacun Block Chain Mountain are super fun!
- In 19 days, 44 policies are favorable, and the blockchain industry is accelerating into the fast lane.
2. Introduce zero mortgage loans;
3. How zero-knowledge proof changes the blockchain (in non-technical terms);
4. The securities law philosophy of the tokenized network;
Token Economics: Capturing Protocol Value in an Effective Way
This article re-examines the value of the agreement. A lot of content is great, because this aspect can also be explained in depth, but the author chooses to enter the shallow, but the truth is still profound. So I still choose to translate more. The author's last sentence was particularly good. "Why do we need a better design of the token economic model? For less hype, more logic."
The need for token economics
Almost every blockchain protocol has its own token. The idea of issuing coins is to effectively monetize and capture value, but contrary to this concept, most tokens cannot inherently acquire value. Blockchain Capital's co-founder Spencer Bogart calls them "friction tokens" because they don't provide any utility and increase the use of friction, making the simple process of using Ethereum or Bitcoin more complicated.
Here, a strong token economic model is needed. I think tokens are similar to equity. As the value of a company rises, the price of shares naturally rises. In order for the token to appreciate as the protocol grows, it is vital to the ecosystem. For example, to use the Maker protocol, you do not need to own an MKR (protocol's native token). By default, a powerful token economic model will link the value of the token to the value of the agreement.
Token Economic Model After Bitcoin
Bitcoin. When using the network, you send BTC from one address to another and pay for it in BTC. Although value acquisition was not included in the agreement, the preemptive network effect of Bitcoin pushed it to the point where a local token began to reflect the growth of the agreement.
After Bitcoin, many token models such as Peercoin and Namecoin failed. Ethereum has risen with a new value proposition, but it still does not have a very robust token economic model. Ethereum's local token, ETH, is also unable to capture value by itself. Ethereum has a huge advantage because any token created on Ethereum must pay Gas to ETH miners instead of their own native tokens. However, the price of Ethereum does not reflect the large-scale development and deployment work in the past two years, which proves that Ethereum may need to improve the token economic model.
Maker's MKR also failed to capture the growth of the protocol. Although a staggering amount of ETH was locked in the agreement, the price of MKR dropped a lot during the same period. MKR holders have the right to participate in an administrative vote to change the Maker agreement. As part of its token economic model, users pay a stable fee to Maker when they open a CDP to buy back a certain amount of MKR from the market and burn it. It is believed that this reduction in supply has made MKR more “scarce,” thereby increasing its prices. Although MKR prices haven't risen and fallen over the past year, Maker's model is still positive. The idea of using part of the revenue from the agreement to try to create value for token holders is a lofty commitment and a capped supply.
Synthetix takes the lead in symbolic economic changes, helps users create synthetic assets by collateralizing the network's local token SNX, and also designs a stepped reward system by pledged SNX.
Why do we design a token economic model
If you have a product that provides real value to the end user, token economics can only help the holder recognize the profit from its vision. In addition, a powerful token economic model can help the protocol increase liquidity, user interest, and help create sustainable systems.
A powerful token economic model can help the protocol obtain actual value. Creating rewards by holding tokens, such as income through fees and inflation, making them similar to stocks, many projects have realized. Kyber Network recently announced their Katalyst upgrade, allowing Kyber Network Crystal (KNC) holders to participate in governance and earn income through Kyber DEx transaction fees.
If we want to reduce the ICO bubble, the project needs to start making practical efforts to ensure that its local tokens will not eventually become Air Coins. I am surprised that many projects return to zero not because they want to cheat money. Many projects are intended to be good, but they are too greedy and do not have a reliable token economic model, and their foundation's money is also due to Ethereum It plummeted and shrank.
Why do we need a better token economic model design? For less hype, more logic.
Full text link: https://marketpsycles.com/token-economics-capturing-value/
Introducing zero mortgage loans
In the new year, the hot topic around DeFi is still insufficient mortgage. Maker needs excess pledge. With this concept, dialogue becomes, can we guarantee repayment without requiring excess mortgage?
This article introduces zero mortgages, a new product created through FarbX.
Perhaps the most novel aspect of the solution is the concept of gaining trust or reputation over time. Unlike companies where all loans, such as Maker, require 150% over-collateralization, the product allows regular users to gradually reduce the need for collateral as their reputation (tracked by the ability to repay outstanding loans) increases.
All loans are capped at 30 days and have a predefined interest rate of 20%. Each wallet can only have one outstanding loan at a time, reducing the possibility of malicious activity. Similarly, after successfully repaying a previous loan, the maximum borrowing capacity increased the interest rate by ½. Less collateral is required after each successful repayment. Theoretically, the borrower will not need a mortgage after eight borrowing and debt service periods (maximum borrowing).
Full text link: https://defirate.com/zero-collateral-loans/
How zero-knowledge proof changes blockchain (in non-technical terms)
It is said in non-technical terms, but it is quite technical. However, some of the zero-knowledge proofs summarized by the author are very useful. Zero-knowledge proofs are not only used in terms of privacy, they have great uses in many aspects. such as:
– Make the blockchain more concise, from GB to KB compression . Examples in this regard are: Coda's blockchain is fixed-size, compressed to 22KB, and the security can even be said to be more secure than traditional blockchains. . .
– Zero-knowledge proof improves efficiency and bandwidth
There is a way to verify the calculation results cheaply without having to redo the calculations: Zero Knowledge Proof (ZKP). It is not necessary for all (or even multiple) computers to run the replay function. Eliminates the need to redo expensive calculations and no longer needs to download the blockchain
– Recursive combination, increasing new possibilities for blockchain interaction
Validation proofs are fast, but how do you create them? It turns out that it is not a fixed time, and it is much less efficient in terms of calculations and memory compared to traditional calculations. With some tricks, it turns out that recursive zk-SNARK can be used. With recursion, we don't have to verify the blockchain from scratch, but we can build on the previous state. That is much faster. In this way, the network has more active nodes, increases decentralization, and provides programs with many new possibilities to interact with the blockchain without the need for a solution like Infura or Metamask.
Full text link https://medium.com/@ronaldmannak_1825/how-zero-knowledge-proofs-are-changing-blockchain-in-non-technical-terms-3d1fc0cab371
Securities Law Philosophy of Tokenized Network
This is a series of four articles (maybe more than four because they are still being updated). Each part is very exciting and suitable for anyone who studies the law and discusses why cryptocurrencies should be classified.
Part 1: What exactly is an open network token?
Open network tokens are the share of network assets
People who purchase ETH or other open network tokens simply want to use it as a currency within the network for a short period of time. With a long-term holding plan, they want to use it to capture the benefits of growing network assets, even for BTC. That being said, BTC is undoubtedly one of the blockchain network tokens most similar to money. Open network tokens are not mainly commodities, products, software or currencies, they are mainly the share of network assets.
Part 2: Tokenized Internet Stocks Imply Securities Law
Today, basic blockchain-based protections are completely absent, but getting rid of these protections in a traditional corporate environment is almost unimaginable. It's not that blockchain development geniuses have thought of some excellent DAO-based methods to encode conflicts of interest around the world, but no one has held them accountable like traditional companies in the world of regulating corporate finance. However, someone should be held accountable for them, and the natural people who do this are token holders, and they will need to accept good thorough disclosure.
Part III: What is the "Blockchain Foundation"?
Many blockchain foundations, such as the Ethereum Foundation, the Tezos Foundation, and the MakerDAO Foundation, are called "prototype blockchain foundations". It is interesting that some for-profit companies, such as Block.One, will also conform to the prototype blockchain foundation model, but in fact, they choose to operate on a clear profit basis instead of designing themselves as non- For-profit foundation. There are also some foundations whose blockchain significantly deviates from the prototype model-for example, the funding source of the ZCash Foundation is not ICO, but rewarded by the founders after the network is gradually generated by the agreement. Now that the founder's reward has ended, the protocol is being updated to provide new block rewards directly to the ZCash Foundation. The Electric Coin Company has similar funding, but operates on a for-profit basis and may engage in multiple blockchain projects instead of separate ZCash. There are other types of for-profit companies that have a strong influence on some protocols / networks, but emerge after the network is launched and / or have a more diverse L2 or enterprise application focus. Analyze all of these strategies There are also interesting regulatory considerations for different types of companies and foundations.
Part 4: A Brief History of SEC Change Principles
In Part 4, the author provides a complete framework to understand how and why securities law applies to open network tokens, and when to stop using them.
Full text link: https://medium.com/coinmonks/size-does-matter-part-1-9f83b130a451
NFT game user overlap report on Ethereum
This is Alethio's weekly data report. They specialize in analyzing the data on Ethereum. The content of the weekly report is also good. In the past, they wrote a lot of overlaps of Ethereum Defi users. Last week they wrote about the growth and overlap of Ethereum game users.
Start with four popular protocols: Cryptokitties (CK), Decentraland (MANA), Unchained Gods (GU), and Plasma Bears (PB).
Looking only at the ERC721 token, even after the boom in late 2017, Cryptokitties [CK] still has about 55k unique addresses. However, considering Decentraland's MANA (ERC20), we found that there is a fairly large community behind Decentraland with more than 65k ERC721 LAND and ERC20 MANA token users. The ongoing attention behind Gods Unchained [GU] is a fairly large community with more than 3k ERC721 token holders and another 1.5k tournament pass holders. Plasma Bears is almost out of sight, with less than 200 unique addresses interacting in the past two years.
By looking at the user overlap, we can see the nuances of the Web3 gaming community. Although the story is incomplete-because one user can interact with different games using two separate addresses-we can at least observe trends and behaviors. Decentraland and Cryptokitties have the largest user overlap. If you only look at the overlap of NFTs, you will see that CK and GU overlap, sharing 1.5k unique addresses. At the beginning of 2019, CK and GU announced a cross-protocol cooperation to make the user's Cryptokitty a statue in Gods Unchained games. This collaboration really emphasizes the interoperability and unique opportunities of the game ecosystem built on shared platforms such as Ethereum.
ERC721 and ERC20 token trading activities also highlight Cryptokitty's continued dominance (even if it does not fluctuate occasionally), but are now being surpassed by Gods Unchained and Decentraland (especially GU recently).
Full text link https://us17.campaign-archive.com/?u=dcebbf21b63c7b25ce61ffdcd&id=49aebbd9b6