I recently traveled to Berlin to take part in Berlin Blockchain week. From many of the week’s events, I visited two of the largest: dAppcon and ETHBerlinZwei.
On the second day of dAppcon, I decided to walk to the venue (about an hour’s walk away). I was lucky enough to stay at the iconic Kreuzberg. During the walk, I saw probably the best street art of my life. Since photos from conferences are usually pretty boring, I’ll just share what I saw on the streets of Berlin.
There were around 800 participants at both the dAppcon and the hackathon. Props to the organizers for successfully herding the cats – the overall experience was quite seamless. The only real problem was the unintentioned digital detox – there was no internet connection at the Technical University where dAppcon was taking place. And I mean truly none – not wifi, not mobile data. Well, at least we in the audience had to pay sustained attention to the speakers, as they rightly deserved.
The toxic maximalist interlude
The debate nicely illustrated the fundamental difference in mental models of the two communities (Bitcoin & Ethereum). For Udi, the only thing valuable in context of cryptocurrencies is the censorship resistant money with immutable monetary policy. For Martin, this is only the beginning and blockchains bring two main promises: 1) to make coordination among people much easier, and 2) to enjoy the benefits of monopoly without the disadvantages of monopoly. The second promise is about having a high quality scalable services without the market dominance and rent-seeking of global corporations.
Although the debate was quite informative, the problem I have with such debates is that the usually talk past each other and aren’t really trying to “grok” the arguments of the other side. It would be hugely beneficial if Ethereum crowd understood the importance of sovereign money with little to none governance (which is Bitcoin) and if Bitcoin crowd understood the importance of building other permissionless services besides money itself.
Bitcoin maximalist is like a paranoid prepper, while Ethereum enthusiast is like a Silicon Valley hippie. Both should pay more attention to the world around them and try to find synergies with each other.
Meme driven development
To illustrate the laid back nature of Ethereum, several guys from the Ethereum foundation dressed up in furry costumes and held a discussion panel on “Meme driven development”. So here is one exception and an actual photo from the conference:
Apparently Ameen Soleimani from MolochDAO is a meme on his own and doesn’t need any further costume.
But jokes aside, memes were also discussed in more serious talks and panels during the conference.
One line that stuck in my head is that Bitcoin’s 21 million coins and the store of value property is itself a sort of meme – just something the community agrees on. This kind of “social contract” reasoning seems misleading to me. The main difference between Bitcoin and fiat currencies are the cryptoeconomic assurances that the promise (monetary policy, max number of coins…) will be actually upheld, because there is no way to change them by the minority rule (e.g. central bank board).
The killer feature of cryptocurrencies and the systems built on top of them is the immutability. All the talk about the immutable monetary policy being a meme and the calls for protocol governance – which will be inevitably subjective and politicizing – seems misguided to me.
Decentralized Finance (DeFi) is a perfect fit for something like Ethereum, much more than security tokens or any other attempts to tokenize real world assets. DeFi serves crypto-native use cases, so there is no need to compromise on trustlessness or permissionlessness – which is impossible if you need to perform a custody of real world assets. If done right, it also serves as a great regulatory arbitrage – there is simply nothing to regulate, at least not by today’s rules. That’s because it’s users themselves who are doing all the necessary steps to enter financial contracts such as lending, borrowing or trading on margin. What previously required a trusted third party can be done in a trustless and transparent manner through smart contracts.
So it’s no wonder that a lot of development teams would like to have a piece of the DeFi pie and contribute. At the dAppcon, Martin Koeppleman from Gnosis talked about their project of conditional markets, which are esentially bets contingent on related events (simple example: if the multicollateral DAI goes live, will it overtake singlecollateral by a certain date?). Read more about conditional markets here.
ETHBerlinZwei hackathon submissions
My favourite projects submitted as a part of the hackathon (not necessarily winning any prize) are also mostly DeFi related:
- RateLock, Cherry Swap, LSDai – projects focusing on interest rate swaps and interest futures for Compound money market. DeFi gets a major facelift with such projects, as it becomes possible to construct predictable derivatives with fixed interest rates in place.
- PaiDai – browser extension to pay with DAI for stuff, e.g. on Amazon. Cool and an obvious path to broader stablecoin adoption.
- Yaw – this one nicely blends a need for better web3 UX with the power of DeFi. Yaw is a DAI wallet, where all the deposits are automatically supplied to Compound money market. The interest (in DAI) gets swapped to ETH after some time, and the resulting ETH is used for gas. All the user sees is his DAI balance and the number of “free” payments he can make.
- WordDAO – this one isn’t a DeFi project, but I appreciate the simple yet powerful idea of representing word strings as integers, which greatly saves space and thus fees.