In fact, it has never been a boring day.
Today he was one of the most active in the recent memory of shortcomings, with a trick worth eight digits, a dump of tokens worth more than eleven of nothing less than the co-founder of Ethereum, Vitalik Buterin, a significant update on the institutional adoption of Aave and a proposal on Uniswap. governance forums to turn $ UNI into a symbol of governance, a proposal once again courtesy of Vitalik. Quick reactions, roughly in chronological order (assuming my memory isn’t fully fried as of today):
Aave announces authorized institutional test group
As Cointelegraph reported for the first time today, Aave currently has a private test group with institutional investors who are challenging.
I had the great pleasure of talking to Ajit Tripathi, the head of institutional business development at Aave (who is also an excellent Twitter follow-up BTW) about the initiative this morning. The key quote from him is that the test group is in an “advanced” state, and will probably soon be active and ready for production as an authorized market with KYC / AML features.
The news sparked a wave of debate in the defi community about whether institutions and their legal needs, specifically these KYC and AML barriers, are ideologically and technically compatible with defi.
Pleasing institutions will kill this movement, remember my words. https://t.co/7AQTFcQD0P
– Being Doggo IV, last of his name (@fubuloubu) May 12, 2021
Here is the reality: in the short term, the institutions that delve into it will inevitably be a blessing to space. More liquidity, more adoption, more users, more money floating around to fund your favorite projects with tremendously ambitious teens. Take your cash, your positive press and shake them whatever they give.
In the long run, its walled gardens will ultimately be a historic problem. Authorized groups will be slower, less agile, and have less liquidity than larger space; they are doomed to failure. This is a first step towards institutions finally adopting participation in fully decentralized systems, which is the inevitable end.
If this dam makes me a lamebotas that pleases our gentlemen CEFIRE, so be it. The jokes on my side have been good at least:
Chokeme papi https://t.co/QpRVMU9bcH
– banteg (@bantg) May 12, 2021
xToken is exploited
One of the most promising projects in space was blown up for more than $ 25 million this morning. While the nature of the exploit was complex (merging and effectively taking advantage of two attacks in one), there is some argument that simple steps could have mitigated the problem.
The xSNXa and xBNTa contracts have been exploited. Minting stopped on all contracts as we investigated further.
Liquidity groups have run out, however, most SNX and BNT remain in xToken contracts.
We owe the community an explanation and will provide another update shortly.
– xToken (@xtokenmarket) May 12, 2021
xToken allows users to have derivatives that earn interest on core assets such as Aave and SNX that require some form of participation and / or participation in government or protocol to access their full value. The design is smart, it even allows users to select risk appetite or the philosophy of participation in governance as options, much more nuanced than their standard “index” or “easy” product.
However, the trade between synthetic or derivative tokens and their parents is partly to blame for this morning’s exploit.
According to white-hat hacker Emiliano Bonassi, the attacker manipulated the Kyber dex market and at the same time took advantage of the way xToken calculates the price of its x-token derivatives. As he told me on Twitter, the attack effectively put “two feats” into a single transaction:
So the problem is that the undervaluation is related to getting the price of the amount exchanged in Kyber, which is low due to the avalanche of SNX borrowed from Aave and downloaded in Uniswap (connected through a private reservation in Kyber ).
– Ξmiliano Bonassi | Ξmiliano.eth (@emilianobonassi) May 12, 2021
It is becoming increasingly clear that using a single DEX as an oracle is irresponsible without some sort of time-weighted average price calculation, mitigating the effects of flash loans intended to launch DEX prices.
Products like xToken are important for tax efficiency and low-effort participation; here is the hope that they will recover.
‘Do it to get my bad shots straight to your inbox!
Vitalik proposes Uniswap as a stable currency oracle
After a successful launch of its v3, Uniswap has been in a good streak.
Yesterday news emerged that Uniswap had invested Bitcoin in terms of daily rates generated, and this morning no more and no less than Vitalik Buterin intervened on a possible use of the $ UNI governance token.
In a post on Uniswap government forums, Vitalik proposed that UNI effectively become a symbol of Oracle, using its high market capitalization to create an Oracle service similar to the design of UMA, which would use cryptoeconomic guarantees to ensure that respondents give truthful answers.
While Buterin believes an oracle focused on stable currencies could bolster the health of the Challenge space, perhaps the most compelling pursuit of a UNI Hodler would ultimately give the witness a purpose.
After all, competitor DEX SushiSwap was founded in part because the developers saw the opportunity to fork out the project and create a version that didn’t have significant equipment and a VC token assignment, in addition to offering a case. of use of tokens beyond the amorphous eventual voting.
While the Uniswap team has said they intend to move to a fully decentralized model where UNI will presumably have more utility, this Vitalik proposal could also give it some purpose beyond speculation. However, it is not a great appearance that a future Nobel Prize winner needs to discover a use case …
A lot of people are talking about how they think the $ Link Marines will lose their heads over the Uniswap oracle proposal
Not enough people are talking about how it took one of the best minds of our generation to come up with a use for $ UNI lmaooo
– Andrew T (@Blockanalia) May 12, 2021
(For the record, the Uniswap guys are brilliant and I frequented the protocol regularly).
Vitalik chooses violence
As reported by Cointelegraph, Vitalik Buterin sell or donate today huge strips of shitcoins that developers sent to their portfolio in recent months instead of a proper cream. Some highlights of Hudson Jameson’s former Ethereum Foundation ad-hoc charity campaign:
‘Epic revelation of digital currency donations by @VitalikButerin!
All Akita tokens for Gitcoin Community Multi-Sig
13,292 ETH to Givewell
1000 ETH + all ELON tokens – Matusalem Foundation
1050 ETH – MIRI (AI security organization)
500 ETH + 10% Shhib – @CryptoRelief_
500 ETH – Institute of Autonomous Cities
– Hudson Jameson (@hudsonjameson) May 12, 2021
All related tokens have gone down double digits, with one of the dog-elon cross monstrosities at a staggering 90% the last time I looked. My advice to investors abandoned by events remains the same as the last absurd memecoin wash on April 20: learn to laugh.
(As a side note, I enjoyed how people used inbound transactions to effectively turn their account into a graffiti wall: insults, pleadings of mercy, and ChainlinkGod cheering among the highlights).
Buterin also transferred some 320,000 ETHs to a Gnosis safe, one I suspect will not accept unapproved incoming transactions, which will prevent this situation from happening again.
In the end, I’m sorry for Buterin. He put himself in an absurd position, with projects sending him tokens like a “cream” in what was ultimately a marketing ploy. In addition, these projects are forks with little innovation and added value, simply speculative vehicles that enjoy unusual success during an even more unusual period in the markets.
It all leads to an ethical mess: is it moral to get rid of these tokens, given the harm it would cause to speculators? Is Buterin responsible for these speculators? Would you be responsible for NOT getting rid of the tokens if you determined that the funds could be better used elsewhere?
Interestingly, however, analyzing these questions could be a task for which you are especially prepared.
A little-known fact about him: he has read, and I would say has been significantly influenced by, contemporary moral philosopher Derek Parfit. My editor says I need to stop linking to external material, but forgive this one, a beautiful profile of an even more beautiful mind.
The impact of Parfit on Buterin is clear. A few years ago, while analyzing the problems of competition stakeholders in a context of cryptographic governance, he published multiple repackaging of Parfit’s famous paradoxes:
I suppose 4000 people support a proposal and 6000 oppose it. However, * 30 minutes in the future * one of the fans will be copied in 20,000 people by a Star Trek-style replicator, and from that moment will live separate lives.
Do you have to implement the proposal?
– vitalik.eth (@VitalikButerin) 27 May 2020
We’ll wait to see what your eventual blog has to say in this regard, but my suspicion is that whatever its justification, it will be well reasoned and defended. It turns out he was more pragmatic than some scam developers expected.
Other important stories this week:
Rare Capital loses $ 11 million to explode
Yearn launches affordable and YFI-linked dog testimonial
Rising carpets in Binance Smart Chain
EasyFi launches compensation plan