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.
Attendees had a chance to listen and talk to some of the biggest names in the industry, such as Vitalik Buterin, Vlad Zamfir, Joseph Lubin. There was a lot of talk about various DAOs and their toolboxes, ETH 2.0 and DeFi. The talks at the conference were mostly about projects that are already public (like Incubed or Centrifuge) and attendees had a chance to discuss the progress with the CEOs.
The toxic maximalist interlude
One of the most entertaining discussion panels was the one with Ryan Selkis (Messari), Martin Koeppleman (Gnosis) and Udi Wertheimer (Reckless Review). Udi wore a Toxic Maximalist t-shirt, making his position quite clear: this was a debate on value and viability of cryptocurrency applications besides Bitcoin.
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.
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.
Highlight of this panel was a Vitalik soundalike (in the fox costume) discussing the cultural importance of memes in Vitalik’s typical android voice. It’s nice to see Vitalik being made tasteful fun of, especially at the Ethereum conference. The worst thing that could happen is to build up an image of a flawless leader. We should doubt human judgement (yes, I make the assumption that Vitalik indeed is from this Earth) and if humor is what it takes to realize we all have flaws (and thus our work should always be not trusted, but verified), then let’s just fire up those memes.
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.
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.
DeFinite progress
Besides all the talk about DAOs and governance there was a lot of DeFi stuff going on, both at the dAppcon and at the hackathon. One thing I really appreciate about DeFi projects is the ability to actually measure the utilization - I can simply look up the onchain data and see how much capital is locked up in the smart contracts and how is the capital used. It’s quite impressive to look e.g. at Compound’s 160M USD in supply and, more importantly, 46M USD in borrow - in less than a year since the money market’s launch!
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.
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.