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    Empire

    Chainlink CCIP Bomb, UniswapX, & Synthetix upgrades explained | Roundup

    Fri Jul 21 2023
    CryptoDeFiCross-chain communicationToken issuersVenture fundsL1 blockchainsEthereum L2BarbieBear marketMedia deals

    Description

    This episode covers a wide range of topics in the crypto industry, including hoodie trading activity, major announcements at the ECC conference, the importance of improving UX and wallet abstraction, the rise of DeFi as an alternative to centralized entities, cross-chain communication protocols like Chainlink, the programmatic nature of token issuers going through exchanges, media deals and venture funds' interest in crypto, choosing L1 blockchains and the convergence of Solana and Ethereum ecosystems, customizability and blockchain choices, converting to Ethereum L2, and discussions on Barbie, bear markets, media deals, and the FTX trial.

    Insights

    DeFi offers efficiency, cost-effectiveness, and minimizes counterparty risk

    DeFi is gaining recognition as a viable alternative to centralized entities in crypto. It offers efficiency, cost-effectiveness, and minimizes counterparty risk.

    Synthetics, Compound, Chainlink, and optimism have contributed to DeFi summer

    Synthetics, Compound, Chainlink, and optimism have contributed to the growth of DeFi in the industry.

    The competition between Layer Zero and Chainlink is similar to the battle between Arbitrum and Optimism

    There is a competition between Layer Zero and Chainlink, similar to the battle between Arbitrum and Optimism.

    Choosing an L1 blockchain reflects the project's character and values

    The choice of L1 blockchain reflects the type of project and team, as it indicates different characteristics and values.

    Customizability is a key advantage of building on Solana compared to Ethereum L1

    Building on Solana offers customizability, which is a key advantage compared to Ethereum L1.

    Security and battle-tested nature make Ethereum DeFi a preferred choice for investments

    Ethereum DeFi is a preferred choice for investments due to its security and battle-tested nature.

    Launching your own L2 allows you to control the economy and technology

    Launching your own L2 allows you to have control over the economy and technology, but it requires more resources and effort.

    There will likely be a proliferation of L2s in the future

    It is expected that there will be a proliferation of L2s in the future.

    The programmatic nature of token issuers going through exchanges will likely continue

    The programmatic nature of token issuers going through exchanges is expected to continue in the industry.

    Sequoia is actively shifting away from investing in crypto

    Sequoia, along with other major funds, is actively shifting away from investing in crypto.

    Chapters

    1. Special crossover episode with Michael from Framework Ventures and Santi joining from Paris
    2. Infinax and Uniswap X: Derivatives front end and auction-based protocol for trading
    3. Competition between Uniswap X and Infin-X, recognition of DeFi as alternative to centralized entities
    4. Cross-chain communication protocols and the role of Chainlink
    5. Synthetics, Compound, Chainlink, and optimism contributing to DeFi summer
    6. Token issuers going through exchanges, media deals, and venture funds' interest in crypto
    7. Competition in media and journalism, shift away from investing in crypto by major funds
    8. Venture funds, LPs, and challenges in the fundraising landscape
    9. Choosing L1 blockchains, convergence of Solana and Ethereum ecosystems
    10. Customizability and blockchain choices, Ethereum L2 and future of L1/L2 solutions
    11. Converting to Ethereum L2, challenges of launching and deploying on L2s
    12. Barbie and bear market discussion, media deals, and FTX trial
    Summary
    Transcript

    Special crossover episode with Michael from Framework Ventures and Santi joining from Paris

    00:00 - 07:01

    • Hoodie trading activity in the punk realm discussed
    • ECC conference as a platform for major announcements and product releases
    • Industry moving towards ebbs and flows of product releases
    • Account abstraction and wallet evolution discussed by Vitalik at ECC
    • Improving UX and wallet abstraction necessary for industry growth
    • Synthetic semen cane announced off-chain signup email password for easy account management
    • Focus on UX and front-facing consumer applications to support more users
    • Infrastructure investment now crucial for scaling the industry

    Infinax and Uniswap X: Derivatives front end and auction-based protocol for trading

    06:41 - 14:04

    • Infinax is a derivatives front end to synthetics, aiming to take on centralized exchanges on a consumer-friendly platform.
    • Infinax leverages the trading protocol of synthetics and is governed by SNX, the native token of synthetics.
    • The move towards V3 in Infinax focuses on creating new markets, liquidity, and ecosystems for trading.
    • Infinax aims to bring new users to DeFi by providing an easy-to-use interface that doesn't require extensive knowledge of DeFi tools like hardware wallets and MetaMask.
    • Trading activity with Infinax can happen across different chains, not just optimism where synthetics currently operates.
    • Uniswap X is a permissionless open-source auction-based protocol for trading across AMMs and other liquidity sources.
    • Swaps on Uniswap X are gas-free for users as swappers sign off-chain orders that fillers submit on-chain and cover the gas fees.
    • Uniswap aims to become a base layer infrastructure for building AMMs and invites new players like fillers into the ecosystem.
    • Both Infinax and Uniswap X optimize for growth, making it easier for new users to interact with their platforms.

    Competition between Uniswap X and Infin-X, recognition of DeFi as alternative to centralized entities

    13:35 - 20:46

    • Uniswap X and Infin-X are two DeFi protocols aiming to compete with centralized exchanges
    • Uniswap X offers access to tokens from different chains, no gas fees, simpler UX, and quicker onboarding
    • Infin-X focuses on perps liquidity while Uniswap has spot liquidity
    • DeFi is gaining recognition as a viable alternative to centralized entities in crypto
    • Regulation is still pending for DeXas and programmatic sales in DeFi
    • DeFi offers efficiency, cost-effectiveness, and minimizes counterparty risk
    • The resurgence of DeFi and real-world assets is being discussed
    • Chainlink CCI represents the industry's move towards cross-chain communication protocols
    • Complete trust and verifiability are needed to move assets across platforms

    Synthetics, Compound, Chainlink, and optimism contributing to DeFi summer

    27:06 - 33:54

    • Synthetics has been through the fire and tested many solutions in token economics.
    • Synthetics, Compound, Chainlink, and optimism have contributed to DeFi summer.
    • The competition between Layer Zero and Chainlink is similar to the battle between Arbitrum and Optimism.
    • There may be a need for a standard messaging service in the industry.
    • The user will choose the safest, most efficient, and reliable option between Layer Zero and Chainlink.
    • Layer Zero and CCIP are steps towards abstracting networks from users.
    • Jake believes that tokens themselves are not securities but how they are sold can have implications.
    • Exchanges like Coinbase benefit from positive rulings on transactions like Ripple's case.
    • There might be penalties for Ripple in the future due to their actions.
    • The programmatic nature of token issuers going through exchanges will likely continue.

    Token issuers going through exchanges, media deals, and venture funds' interest in crypto

    33:36 - 40:38

    • Programmatic nature of token issuers going through exchanges is important
    • Lockups and traditional investor practices are also important
    • Bullish sentiment towards the ruling
    • Markups on the McKendry-Thompson bill and stablecoin bill coming up
    • Recognition for the work of the blockchain association and Coin Center
    • Hope for a more reasonable conversation from regulators and policymakers
    • $125 million acquisition of CoinDesk by Matt Rosak and Peter Vessness
    • Background on DCG as parent company of CoinDesk
    • Matt Rosak's involvement in crypto since early days
    • Peter Vessness' role in identifying security vulnerability in the DAO hack

    Competition in media and journalism, shift away from investing in crypto by major funds

    40:14 - 47:12

    • The podcast discusses the recent deal and competition in media and journalism.
    • There was a big shake-up at Sequoia, with the entire crypto team being fired.
    • Sequoia is actively shifting away from investing in crypto.
    • Other major funds are also moving away from crypto.
    • There is a stark difference between traditional venture and blockchain venture.
    • A16C has shown commitment to crypto by opening a London office and hiring regulatory experts.
    • Sequoia likely made the decision to protect their reputation as a premier venture fund.
    • Venture plus crypto is difficult to evaluate, but A16C is still here despite marking down their portfolio.

    Venture funds, LPs, and challenges in the fundraising landscape

    46:44 - 53:35

    • LPs are interested in whether a fund is open-ended or closed-ended
    • The fund manages closed-ended funds and considers itself a venture thesis
    • The fund provides early access to digital assets and encourages participation in governance
    • Startups in the portfolio seek advice on various topics including hiring, marketing, token economics, and people management
    • Early-stage startups require assistance with recruiting, messaging, and basic operations
    • Founders of protocols experience a shift in philosophy as they relinquish control over time
    • Fundraising environment and accessing L2 networks are top concerns for portfolio companies
    • Choosing an L1 blockchain reflects the project's character and values

    Choosing L1 blockchains, convergence of Solana and Ethereum ecosystems

    59:36 - 1:06:17

    • The choice of L1 blockchain reflects the type of project and team
    • Building on Solana or Polygon indicates different characteristics
    • Solana community has seen projects leave for more success on L2 or EVM chains
    • Solana was popular but now considered a dead protocol
    • SOGA phone shows signs of resurgence in the Solana DeFi ecosystem
    • People tend to shut themselves out from learning about Solana after negative experiences
    • There should be another episode discussing the convergence of Solana and Ethereum ecosystems
    • Anatoly welcomes criticism from the Ethereum community as it allows for innovation
    • Factors influencing chain decisions include technical, cultural, and financial aspects
    • DeFi protocols historically deployed in Solana due to excitement and non-solidity coders joining the industry
    • Currently, most people prefer Ethereum due to activity and user base
    • Base, arbitrum, optimism, and other innovations attract developers to Ethereum ecosystem
    • Longevity and customizability are important considerations for developers when choosing a protocol

    Customizability and blockchain choices, Ethereum L2 and future of L1/L2 solutions

    1:05:54 - 1:13:03

    • Customizability is a key advantage of building on Solana compared to Ethereum L1.
    • Building on ETH L1 can be complex, while Solana offers an easier starting point.
    • The percentage of Ethereum-centric investments is around two-thirds, with one-third focused on Solana.
    • Games on Solana have seen more traction than games on Ethereum due to different blockchain requirements.
    • Some investments are agnostic about the blockchain they will eventually choose.
    • More protocols, especially games, may launch their own L1 in the future.
    • Security and battle-tested nature make Ethereum DeFi a preferred choice for investments.
    • Avalanche may become the third chain for some applications that require multi-chain functionality.
    • Celo's proposal to convert into an Ethereum L2 is an interesting strategy.

    Converting to Ethereum L2, challenges of launching and deploying on L2s

    1:12:45 - 1:20:11

    • The cello announced a proposal to convert to an Ethereum L2.
    • Securing a network of nodes is difficult and time-consuming, so many projects are turning to Ethereum for security as a service.
    • There was a period where many competing L1s were launched, but now projects are realizing the challenges and returning to Ethereum.
    • There will likely be a proliferation of L2s in the future.
    • If you have a differentiated product or service, an L2 strategy can be beneficial.
    • Launching your own L2 allows you to control the economy and technology, but it requires more resources and effort.
    • The architectural difference between launching your own L2 and deploying on existing ones is the ability to control aspects like the economy and technology.
    • It's important to have justifiable reasons for launching an L2 instead of doing it solely for having a token.

    Barbie and bear market discussion, media deals, and FTX trial

    1:19:51 - 1:22:08

    • Barbie and bear market discussion.
    • Rotten Tomatoes ratings for movies.
    • Hollywood's recovery after COVID.
    • Possible dead spot with upcoming strike.
    • Michael Lewis launching book before FTX trial.
    • Quick turnaround for the book publication.
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