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    Bell Curve

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

    Fri Jul 21 2023
    CryptoDeFiBlockchainInvestmentCross-Chain Communication

    Description

    This episode covers a range of topics in the crypto space, including discussions on hoodie activity in the punk realm, product announcements at ECC conference, the importance of improving user experience (UX), and the potential for gaming, NFTs, DeFi, and stablecoins to drive adoption. It also explores the announcements of Infinix by Synthetix and Uniswap X, as well as the need for cross-chain compatibility. The episode delves into regulatory updates, media shakeups, shifts in the crypto investment landscape, and insights from industry experts. It concludes with discussions on choosing the right blockchain, investment strategies, and the future of blockchain platforms.

    Insights

    DeFi Summer and Layer Two Solutions

    DeFi Summer was influenced by synthetics and compound, and layer two solutions like Chainlink played a crucial role in enabling expensive interactions and claiming SNX on a weekly basis.

    Competing Protocols and Cross-Chain Communication

    There may be a future battle between CCIP and layer zero protocols, but the industry needs to align with a standard for messaging providers. The current architecture of bridges is broken, and attempts like CCIP and layer zero are steps in the right direction.

    Shifts in Crypto Investment Landscape

    Major funds like Sequoia, Tiger, and triple point have shifted away from investing in crypto, while crypto native firms remain interested. Framework Ventures offers a participatory approach with early access to digital assets and involvement in governance.

    Choosing the Right Blockchain

    The decision to choose one blockchain over another depends on technical, cultural, and financial factors. Ethereum remains popular due to its activity and user base, while Solana has seen a swing in popularity. Developers prioritize longevity and customizability when choosing a protocol.

    Investment Strategies and Layer Two Solutions

    Approximately two-thirds of investments are in Ethereum, with Solana also gaining traction. Security is a significant factor for choosing Ethereum for DeFi applications. Avalanche is expected to be the third platform for certain applications, with assets living on Ethereum.

    Chapters

    1. Special Crossover Episode with Michael from Framework Ventures and Santi Joining in Paris
    2. Synthetics Announces Infinix and Uniswap Reveals Uniswap X
    3. Uniswap X, Infinex, and Chainlink CCIP in the DeFi Space
    4. Chainlink CCIP and Synthetics' Adoption of Chainlink
    5. Insights from the Episode
    6. Regulatory Updates and Media Shakeups
    7. Shifts in Crypto Investment Landscape
    8. Crypto Native Funds and the Future of Crypto Investment
    9. Insights from the Chapters
    10. Choosing the Right Blockchain and the Rise of Layer 2 Solutions
    11. Investment Strategies and the Future of Blockchain Platforms
    12. Insights from the Investment Landscape
    Summary
    Transcript

    Special Crossover Episode with Michael from Framework Ventures and Santi Joining in Paris

    00:02 - 07:04

    • Discussion about hoodie activity in the punk realm and misconceptions about owning punks
    • Mention of ECC conference and the trend of big product announcements
    • Reference to a book called 'Build' by Tony Fidell discussing product cadences in new industries
    • Prediction of ebbs and flows of product releases centered around big conferences like ECC
    • Vitalik's talk on account abstraction at ECC and his vision for crypto wallet evolution
    • Importance of improving user experience (UX) as the industry scales
    • Introduction of Infinex by Synthetix and its off-chain signup feature
    • Kane's focus on UX and timing for investing in infrastructure
    • Potential for gaming, NFTs, DeFi, and stablecoins to drive adoption in the next bull market

    Synthetics Announces Infinix and Uniswap Reveals Uniswap X

    06:34 - 13:35

    • Synthetics announced Infinix, a derivatives front end to synthetics that aims to take on centralized exchanges on a user-friendly interface
    • Infinix leverages the trading protocol of synthetics and is governed by SNX, the native token of synthetics
    • Infinix is part of the move towards V3, which focuses on creating new markets and forms of liquidity in DeFi
    • Infinix is designed to bring in new users to DeFi by providing a consumer-friendly way of accessing markets without requiring extensive knowledge or trust in DeFi protocols
    • Infinix allows trading activity across different chains, not just optimism where synthetic currently operates
    • Uniswap revealed Uniswap X, an open-source auction-based protocol for trading across AMMs and other liquidity sources
    • Uniswap X outsources routing to an open network of competing fillers who fill swaps at the best prices through Dutch auctions
    • Swaps on Uniswap X are gas-free for users as off-chain orders are signed and submitted by fillers who cover the gas fees
    • Uniswap aims to become a base layer infrastructure for building AMMs on top of and optimize for growth and ease of use for users
    • Both Infinix and Uniswap X recognize the need for cross-chain compatibility and aim to provide liquidity options beyond a single ecosystem

    Uniswap X, Infinex, and Chainlink CCIP in the DeFi Space

    13:07 - 20:23

    • Uniswap X and Infinex are two DeFi protocols competing with centralized exchanges
    • Uniswap X offers access to tokens from different chains, no gas fees, simpler UX, and quicker onboarding
    • DeFi has the tools to take over from centralized entities in crypto
    • Regulation is still pending to clarify if DeX is a programmatic sale
    • DeFi is highly efficient and cost-effective compared to traditional centralized exchanges
    • DeFi will catch people off guard with its nice UX and quick traction
    • Chainlink CCIP embodies the Internet of Smart and cross-chain communication protocols
    • Complete trust and verifiability are needed for moving assets across platforms

    Insights from the Episode

    26:37 - 33:26

    • Synthetics has been through the fire and tested many solutions
    • DeFi Summer was credited to compound, but elements were borrowed from synthetics
    • Chainlink and synthetics were instrumental in layer two solutions for expensive interactions and claiming SNX on a weekly basis
    • There may be a CCIP vs. layer zero battle in the future
    • The industry needs to align with a standard for messaging providers
    • It's too early to tell how competitive or complementary layer zero and chainlink are
    • There are already other contenders besides layer zero and chainlink
    • The current architecture of bridges is broken, so attempts like CCIP and layer zero are steps in the right direction
    • Abstracting networks away from users benefits them regardless of whether they use layer zero or CCIP

    Regulatory Updates and Media Shakeups

    33:08 - 40:18

    • Programmatic nature of token issuers going through exchanges is important
    • Investors in the company receive tokens on a case-by-case basis with lockups
    • Bullish sentiment towards the recent ruling
    • Upcoming markups on the McHenry Thompson bill and stable coin bill
    • Golden age for lawyers in crypto due to increased visibility and coordinated efforts
    • Recognition for the work of the blockchain association and Coin Center
    • Positive outcome could lead to a more reasonable conversation from a regulatory perspective
    • $125 million acquisition of CoinDesk by Matt Rosak and Peter Vessness
    • DCG's ownership of CoinDesk and other crypto assets, Genesis needing cash
    • Matt Rosak and Peter Vessness as crypto OGs
    • Competition in media is beneficial for the industry
    • Shakeup at Sequoia with firing of entire crypto team

    Shifts in Crypto Investment Landscape

    39:51 - 47:07

    • Sequoia fired their entire crypto team, including Michelle and Mike
    • Sequoia is shifting away from investing in crypto going forward
    • Other major funds like Tiger and triple point have also moved away from crypto
    • Crypto native firms remain interested in the space
    • There is a stark difference between traditional venture and blockchain venture
    • Venture returns have compressed due to increased competition and high valuations
    • Polychange and Katie Han Ventures have raised significant capital for crypto investments

    Crypto Native Funds and the Future of Crypto Investment

    46:37 - 54:09

    • Competition in the crypto investment space has shifted towards crypto native funds
    • Traditional venture capital firms are not as active in the crypto market
    • The quality of investment opportunities in the crypto space has increased, but there are fewer opportunities overall
    • Non-crypto native funds have historically focused on equity deals rather than on-chain strategies like yield farming and staking
    • Framework Ventures is an open-ended fund that invests with a long-term ownership focus
    • LPs are receptive to Framework Ventures' participatory approach, which includes early access to digital assets and involvement in governance and ecosystem support
    • The distinction between traditional venture funds and crypto native funds lies in their approach to digital assets and tokens

    Insights from the Chapters

    53:47 - 1:00:33

    • Crypto native investors believe that the value will accrue to tokens, not equity
    • Investors in seed stage companies often seek advice on hiring, marketing, and messaging
    • As projects launch, the focus shifts to technical aspects like staking and governance assistance
    • Founders of protocols have a different philosophy on entrepreneurship compared to traditional startup founders
    • The main questions from portfolio companies are about fundraising in a tough environment and getting in front of L2s with grant programs
    • Choosing which L1 to build on reflects the type of project and team you are
    • Culture is what you do, not what you say. Deploying on Solana doesn't necessarily indicate anything significant about a project or team's culture
    • Solana has experienced a swing in popularity but still has an interesting DeFi ecosystem
    • People tend to shut themselves out from learning about projects they have negative experiences with

    Choosing the Right Blockchain and the Rise of Layer 2 Solutions

    1:00:13 - 1:07:06

    • People sometimes shut themselves out from learning about what's happening in a certain ecosystem after being scarred by it
    • There should be another episode discussing the convergence of the Solana ecosystem with other worlds
    • Solana welcomes criticism and uses it to innovate, unlike other protocols that ignore or sue critics
    • The decision to choose one blockchain over another depends on technical, cultural, and financial factors
    • Historically, DeFi protocols were deploying in Solana due to its language (Rust) and exciting narrative
    • Currently, most people choose Ethereum because of its activity and user base, as well as the excitement around Layer 2 solutions like Arbitrum and Optimism
    • Developers want longevity and customizability when choosing a protocol. Building on Solana was easier compared to Ethereum L1 due to complexity
    • The founder's choice of protocol deployment can influence investment decisions but is not the sole factor considered
    • Around two-thirds of the portfolio is Ethereum-centric

    Investment Strategies and the Future of Blockchain Platforms

    1:06:38 - 1:14:20

    • Approximately two-thirds of the investments are in Ethereum and 25% in Solana
    • Games on Solana have seen more blockchain interaction compared to Ethereum
    • Some investments are agnostic and considering launching their own L1
    • Security is a significant factor for choosing Ethereum for DeFi applications
    • Avalanche is expected to be the third platform for certain applications, with assets living on Ethereum
    • CCIP allows applications to interact with multiple blockchains based on their specific needs
    • Celo announced a proposal to convert into Ethereum L2, leveraging its security and robustness
    • Launching competing L1s was financially lucrative but many projects are now returning to Ethereum
    • There is an increasing number of pitches for Layer 2 solutions

    Insights from the Investment Landscape

    1:13:50 - 1:20:48

    • L2s are being pitched every week, indicating a competitive market
    • Differentiated products or services may benefit from having their own L2
    • Launching your own L2 requires more technical resources and control over the economy
    • Controlling the technology and economy of an L2 comes with pros and cons
    • Having a justifiable reason for launching an L2 is important
    • Discussion about movie plans and upcoming books
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