Crypto offers several advantages in wealthy countries: Safety against de-platforming, More convenience to make donations, and Represent private money in a cashless society.
Stablecoins issued on-chain have many convenient properties:
Vitalik saw the stablecoin design space as basically being split into three different categories: centralized stablecoins (such as USDC, USDT and BUSD), DAO-governed real-world-asset backed stablecoins (DAI) and governance-minimized crypto-backed stablecoins (RAI, LUSD). USDC works but stability depend on the macroeconomic and political stability of the US, while RAI can survive all of these risks, but it has a negative interest rate.
Decentralized stablecoins are the most important Defi product, but there are a few others that have an important niche:
Identity examples include names, attestations, proof of personhood, and basic authentication. Besides, the attempt to create a centralized platform to achieve all of these tasks from scratch won’t work.
Additionally, Vitalik stated that the big future challenges for this ecosystem are privacy and scaling. There are ways to solve the privacy problem by combining on-chain and off-chain information and making heavy use of ZK-SNARKs, while scaling can be solved generically with rollups and perhaps validiums.
There are two questions to answer: Firstly, what kinds of governance structures make sense, and for what use cases? Secondly, does it make sense to implement those structures as a DAO, or through regular incorporation and legal contracts?
A decentralized governance structure protects against attackers on the inside. Decentralized implementation protects against powerful attackers on the outside (“censorship resistance”).
Governance decentralized for efficiency preserves the ability to act rapidly but tries to move decisions away from the top. Not good for large-scale projects in the same wealthy country. Good for very small-scale projects, highly internationalized projects, and projects located in countries with inefficient institutions and weak rule of law.
It’s easier and more secure for on-chain things to interact with other on-chain things than with off-chain systems that would inevitably require an (attackable) bridge layer.
There are hybrid applications that take advantage of both blockchains and other systems to improve their trust models.
Applications are seeing only limited usage because of the limitations of present-day technology. Blockchains are not scalable, transactions until recently took a fairly long time to reliably get included on the chain, and present-day wallets give users an uncomfortable choice between low convenience and low security.
Solutions for the aforementioned limits:
The FTX collapse has shown many people the importance of truly decentralized solutions to holding funds, and the rise of ERC-4337 and account abstraction wallets gives an opportunity to create such alternatives. Rollup technology is rapidly progressing to solve scalability, and transactions already get included much more quickly on-chain than they did three years ago. Read the full article here.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Website: coincu.com
Thana
Coincu News
Chiliz Chain CEO Alexandre Dreyfus has made waves in the cryptocurrency world with a recent…
HashKey Group has executed a strategic withdrawal of 178,126 PENDLE tokens from the renowned exchange,…
Binance founder CZ faces potential prison time for anti-money laundering violations.
The initiative, commemorating the successful issuance of the Bosera HashKey Bitcoin ETF, aims to involve…
With a plethora of options available, discerning the trusted faucets from the rest can prove…
Along with Bitcoin halving, the Runes Protocol was launched, which is expected to replace Ordinals…
This website uses cookies.
