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Ok, I'll make a 2020 prediction (trigger warning!)
-> A select set of tokens make a comeback in 2020 (urgh! oh no!)
Although all utility coins and nearly all non-BTC L1 coins ever are terrible, there might exist a kind token that isn't 100% unnecessary or worthless.
-> A select set of tokens make a comeback in 2020 (urgh! oh no!)
Although all utility coins and nearly all non-BTC L1 coins ever are terrible, there might exist a kind token that isn't 100% unnecessary or worthless.
"How could this be? But you used to say all tokens were crap? I am too set in my ways to hear a refreshed take on this matter, and I enjoy my current worldview! How could you do this to me Eric, I trusted you!"
Ok, please, calm down. Hold off with the fire until I made my point?
Ok, please, calm down. Hold off with the fire until I made my point?
Here are my assumptions:
Assumption #1: There can exist a smart contract which provides a service which people are infact willing to pay fees for.
Examples: DEX trades (e.g. Uniswap), leverage (MakerDAO), offchain transactions (Plasma, ZK rollups).
Assumption #1: There can exist a smart contract which provides a service which people are infact willing to pay fees for.
Examples: DEX trades (e.g. Uniswap), leverage (MakerDAO), offchain transactions (Plasma, ZK rollups).
Assumption #2: For the smart contract to function, it may rely on some parameters selected and maintained by human actors.
Examples: Emergency shutdowns of the system (MakerDAO), transaction aggregators who are needed to move the system forward but can't cheat (Plasma, ZK Sync)
Examples: Emergency shutdowns of the system (MakerDAO), transaction aggregators who are needed to move the system forward but can't cheat (Plasma, ZK Sync)
Assumption #3: In order to prevent the system from being centrally controlled via the person(s) who are controlling the parameters in #2, you allow the parameters to be voted on by a distributed group of token holders. These token holders will share the fees from #1.
Short FAQ
1: Why use a separate token for this? Why not use ETH?
ETH value may be fine even if this particular contract fails = no good. The value of the token is tied to the ability of the contract to earn fees. Token holders have a bigger imperative to vote correctly.
1: Why use a separate token for this? Why not use ETH?
ETH value may be fine even if this particular contract fails = no good. The value of the token is tied to the ability of the contract to earn fees. Token holders have a bigger imperative to vote correctly.
2: How are you sure you'll get a good distribution of this "contract"-token though? Have you seen MKR?
This is a valid point. It is also not necessarily a good thing that the parameters can be changed by anyone with enough cash to buy enough tokens: it's an attack vector.
This is a valid point. It is also not necessarily a good thing that the parameters can be changed by anyone with enough cash to buy enough tokens: it's an attack vector.
(You could potentially alleviate the above scenario by having some sort of dispute period where changes are first soft-confirmed and then finalized only if not contested by certain threshold of token holders within a window, I guess.)
3: Won't people just hardfork a contract that is earning fees into a new one that isn't?
Not always. Contracts can require structure/routine worth paying for (like ZKrollup proof relayers). That doesn't mean they're trusted, ZKrollup proof relayers can't "cheat" the system.
Not always. Contracts can require structure/routine worth paying for (like ZKrollup proof relayers). That doesn't mean they're trusted, ZKrollup proof relayers can't "cheat" the system.
4: Okay but this token is crap compared to bitcoin, it's never going to become global money?
It has nothing to do with bitcoin. You can buy the token if you think the cash flows (fees) accrued will be worth holding the token for. It's completely separated. Like exchange tokens.
It has nothing to do with bitcoin. You can buy the token if you think the cash flows (fees) accrued will be worth holding the token for. It's completely separated. Like exchange tokens.
5: But everyone who even thinks about a different token than bitcoin is an altcoiner/multicoiner/shitcoiner?
You can still think that bitcoin is the currency most likely/most suited to be the world SoV/currency among cryptocurrencies. These token have nothing to do with that.
You can still think that bitcoin is the currency most likely/most suited to be the world SoV/currency among cryptocurrencies. These token have nothing to do with that.
6: Ok but then it should be valued nowehere near bitcoin!!!
Yes.. that's obvious? Are you talking to yourself now
Yes.. that's obvious? Are you talking to yourself now
7: Is this a good/bad thing?
Who knows? Maybe bad? I'm just predicting these tokens make a comeback in 2020. They're testing out a model that could distribute control of smart contracts. Their track record isn't good so far though, but they may not be inherently 100% broken.
Who knows? Maybe bad? I'm just predicting these tokens make a comeback in 2020. They're testing out a model that could distribute control of smart contracts. Their track record isn't good so far though, but they may not be inherently 100% broken.
8: Eh, smart contract tokens that have any sort of voting schemes built in *are* inherently broken. See how they're built for manipulation by e.g. Dark DAOs: http://hackingdistributed.com/2018/07/02/on-chain-vote-buying/
Yeah, this is a highly valid concern. I stand by the prediction that we'll see them though.
Yeah, this is a highly valid concern. I stand by the prediction that we'll see them though.
9: Are you pumping your bags? Are you buying these tokens?
I haven't bought/not planning to buy any of such token. Perhaps if I notice something extremely undervalued and the risk/reward was worth it I would? I don't know of any such thing though. I'm not selling anything here.
I haven't bought/not planning to buy any of such token. Perhaps if I notice something extremely undervalued and the risk/reward was worth it I would? I don't know of any such thing though. I'm not selling anything here.
