LN Markets newsletter - Issue #8:
Update on DeFi with @SBF_Alameda
Our two sats on DeFi
New Lightning proposal by @roasbeef
1-click Lightning Networks with @lightningpolar
LN Retail payment with @GaloyMoney
Satoshi GPT-3
Bonus
https://lnmarkets.substack.com/p/8-july-24th-2020
Update on DeFi with @SBF_Alameda
Our two sats on DeFi
New Lightning proposal by @roasbeef
1-click Lightning Networks with @lightningpolar
LN Retail payment with @GaloyMoney
Satoshi GPT-3
Bonus
https://lnmarkets.substack.com/p/8-july-24th-2020
Our two sats on #DeFi
How can we define the value proposition of decentralization for finance?
In our view, #Bitcoin is the first decentralized financial network, and the value proposition of its decentralization mainly boils down to censorship resistance.
How can we define the value proposition of decentralization for finance?
In our view, #Bitcoin is the first decentralized financial network, and the value proposition of its decentralization mainly boils down to censorship resistance.
Our two sats on #DeFi
By analogy with #Bitcoin , a truly decentralized exchange would enforce censorship resistance: it would guarantee that its trading rules are transparent and can not be altered by anybody, not even a government.
By analogy with #Bitcoin , a truly decentralized exchange would enforce censorship resistance: it would guarantee that its trading rules are transparent and can not be altered by anybody, not even a government.
Our two sats on #DeFi
The term #DeFi is mostly used to refer to the so-called “Decentralized Exchanges” and “Automated Market Makers”.
They have mainly been developed on Ethereum so far, but coding public smart contracts is highly challenging.
The term #DeFi is mostly used to refer to the so-called “Decentralized Exchanges” and “Automated Market Makers”.
They have mainly been developed on Ethereum so far, but coding public smart contracts is highly challenging.
Our two sats on #DeFi
And the possible attack surface increases exponentially with the complexity of the code.
Hence, most #DeFi contracts have back doors in case of major issue, meaning that they are not censorship-resistant.
And the possible attack surface increases exponentially with the complexity of the code.
Hence, most #DeFi contracts have back doors in case of major issue, meaning that they are not censorship-resistant.
Our two sats on #DeFi
As we do no expect Ethereum design to change anytime soon, #DeFi built on Ethereum will probably never be able to deliver the true value proposition of decentralization: censorship resistance.
Decentralization will not happen on Ethereum.
As we do no expect Ethereum design to change anytime soon, #DeFi built on Ethereum will probably never be able to deliver the true value proposition of decentralization: censorship resistance.
Decentralization will not happen on Ethereum.
Our two sats on #DeFi
To label these financial contracts, the term open source finance would be more relevant (but certainly less catchy) than #DeFi in our view.
They are more transparent in the way they deal with the funds.
To label these financial contracts, the term open source finance would be more relevant (but certainly less catchy) than #DeFi in our view.
They are more transparent in the way they deal with the funds.
Our two sats on #DeFi
But they remain centralized, since there is trust involved in a smart contract, or in the person that can freeze assets locked in a smart contract…
But they remain centralized, since there is trust involved in a smart contract, or in the person that can freeze assets locked in a smart contract…
Our two sats on #DeFi
Over the long run, after the rise of #DeFi governance tokens stops subsidising the whole field, end users will be faced with a trade-off.
Over the long run, after the rise of #DeFi governance tokens stops subsidising the whole field, end users will be faced with a trade-off.
Our two sats on #DeFi
Trading on open source finance services, they will benefit from a better transparency, NOT a better control over their funds.
We don't think it will be sufficient for hedge funds & big whales to take the risk of having assets stuck in a smart contract
Trading on open source finance services, they will benefit from a better transparency, NOT a better control over their funds.
We don't think it will be sufficient for hedge funds & big whales to take the risk of having assets stuck in a smart contract
Our two sats on #DeFi
With @LNMarkets, we took a different road.
We have decided to focus on the speed of fund transfers. We believe that it is a strong value proposition, much stronger than transparency.
With @LNMarkets, we took a different road.
We have decided to focus on the speed of fund transfers. We believe that it is a strong value proposition, much stronger than transparency.
Our two sats on #DeFi
Anyone who has regularly transferred large amounts of bitcoins knows the terrible feeling of having to wait for an hour to be sure that your transaction is finally done.
Anyone who has regularly transferred large amounts of bitcoins knows the terrible feeling of having to wait for an hour to be sure that your transaction is finally done.
#DeFi
We have been following the DeFi craze from a distance, since well, as you know, we are more focused on building on Bitcoin’s Lightning Network.
@SBF_Alameda has recently published a great thread to demystify the dynamics of this very hot topic https://twitter.com/SBF_Alameda/status/1284965991445704705?s=19
We have been following the DeFi craze from a distance, since well, as you know, we are more focused on building on Bitcoin’s Lightning Network.
@SBF_Alameda has recently published a great thread to demystify the dynamics of this very hot topic https://twitter.com/SBF_Alameda/status/1284965991445704705?s=19