Mika Honkasalo

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This is the second research piece in our ELI5 crypto concepts. See the previous one here — which includes discussion on Rollups, multi-chain deployments, algorithmic stablecoins, impermanent loss protection, etc. If Uniswap can censor its trading application, is it decentralized? Last week, Uniswap Labs cut off access to specific tokens from the “official” app.uniswap.org frontend. […]
Jul 30, 2021, 1:35PM UTC
Crypto protocols live in a different competitive environment compared to regular business. There’s no intellectual property because the software can be copied (though, real-world entities are subject to software license restrictions), and any incentives to capture users/liquidity are allowed. Every smart contract, and the historical interactions with them, is open for anyone to audit and […]
Jul 14, 2021, 9:52AM UTC
The most well-known upcoming upgrades to Ethereum are the economic ones — namely EIP-1559 which is expected to go online sometime in July and the switch from Proof-of-Work to Proof-of-Stake consensus mechanism. The former will turn ETH into a productive asset by burning (a majority of) transaction fees, while the latter will direct inflation rewards […]
Jul 1, 2021, 10:29AM UTC
Taproot is the latest major upgrade to Bitcoin, now locked in for activation in November 2021. This is the biggest upgrade to Bitcoin since 2017 when Segregated Witness was added. SegWit marginally increased block space and enabled the Lightning Network to be safely deployed.  Taproot was proposed by Greg Maxwell in January 2018, and much […]
Jun 21, 2021, 10:03AM UTC
Ecosystem Resources The first major aspect to note when comparing the development of, and the tooling for building Web3 applications, is how large the amount available capital is in many Layer 1 blockchain ecosystems. Most recently, Solana raised $314 million, led by a16z and Polychain. This raise was on the heels of Dfinity announcing its […]
Jun 11, 2021, 5:28PM UTC
To date, the successes in DeFi have been around the simplest and most used financial primitives. For example, the number one use case by value is stablecoins, the supply of which recently passed $100 billion. Stablecoins offer the baseline unit-of-account for denominating debt, and this is most useful in margin trading. DEX designs from AMMs […]
Jun 5, 2021, 5:34AM UTC
dYdX is one of the longest standing “blue chip” DeFi projects. The protocol first raised a $2 million seed round in December 2017 led by Andreessen Horowitz and Polychain, with participation from Coinbase founders Fred Ehrsam and Brian Armstrong (among others). This was followed by a $10 million Series A in October 2018, which added […]
May 7, 2021, 10:21AM UTC
What is Flashbots and is it driving gas prices down? Flashbots is an attempt to make miner extractable value (MEV) have less negative externalities to the Ethereum ecosystem. MEV is the profit miners can extract from their ability (and responsibility) to order and place transactions in a blockchain. For example, we can imagine a miner […]
Apr 21, 2021, 10:14AM UTC
What is decentralized governance? Web3 applications — from decentralized finance and compute, to the continued process of blockchain consensus — is all about coordinating different parties, who do not know each other, towards a common goal. The aim can be to run a lending market, asset or derivatives exchange, digital gold, or any other potential […]
Apr 14, 2021, 9:45AM UTC
The DeFi lending space on Ethereum has been heavily dominated by the “big three” of MakerDAO, Aave, and Compound — combining for $12.7 billion in outstanding debt. Recently, Venus on Binance Smart Chain has also grown to a comparable $3.7 billion in outstanding borrows. The general pattern for lending markets is having a supply pool […]
Apr 7, 2021, 9:40AM UTC
Included protocols Lending:  MakerDAO, Compound, Aave. Exchange: Uniswap, SushiSwap. Yield: Yearn, Alchemix. Other: Nexus Mutual (insurance), Pool Together (lottery), Perpetual Protocol (perpetual swaps). Shorter notes on not included protocols with less notable governance activity are listed at the end.  MakerDAO MIP49 staking rewards MakerDAO is generating the most profits to token holders by miles, reaching […]
Mar 31, 2021, 8:54AM UTC
There’s quite a bit to say about the details of Uniswap’s v3 release. But if Uniswap’s core intention was to improve capital-efficiency and “to prove AMMs can outcompete traditional exchanges on all fronts,” v3 accomplishes about as much as could have been expected on that front. To understand this, we can compare the main innovation […]
Mar 23, 2021, 5:34PM UTC
The strengths and weaknesses of decentralized compute In addition to finance, the big “expected” category for crypto applications is in decentralizing the compute stack. This part of Web3 doesn’t have meaningful activity like DeFi does — with growth from $1 to $44 billion in value locked within the past 9 months. The argument for decentralized […]
Mar 17, 2021, 10:54AM UTC
Compound Usage Data on Ethereum Compound is one of the “Big 3” (in addition to MakerDAO and Aave) lending protocols on Ethereum, with $4.6 billion in outstanding debt. This is the highest figure among lending protocols — MakerDAO’s DAI supply is at $2.6 billion and Aave has $1.5 billion in outstanding debt (split evenly between […]
Mar 10, 2021, 10:41AM UTC
NFTs The latest addition to The Block’s data dashboard is a category on NFTs (non-fungible tokens), with DappRadar as the newest data provider. NFTs have been a roaring success of the past few weeks — accompanied by notable headlines like Grimes selling $5.8 million worth of NFT art in 20 minutes, and NFT marketplace Sorare […]
Mar 3, 2021, 10:16AM UTC
Uniswap is the most used decentralized exchange, with a 55% trade volume market share and approximately 10x the number of users (measured by addresses) compared to any competing protocol. Source: Dune Analytics For the first time, Uniswap’s weekly moving average for trade volume passed $1 billion. The protocol’s next upgrade (v3) is a long-awaited one […]
Feb 23, 2021, 5:37PM UTC
Bitcoin’s price has continuously risen for the past six months. On October 1st, BTC was at ~$10,600 to over $51,000 today — a 380% increase. As a product of this run, the demand for stablecoin-denominated debt for leverage has increased appreciably. For stablecoins (or constructions of synthetic USD positions), the yields are extraordinarily high compared […]
Feb 17, 2021, 11:32AM UTC