Proof of Work #43

In #41 I talked a little about why it’s a mistake to think about USD or other asset-backed coins as “crypto,” and Coinbase’s announcement of their USDC project has made this discussion worth revisiting. TL;DR: USD backed coins are a great complement to real crypto, but they are not themselves cryptocurrency and are in fact far closer (although still slightly distinct) from centralized payment systems like Paypal. Coinbase in their announcement claimed four features of USDC:

  1. 24/7 Access

  2. Fast Transfers

  3. Programmability

  4. Macro and Micro payments

The first (24/7 access) Paypal mostly has—you can use Paypal to send smallish amounts instantly but larger amounts are often sent as “e-checks” which take a while to clear.

Fast transfers Paypal also has, but again not for arbitrarily large amounts.

Programmability is an interesting one. Paypal of course has an API, but the set of things you can easily do with that is disjunct from those that you can do with an Ethereum token, and in general the latter involves less counterparty risk. However a lot of the most interesting programmatic applications are likely to be treif in some regulatory regimes, which means it’s unlikely that people will want to risk building on top of these types of coins.

Micro and macro payments. This one is actually not true of either Paypal or any eth-based dollar token, at least in the traditional definition of a micropayment. If anyone tries to deploy a micropayments system at scale on Ethereum, gas costs will rise to make it prohibitively expensive. However, macro (very very macro) payments are indeed possible on USDC in a way that would be very difficult on Paypal, which limits you to $60,000 per transaction. On USDC, you could send millions if you wanted. However, I’d be fairly uncomfortable using it for that because it’s difficult to know when a transaction is “final” on USDC (since the contract is centrally controlled and could be frozen) whereas Bitcoin transactions (while technically never reaching finality) are extraordinarily expensive to reverse after a hundred or so confirms.

This account of dollar-backed coins seems pretty negative, but I actually have a cautiously positive outlook on them. The caution comes from the massive uncertainty around when the custodians will choose to intervene and freeze balances, and specifically how they will go about that. The speculation seems to be that they will only do so in extreme cases (assassination markets, large-scale drug markets etc) but thus far none of the stablecoin providers including Circle/CB has released concrete guidelines on how the coins may be used, which is unnerving for anyone building something interesting atop them. At the end of the day, holding real crypto like Bitcoin is a lot less complicated of a bet.

Lots of interesting updates in this issue. OpenBazaar keeps chugging along towards a robust mobile app. Decred’s Politea goes live. Bulletproofs went live on Monero! More next week.

Bitcoin & Friends

Daniel from Grin

Jimmy on Bitcoin

Aviv from Spacemesh

  • No Updates.

JZ from Decred

Johnny from Stellar

  • Stellar Horizon is releasing pushing towards its 0.15.0 release, which includes a major refactor of path finding (reducing time of most queries from 10 seconds to 2 seconds).

  • Redesigned ledger state implementation is almost completed.

  • We've launched a mailing list focused on protocol discussion (we're reposting this, as we're going to continue ramping it up), and plan to release an update on governance of various SDF projects in the next week. [ed note: signed up!]

Mitchell from Blockstack

  • We launched 'App Mining', a program to fuel decentralized app developers. We're working with Product Hunt and Democracy Earth to pay developers building great dapps, meet the first to receive App Mining payouts and learn how easy it is to register for the program.

  • The Stacks Genesis Block is launching! The Stacks token is introduced in this hard fork and the foundation for exciting new functionality is being rolled out on October 30th. Learn more about what's happening, proof-of-burn mining, how this helps mobile dapps, and other token related updates in the full announcement.

Izaak from Coda

  • Want to let everyone know some further info on our open-source launch party. There will be a few interactive tracks, including setting up a Coda node, getting familiar with the code base, and learning to use our zk-SNARK language snarky. We are close to capacity, so if the event fills up please add yourself to the waitlist and we will add you if space becomes available. [ed note: go to this if you’re in SF]

Privacy coins

Paige & Zooko from Zcash

Diego and Riccardo from Monero

  • Monero has undergone a network upgrade. You must update your software here to continue using Monero.

  • Bulletproofs are live on the main net, and have reduced transaction fees by more than 80%. [ed: this was quiet but is actually extremely cool.]

Smart contracting platforms

Evan from Ethereum

Myles from EOS

Zaki from Cosmos

Kate and Dean from Agoric

  • We made progress towards parachain design, specifically in terms of serializing our JavaScript contract objects as merklized data structures.

  • Dean will be speaking on "The Duality of Smart Contracts and Electronic Rights" at the Web3 Summit on Tuesday October 23rd at 14:15.

  • Our in-house economist, Bill Tulloh, will be presenting at Research and Practice on Blockchain October 27th, on “A Principal-Agent Approach to Securing Smart Contracts.” You can see more upcoming events on our events page.

Financial Infrastructure

Antonio from dYdX

  • Announced our $10M Series A raise led by a16z crypto and Polychain Capital. We'll use the capital to continue growing our team and building new protocols and products.

  • Implemented support for Leveraged Ethereum (LETH) on staging. LETH moves at a multiple of ETH. Testing this week.

  • Launched our second Short Token on expo, sETH 11/15.

  • Hiring for engineering, design, and operations roles full-time in SF.

Brendan and Nadav from Dharma

  • Completed development of creditor-driven loans, giving lenders the ability to create open lines of credit at a set of pre-specified requirements, starting with a minimum loan-to-value ratio. You can view the experimental, un-audited repo here.

  • Centrifuge issued a test loan on Dharma.  Centrifuge enables businesses to exchange private documents (invoices, purchase orders, company master data, etc.) in a private, verifiable, and secure manner on Ethereum. You can read about their service here.

  • We held our quarterly strategic planning offsite. We came to consensus on an internal 3-month plan :)

  • We’re hiring for a product manager, a talent ops associate, and more. Check out our open positions here.

Coulter from MakerDAO

Phil from MARKET Protocol

  • MARKET Protocol is now part of #DeFi. #DeFi was created as a shared community for projects developing open source financial primitives. There are a number of decentralized finance protocols trying to solve some of the same problems so this community was created to bring a bit more collaboration between its partners.

  • Phil Elsasser and Robert Jordan will be heading to Prague for the DeFi Summit, Oct 29, and DevCon, Oct 30 - Nov 2. If you're traveling that way and want to meet up, let us know.

  • Our Simulated Exchange is now feature complete! We're driving towards our second release on Testnet (Rinkeby). Log in and get a preview of the future of derivatives on the blockchain.

  • With the pending beta launch of our Simulated Exchange, we've branded the platform as MPX (MARKET Protocol Exchange) and a tagline of "Experience the power of blockchain derivatives trading with MPX!"

Robert from Compound

  • Completed community asset-voting governance system to select the next market.

Layer two and interoperability

Tieshun from Namebase

  • No Updates.

Paul from Veil

  • We added ZRX and REP price feeds to our library of indices.

  • We built and launched the first version of a system to automatically report on Augur markets and resolve them in Veil. The first version supports markets where the underlier is one of Veil’s indices. This feature lets us support many more markets simultaneously and lets users redeem their Augur shares for ETH immediately on resolution.

  • We made a number of small bug fixes and UX improvements to our trading UI.

  • We built a system for calculating a user’s profit and loss in individual markets as well as across Veil.

  • We were featured in 0x’s Relayer Report #12.

Tom from 0x

  • No Updates.

Dong Mo from Celer

  • User-facing: We fixed several bugs with small scale user testing for cWallet applications (things are mostly stable), defined the next milestone for cWallet mainnet delivery plan, designed a new user onboarding flow for off-chain mobile wallet and started to get initial user study and user feedbacks and publicly announced the open alpha of cWallet.

  • Celer SDK: We refined the go client to open more APIs including on-chain dependency payment, refined iOS SDK with a sample application for users to build on top of Celer Platform, helped revive Ropsten testnet, setup our own dedicated blockchain infrastructure to decouple from Infura and planned the next product release plan and engineering tasks.

Alexandra from Parity Technologies

  • No Updates.

Application infrastructure

Doug from Livepeer

  • Showcased an integration between the LivepeerJS explorer and The Graph data indexing project, decreasing load times in the Explorer DApp over 50x. Testing in staging, and will deploy to production soon.

Ryan from FOAM

  • Published the second release in the series of updates on the development of the FOAM map, which include a new search function, updated tags and a Proof of Use tracker modal 

  • Developed and Updated new front end libraries for purescript-deck-gl, based off of Uber's, a large-scale Web-GL powered Data Visualization tool used to Redner blockchain data on the FOAM Map. 

David from Sia

  • 3 Nebulous repo was updated. 7 issues were created, 8 were closed. 23 MRs were merged.

  • GitLab users Shatnerz, Thomas Bennett, Joshua Noble , Eddie Wang, MSevey, ChrisSchinnerl, Luke Champine and David Vorick had code contributions merged into Sia.

  • Sia version 1.3.6 was released this week. It includes a hardfork programmed at block 179 000 (estimated to take place on October 31th), making it a mandatory update for users that want to remain on the main chain. A timely update is especially important for hosts and renters, so do it as soon as possible here.

  • Luke Champine and David Vorick worked on preparing the hard fork implementation: A restriction to the valid nonces that solve a block was implemented (they will need to be a number divisible by 1009 after the fork). Importantly, a replay protection to transactions was added (a 0 prefix added to the inputs when calculating the hash of the transaction), what will prevent accidental or intentional spending of coins on both sides of the fork simultaneously (a strategy used often to attack exchanges after forks). Multiple code preparations were placed, and this is the final MR deploying the fork.

  • Luke Champine merged the initial implementation of the new RPC protocols. RPCs are the communication channel between the hosts and the renters. This change is the foundation for the future partial downloads feature.

  • ChrisSchinnerl and David Vorick merged multiple MRs connected to the hosts scoring, related to their appropriate collateral and contract formation fees. ChrisSchinnerl also unified the host score calculation across the codebase, that was being calculated in 3 different places before.

  • External contributors added multiple improvements this week to the codebase: Thomas Bennett added clarity to error messages returned by the package entropy-mnemonics, Joshua Noble migrated links from GitHub to GitLab on the package Sia-Ant-Farm, and Shatnerz corrected the API documentation. Thanks to all of them.


Martin from Tezos

  • Catsigma released a package manager ( for Tezos smart contracts written in Liquidity. It works with the module system introduced in Liquidity 0.4.

Ari from Decentraland

  • Progress on new Agora UI, to vote on Decentraland policy (target release 10/29).

  • Worked on our in-world chat UX and chat limitations and on understanding main challenges around our sidechain, parameters, bridge.

  • Integrated a new content-hosting server into the CLI and Client and set up an OpenSigner/WalletConnect architecture to test the protocol.

  • Finished support setting the update operator for Estates on the Marketplace UI, and to update the publication price from the Marketplace UI without the need to cancel and republish.

Bowen from Hydro/

  • Wallet connect feature in development: connecting desktop DDEX to mobile Wallets using end-to-end encryption by scanning a QR code. 

  • DDEX App updated 1.0.1 (iOSAndroid) with improvements on token available balances and display.

Sam from OpenBazaar

  • The mobile app has entered internal testing and we hope to enter external testing soon.

  • Server and client work are still focused on the multiwallet feature to be released in the upcoming 2.3.0 version.

Martín from Zeppelin

  • We released OpenZeppelin 2.0, with 100% test coverage, new and stable API and EVM package support

  • We'll be hosting a ZeppelinOS workshop on smart contracts upgradeability and evm packages the 24th on the Web3Summit, Berlin. See you there!