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Token Daily Newsletter #14


"Steve Lee. Matt Corallo. The guy who writes these tweets. If you thought we already had the bitcoin dream team, think again. Please welcome Valentine Wallace (🌀vallywal), Jeffrey Czyz (🌀jkczyz), and Arik Sosman (🌀arikaleph) to Square Crypto." 

Square Crypto is building out a dream team.



⚡️ Sparkswap

Buy Bitcoin on the Lightning Network. If you've ever tried using Lightning for payments, you'll understand why this will make transactions a lot smoother.

⚡️The Difference Between Stratum V2 and Betterhash

We coincidentally happen to be writing this from the Slushpool (Braiins) office. In case you're wondering what the difference between mining protocol Stratum V2 and BetterHash is, read Matt Corallo's tweet here.

⚡️ BTCPay Server Grant From Square Crypto

The folks over at Square Crypto just gave BTCPay Server a grant which is especially awesome considering Square is arguably competitive with BTCPay Server. Overall, net good for the ecosystem. Square Crypto puts its money where its mouth is.



🔹 DeFi Robo Advisor 🤖 

Staking service provider has introduced Ray; a Robo-Advisor for Yield. Ray is a set of smart contracts that automatically reallocate funds to the highest yielding DeFi opportunities. Automated fund management has started trending due to the sheer number of new DeFi projects - users can no longer easily compare products for the highest yield opportunity. 

🔹  Dapper Labs Partially Deserts Ethereum and Launches Flow

The company behind the popular dapp Crypto Kitties has thrown in the towel on using Ethereum for future dapps. Citing Ethereum's scalability issues and how sharding will make it harder to design and use dapps on Ethereum, Dapper Labs announced a new blockchain network Flow. Although the company will keep its popular games on Ethereum for now, it plans to gradually off-ramp its user base from Ethereum to use Flow.

🔹  BloxRoute Ethereum Mainnet Test

Bloxroute has concluded the testing of their block distribution network (BDN) on Ethereum's mainnet. The results show that miners could, on average, reduce the time to receive a block by 23%. This could result in a substantial reduction in the rate of uncle blocks.



💰  EOS Dapp $200K Hack

A popular gambling app on EOS suffered a major hack where ~ 50K EOS were stolen. The attack seems to have exploited a vulnerability in the dapp code while congesting the EOS network. The attackers rented a lot of EOS computational resources through a resource DEX and utilized the resources to congest the network. The congestion goal was to prevent the dapp devs from disabling the dapp smart contract, hence, preventing them from stopping the attack. 


💰 Tokenized Career Getting The Spot Light

Investing in someone's career is an emerging trend geared toward enabling talented individuals. Investors provide initial cash to help talented people get the education or training needed to unlock their potential. The investments are paid back by future income. The most known example of that is Lambda School.  Interestingly, a twist to this is coming from the athletic world; NBA's Spencer Dinwiddie is planning to tokenize part for their Nets contract to raise money upfront. Although It is not clear how he will use the raised capital, it's clear that digital tokens enable new uses cases that weren't imaginable before.  


CoinAlts 2019, Chicago

Token Daily Capital's general partner Imran Khan is speaking at the BlockWorks Group's CoinAlts Fund Symposium 2019 along with an amazing lineup of fund managers and major company representatives. The event is being held at the Art Institute of Chicago on September 26. Our readers can use promo code IPTDC25 for 25% off tickets.   



A Few Lessons to Learn From the Failure of Edgeware Mainnet Launch 

Early this year Edgeware made headlines because of its unique Lockdrop bootstrapping mechanism. The project decided to distribute 90% of its EDG tokens to Ethereum users who demonstrated interest in the new network by either 1) locking their ETH in special lockdrop smart contracts or 2) signaling interest by signing a special Ethereum message. The lockdrop process followed a specific schedule that concluded on August 30th with a promise of a mainnet launch on September 15th. About 5 million ETH were used for both locking and signaling, indicating a reasonable amount of interest in the new network.

In preparation for the launch, the team predictably deployed a testnet. Surprisingly, however, the team decided to ignore the incentivized testnet approach that has been used by most projects launched this year - a model innovated by the Cosmos team to incentivize participation in test networks to debug network consensus. 

Incentivized testnets have proven to be very useful in catching consensus bugs in Cosmos and the other networks.  Ignoring that approach turned out to be the first critical mistake for a project that is already giving out most of its tokens for free.  The result was a highly unstable testnet that raised concerns about whether the network should actually launch.

The second mistake was ignoring all the warning signs from the testnet and proceeding with the mainnet launch using a number of untested modifications such as removing the slashing penalty for validators and disabling the token transfers.

To no one's surprise, the untested modifications failed to deliver their goal, validator slashing continued for a number of validators, and users were able to transfer their tokens. Moreover, the Edgeware team committed mistakes in the initial token distribution. Given all these issues, there was no choice but to downgrade the launched network to a testnet, take more time to fix numerous issues, and reschedule the mainnet launch to a later date. 

The failure of a mainnet launch is an uncommon situation in 2019 given the tough competition between different protocols. The Edgeware team seems to have stumbled in their eagerness to deliver the mainnet on-time, foregoing robust testing in the process. This decision has severely backfired and the mainnet has been delayed in a market where optics matter. A lot.

This should go without saying, but the major lesson here is: never launch a network without sufficient testing. Delays in shipping may be bad, but they are infinitely better than launching a buggy mainnet network that can cause financial losses to the network participants.

The former causes disappointment, the latter breaks trust.

Move fast and break things is the exactly wrong ethos to have in crypto. Remember this when building outside or on top of Layer 1 too: dapps, DeFi protocols, layer-2 solutions -- there is no project above this standard.

Disclosure: Token Daily Capital and/or its partners may have exposure to some of the cryptocurrencies mentioned in this newsletter.

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