"Why are traders borrowing DAI on @compound these days? What exactly are they using the DAI for?"
- Casey Caruso. To better understand why, we highly recommend folks check out the AMA we did with Compound CEO Robert Leshner a year and a half ago here.
The annual international nonprofit engineering conference focused on Bitcoin and blockchain scalability (try saying that three times fast) was held in Tel Aviv this week. If you couldn't travel to the holy land, here are all the presentations from the 2019 conference and past Scaling Bitcoin conferences.
⚡️ Bitcoin Reads
A few more State of the Union: Bitcoin Edition types-of-pieces have been published lately including James O'Beirne's Bitcoin for Safety and Galaxy Research's report Bitcoin & Macroeconomic Uncertainty (yeah we're making you look it up so we don't max out on linked content in this issue).
🔹 Edgeware Lockdrop Participation Passed 5 Million ETH
More than 1 million ETH were locked and another 4 million "signaled" to participate in the Edgeware lockdrop. The Edgeware network (along with its zero-day fork Straightedge) will launch on September 15th. According to Straightedge team, the last-minute modifications to the Edgeware lockdrop terms will allow Parity Technologies to obtain 11% of all EDG supply for signaling in behalf of the ETH locked because of the Parity mutlisig wallet bug.
🔹 Ethereum 2.0 Client Compatibility Progress
Just two days after two Ethereum 2.0 clients (Nimbus and Lighthouse) announced the success of their interoperability tests, the third major client (Prysm) achieved the same milestone. The progress increases the prospects for a public multi-client Ethereum 2.0 testnet in early Q4.
🔹 A New DeFi Primitive Building Block
The Yield protocol, proposed by Dan Robinson, defines a mechanism to tokenize fixed-term debt with full collateralization. By locking collateral, yield tokens (yTokens) can be minted which would have a certain expiry date. They are tradable and redeemable for face value upon expiration. As a low-level primitive, they can be integrated with other DeFi protocols to create more complex use cases.
💸Airdrops Are Back
Some projects still think airdrops are good to build and incentivize a community around their projects. In the same week, Stellar announced a 2 million XLM airdrop (~ 120M) to Keybase users and Bancor announced it will airdrop its whole ETH reserve (~ $2.4 million) to the BNT token holders.
TOKEN DAILY EVENTS
On Deck Dinners
Token Daily Capital team is collaborating with On Deck to host a number of dinners in San Francisco and New York for the upcoming On Deck fellowship cohort. The fellowship application is open until September 22nd. We will be working closely with the fellows in the crypto track.
As of today, the LAO is more of an effort to make decentralized funding efforts compliant. The LAO will be incorporated in the US and will be open only to accredited investors. The difference between a traditional fund and a LAO is that proposing deals, voting, and making investment offers will be performed via smart contracts instead of GP meetings. In this sense, the LAO offers more legal protection to investors than other competing investment DAOs. However, that legal protection won’t solve the inherent limitations of investment DAOs.
Although smart contracts and voting may appear to be a more efficient way of conducting VC business, deciding on an investment is usually a more complicated process. It usually requires meetings with the team, asking in-depth questions about go to market strategy, and evaluating the team’s track record.
Without a clear mechanism to do this diligence, the LAO will essentially be a dressed-up form of the ICO phenomena where teams were raising money on vague promises wrapped around a white paper. A possible way to design around this issue is to allow LAO participants to vote not directly for a project but for a lead investor who will lead the diligence process. The selected lead investor can be compensated for their work. In this structure, the LAO would be conceptually similar to an AngelList syndicate where investors follow or vote for a project based on a signal from a seasoned lead.
Another challenge concerns the possibility that the LAO’s plan of tokenizing invested company shares may lead to instant liquidity of these shares...
More thoughts on why in the full report linked above.
Disclosure: Token Daily Capital and/or its partners may have exposure to some of the cryptocurrencies mentioned in this newsletter.