“There’s a Role for Ethereum as a Permissionless Platform for Central Bank Digital Currencies:” Vitalik Buterin

Also, NEAR blockchain launches into crowded "Eth Killer" space.

Hello Defiers! Here’s what’s going on:

  • Vitalik Buterin interview at Ethereal Summit

  • NEAR blockchain launch

  • It’s now easier to use Synthetix

  • Loopring bug

Also, don’t forget to listen to last week’s podcast:

🎙Last Week’s Podcast: Emin Gun Sirer on AVA competing with ETH


🙌 Together with Eidoo, a cryptocurrency-powered debit card and platform for easy access to decentralized finance.


“There’s a Role for Ethereum as a Permissionless Platform for Central Bank Digital Currencies:” Vitalik Buterin

Earlier today I interviewed Vitalik Buterin, the creator of Ethereum, at the Ethereal Summit. He talked about the possibility of ether becoming the global reserve currency in a world which has lost trust in national currencies and Ethereum becomes the “glue,” about DeFi apps he uses and those he wishes there were more of. He said talking about tokens primarily as governance vehicles is “wrong-headed,” and that it’s inevitable that Etheruem dapps will lose some composability when communicating between shards in Eth2.  He also said we’re only a few months away from the launch of Eth2’s phase 0.

Also, I’ll be interviewing Compound Finance founder Robert Leshner and moderating the ETH is Money panel later today. Tune in here.

Here are some of his best quotes (thanks to Ethereal, ConsenSys Codefi and Decrypt for compiling):

Crisis

"I definitely think that there is a role for Ethereum to play as this neutral, global, permissionless platform for all of these new central bank digital currencies and more"

"Ether as an asset would be the best neutral asset to use if Ethereum ends up becoming the glue between these nation states"

DeFi

"DEXs are well on their way to competing with centralized exchanges.”

"Marketing in DeFi should not be about performance (and competing between interest rates and collateral rates offered) as the reality is that the chance of any of these systems breaking is higher than the interest rate that they're paying."

"I think advertising governance as the primary characteristic of newly emerging utility tokens is a little wrong-headed (...) If people really do value tokens solely due to its governance component then distribution will end up centralized." 

"I have a bit of money in a Uniswap Exchange pool as a liquidity provider, I've tried out Loopring's zk-rollup DEX and Synthetix’s Layer 2 DEX with Optimism, and I've used ETH to pay for things from time to time."

"I'd like to see more governance minimized stablecoins on Ethereum (...) synthetic assets. More governance experimentation.”

ETH2

"Ethereum as it exists today will be its own separate shard on the Eth2 network.”

"Applications on different shards will be able to communicate with each other, they will be able to do so asynchronously (...) many dapps and primitives transact this way and don't require instant syncing.” 

“The biggest risk is running into technical roadblocks but I'm less concerned about the community and political risks.”

“I’m very confident about the transition from Eth 1 to Eth 2 (...) We’re already at the point where Eth 1 was a few months before launch.”

NEAR Protocol Joins Crowded Ethereum Killers Party

By Sebastian Aldasoro

The Ethereum killer space is getting crowded. The latest one to join is NEAR protocol, which launched its mainnet this week. Like the dozens of smart contracts platforms competing with Ethereum, they have funding and a rockstar team, but so far that hasn’t been enough to secure network effects. 

The first wave of Ethereum killers

At least eight Ethereum killers have launched in the past two years. First, there was the initial wave with projects including EOS, Tron, Tezos, Blockstack, Waves, and Lisk. Many of them raised enough capital to still be running their ecosystem funds or grants programs that seek to stimulate the development of their ecosystem similarly to ConsenSys and the Ethereum Foundation’s role in Ethereum. 

But none of them have succeeded in coming close to Ethereum in terms of new decentralized applications, active users and volume, which has massively increased on Ethereum with the explosive growth of stablecoins.

Image source: https://dapp.review/article/251

Get in Line

The space is already saturated with relatively empty smart contracts platforms, and many more are waiting to launch. At least 10 additional projects have raised capital and are getting to launch between this year and next.

Image source: Messari

Even though many have marketed their projects to give the impression that they could easily dethrone Ethereum, some of them have found the need to build bridges to access Ethereum infrastructure. NEAR already has a decentralized bridge, Polkadot is also working on it, there’s the EOS bridge (actually being run by the Kyber Network), while Cosmos, and AVA are also making sure their networks can easily connect with Ethereum. This is how they can access the billions of dollars locked on DeFi protocols, liquidity pools and network effects already in place on the second biggest cryptocurrency.

Community Efforts

Real traction can only come from a large, active developer community. Near is using the funds raised to run a support program for teams that want to build on their infrastructure and do everything from assigning mentors to allocating NEAR tokens to fund developers. You can check out more about it here.

There already are a handful of projects building on NEAR: 

  • TessaB, a second-hand mobile phone marketplace with traceability solutions built on its own Tessa blockchain.

  • 1inch, a DEX aggregator built at ETH New York in 2019.

  • Stardust, a revenue-sharing secondary marketplace, and game explorer for gamers

Image source: @nearprotocol twitter feed.

To further spur development, NEAR is running a Github hosted online hackathon in the context of the Ready Layer One conference, with more than 130 participants signed up, similar to Ethereum’s latest hackathon, ETHLondon. 

Proof of Stake

NEAR protocol is a Layer 1, sharded proof of stake open blockchain that claims to solve the scalability problems that other blockchains like Ethereum face. They also claim to be more developer-friendly (you can check their tools here). The first phase of their protocol is powered by a Proof-of-Authority algorithm (hence the name of its chain, MainNet: POA) and is administered by the NEAR Foundation and the 40 or so validators who purchased tokens. 

The MainNet: POA is running on just 3 foundation nodes instead of the 4 stated on their announcement post for this phase, compared with Ethereum and Bitcoin’s thousands of nodes. This is the first of three phases before NEARN is fully permissionless and functional. The second phase, which will include whitelisted validators and apps deployed through the Foundation Developer Program, is expected to launch between June and August, while the release date of the final phase, where anyone can join the network and deploy dapps, is still TBD.

Source:https://explorer.mainnet.near.org/

a16z and Microsoft

Similar to other Layer 1 blockchain projects, NEAR has a star-studded team, with engineers from Microsoft and Google. They also have big-name investors, with a16z leading their latest $21.6 million token sale round.

But the blockchain space is now saturated with well-funded, world-class teams, and technical solutions that claim to solve scalability issues. Still, it’s become clear that even for projects that have all of these boxes checked, bandwagon effects are hard to achieve and today the only general-purpose blockchain that shows signs of this type of effect is Ethereum. It remains to be seen whether tech, hackathons and bridges can change that.

Loopring Temporarily Paused Exchange After Finding Bug

“A critical frontend bug has been identified, we will stop our relayer service and and put Loopring Exchange into maintaince mode. Stay tuned for more update,” the project said in a tweet. The exchange has completed an upgrade and restored trading.

[UPDATES to say trading was restored]

SNX Link making it Easier to Use Synthetix Platform

DeFi project SNX Link, which built an interface to use the Synthetix exchange, launched a feature which automatically adjusts users’ collateral ratios, while before users had to do so manually. If the collateral ratio is below the threshold, a smart contract will burn enough synthetic USD tokens, or sUSD, to adjust it and claim the rewards on your behalf.


The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.

Click here to pay with DAI.There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).

About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.