Somewhere in December 2013, I just finished my masters degree and was coding during the southern hemisphere summer on Bitcoin payment channels (trying to find bugs and helping where I can in the first experimental implementation: Mike Hearn’s PayFile). With my parents agreeing with me that I could live at home, I endeavoured to use what savings I had left to get full-time into this cryptocurrency thing. Looking back, I’m still amazed that they did.
It was one of those summer days when Dogecoin first appeared, and I was stunned to see something thriving that had no new technical innovation, but innovated in its memetic power. I thought: “Wow. What if you could launch a million currencies, all who had value merely because it was a meme of *something*?” Through digging deeper into its code, I learned how it all worked, and even subsequently discovered the “bug” that Dogecoin had no supply cap.
I wanted to create personal tokens. To keep experimenting with this hypothesis: money as memes.
The 6 years that passed, I kept thinking about this problem: creating personal tokens. In order to get there however, new things had to be invented. So, I helped create the ERC20 standard, and I contributed a lot of research towards continuous token models (such as inventing the token bonding curve).
I owe much of my passion in this space to this pursuit. All for one reason: trying to unlock capital and give agency to people. I’ve since taking a more measured approach, and a bit more afraid of sticking markets into places where it shouldn’t necessarily go. Regardless, there’s still a lot of space for innovation that is both focused on human agency, and human empowerment without sacrificing our souls to the market.
With recent conversations going around again regarding personal tokens, I wanted to share my thoughts on what we are seeing, and what I think is an interesting avenue for personal tokens: not service/resources to your time, but the ability to affect social influence.
As I’m writing a novel, I’ve seriously enjoyed this YouTube channel on writing. Succinct and does great essays on what works and doesn’t work. Really recommended if you enjoy this kind of content (video analysis).
The current hot topic in Ethereum. A flash loan allows you take out any amount of collateral (for free or negligible cost) to use, as long as you return the collateral in the *same* transaction. If it does not, the transaction is reverted/cancelled and no one lost anything (except blockchain fees). This was used to ‘attack’ or arbitrage a protocol, netting someone $360,000 in one transaction (or the space of 15 seconds). This is a new design framework that asks a LOT of interesting questions. For example, Marc Zeller asks whether this is harmful. Understandably, Marc thinks it’s a good thing, because their platform provides flash loans.
Regardless, it’s incredibly interesting. We’ve never seen the possibility of doing such things, and now it has become possible. Whether it’s a good thing, time will tell. So far, I’m leaning to good. Protocols definitely have to change their threat models, knowing that anyone can become a ‘whale’, swinging around large amounts of collateral for low, to no risk. It’s not just the domain of the rich anymore.
What was cool about this event is that, Nexus Mutual, the first smart contract insurance mutual, paid out for claims, because the protocol that was ‘attacked’ using a flash loan: bzx, actually had a bug. This was historic! I’m happy to see Nexus Mutual working and providing insurance. It’s also cool to see a bonding curve, working in practice!
A virtual world whose ownership is shared/owned on Ethereum. How cool is that? It gets even weirder when you consider that it lives in the same arena as above: flash country. Imagine taking out large collateral loans to swap and arbitrage virtual land all in the space of one transaction?
Sometimes it does feel like we’ve reached that frontier we’ve imagined would one day exist. Dogecoin was weird, and 6 years later, it still has a $327m market cap as of February 2020. With all this innovation, what’s the next 5 - 10 years going to look like.?It’s all very exciting.
Enjoy the sunset!