The Jones is impressed with Ethereum again. Feel free to share your comments and predictions.
I’ve been utilizing a decentralised finance dapp, I link it to my metamask account . My plan is to borrow stable coins and use them to purchase assets such as ethereal which I think will grow in price. Then after a year or whatever I sell part of the assets that increased in value (hopefully) to pay back the stable coin loan and keep the extra Ethereum. My collateral is Ethereum itself. You can do the opposite and borrow an asset that you think will decrease in value , sell immediately and pay it back at reduced cost in future . I’m very bullish though at this time for most assets.
Ethereum transaction speed has vastly improved . It can take just ten seconds to see four confirmations. Fully confirmed in minute or two. It’s fast enough to work at real world transaction speeds and so are the ERC20 tokens . It means they can be more useful for near real time transactions.
Ethereum transaction costs are still very low in my book, often ten cents , but they are working on further protocol improvements for microtransactions and smaller payments to be viable.
Decentralised finance is easy to get into and very flexible , if you have collateral you can get started immediately. There are many platforms in operation and rates are fully transparent . There’s a learning curve involved in calculating risk of various borrowing strategies. I’m still learning.
Mostly folks are borrowing or depositing stable coins I believe. Dai is incredibly popular occupying most of the market and has proven to be very, well, stable so far. Around 1 billion USD is already locked up in DeFi platforms. I expect this to grow very rapidly .
This all looks great for Ethereum because they almost all rely on being ERC tokens and bring interoperable and the lower risk and trusted Ethereum network behind it.
With staking coming up soon for Ethereum, with the major stable coins all being Ethereum tokens and the need to own Ethereum for Gas to process transactions and also as a favoured DeFi collateral (which will mean more and more is locked up) and also for index funds, I just see this as incredibly bullish in the short and medium term.
Nothing else out there has an ounce of the popularity of Ethereum it surely will be the network effect winner.
Should it be good for the price, most definitely ! More so because it will attract more speculative investors again than any other factors. I’ve invested quite a bit in Ethereum over the last year so I do admit to being self interested in its success.
I still have these 1.43 ETH that I bought in January 2018 (now look at the price history and laugh ( but not sold means no money lost yet I guess.
Last night I made a dream: BTC price skyrocketed to insane level (988k or something similar), felt very upset that I sold all my BTC, then thought damn just check ETH price, surely it should follow… but woke up.
ETC looking good but I have none of it, hope ETH price will get to 2 or 3k minimum in the future. Issue is, the quantity is unlimited.
There are tonnes of videos out there on ethereum, i don’t follow YouTubers myself most of them are paid crypto shills. I just read online. Of course you can find some good explanatory vids on Eth 2.0 and DeFi online.
How to make $350,000 on DeFi in one convoluted transaction
Decentralised Finance — or DeFi — is a street corner shell game with thousands of shells, and you have to guess which shells the thousands of fractions of a pea are under. It lures in suckers by being so complicated they figure there must be something to it, to justify the double-digit interest rates.
bZx Fulcrum just got taken for $350,000 in ether — which they claimed was a “hack.” It wasn’t, quite. [Twitter]
The trader chained a string of actions together in a particular way so as to squeeze money from the DeFi ecosystem. The exploit used a flash loan — which lets a trader borrow and then return funds in a very short window.
Flash-borrow 10,000 ETH from DeFi provider dYdX.
Send 5,000 ETH to Compound (another DeFi protocol), and 5,000 ETH to bZx.
Short-sell WBTC — Ethereum ERC-20 tokens, each representing a bitcoin — on bZx, and also quickly borrow 112 WBTC on Compound.
Sell the borrowed WBTC on Uniswap.
bZx was taking its price for WBTC from Uniswap (bZx has denied this, but everyone else says they were doing this) — and this one sale dropped the price enough to make short-selling the WBTC extremely profitable.
This was a rerun of a similar attack on DAI last year — which also hit bZx. Someone also tried a transaction of this sort again just today. [ blog post; Twitter ]
In any regulated market, trades of this sort would likely be legally problematic — certainly the blatant price manipulation — but if DeFi were a regulated market, none of this laughably rickety nonsense would be allowed to exist.
Interesting one in DeFi during the week. Someone bid $0 for $8M of ETH from Maker vaults and got it. Pretty sweet deal. Not so sweet for the owners of those vaults, who have no legal recourse. The error was an unintended consequence of a bug/missing feature shown up by network congestion.
I had panicked and sold a bit of my ethereum holdings, now buying back again (with my same crypto pot). Now at record record holding levels. Never panic. Once a holder always a holder should be the motto.
Ethereum ecosystem is flying by all metrics , DeFi has recovered very quickly, now there are more wBTC than BTC in the lightning network. It’s funny that wrapped BTC can achieve what BTC cannot do.
I was waiting to see if BTC was going to make any moves but it’s been fairly stable and I think , hopefully, that the momentum will transfer to Ethereum now. Well it has very clearly already for decentralised finance but I mean in the broader speculator and investor community.
It is going to be very exciting moving to Eth 2.0 (scheduled in July).
Load up boys and girls. I bought a few DeFi coins too.
Guys, put a small bit of your net worth in Ethereum.
DCA in every month if you are concerned about volatility.
Basically Ethereum is starting to incorporate large amounts of value onto it’s chain now and is odds on to be one of the main financial networks worldwide or even the biggest one within ten to fifteen years (that’s my prediction).
I will explain my reasoning.
Ethereum is a decentralised computer network. The first big real world use cases is to act as a decentralised financial network. DeFi.
There’s about billion USD on it already in loans, assets, derivatives .
In this case what has been done is to ‘wrap’ a huge amount of BTC onto the network and then borrow another crypto asset (stabelcoin Dai ) against it. Similar to depositing money in a bank and then taking a loan.
The problem with BTC is it’s really slow to transact so not good for payments. Here you can use it to borrow assets that are easy to transact, but the bitcoin is also locked up (which helps drive it’s scarcity too). The wrapped bitcoin on Ethereum be transacts super quick too, making Bitcoin be useful for payment again as per its original usecase
Now imagine you do the same for real estate assets, or stocks, so now you can transaction the ownership of those assets immediately anywhere in the world (especially in a very small fractions ).
Anyway that bitcoin is starting to be locked up on the Ethereum network is pretty cool .
The point of his article is that Ethereum can suck any financial asset onto its chain worldwide. My point is that adds immense value to the network.
Good point, it’s somewhat related but the gas cost is related to the demand for transactions more than anything. There are new functions being introduced that can dramatically increase the transaction number and reduce cost per transaction.
From the article in the twitter thread linked it appears the transaction was some sort of move by ‘Nexo’ to transfer collateral. The collateral will be used for borrowing DAI from MakerDAO. Nexo appear to want to arbitrage the difference between their DAI lending rate out to their customers (5.9%), and the MakerDAO lending rate of 1.0%, where the MakerDAO loan is collateralised by WBTC. It’s difficult to read because these coiners have reinvented a lot of financial markets jargon. I am still unclear as to what WBTC is .