The rise of the protocol politicians (Market Monday)

Market Monday for October 21, 2019

Ryan Sean Adams
Oct 21, 2019

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Dear Crypto Natives,

A dozen bankers meet every 6 weeks to set the interest rates for the world. A committee of unelected officials charged with achieving maximum unemployment and price stability—keeping the U.S. economy on track.

Federal Open Market Committee - January 2014

This institution of technocrats—do they have skin-in-the-game? Are they apolitical? Are they accountable to anyone? Are they captured by special interests?

And you think this system is flawed—ok, what would you suggest instead?

Maker has a suggestion. A new protocol with a sole mandate of currency stability governed by MKR holders who each have skin-in-the-skin. Successful management increases MKR price. Flawed risk management dilutes it.

If successful, the stablecoin they govern—DAI—becomes a major world currency.

Today MKR holders vote on changes to DAI interest rates. With the launch of multi-collateral DAI, they’ll also determine which collateral assets back DAI and the risk parameters of those assets—the decisions get more complicated.

Since each MKR holder votes directly governance requires time and effort. A voter must be knowledgeable on the issues and vote often. This means the interests of passive MKR holders aren’t represented. And smaller voters become too apathetic to participate—their vote doesn’t matter when the larger holder swing the outcomes.

But what if the passive holders could delegate their votes to representatives?

👹 Mariano Conti @nanexcool
If you could delegate your MKR to someone (non-custodial, retrieve at any time) so you don't have to vote every week, would you do it? Who in the community would you trust to vote in your best interest?

October 19th 2019

12 Retweets

Does voting become more scalable? Does the system start to resemble some new form of shareholder governance—one with with instant election and removal?

Will we see new politics emerge as prospective delegates campaign for voters?

And maybe someone like me will create a platform to Keep DAI bankless!

Ryan Sean Adams @RyanSAdams
As a MKR delegate: I will make every effort to maximize the trustlessness of DAI by... - voting to preserve ETH as the primary collateral - voting against the inclusion of permissioned assets Vote for RSA! Keep DAI bankless!

👹 Mariano Conti @nanexcool

We could pit @RyanSAdams vs @TrustlessState and see who can gather the most MKR 😃 "I will give you lower stability fees" "With your help, I will increase Token X debt ceiling" "I promise lower liquidation penalties" https://t.co/9HrYirWO3y

October 19th 2019

10 Retweets


While political rivals rise up promising the highest MKR rewards:

David Hoffman🧢 @TrustlessState
As an MKR delegate: I would accept Permissioned collateral, while preserving ETH as main col. How: - Low penalties and SF for ETH CDPs - high SF for permissioned assets CDPs Maximize ETH lockup while maximize secondary collateral fees. Burn that MKR with @TrustlessState! https://t.co/5S4YIZ3dz9

Ryan Sean Adams @RyanSAdams

As a MKR delegate: I will make every effort to maximize the trustlessness of DAI by... - voting to preserve ETH as the primary collateral - voting against the inclusion of permissioned assets Vote for RSA! Keep DAI bankless! https://t.co/UchRNDOHLR

October 20th 2019

7 Retweets


David Hoffman and I had fun defining our MKR political platforms this weekend:

You can see how quickly rhetoric emerges and sides are chosen. Ahh…politics.

To be clear, while Hoffman and I probably have positions resembling our hyperbolic tweets, MKR delegation does not yet exist and our twitter vitriol was more illustration than serious. But a delegation system can be created with just a bit of code. And isn’t this an inevitable glimpse into the future?

Imagine a monetary protocol with the power to affect global economies—a private, protocol-based central bank for open finance. How could such an institution exist without accruing political cruft at every open surface area of decision-making?

  • Political parties

  • Forks based on disputes

  • Vote-buying markets

  • Lobbyists & interest groups

The rise of the protocol politicians?

Let’s shore up our governance systems and enter these next chapters with eyes wide open. The protocol politicians are coming.

- RSA

We’re maybe 6 months away from having a completely bankless version of Venmo but the crypto markets don’t care yet—put some syrup on em—they’re flat as a pancake

MARKET MONDAY:

Scan this section and dig into anything interesting

Market numbers

  • ETH down slightly at $176 from $182 last Monday

  • BTC about even at $8,240 from $8,243 last Monday

  • Maker stability fee down to 9.5%—back to double digits!

Market opportunities

New stuff

What’s hot

Money reads

New release—🔥Bankless exclusive AMA with one of the most promising privacy tech protocols in open finance today. Does it make DAI private? Find out!

👉AMA with Aztec Protocol (full subscribers only—here’s what one VC said about it)

WHAT I’M DOING

Check out a few opportunities I’m capturing right now with my crypto money

Explored a crypto card. Update: investigated crypto.com crypto card this week and I ordered one. It’s a custodied solution using BitPay, mobile app is slick, though I still have some analysis to do on their MCO token. I plan to use the card and do a full write-up for us. Stay tuned!

Used new Wyre on-ramp. This was the easiest fiat onramp experience I’ve ever had in crypto (still jurisdiction restricted though). A mainstream user can get crypto without extensions or downloads directly from a browser link—all they need is an Apple or Google Pay wallet—no account setup, no KYC, no prerequisites. Costs 2.9% + 0.30 fee. This is Stripe for money protocols. (In Europe? Hearing good things about Ramp)

I bid on a few premium ENS names. In last week’s assignment you picked up and registered an ENS name—did you know auctions are going on right now for premium ENS names? I’ve bid on a couple so far. DeFi.eth (10 ETH), Gold.eth (5 ETH), and BTC.eth (4.6 ETH) will all be auctioned off in the next week—and sorry folks money.eth is gone—because guess what? ETH is money.

What did you do in crypto last week? A few of my faves from this thread:

WEEKLY ASSIGNMENT:

Make time to complete this assignment before next week

Setup MyDeFi app. (15 mins) I’ve mentioned this money protocol management app a couple times. It’s time for me to officially assign it. This week we’re going to download the MyDeFi app and set it up.

What is it? Think of your ETH address as a bank account. But unlike a traditional bank account, you own it. So you can plug it into any user interface you want. MyDeFi is one such interface—really simple, mobile optimized, ETH account tracking.

Here’s what you do:

  1. Download and install MyDeFi app (iOS and Android)

  2. Add an active ETH address

  3. See your account activity

This is a view-only interface meaning no ability to access your private keys.

Note on privacy: according to the developer the ETH address is stored locally—no addresses stored in server—do further due diligence on privacy if paranoid.

Now view your account assets, money protocol activity, and balances. Also, check out Best Lending Rates under Tools to see opportunities. This app will be useful for future weekly assignments—e.g. check out Pool Together assignment in MyDeFi!

Cool right? Open finance is already creating its Mint.com. And I expect ETH account wrapper tools like this to get a lot better in the coming months.

Extra Credit Learning

MAIN TAKES:

Read my takes but draw your own conclusions

MINI TAKES:

TWEET-A-QUESTION

Tweet me your question—I reply to one per week

Question from Inner Circle:
If Argent the company goes away can you lose access to your Argent wallet funds?

RSA Response:
This is an important question for any smart-contract wallet. I don’t think Argent’s had a good answer to this previously, aside from setting a hardware wallet as a recovery guardian.

More recently however they released details. There’s good news—you can fully recover your funds by following a few steps here.

And this is a useful level-up even if you don’t use Argent.

Because really, any time you trust a substantial amount of funds to a smart-contract you need to make sure there’s a recovery processes. Have funds in Set? They recently released their recovery instructions too.

Remember: the functions of a truly bankless money protocol are completely accessible on the public ledger. The app you use? That’s just the wrapper.

- RSA

Some recent tweets…

Ryan Sean Adams @RyanSAdams
Ethereum = magical internet money system Ethereum address = magical internet bank account ENS domain = name your magical bank account ETH = magical internet money DAI = magical internet money (that's stable) Maker = magical internet bank Uniswap = magical internet exchange

October 18th 2019

55 Retweets
Ryan Sean Adams @RyanSAdams
Poloniex just announced they're exiting the US Binance US is now separate from Binance Global But... There's only one Uniswap There's only one Maker And they're global The crypto banks continue to geofence The money protocols are global

October 18th 2019

18 Retweets
Ryan Sean Adams @RyanSAdams
People misunderstand We have nothing against banks But we had nothing against Blockbuster either It's just that Netflix was better

October 15th 2019

39 Retweets
Ryan Sean Adams @RyanSAdams
We’re probably 6 months away from having a 100% bankless version of Venmo No central bank No commercial bank Just you and the public ledger I don’t think any of this is priced in

October 15th 2019

34 Retweets
Ryan Sean Adams @RyanSAdams
To the general public there's absolutely no difference between BTC, ETH, XRP, LTC, BCH, or TRX They just want the one that goes up the most If you know the differences between these assets you have massive information asymmetry right now

October 16th 2019

33 Retweets

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Crypto Jet Jockey @sjude09
I finally did it. I subscribed. This is the first newsletter that I’ve felt is worth paying for. @RyanSAdams #bankless BanklessThe ultimate guide to crypto financebankless.substack.com

October 4th 2019

2 Retweets

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. I’ll always disclose when this is the case.

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