Unstoppable Liquidity (Market Monday - Lite)
Market Monday for December 9, 2019
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Dear Crypto Native,
I’m going to call it now. It’s Uniswap week on Bankless.
Today’s weekly assignment below the fold—zap liquidity to Uniswap. Tomorrow’s tactic—how to use Uniswap to make money (you don’t want to miss it).
Uniswap is the most Bankless money protocol on Ethereum—it in my top 5 fave protocol list behind BTC, ETH, and MKR. It’s unstoppable liquidity.
So how did I react to the news last week that the team behind the Uniswap protocol geo-blocked their official front-end to the protocol? That the Ethereum critics now say this is proof DeFi is a sham? That if you’re located in North Korea or Iran you see this when accessing Uniswap.exchange?
I shrugged then smiled.
This does the opposite of what the critics proclaim.
It demonstrates how unstoppable the protocol truly is.
It tells me these critics don’t actually understand the system they’re criticizing.
If you have an ENS friendly browser like Opera or are using MetaMask you can access one of these decentralized interfaces at http://uniswapexchange.eth/ in your browser bar. Anyone else can type http://uniswapexchange.eth.link. Each of these interfaces are accessed through a censorship resistant domain hosted on Ethereum instead of DNS.
Blocking the official interface does nothing to block Uniswap.
It only makes it stronger. More decentralized.
How’s this possible?
Some point to the fact that Uniswap’s front-end is open source so anyone can fork it and host their own version. But that’s not what makes Uniswap unstoppable. Say all the code that ran Facebook.com was open source, could you recreate Facebook? No. Facebook’s state—its network effect—stays with Facebook.com.
But Uniswap’s state lives on chain. Not on a server controlled by a centralized entity. On 1000s of servers spread across an economically secured decentralized public network. Uniswap is a liquidity robot that lives on Ethereum. No external oracle. No price feeds. No other dependencies—just Ethereum.
With Web apps like Facebook—a centralized entity owns the state.
With Money protocols like Uniswap—a public network owns the state.
This what makes Uniswap unstoppable. That’s the paradigm shift.
It means a single interface isn’t important for decentralized protocols. Uniswap’s liquidity isn’t tethered to an interface or a server. As long as the liquidity robot keeps running onchain any of the machines or interfaces using it are unaffected.
But maybe you still blame the Uniswap team for geo-blocking OFAC countries. Ok. The beautiful thing here—it doesn’t matter. Because even the Uniswap team doesn’t have the power to block Uniswap.
Uniswap isn’t a company. It’s not a team. It’s not an interface. It’s a protocol. It lives on chain. To stop Uniswap you’d have to stop Ethereum.
Any bank you know work like that?
I say we turn em all into protocols.
Value of Maker DAI flips the value of SAI—migration is more than halfway complete now—and DAI savings rate up to 4%—that’s the highest risk-free rate for DAI ever
Scan this section and dig into anything interesting
ETH down slightly to $146 from $149 last Monday
BTC down a pinch at $7,302 from $7,324 last Monday
Maker SAI steady at 4%—DAI fee steady at 4% but savings rate up to 4%
BitFinex support Lightning (you can send them BTC via Lightning)
ATH of Bitcoin Addresses holding BTC—28.39m BTC accounts
BTC stock more popular than Netflix for Millenials (ugh, why GBTC tho?)
60k active bankless bank accounts is another all time high
Best report on crypto lending I’ve seen - Greychain
Bitcoin’s financial stack (compare to Ethereum) — Digital Asset Research
Good take on decentralize liquidity - Amentum (Steven McKie)
Bearish case for Bitcoin (mainstream still missing DeFi) - Jeffrey Tucker
Review of Open Finance in 2019 - ConsenSys
ETH as collateral for Synthetix (more on this soon) - Synthetix Community
WHAT I’M DOING
Check out a few opportunities I’m capturing right now with my crypto money
Make time to complete this assignment before next week
Use DeFiZap to provide liquidity to Uniswap. (10 minutes) DeFiZap is a system of smart contracts—Zaps—that deploys capital across multiple DeFi protocols in one transaction, saving users’ time and gas fees. What does this mean? You could long ETH with 2x leverage on Fulcrum and supply liquidity on Compound in ‘one-click’ by sending ETH to Lender Zap smart contract registered on ENS under Lender.DeFiZap.eth.
It’s important to note: when you use DeFiZap, you mint & receive the same liquidity/position tracking tokens as when separately using Uniswap, Compound, bZx, Synthetix on your own. DeFiZap doesn’t spread your money into 'top 10 on coinmarketcap'—Zaps inject capital into DeFi protocols built on top of Ethereum.
This week they launched a new integration with Uniswap which allows for one-click liquidity pooling into one or multiple pools using just ETH. Right now, if you want to enter a pool on Uniswap to generate trading fees you need to supply equal values of ETH and ERC-20 tokens. In return you’ll be given tokens from the exchange contract which can be used to withdraw your proportion of the liquidity pool at any time.
DeFiZap helps you enter one or multiple pools in one transaction using just ETH. For example, if you want to enter ETH/DAI pool, just send ETH to DAIUnipool.DeFiZap.eth and this Zap will auto-convert 50% of your ETH into DAI + mint ETH/DAI Uniswap Liquidity tracking tokens.
Here’s the assignment:
Send a small test amount of ETH to DAIUniPool.DeFiZap.eth (e.g. 0.1ETH)
(Note: you must use 1,500,000 gas limit. Follow detailed tutorial here, ENS method.)
Once you receive your ETH/DAI Uniswap Liquidity tracking tokens, you can track your returns on pools.fyi
Withdraw liquidity when desired on Uniswap (e.g. try a week and analyze your ROI). Folks at DeFiZap will deploy ‘Anti-Zaps’ soon which will allow your to one-click exit pools back into ETH.
Tomorrow’s tactic will cover “How to make money using Uniswap” so stay tuned!
Extra Credit Learning
MAIN AND MINI TAKES:
Read my takes but draw your own conclusions
Tweet me your question—I reply to one per week
Question from Twitter:
I've been following you for several years and still have no idea what you are talking about half the time. Bottom line all of this and point me in a direction that unravels the opportunity for investors - Douglas Smith
Some recent tweets…
Execute any good market opportunities you saw
Complete weekly assignment: Zap liquidity to DeFi
Let’s onboard 1 billion people to open finance…
If you believe in what we’re doing don’t keep it to yourself—share Bankless with as many people as possible.
Post. Tweet. Tell. That’s how we take back our money system.
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.
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