WhiteboardCrypto Newsletter - Apr 13

Welcome back to this week's edition of our WhiteboardCrypto Newsletter!

MakerDAO drama

MakerDAO has been in the news a few times this year for some controversial stuff, and the latest this week has really brought the argument about decentralization to the front of everyone’s minds. The DAI stablecoin is created and backed by MakerDAO, who manages the assets used to help stabilize the token. They decided to include Ethena's USDe as backing for DAI. If you haven’t heard of Ethena yet, it’s a controversial new “synthetic dollar” project that uses automated methods to maintain its price that some critics liken to the notorious Terra Luna’s 2022 setup. AAVE decided to lower DAI’s collateral in their ecosystem after this news, claiming it was less safe than before. In response to the criticism, Rune Christensen, the founder of MakerDAO, made a statement that suggested the DAOs governance should be more centralized. The point of a DAO—a decentralized autonomous organization—is to have distributed power, but this decision (and many others recently) have shown how centralized decision-making is in this particular DAO, which makes some people very unhappy.

Learn more here.

EigenLayer goes live

Up until now, EigenLayer was only fully functional on testnets, and users could deposit their liquid staking tokens (LSTs) or set up their own way to natively restake ETH. After launching on mainnet, the protocol gained 28 operators, who are the people that provide network security to apps on the protocol, and received more than 137,000 staked ETH, which is almost $500 million. But, despite going live on mainnet, many of its core features are still unavailable, including the reward system and slashing mechanism. They claim these will roll out by the end of the year and this is still the “develop and stabilize” phase.

Learn more here.

Bitcoin more centralized than we thought

In any blockchain, it’s important to have a large number of people helping secure the network via whatever consensus protocol is being used. Bitcoin uses proof-of-work, where miners compete to solve complex math problems to mine new blocks - validating and saving data to the blockchain, and receiving new bitcoins in rewards. It turns out that one custodian called Cobo has been consolidating mining rewards from seven major pools. This works out that Cobo holds the keys to 47 of every 100 newly minted bitcoins. This gives them significant say in how the network will function moving forward, and if they reach 51%, they would be able to essentially control the blockchain. But it’s pretty easy for mining pools to change custodians so this issue could be easily fixed.

Learn more here.

SEC is suing Uniswap

The US Securities and Exchange Commission is at it again, this time suing Uniswap Labs, though the specifics aren’t released yet. The SEC has taken a “regulation through enforcement” approach to crypto, and the creator of Uniswap Labs, Hayden Adams, says, “I’m not surprised. Just annoyed, disappointed, and ready to fight.” The protocol will continue to be useable during the litigation, as it will likely take years to fully play out.

Learn more here.

NEAR Protocol to build user-owned AI

Illia Polosukhin, the co-founder of the layer-1 NEAR, is an AI research and software engineer, and he’s eager to have AI be open source. Along that line, the team will start hiring AI engineers soon as they implement a 3-6 month transition phase.

Learn more here.

Thanks for reading and I hope you learned something!

- Theodore