The Daily Gwei - Solid Foundations - The Daily Gwei #503
When a new skyscraper is being built, one of the most important things to get right is the foundation of the whole thing. If the foundation is, for any reason, unsound or fragile - it risks bringing down the whole building. The same isn’t true for any particular level on the building - for example, level 40 of the building could be completely destroyed in a fire and it’d have little effect on the overall building (it may spread to some other levels before being put out, though). The same dynamic is just as true for crypto-networks and it’s why building robust networks is so critical. It's easy to build a frail, centralized protocol on a robust, decentralized blockchain like Ethereum.
However, it's *impossible* to build a robust, decentralized protocol on a frail, centralized blockchain. There is actually an example we can look at here for what a frail and centralized protocol that collapsed looked like - of course, I’m talking about Terra. The foundations of Terra were so fragile due to the nature of UST that the collapse of the stablecoin took down the entire Terra ecosystem with it (along with the Terra blockchain itself). This meant that any project that had built on Terra or heavily integrated with UST collapsed and had to find a new home if they wanted to continue existing. It also didn’t matter how decentralized any of these applications were - they were all the mercy of the centralized Terra chain itself. Now let’s take Ethereum - its solid foundations are like what antiprosynthesis outlined above - the core protocol code is robust, the network itself is decentralized, and there isn’t really anything that could be built on the application layer that could take down the network via centralization (certainly not something like UST). Though this isn’t to say that in the future something couldn’t threaten the network from the app layer, but Ethereum is built in such a way that it can resist and recover from things like this - it’s one of the main reasons why we haven’t compromised even a little on layer 1 decentralization. We can also look at Ethereum’s application layer where there have been plenty of projects over the years that have either outright collapsed or just zombiefied due to not finding product/market fit. Obviously this is expected to happen but it has absolutely no bearing on the Ethereum protocol itself - a million projects could fail and the Ethereum network would still keep producing blocks through it all. Again, this is due to Ethereum’s solid foundations and commitment to keeping the protocol layer and application layer separate. All of this doesn’t just stop at applications - it also applies to everything built around an ecosystem like Ethereum. Layer 2 protocols, centralized exchange/service integrations, middleware protocol integrations or just users simply holding assets on Ethereum and trusting that it won’t collapse. The best bit is all of this is transparent - Ethereum’s code is open source and anyone can run a full node on their own hardware - all of this comes together nicely to make Ethereum a solid foundation to build on. Have a great day everyone, Enjoyed today’s piece? I send out a fresh one every week day - be sure to subscribe to receive it in your inbox! Join the Daily Gwei EcosystemAll information presented above is for educational purposes only and should not be taken as investment advice. If you liked this post from The Daily Gwei, why not share it? |
Older messages
Overleveraged - The Daily Gwei #501
Friday, June 17, 2022
Don't blow yourself up.
Optimistic Bears - The Daily Gwei #502
Friday, June 17, 2022
Remaining optimistic in a bear market.
DeFing All Odds - The Daily Gwei #500
Tuesday, June 14, 2022
DeFi is here to stay - are you?
The End Times - The Daily Gwei #499
Monday, June 13, 2022
Are they really upon us?
High Signal - The Daily Gwei #498
Friday, June 10, 2022
Where you get your information from matters.
You Might Also Like
April 30 set for historic launch of Bitcoin and Ethereum ETFs in Hong Kong
Wednesday, April 24, 2024
Competitive fee structures revealed for new Bitcoin and Ethereum ETFs in Hong Kong. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
DeFi & L1L2 Weekly - 💧Ethereum Liquid Restaking Drives DeFi TVL to 2-Year Highs
Wednesday, April 24, 2024
Ethereum liquid restaking drives DeFi TVL to 2-year highs. Cronos unveils Spring Odyssey campaign powered by Galxe. Runes launch fueled Bitcoin miners' earnings to surge. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
DeFi & L1L2 Weekly - 💧Ethereum Liquid Restaking Drives DeFi TVL to 2-Year Highs
Wednesday, April 24, 2024
Ethereum liquid restaking drives DeFi TVL to 2-year highs. Cronos unveils Spring Odyssey campaign powered by Galxe. Runes launch fueled Bitcoin miners' earnings to surge. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
OKX Web3 On-Chain Anti-Phishing Security Trading Guide
Wednesday, April 24, 2024
Aurthor: OKX Web3 As we enter a new cycle, the risks of on-chain interactions are becoming increasingly exposed with the rise in user activity. Phishers typically use methods such as creating
You’re Not Going to Believe This
Tuesday, April 23, 2024
Massive Surprise Inside
New Quests: increase AirDrop eligibility
Tuesday, April 23, 2024
New Flipside Quests just dropped. Claim $AVAX and $APT while you increase your chain score and build your reputation, helping with airdrops. Flipside Crypto Hey there, Claim $APT and $AVAX when you
Robert F. Kennedy, Jr. wants to put US budget on blockchain for 24/7 transparency
Tuesday, April 23, 2024
The public could inspect government spending 24/7 under the plan. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Layer-1 Landscape
Tuesday, April 23, 2024
A data-driven look across Layer-1 ecosystems ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Cathie Wood Iinterview In HK: Bitcoin Price Prediction for 2030, HK Is a Leading Crypto Policy Pioneer
Tuesday, April 23, 2024
Editor | Wublockchain Here is the full transcript of the Hong Kong Web3 Festival: Please welcome the head of HashKey Singapore and CEO of HashKey Capital, Mr. DC, and the CEO and CIO of ARK Invest, Ms.
100k signatures can trigger Swiss national referendum on adding Bitcoin to country reserves
Monday, April 22, 2024
If the Bitcoin advocates' plan succeeds, Switzerland could become the first country in the West to embrace the flagship crypto asset. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏