The Daily Gwei - The Social Layer - The Daily Gwei #461
Hey readers - apologies for not publishing a piece for the last 4 days - I was traveling and just didn’t have the time to put something together. Though don’t fear - I’m back home now and will be putting out pieces at the regular cadence going forward (well, at least until I head to Amsterdam in mid-April)! I strongly believe that the “social layer” of a crypto ecosystem is the most important property - even more important than all of the technical details. This is because the social layer is the layer of last defense in the event of any malicious activity or attacks - especially if that attack comes from nation states. And don’t get me wrong - building a strong and healthy social layer is no small feat - but it is absolutely critical if crypto-networks want to survive concerted attacks against them. The social layer is not an "afterthought" in crypto
It's the entire point
Without a strong and healthy social layer, a project is doomed to fail in the long-term Let’s run through an example so that I can clearly illustrate the importance of a strong social layer. Hypothetically speaking, imagine that a nation state has been able to covertly obtain 51% of the hashing power on the Bitcoin or pre-merge Ethereum networks. At some point in time, the nation state decides to exert this power by forking the chain with a breaking change (such as giving themselves newly minted coins). Technically, based on the view of the protocol, the nation state chain would be the “canonical” one since it has the most accumulated Proof of Work. Though this is where the social layer kicks in and rejects this as the canonical chain - instead choosing to stick with the chain that has less accumulated Proof of Work because it has the backing of social consensus. I strongly believe that the make up of a social layer of a chain is dictated by the chain itself. For example, because Bitcoin is a very simple network (it basically just secures BTC), it attracts those who really only care about one thing (in the case of Bitcoin, non-nation state money). Whereas a network like Ethereum is extremely expressive and attracts all kinds of individuals that may not necessarily be interested in the same things. I’m personally very interested in the core protocol and layer 2 work being done in Ethereum but don’t really follow NFTs too closely or care to keep up with the day to day happenings of that area. Lastly, a strong social layer is not something that money can buy and we’ve seen this put to the test plenty of times over the years. In 2017, there was lots of money being thrown around by alternative layer 1’s to attract people to their platforms (especially developers). But what this did was just attract mercenaries instead of missionaries which were quick to leave once the money ran out - sounds familiar to liquidity mining/yield farming, doesn’t it? There’s plenty of lessons to be learned from this that can be applied to modern day networks and projects - namely, balancing mercenaries and missionaries is critical for the long-term health of a project. At this point in time I’d say that only the Bitcoin and Ethereum networks have a strong enough social layer to resist nation state level attacks and also continue thriving far into the future. Though funny enough, even though the Bitcoin and Ethereum communities couldn’t be more different from eachother, they do have one thing in common - they will both defend their respective networks with everything they’ve got. Have a great weekend 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
Show Me the Money - The Daily Gwei #458
Wednesday, March 16, 2022
Money doesn't grow on trees - or does it?
Up, Down and Sideways - The Daily Gwei #456
Monday, March 14, 2022
Markets are a cruel mistress.
Tasty Yield Burgers - The Daily Gwei #455
Thursday, March 10, 2022
McDonalds doesn't serve them but Ethereum does!
Funding Layer 2 - The Daily Gwei #453
Tuesday, March 8, 2022
Billions and billions and billions.
Crypto OGs - The Daily Gwei #452
Monday, March 7, 2022
They're formed in bear markets and set free in bull markets.
You Might Also Like
SEC calls Ripple’s proposed stablecoin an ‘unregistered crypto asset’
Wednesday, May 8, 2024
Ripple's CLO Stuary Alderoty said the SEC filing was baseless. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Integrate BTC, cooperate with Pendle and MakerDAO Can Ethena become a new generation of stablecoin?
Wednesday, May 8, 2024
Author: defioasis By holding LST and an equivalent amount of perpetual contract short positions, Ethena has created a delta-neutral CDP, pioneering a new chapter in synthetic dollars . The yield on
DeFi & L1L2 Weekly - 🎉 Crypto.com Reaches 100M Users, BlackRock’s BUIDL Becomes Largest Tokenised Treasury Fund
Wednesday, May 8, 2024
Crypto.com hits new milestone with 100 million global users. BlackRock's BUIDL is now the largest tokenised treasury fund. Ethereum devs propose EIP-7702 to enhance externally owned accounts. ͏ ͏ ͏
DeFi & L1L2 Weekly - 🎉 Crypto.com Reaches 100M Users, BlackRock’s BUIDL Becomes Largest Tokenised Treasury Fund
Wednesday, May 8, 2024
Crypto.com hits new milestone with 100 million global users. BlackRock's BUIDL is now the largest tokenised treasury fund. Ethereum devs propose EIP-7702 to enhance externally owned accounts. ͏ ͏ ͏
Holy Grail! We’re live with a $100k prize pool 🏆
Tuesday, May 7, 2024
Swap, borrow, and stake to earn yield and get a chance to win a slice of the massive prize pool. Flipside Crypto Holy Grail! 🏆 Aptos Grail Tournament with $100k in prizes starts today! Keep doing what
US Bitcoin ETFs see record outflows as Hong Kong counterparts thrive
Tuesday, May 7, 2024
Hong Kong spot Bitcoin and Ethereum ETFs recorded significant inflows of more than $300 million last week. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
The Usage & Evolution of Decentralized Exchanges (DEX’s)
Tuesday, May 7, 2024
Checking in on liquidity pools, trading volumes and adoption across Ethereum DEX's ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
What is Based Rollup, and How Does it Inherit Ethereum's Liveness?
Tuesday, May 7, 2024
By 0XNATALIE, Researcher at @ChainFeedsxyz Source: With the completion of the Cancun upgrade and the reduction of L2 gas fees, the market's focus has once again shifted to L2. There are currently
Bitcoin network celebrates 1 billion transactions as a Satoshi-era wallet awakens
Monday, May 6, 2024
Bitcoin's 1 billion transactions is over a decade faster than Visa. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Crypto Market Pulse Weekly – 💸 HK Spot Bitcoin ETFs Saw ~$250M Inflows in 3 Days
Monday, May 6, 2024
Hong Kong Spot Bitcoin ETFs saw US$250M net inflows in 3 days. Morgan Stanley filed with the US SEC to permit exposure to Bitcoin ETFs. Australia is reportedly considering the launch of Bitcoin ETFs. ͏