Google Shows Ethereum Balance, Appchains, Crypto vs FANG & More!

In this edition of the Superteam Crypto Twitter Round Up, hosts Cash, BD, and Tanmay explore recent developments in the cryptocurrency space, focusing on adoption, technological advancements, and market trends. The discussion covers a wide range of topics, from Google's integration of Ethereum balances to the potential of appchains and the ongoing debate between traditional tech giants and the crypto industry.

The Need for Consumer-Focused Web3 Apps

The podcast begins with a discussion on the importance of building Web3 applications that prioritize consumer adoption. This insight stems from an essay written by Aditya Saib, which emphasizes the need for crypto projects to focus on user experience and product design principles that have made Web2 applications successful.

Aditya's essay highlights several key points for Web3 developers to consider:

1. Mobile-first approach
2. Fast and responsive applications
3. Delivering a "magic moment" to users quickly
4. Abstracting away blockchain complexities

BD elaborates on this, stating, "This is where Aditya's product management skills shine through because he basically takes his Web2 product management experience and writes down the list of things you need to get right to build an awesome product." This approach is crucial for the crypto industry to move beyond its current focus on technical aspects and towards creating products that genuinely appeal to mainstream users.

Stablecoins: A Clear Use Case for Crypto

The hosts discuss the tangible benefits of stablecoins, particularly in the context of international money transfers. They highlight that the average cost of sending money internationally is about 6%, which amounts to approximately $16 billion annually in fees. In contrast, stablecoins, especially those on efficient networks like Solana, offer near-zero cost transfers.

Cash emphasizes this point, saying, "This is for stablecoins on networks like Solana because it takes $16 billion to send $20 on Ethereum. So it doesn't really apply to all of some L1 blockchains." This comparison underscores the practical advantages of certain blockchain networks and their potential to disrupt traditional financial systems.

MEV and Its Impact on the Crypto Ecosystem

The podcast delves into the world of Maximal Extractable Value (MEV) and its growing importance in the crypto ecosystem. MEV refers to the profit miners or validators can extract by manipulating the order of transactions within a block. The hosts discuss a tweet that showcases the competitive and sometimes ruthless nature of MEV searchers.

In one example, an MEV searcher posted a seemingly innocent question about code vulnerability, baiting others to reveal their own vulnerabilities. This led to the exploitation of those who admitted to using similar code. The hosts use this example to illustrate the high-stakes, adversarial nature of MEV in the crypto world.

BD comments on the culture surrounding MEV: "This is like, this is aspirational, this is like fine. This doesn't feel like stealing because it's so like PVP at all times." This highlights the unique ethos within the MEV community and the broader implications for blockchain security and fairness.

Uniswap's Funding and the Potential for Appchains

The discussion shifts to Uniswap's recent $165 million Series B funding round and the potential for the decentralized exchange to develop its own appchain. Appchains, or application-specific blockchains, have been a topic of interest in the crypto community due to their potential for improved scalability and customization.

The hosts explore the benefits Uniswap could gain by launching its own appchain:

1. Reduced gas fees
2. Greater control over MEV
3. Improved user experience

Cash explains, "By having their own appchain, they would still of course have the swap fees, right? But you don't have to pay the validators as much. And you don't have to pay, you don't have the MEV kind of problems because you can arrange the blocks yourself." This potential move could significantly reduce costs for users and increase Uniswap's competitiveness in the decentralized exchange market.

MakerDAO's Treasury Management Strategy

The podcast touches on MakerDAO's recent decision to invest $500 million in US Treasury bonds and corporate bonds. This move represents a significant shift in how decentralized finance (DeFi) protocols manage their treasuries and interact with traditional financial instruments.

BD comments on the implications of this decision: "I think this is actually bullish for the space from a regulatory perspective because if on-chain usage leads to bids for the US Treasury, I think that's literally what America needs now." This perspective highlights the potential for crypto projects to bridge the gap between decentralized and traditional finance, potentially leading to greater regulatory acceptance.

Google's Integration of Ethereum Balances

One of the most exciting developments discussed is Google's new feature that displays Ethereum wallet balances directly in search results. This integration represents a significant step towards mainstream adoption of cryptocurrency information.

The hosts demonstrate the feature, showing how users can now easily check Ethereum wallet balances without visiting specialized blockchain explorers. While the current implementation is relatively simple, it signals Google's recognition of the growing importance of cryptocurrency data to its users.

Cash notes, "It's really just like a rich link to Etherscan. But it just shows that like clearly there's enough interest on people using Google Search to search for this that they decided to add this to the product." This move by Google could pave the way for further integration of blockchain data into mainstream search and information platforms.

Expansion of Superteam to Vietnam

The podcast announces the expansion of Superteam, a Solana-focused community and development group, to Vietnam. This move is significant given Vietnam's high cryptocurrency adoption rate and active blockchain community.

The hosts encourage listeners in Vietnam to get involved with the new Superteam chapter, highlighting the opportunities for developers, creators, and enthusiasts to contribute to the Solana ecosystem. This expansion demonstrates the growing global interest in Solana and the potential for decentralized communities to drive adoption and innovation.

Recent Hacks and Security Concerns

The discussion takes a more serious turn as the hosts address the recent wave of hacks and exploits in the crypto space. October 2022 has seen a record-breaking amount of funds stolen through various attacks, highlighting the ongoing security challenges faced by the industry.

Binance Chain Hack

The podcast covers the significant hack of the Binance Chain, which resulted in the theft of approximately $566 million. The hosts explain that this attack was not a typical smart contract exploit but rather a vulnerability in the bridge connecting the Binance Chain and Binance Smart Chain.

Cash provides a detailed explanation of the hack: "Basically, what the hacker was able to do was to take advantage of the Binance bridge that connects these two different Binance chains. And he effectively just pretended that there should be a transfer happening when there was not actually one happening." This incident underscores the critical importance of secure bridge implementations in cross-chain ecosystems.

Mango Markets Exploit

The hosts also discuss the recent exploit of Mango Markets, a Solana-based decentralized exchange. This incident involved a complex manipulation of the protocol's oracle and liquidation mechanisms, resulting in the temporary loss of around $100 million in user funds.

Cash explains the intricacies of the exploit: "Basically, the exploiter put $5 million into mango for a future position on the mango token itself, which is very illiquid, right? In order to kind of sell or to have that option there, you need somebody to take the other side of the trade, right? So they put another $5 million to take the other side of the trade as well."

The discussion highlights the vulnerabilities that can arise from illiquid markets and the importance of robust oracle systems in DeFi protocols. Notably, the Mango Markets situation had a relatively positive resolution, with the exploiter agreeing to return a significant portion of the funds to make users whole.

The Importance of Secure Oracles in DeFi

The podcast emphasizes the critical role of oracles in decentralized finance, using the example of GMX, a perpetual exchange protocol. The hosts explain how GMX's oracle implementation led to significant losses due to MEV bot exploitation.

Cash details the issue: "It turns out that over the last 40 days, 10% of the total protocol profits, which are meant to be distributed to GMX token holders, are actually being taken away by MEV bots because their oracle does not update fast enough." This example serves as a cautionary tale for DeFi projects, highlighting the need for robust and fast-updating oracle systems to prevent exploitation.

The Evolving Landscape of Traditional Finance and Crypto

The podcast touches on the broader economic context in which crypto is developing, discussing recent trends in the US Treasury bond market. The hosts explore the concept of "yield curve control" and its potential implications for both traditional finance and the crypto market.

BD provides insight into these complex financial dynamics: "It contemplates a regime that many refer to as yield curve control, which is basically peg the yield curve and the rates on the duration curve. Just peg it at some percentage. And to be able to do that, you have a continuous purchase of treasuries by the central bank."

This discussion underscores the interconnectedness of traditional financial markets and the crypto ecosystem, suggesting that macro-economic trends will continue to play a significant role in shaping the future of digital assets.

Career Advice for the Crypto Era

The podcast concludes with a discussion on career development in the age of crypto and Web3. The hosts reflect on a tweet suggesting that focusing solely on compensation at large tech companies (FANG) may not be the best strategy for long-term career growth.

BD shares his perspective: "When I quit my job, I realized how risk-averse had become because quitting the job was truly an eight to nine month process. It was not a step. It was a process." This insight highlights the potential opportunity cost of staying in traditional tech roles and the benefits of embracing the volatility and opportunities present in the crypto industry.

The hosts encourage listeners, especially those early in their careers, to consider building skills and networks that position them for asymmetric opportunities in the rapidly evolving crypto and Web3 space.

Conclusion

This episode of the Superteam Crypto Twitter Round Up provides a comprehensive overview of recent developments in the cryptocurrency and blockchain space. From Google's integration of Ethereum balances to the potential of appchains and the ongoing security challenges faced by the industry, the discussion offers valuable insights for both newcomers and experienced crypto enthusiasts.

The hosts' analysis of various trends and events underscores the dynamic nature of the crypto ecosystem and the importance of staying informed about technological advancements, market trends, and potential risks. As the industry continues to evolve, the insights shared in this podcast serve as a valuable resource for anyone looking to navigate the complex and exciting world of cryptocurrency and decentralized finance.

Facts + Figures

• Google now displays Ethereum wallet balances directly in search results, indicating growing mainstream interest in cryptocurrency data.
• The average cost of sending money internationally is about 6%, amounting to approximately $16 billion annually in fees.
• Stablecoins on efficient networks like Solana offer near-zero cost transfers for international remittances.
• Uniswap raised $165 million in a Series B funding round, potentially positioning them to develop their own appchain.
• MakerDAO invested $500 million in US Treasury bonds and corporate bonds, signaling a shift in DeFi treasury management strategies.
• October 2022 saw a record-breaking $780 million stolen through various crypto hacks and exploits.
• The Binance Chain hack resulted in the theft of approximately $566 million due to a bridge vulnerability.
• The Mango Markets exploit temporarily resulted in the loss of around $100 million in user funds.
• GMX, a perpetual exchange protocol, lost 10% of its total protocol profits over 40 days due to MEV bot exploitation of its oracle system.
• Superteam, a Solana-focused community and development group, announced its expansion to Vietnam.
• Vietnam ranks as one of the top countries in the world for cryptocurrency adoption.
• The 30-year US Treasury note reportedly went "bidless" in a recent auction, indicating potential shifts in the traditional financial markets.

Questions Answered

What is the significance of Google showing Ethereum balances in search results?

Google's integration of Ethereum wallet balances in search results represents a significant step towards mainstream adoption of cryptocurrency information. This feature allows users to easily check Ethereum wallet balances without visiting specialized blockchain explorers, indicating growing interest in and acceptance of cryptocurrency data among general internet users. While currently a simple implementation, it signals Google's recognition of the importance of blockchain data to its users and could pave the way for further integration of crypto-related information into mainstream platforms.

How do stablecoins compare to traditional international money transfers?

Stablecoins offer a significant advantage over traditional international money transfers in terms of cost and speed. While the average cost of sending money internationally is about 6% (amounting to approximately $16 billion annually in fees), stablecoins, especially those on efficient networks like Solana, offer near-zero cost transfers. This makes stablecoins a clear use case for cryptocurrency adoption, particularly for remittances and international payments. The drastic reduction in fees and transfer times demonstrates the potential for blockchain technology to disrupt and improve upon traditional financial systems.

What are appchains and why are they significant for projects like Uniswap?

Appchains, or application-specific blockchains, are custom blockchain networks designed for a specific application or set of applications. They are significant for projects like Uniswap because they offer potential benefits such as reduced gas fees, greater control over MEV (Maximal Extractable Value), and improved user experience. By developing its own appchain, Uniswap could potentially reduce costs for users, increase transaction speeds, and have more control over the network's parameters. This could lead to a more efficient and competitive decentralized exchange, ultimately benefiting users and potentially attracting more liquidity to the platform.

How did the Mango Markets exploit work and what was the outcome?

The Mango Markets exploit involved a complex manipulation of the protocol's oracle and liquidation mechanisms. The exploiter took advantage of the illiquidity of the MNGO token by taking large long and short positions, then manipulating the token's price on other exchanges. This allowed them to borrow against inflated collateral value, temporarily draining about $100 million from the protocol. Notably, the situation had a relatively positive resolution, with the exploiter agreeing to return a significant portion of the funds to make users whole. This incident highlighted vulnerabilities in DeFi protocols related to oracle reliability and market manipulation in illiquid markets.

Why are oracles critical in DeFi and what risks do they pose?

Oracles are critical in DeFi because they provide external data to smart contracts, allowing protocols to interact with real-world information. However, as demonstrated by the GMX example, poorly implemented oracles can pose significant risks. In GMX's case, their oracle's slow update time allowed MEV bots to exploit price discrepancies, resulting in the loss of 10% of the protocol's profits over 40 days. This highlights the need for robust, fast-updating oracle systems to prevent exploitation and ensure the integrity of DeFi protocols. Secure and reliable oracles are essential for the proper functioning of many DeFi applications, from lending platforms to decentralized exchanges.

What is the significance of MakerDAO investing in US Treasury bonds?

MakerDAO's decision to invest $500 million in US Treasury and corporate bonds represents a significant shift in how DeFi protocols manage their treasuries. This move bridges the gap between decentralized and traditional finance, potentially leading to greater regulatory acceptance of crypto projects. It demonstrates a more conservative approach to treasury management, which could provide stability and diversification for the protocol. Additionally, this investment could be seen as bullish for the crypto space from a regulatory perspective, as it shows how on-chain activity can lead to increased demand for traditional financial instruments like US Treasuries.

How is the expansion of Superteam to Vietnam relevant to the crypto ecosystem?

The expansion of Superteam, a Solana-focused community and development group, to Vietnam is significant due to Vietnam's high cryptocurrency adoption rate and active blockchain community. This move demonstrates the growing global interest in Solana and the potential for decentralized communities to drive adoption and innovation. By establishing a presence in Vietnam, Superteam can tap into a vibrant ecosystem of developers, creators, and enthusiasts, potentially accelerating the growth of the Solana ecosystem in the region. This expansion also highlights the increasingly global nature of the crypto industry and the importance of engaging with diverse communities worldwide.

What career advice does the podcast offer for those interested in the crypto industry?

The podcast suggests that focusing solely on compensation at large tech companies (FANG) may not be the best strategy for long-term career growth in the age of crypto and Web3. Instead, they encourage listeners, especially those early in their careers, to consider building skills and networks that position them for asymmetric opportunities in the rapidly evolving crypto space. This might involve taking calculated risks, such as leaving traditional tech roles to work on crypto projects or freelancing to gain experience with blockchain technologies. The hosts emphasize the importance of being comfortable with volatility and the potential for high-growth opportunities in the crypto industry, rather than optimizing for short-term stability and compensation.