The web3 landscape has witnessed a massive jump in its active users in the year 2021 as compared to the initial years. Be it the NFTs, making Defi transactions, or activity with the metaverse in general, all have seen a massive influx of users and their activity clearly shows that the user adoption can only increase from here and it's happening at a speedy rate.

The era of transitioning from the early adoption phase to the mass adoption phase is currently underway and this is probably not a good time to have unnecessary barriers which we are facing especially while using DApps.

Before we jump to the current problems which the users are facing, let’s have a look at some statistics which shows us the active users in the DeFi space:

These numbers clearly point out how speedily the user base is expanding. But the question is, are we able to match this speed in terms of making it easier for the users to be able to use this technology?

We’ll come back to this. But before moving ahead, what are the problems that the users are facing right now? Let’s dive in.

1. Increased number of steps

The User Journey from 0 to 1 goes something like this while they are interacting with a DApp:

These 21 steps are enough to overwhelm someone who’s a non-techy and/or someone who is new to this space. While interacting with any web2 application, one has to follow a maximum of 5-7 steps and hence user adoption can be a major issue while switching from web2 to web3.

2. Complicated UX

Every interaction with a dApp is a blockchain transaction, and they still require significant user knowledge. Users need to be proficient in crypto wallets, understand gas, and how to properly estimate it so you don't overpay or underpay. They need to actively manage each blockchain interaction. Even then, they face failed transactions and long waiting times for transaction completion. High gas prices have become a major hurdle for most web3.0 users.

Layer 2s & scaling solutions come with their own UX issues. It becomes very difficult for a user to interact with the application across different blockchains. Also, not to forget that the users need to understand layer 2s and why they can't access their funds on dApps on these chains. They need to use bridges to send their funds to these chains. They also need to buy & hold the native token for gas to do any action. Onboarding to any of the scaling solutions is slow, complicated & expensive. Most bridges take hours to move your funds. As dApps scale to multi-chain architecture, the users bear the burden of added complexities. The multi-chain nature of web3.0 compounds the already existing UX issues.

3. Fragmented multi-chain infrastructure

The high friction in movement between various chains causes delays in the movement of value and does not offer an instant and seamless transfer of funds. And it's not the only value that has to move smoothly between these chains, the communication across these chains is also highly technical. DApps & users should be able to communicate efficiently across the whole multi-chain web in real time.

These high levels of friction between various chains, layer 2s & sidechains have currently caused fragmented liquidity & usage. This lowers the network effects & composability for the multi-chain web 3.0. The underlying infrastructure itself is disjointed, leading to users either enjoying Ethereum's network & composability or layer 2's cheaper & faster transactions, but not both.

Apart from the aforementioned issues, here are a few more:

• The necessity to pay a gas fee every time the user uses your application. Netflix does not charge you their AWS fees every time you watch a video, so why should dApps charge you gas fees for every interaction you do?

• Users can only pay in ETH, which they may not have at that moment. Or the user may not want to spend their ETH investment.

• New Users have a long & complicated onboarding process. Non-crypto-savvy new users have to pass KYC, purchase ETH from an exchange, download a wallet, then connect their wallet before they can go any further, which can take days! No one waits for days to try out an application.

• Proficiency in complex blockchain technicalities is required such as using MetaMask, signing transactions, understanding gas, etc. If the project is on layer 2, they need to know what that really means and be able to change RPC manually.

• Volatile and high gas fees further dampen the user experience on your dApp.

• Pending and stuck transactions can force your users to wait for minutes and even hours before they can carry on interacting with your application. And sometimes the transaction fails altogether.

Enters Biconomy

With a vision to make blockchain-based applications work seamlessly and conveniently for users, especially those who are new to the market, they are working on making this a reality where users can seamlessly be able to utilize the DApps and explore their potential to their fullest than focusing too much on the process.

They are designing such an experience for the user so that the user can focus totally on the core aspect which is the DApps. They aim to streamline the flow and make the user journey effortless as if one is adopting a new web2 product.

So what is it exactly?

• It is a platform that links users to a blockchain without requiring advanced technical knowledge to be able to perform transactions. Their relayer network is a collection of software development kits (SDK) and APIs designed to make the blockchain more accessible and understandable for everyone, regardless of their knowledge and experience. Biconomy can also be integrated with dApps and digital wallets.

• They can work seamlessly with any blockchain-based application without requiring much oversight on the part of operators. Apart from a sophisticated programming back-end, smart contracts also help make this setup possible. The metric we can look at to assess whether a platform is effective is just to look at how easy it has become for anyone to set up or use dApps.

• Through Biconomy, users do not even need to download digital wallets or buy cryptocurrencies from exchanges themselves. The platform has automated the whole process for its users.

• Their infrastructure handles gas optimization and transaction management as well. The parameter that the platform works with ensures that each transaction made in the platform is finalized as quickly as possible. They also factor in gas price fluctuations so users do not have to watch over them by themselves every single time.

Sounds great and interesting. But how is it going to achieve all of this?

Solution: A Multi-chain Relayer Protocol which unlocks the following superpowers :

A. Meta-Transactions

Meta-transactions let a third party (a relayer) execute a transaction on behalf of the user. The user just signs a message that contains the details about the transaction they want to execute. Then the relayer executes these transaction details on the desired blockchain, even paying the gas.

This way, the relayer manages the whole transaction for the user, shielding the user from complicated blockchain UX. The user doesn't need to own the native tokens. They don't need to estimate gas. They don't even need to pay the gas fee. They just need to click once to sign, and then the relayer ensures a 100% success rate handling everything under the hood.

Their Meta transaction SDK - MEXA mainnet is making this a reality.

This is where the gas costs are abstracted away from the end-user and are subsidised by a third party, in this case, it would be the DApp developer paying the gas fees. This is their core focus i.e. to build an efficient, scalable and secure solution that DApps can easily integrate to offer their users a seamless user experience.

Mexa is created so that both savvy and non-savvy crypto users, can get rid of all the annoying & technical steps involved when interacting with a DApp.

The Mexa integration solves the hurdles that DApp developers have been struggling with when increasing user adoption of their DApps. This means:

1. No need to install Metamask

2. No gas fees are involved for the end-user

3. Users do not need to worry about wallets and private keys

4. Accessibility to any pc or mobile browser

Integrations just take a few minutes without making any major changes in code.

B. Cross-Chain Transactions

Biconomy enable meta-transactions on a variety of blockchains & L2s. Thus, dApps on these networks can enable meta-transactions & gasless transactions for their users.

The Biconomy protocol also enables the flow of value & messages across different chains in an easy, affordable, secure, and decentralized way. Thus, users can instantly move their funds between various chains. They can also enjoy instant cross-chain communication & contract calls. The Biconomy blockchain contains verified information for a transaction on any blockchain X. This way the interaction between users and dApps on every chain will be seamless. Their transaction network is inherently multi-chain. It acts as the foundation for a seamless multi-chain infrastructure for web3.0.

They have introduced ‘Hyphen’ - an instant cross-chain transaction infrastructure that solves the critical problem of fragmented & isolated L2s by enabling almost instantaneous cross-chain value transfers. It provides simple APIs that lets you easily offer instant transactions between EVM (Ethereum Virtual Machine) chains, and various L2s & allows quick onboarding from Ethereum to L2s & sidechains.

• As a DApp scales to various scaling solutions, Hyphen provides easy access to inter-blockchain liquidity on supported EVM chains. Thus, the end user enjoys the network & composability of Ethereum as well as cheaper & faster transactions of layer 2s.

• Integrating Hyphen makes the multi-chain experience on any dapp frictionless. Currently, onboarding onto L2s is expensive, slow & complicated. Hyphen enables easy on-ramp to L2s through fast, cheap & gas-efficient inter-chain transactions.

• Moreover, scaling to a multi-chain architecture adds unnecessary complications for the end users. Hyphen ensures a seamless experience for your users as they navigate effortlessly between Ethereum & various layers.

The $BICO Tokenomics

$BICO is the native work & governance token of the decentralized multi-chain relayer infrastructure.

• Token Utility

$BICO plays a key role in decentralizing the network by acting as the network fees, incentivizing all stakeholders to secure and maintain the network, and participating in the network’s governance.

• Network fees

The Biconomy blockchain will act as a settlement and verification layer for all the activity on the Biconomy Network across all supported chains. The node operators pay a transaction fee in $BICO to add any information on the chain and they earn $BICO proportional to the work they perform on the network.

• Stakeholder incentives

1. Node operators (Validators and Executors) have to stake $BICO to start contributing to the network. They earn $BICO proportional to their contribution and their $BICO stake. The network can also slash its stake in the case of bad behavior.

2. Delegators are $BICO token holders who can stake their tokens to secure the network further. They earn $BICO proportional to their $BICO stake.

3. Liquidity providers can provide liquidity in a variety of crypto assets to the protocol’s liquidity pools on different chains. A small fee will be collected when a user uses the liquidity pools, which will be distributed to the liquidity providers. Apart from this fee, they will also earn $BICO in proportion to their relative contribution to a given Liquidity Pool.

Governance

$BICO holders can propose and vote upon decisions affecting Biconomy’s protocol and overall Network. Such decisions can include changes to the Network’s code, adding additional services, or decisions regarding the disbursement of its treasury funds. Any $BICO holder can submit a proposal for consideration by the wider Biconomy community.

Distribution: There are in total of 1 billion $BICO tokens in supply. The token allocation is as shown below:

Investors & Advisors:

Bicosystem

They have a growing Bicosystem of 70+ dApps. Some dApps that leverage Biconomy includes Zed Run, Perpetual Protocol, Dfyn exchange, Showtime, Idle Finance, Aavegotchi, Decentraland, and many more.

Community

Biconomy has a huge and active community with 65K+ Twitter followers, 21K+ Telegram members, and 100K+ members on the Discord server.

Closing Thoughts

Biconomy has a great opportunity to solve the most common and annoying problems that users are facing while interacting with DApps by leveraging its infrastructure and the ideas that they are working on. Their roadmap lays down their plan to build a partnership with more product providers, investors, and, hopefully, the entire crypto community, in developing more Web3 tools that complement their model. With the goal of crypto adoption, Biconomy will introduce many products that aim to help ease newbies into the crypto space.

Before diving into which DAOs to join or how to explore based on your interest areas, you need to understand that DAOs are permissionless. It’s extremely easy to join most of them by just entering into their discord, hold a token if they demand you to else you can just start contributing. You don’t need anyone’s permission to contribute. Just keep sharing what you can, show the proof of work or whatever skill you have, join them on their mission and you are in!

How to get in?

1. Find your Tribe

   It’s important to know which environment and group of people would you want to hang around where you can feel that you truly belong there. Usually, DAOs have their communities on either Discord or Slack and once you join, you can check out the channels, the work being done, who are the members and contributors, etc. Check the vibe - see what kind of interactions are people having, ask yourself if you’re able to develop a connection or at least any inclination towards them?

2. Go through the ‘About Us’ section or their Charter

   DAOs have a specific purpose due to which they exist. The members believe in a certain set of ideas where they work together to attain a common goal. To get a gist of this, you should read what the DAO is about, what do they believe in, what are their core values, etc. so that you don’t have any unrealistic expectations and have a clear idea of which community are you joining. It also talks about members' rights and responsibilities, as well as the correct procedure for proposals, elections, and voting.

3. Choose your discipline

   Some common roles that exist in most of the DAOs are (a non-exhaustive list):

   • Community Management

   • Business Development

   • Designers/Artists

   • Developers

   • Treasurers

   • Product Managers

   • Writers

   • Governance

   • Marketing and PR

   • Operations

   • and more...

   Having a clear idea of the role that you can pick up accelerates your progress in a DAO along with improving future prospects.

4. Getting Involved

   Once you get in after checking out what the DAO is about, you need to start getting involved. You need to identify the goals that you want to achieve staying there. What skills/deliverables can you provide which can help the community grow? How much time can you dedicate to community projects? What community calls/events should you pay attention to? Which projects/initiatives attract you and where you’d like to contribute the most?

   These are some questions that you might need to answer before you can start getting involved.

   After you have some answers to these questions, start socializing. Talk to members, and contributors, and be like a kid who’s exploring a new world. Get to know how things are working there. Chat with them on DMs, set up a call where you can ask your doubts, and get some ideas about what you can do. Join community meetups, introduce & interact with people to get the context of the ongoing projects.

5. Acquiring Tokens

   In order to vote for any proposal or participate in a decision-making process, you need to have some tokens that a DAO issues. In some DAOs, decision-making can be open but in others, it can be gated. Your voting power might also depend on the number of tokens that you hold. One can acquire tokens by either:

   • Purchasing from an exchange

   • Completing some bounties or tasks for which the DAO awards tokens

   • Participating in a funding activity that gives you access based on your level of contribution.

Getting Paid by DAOs

From earning in fiat to earning in crypto and getting some ownership is something that makes the ecosystem super exciting. Earning ownership in communities or protocols can create an insane level of advantage in the longer run. Let’s explore the ways in which you can do so:

• Grants:

  Members or anyone who can build game-changing products or offer any valuable service are awarded grants in order to support them and promote them. Many DAOs like Compound and Aave have pools to distribute grants to these amazing builders so that they can continue to grow the space.

• Full-Time roles:

  Just like traditional companies, DAOs offer full-time roles but one requires to prove themselves with some solid proof of work to grab an opportunity like this. They are usually paid in stable coins like $USDT, and $DAI and sometimes they are also paid some bonuses. Compensation for such contributors can go to millions.

• Bounties:

  These are some specific, standalone tasks that allow not-so-regular or new individuals to get a taste of the space. If they add some solid value or complete the given task in the best way possible, they are declared winners and are compensated(in native tokens) accordingly. Examples: Layer3, SuperteamDAO, Gitcoin, etc.

  Bounties help the ecosystem grow rapidly since many members participate in it, but their work out on the internet is consumed by various people around the world.

• Revenue Sharing:

  Suppose a DAO launches a merch, NFT project, service, or any product, and they generate revenue, the community members get a cut from this. The proceeds are distributed amongst builder(s), contributors, and members, and some part is allocated towards the treasury. This happens in a few DAOs only right now but we could definitely see more DAOs following in the future.

Joining a DAO and contributing has infinite upsides and zero downsides. Just a few hours of volunteer work can open up some huge opportunities plus rewards in the web3 space. Only time will tell how things will unfold further but surely there’s a lot to come.

https://twitter.com/banklessDAO/status/1443975776978837533?s=20

Where some DAOs require you to own some tokens (proof of stake) in order to be a verified member, others require you to contribute (proof of work) and earn your place in the DAO.

Broadly, there are 2 categories of DAOs: “Technically-oriented” and “social-oriented”. Technical ones are solving problems by building in the crypto space. Their operations are usually on-chain. Social ones gather people and contribute in all the non-technical ways. Here, governance is usually off-chain.

But there’s no line that strictly separates them. Both of their components can function on either side. There’s a wide range of sub-categories of DAOs from which you can choose. Depending on your interest area, alignment with the mission, and the “tribe” that you're looking for, you can do some research, start contributing and be a member of the DAO. In this guide, let’s go through the types.

Social DAOs

Social DAOs gather people with shared interests, where the members can be both - friends and co-workers. Social DAOs focus on social capital since the goal is to create a strong community. They have strong beliefs in something specific and being surrounded by those who have these shared beliefs gives them power and owning a token gives them the confidence of having skin in the game. They may also extend from digital relations to real-life events where the tribe meets and hangs out.

Examples: Friends With Benefits ($FWB), Radicle ($RAD), Cabin, etc.

Protocol DAOs

Protocol DAOs transfer the power and control of the protocol from a core team to its community. The community issues a token that lets its members propose, vote, and implement any changes to the protocol or decide on how should it evolve in the future. It also involves token distribution and allocation.

Examples: MakerDAO ($MKR), Compound ($COMP), Olympus ($OHM) etc.

Grants DAOs

In order to support impactful contributors and promote the web3 landscape, Grant DAOs donate funds and promote them by opening various avenues for them.

Examples: MolochDAO, MetaCartel Ventures, etc.

Investment DAOs

In this, the community works together by pooling and getting into projects which have good potential. They raise funds to invest in digital assets which could be domain names, blue-chip NFTs, early-stage crypto startups, etc. The decision-making is democratic and they have a focus area where they tend to invest.

Examples: Constitution DAO, Flamingo DAO, The LAO, Metacartel, etc.

Media DAOs

These are the DAOs that produce content collaboratively. The community members decide on the type of media they want to focus on, brainstorm about the topics, and the rewards are shared across the community. The media that is created has collective ownership, identity, and experience.

Examples: Bankless DAO, Forefront, GCR, etc.

Service DAOs

These DAOs are responsible for talent allocation to the web3 projects. They create working groups of individuals who are directed to work on a certain project. In return, they are paid usually in ERC-20 tokens. Service DAOs act like talent aggregator agencies that target a niche and work on specific projects.

Examples: DAOhaus, Yam Finance, HoneyDAO, etc.

Collector DAOs

These DAOs gather contributors around collectibles such as NFTs and focus on accumulating them. They collect NFTs that they don’t intend to sell at least short-term and they try to create a cult or a fandom around it. They collect pieces (s) of specific artists or platforms and support them by holding and creating a strong affinity with them.

Examples: PleasrDAO, Meebits, SquiggleDAO, etc.

Gaming DAOs

Gaming DAOs can be divided into 3 broad categories:

• Gaming Guilds

  These DAOs invest the funds which are shared by the community into acquiring digital assets in games. These assets can be held for yield generation, sold for profits, or simply held as growth investments.

  Examples: Yield Guild Games, GuildFi, Unix Gaming, etc.

• Incubators & Accelerators

  These DAOs are focused on growing the web3 gaming ecosystem as a whole by sharing their expertise with founders, funding promising new ventures, and supporting tools and tech solutions that can potentially benefit all web3 games.

  Examples: Gamestation, Game7, DivineDAO, etc.

• Developers

  These DAOs actually work on building games in the web3 world. The community voices their opinions while the game is under development and they share a common idea about the game as a whole.

  Examples: Aavegotchi, Star Atlas, DopeWars, etc.

DAOs can exist beyond these categories or they can fall into multiple categories. The space is expanding rapidly and only time can tell how these will evolve and modify themselves to adjust to the current society.

D - Decentralized (free from a centralized authority, one which is online & global)

A - Autonomous (independent of governments or private sector entities)

O - Organisation (coordination & collaboration around shared objectives)

More than just being a community, it

• is a commitment to share value to be able to achieve an objective that it intends to.

• gives an equal opportunity to their members to voice out their opinions through governance.

• flattens the hierarchy and streamlines the work processes.

• allocates resources to achieve a core mission.

What differentiates a DAO from a traditional company?

• There is no CEO/VP/Director etc. Instead, there are Guild Leaders/Captains and Core Contributors and no one reports to anyone specifically.

• Unlike a company, it’s accessible globally with minimum to no entry barriers.

• Since all the actions and funding are visible and can be verified by anyone, a DAO is more transparent and every member has an equal amount of information.

• A DAO has a treasury and issues tokens to the contributing members.

• To be a member of a DAO, one needs to own a 'token' which is issued on a blockchain as Ethereum which acts as a digital membership card, enabling access to gated content, voting rights, and other benefits.

• Members can join a DAO and choose to contribute in a way they find most compelling. The members choose the work on their own that they wish to do depending on their capacity and availability and they self-organize.

• As the system is permissionless, the members can start contributing right away to gain the trust of core contributors.

• Contributors may work part-time or full-time depending on how serious their role is and are compensated through DAO tokens or other cryptocurrencies.

• While decision-making, the members submit proposals and vote on them using DAO tokens in public.

One thing to note here is that DAOs are unregulated but there are still rules which are formed by the community, for the community. Initially, one will see some regulations which the contributors set while establishing the DAO but soon when the community grows, its members can vote/send proposals for the decision making if and when needed.

Possible issues with a DAO

• No legal protections exist outside the rules outlined by a DAO.

• In some cases, the decision-making might slow down since every time the proposals have to be passed and then only a decision can be made. Progressive decentralization can be followed where a DAO can become decentralized over time.

• Each and every member might not cast their vote while proposing a change. Also, there’s an option of delegating the votes where other people may vote on their behalf but they might not be best suited since their beliefs might be different from the other individual.

• Since most of the DAOs can be joined by anyone, there may be high noise and low signal. In this case, the DAO can make it a gated community by introducing some sort of screening or minimum token holding.

Note: There might be some DAOs that already have solved these issues. The aforementioned issues cover the scenario of most of the DAOs currently, hence they’ve been shared here.

What is it, how does it work and what's happening with Tezos?

A thread 🧵

The most dominant and widely adopted blockchain is Ethereum at the moment. Solana is proving to be a great alternative day by day due to its speedy and extremely low-cost transactions.

But there's a dark horse that needs to be highlighted and talked about and it's Tezos.

Before proceeding, whatever problem a team is seeking to solve might very well be solved by the Ethereum Layer 2 solutions (such as Immutable X, Polygon, etc.) or by other blockchains like Solana.

This post is just to bring some highlights on Tezos and talk about its features.

Tezos is a self-amending blockchain which means that it can upgrade & develop itself whenever needed.

Upgrades and amendment processes are done in the core protocols of the blockchains with time.

In Tezos' case, the people who own & stake it have a say in its amendment process as it gives them the voting power.

It follows a liquid-proof of stake method which allows the stakers to liquidate any time they want without having any lockup period.

Recently they've had a big update which is the Granada upgrade.

But why is it a big deal? Because it has brought down transaction costs by 3x to 6x and has also decreased the block formation time from 60 to 30 seconds ( Ethereum has 12-14 seconds tho )

In terms of flexibility & easy upgrades, Tezos clearly wins since most of the blockchains use a fork-based governance model that involves asking people to take some action from their end like upgrading their software & it slows down the process while adopting new changes.

But Tezos has an on-chain governance system that involves self-amendment which lowers the cost of upgrade and speeds up the process significantly.

No hard forks are involved here since the main chain is upgraded and it doesn't create multiple versions of the blockchain.

BTC & Eth went thru hard forks & hence today we have BTC Cash & Eth from Eth Classic.

Lastly, it offers an open-source platform to form tokens & DApps. It has a Formal Verification Mechanism that offers strong security & it ensures the smart contract works as it is intended to.

Apart from the tech, Tezos has had a roller-coaster ride till now. From having some disputes in the top management after having their ICO in 2017 to concluding a lawsuit last year, Tezos has had a troublesome time.

Check out the whole story: https://hackernoon.com/the-curious-tale-of-tezos-from-a-232-million-ico-to-4-class-action-lawsuits-6f411b7aad7e

It will be interesting to see how things unfold ahead. We see Tezos NFT platforms like Hicetnunc, Kalamint, OneOf, etc, and wallets like Galleon, Kukai surfacing recently and they have the potential to grow from where they are right now.

Thanks for reading folks!

The elves at @elf_DAO are making this happen. Here's some info about the cause and how you can contribute 👇

For kids around the globe, the holidays mark some of the most special days of the year. However, there are many kids that don't get to celebrate the holidays as we do 🙁

elfDAO has launched a 12-day fundraising campaign for the first-ever Web3 toy drive 🤩

They want to raise $1,000,000 USD. At $25 USD per gift, their goal is to give 40,000 kids a gift this holiday season.

Why care in the first place?

Because it can make some kids happy. If you would like to see a smile on some faces & make them feel they are as fortunate as other kids, it might make their day.

Any amount can do but contributing more will earn you an NFT, more on this below

The core team coordinates to drive key efforts across the DAO and lay the structure for governance to enable DAO community-driven decisions.

The people listed as signers on the Multisig are responsible for the transfer of funds.

All contributors will receive governance tokens proportional to your donation size, at a 670k $GIFT/ETH ratio. Governance tokens give you voting power within elfDAO, meaning that you’ll help decide how their funds are spent.

The core team will receive 33% of the governance token supply as donations flow in through Juicebox. This will be used to make sure that the team has a meaningful say in governance.

After the project ends, the core team’s token allocation will be burned 🔥

To thank the contributors for their generous contributions, they'll be offering thank you NFTs for contributors to mint. The eligibility to mint the NFTs varies based on their Juicebox contribution amt.

There will be three NFTs available to the public: Santa, Reindeer, & Elf

If you donated 0.1 ETH or more, you'll be eligible for an Elf NFT token 🧝

If you are one of the first 970 contributors to donate 0.5 ETH or more, you'll be eligible for a Reindeer NFT token 🦌

Their Santa NFTs will be airdropped to the top five contributors to their Juicebox at the end of the fundraising period 🎅

How you can contribute?

Donate: Donate any amount of ETH on Juicebox!

Contribute to elfDAO: If you love their mission and want to help make it a reality, hop onto their discord! They'd love any support in dev, marketing, partnerships, PR, and legal matters.

Join elfDAO: https://join.elfdao.com/

Spread the word: Tell your friends, share on Twitter and other social media, add their emojis (🎄,🎄) to your bio, and spread the holiday love! To read about their cause in detail, please read: https://elfdao.com/about

@OlympusDAO has recently announced their Version 2 and it's a massive leap from their previous version.

Why is it a big deal? Why to even migrate from V1 to V2? What all do you need to know?

A thread🧵

Why migrate? Let's break it down:

2 new features are introduced under V2. They are:

• On-chain Governance

• Auto-Staking of Bonds

Under On-chain gov, the stakers will take full control of protocol contracts which will occur in phased roll-out.

How will the process take place:

On-chain governance will occur through the gOHM token & users can now stake directly into/out of gOHM, which will save their time and gas.

Now, looking at the upgrades that Bonds have gotten:

• Bond payouts are staked at the time of purchase. Rather than requiring bonders to factor in missed rewards when considering a discount, they are now earned by default.

• Bonds no longer vest linearly. Instead, bonders must wait until the end of their term to redeem.

• New bond types are created as isolated offerings. Each bond has a max amt of OHM that can be paid or a max amt of principal that can be purchased and, once exceeded, the bond is retired.

• Bonds can be held as NFTs.

• Bonds can be fixed-term or fixed expiration. Fixed-expiration means the maturation date is the same for all who buy that bond.

• Bonds offer a front-end reward: Incentivizing third-parties to run front-ends for Olympus.

Okay so that's the new stuff but what'll happen with all the tokens?

Let's first sort the nomenclature a little:

OHM: The main tokens sOHM: Staked OHM tokens wsOHM: Wrapped, Staked OHM tokens

We are aware of the above ones. But what comes under V2? gOHM: Governance OHM tokens

So,

1. the wsOHM V1 will be replaced by gOHM. They function exactly the same, but gOHM is set up for on-chain governance.

2. OHM and sOHM tokens will have their identical V2 counterparts. OHM V1 becomes OHM V2, and sOHM V1 becomes sOHM V2.

3. Token tickers will remain the same for V1 tokens. For example, after migration, your wallet will show "OHM" instead of "OHM V1".

Make sure to update the token contract in your wallet with the V2 addresses to show your balances.

1. When migrating OHM V1 and/or sOHM V1, you will get gOHM in return. Although the token balance will be different, the dollar amount remains the same.

2. After the migration, OHM V1 pools such as OHM-DAI will utilize OHM V2. This applies to new bonds as well.

An example of how much gOHM you can expect from the migration:

Other important points to note:

1. Enabling V2 will require migration to a new set of smart contracts. The migration will replace all existing contracts, including the OHM token.

2. One will have a window of ~2 months to migrate without missing rewards. After this window, you can still migrate; however, some rewards will be forfeited.

3. Migrating will be a single transaction and it won't cost much more than staking.

4. If you don't migrate, you don't get to enjoy the new features introduced by V2.

5. You can either migrate all your V1 tokens (i.e. OHM, sOHM, and wsOHM) or none at all.

6. You can't switch back from gOHM to V1 tokens through the migration tool.

7. In V2, you can purchase multiple bonds of the same type without resetting the bond vesting period.

   The process of claiming rewards & staking will be automated. The bonders will receive their entitled sOHM at the end of the vesting period.

8. Your gOHM will still earn rebase rewards. It is because the price of gOHM is tied to the Current Index:

Every rebase event will cause the Current Index to go up, and your gOHM is worth more as a result.

Lastly, regarding the migration process, it requires two steps: one to approve the contract for each of your V1 tokens, and another that actually migrates all your tokens to gOHM.

Each V1 token type requires its own approval step. For example, if you have OHM V1 and sOHM V1 in your wallet, you need to perform two token approvals, but only one migration operation (3 transactions in total)

OHMies, so these are all the necessary updates regarding version 2 and I hope this will give a clear picture of what's all there in the update. Thanks for reading! :)

As we talk about the various use cases, one concept that strikes is DeFi and its applications. I recently came across an interesting borrowing protocol that is built on Solana called the Hubble Protocol.

What is it?

As stated on their website, Hubble helps you to “Maximize your portfolio efficiency while your funds are deposited. Your crypto continues to earn the best yield available. You use USDH across the Solana ecosystem”

It is a borrowing protocol built on Solana that is designed to allow long-term holders of crypto assets to unlock liquidity, increase capital efficiency and earn yield at the same time. The users achieve this by taking out a zero-interest loan against their multi-asset collateral, with no recurrent interest payments, or maturity. There will be a small upfront fee and, in turn, users will receive USDH, Hubble’s native dollar-pegged stablecoin. The great part is that USDH can be deployed across the whole Solana ecosystem.

Whoa, that was a lot of complex information, let’s break it down by understanding their features one by one:

Features

Multi-asset collateral

Suppose you are having crypto that you don’t want to sell, you can deposit them as collateral and get an interest-free loan in USDH (more on this below) to invest in some other asset.

One can deposit collateral such as SOL, BTC, ETH, RAY, SRM, FTT or any combination of those assets and get your loan. The maximum loan one can get is up to a 110% collateral ratio; where the collateral ratio is calculated as CollateralValue / LoanValue. If the coins drop, your collateral ratio might go below 110%, in which case you will get liquidated. You lose your collateral, but you don’t have to pay back your debt anymore!

Zero-Cost and Earning yield

If one wants to increase their leverage in the market, one can deposit some funds in SOL or other cryptos and then take a loan. With the loan, one can buy some more SOL and deposit them and rinse and repeat. One can increase their collateral (SOL, ETH, etc.) exposure and gain up to 11x leverage, without incurring continuous borrowing costs. There’s only a one-time fee of 0.5% to take a loan.

While one waits, Hubble with their partners, deploy your collateral and earn yield for you.

Hubble (HBB) stakers earn 100% of fees generated by the protocol

To be able to earn along with Hubble, one needs to stake HBB. It is Hubble’s native value-accruing coin. Stakers of HBB receive the fees from anything issued through Hubble, whether that is a loan, a derivative, or a structured product. HBB is also the governance token for Hubble, allowing users to propose and vote on directly executable chances to the protocol along with other governance activities.

HBB stakers earn 85% of Hubble’s revenue. The other 15% is directed towards Hubble's treasury. Once Hubble decentralizes governance and forms a DAO, the community will be in charge of the treasury and may amend these figures.

We came across USDH many times, so what exactly is it?

USDH is a Solana-native SPL token that can be used for anything stablecoins are used for in DeFi: pairing for liquidity on AMMs, bonding for tokens, or being held as a store of value. It is the Hubble-issued stablecoin pegged to USD at 1:1, backed by a basket of crypto assets including SOL, BTC, ETH, RAY, SRM, and FTT. Hubble achieves a peg within 1.005 and 0.995 at all times due to Solana’s scaling. USDH is always backed and over-collateralized by crypto assets. It’s designed to be used anywhere in the Solana ecosystem.

The minting and redeeming mechanisms combined with bots and Solana’s extremely fast speeds and low costs means USDH will remain strongly pegged to USD while providing arbitrageurs and HBB stakers a consistent stream of revenue.

But, why use Hubble?

It’s simple, to make your funds work for you. This is how you can do it:

1. Keep upside to your collateral while earning yield elsewhere

   Take a loan in USDH and invest it in other protocols paying yield for stablecoins. Return to Hubble and pay back your debt. At the end of the process you have your collateral back and the profit from your stablecoin. If your collateral has increased in price, you have benefitted from that price action as well.

2. Earn yield on collateral without being blocked

   Solana DeFi allows you to take a loan against yield-bearing collateral. For eg., you can deposit SOL or mSOL and still take a USDH loan. When depositing SOL, Hubble will delegate it to PoS yield staking protocols (such as Marinade) to earn yield. For BTC, ETH, they will delegate it to partner lending platforms. All this time you have control and can change the yield strategy or withdraw your collateral. All the yield earned is yours, Hubble does not take a cut.

3. Earn from democratizing liquidations

   If you deposit USDH into Hubble's Stability Pool (which helps keep the platform healthy by guaranteeing loans are repaid) then, as a reward, Stability Pool providers earn the ~10% difference from liquidated accounts.

   Users who deposit USDH in the Stability Pool also earn HBB rewards at a constant rate.

4. Earn fees from the protocol

   Hubble is a fee-sharing protocol, and 85% of the platform's fees are distributed to users who stake HBB. The more USDH is minted or redeemed, the more HBB stakers can earn. In the future, additional services and products will generate even more revenue for HBB stakers.

5. Hubble doesn’t charge interest and doesn’t require a payment due date, so you are free to repay the same amount you borrowed at any time. Your debt will never increase unless you borrow more USDH.

6. With other borrowing platforms, you will watch your debt increase over time. However, with Hubble, you can watch your deposit amount increase over time by choosing a yield strategy for your tokens while you borrow. Your debt remains the same, but your collateral value increases, and in the future Hubble will explore making self-repaying loans a feature.

Product Roadmap

Hubble’s roadmap has been broken down into 3 phases. Currently, the project is in Phase 1 and working towards Phase 2.

• Phase 1 is the borrowing protocol, designed to allow holders of crypto assets to unlock liquidity, increase capital efficiency and earn yield at the same time.

• In phase 2, which is estimated to launch in Q2 2022, Hubble will introduce structured products like capital-protected notes by combining PoS yield and options.

• In phase 3, Hubble will introduce vanilla lending and undercollateralized bond issuance that could further bring DeFi use cases to the mainstream.

Tokenomics, Governance & Distribution

Hubble will begin as a centrally controlled platform and move slowly towards full decentralization, a situation where decision-making and protocol changes are handed over to the community. There will be two types of proposals the community will vote on:

• Executable code proposals will be the majority of the proposals, implemented by the community and, upon successful voting, will be swapped out for the old programs.

• General directive proposals will happen once a quarter where part of our developers’ time will be dedicated to community-driven decisions, subject to the previous quarter’s directive being completed.

Governance will follow the model of community implementation and community voting. Voting power at first will be conferred holding HBB holders, but they will slowly be granted by also owning USDH, providing Liquitidy Pools for HBB or USDH, or holding having an open Debt Position.

Users with at least 0.5% voting power will be able to vote or delegate their voting rights and propose changes. After a 7 days period of voting and debate, using their Governance forum and Governance platform, a proposal can succeed and be automatically queued up for going live.

Community

Hubble has an active community with 19K+ Twitter followers, 7K+ Telegram members, and 8K+ members on the Discord server. They also have their Substack and blogs on their website which are super clarifying and rich in information. The community and the team overall are helpful and very responsive.

Hubble is backed by a long list of credible investors like:

Product Walkthrough

Hubble is only available on the web currently. There are no iOS or Android apps. Their website has a clean and intuitive user interface that is easy to follow. There are 6 self-explanatory tabs at the top.

Go to https://dev.hubbleprotocol.io/, use the connect button to connect to a Solana wallet (I used Phantom, but in total 7 different wallets can be used). After you approve the wallet connection, you’ll be able to see all the data linked to your wallet.

Closing Thoughts

With such a wide range of benefits and features plus the ease of usage that the protocol offers, Hubble Protocol will go a long way and it is just getting started. As thousands of users are adopting to use and build on top of the fastest blockchain - Solana, Hubble is setting itself in the early stages with a high-value product. When the mass adoption will start to happen which might be just around the corner, Hubble will be ready for both, beginners and advanced users and it will serve as a revolutionary borrowing and staking platform with lots of more upcoming features, all built on Solana.

This usually happens in minutes and unlike day trading or swing trading, one doesn’t wait for particular price action.

It happens due to the concept of liquidity variance. There’s some variance in the prices of the assets on different exchanges and using that to one’s advantage is what arbitrage is.

But how does it happen?

A bunch of people use exchange A and another bunch of people use exchange B for buying and selling their assets. The trade demand & supply is different on both the exchanges, the bid-ask everywhere is slightly different and hence the prices differ.

Simple arbitrage trading works with small amounts only and it can’t continue to work infinite times. This is because :

You are buying from market A and selling to market B. This way, you create more demand in market A because of constant buying from there (creating scarcity) and more supply in market B because you are selling all of it there (creating a surplus). A point will come when the prices of the asset on both markets will almost be the same and the profit earned will be negligible. Also, not to forget the transaction fees which vary on each exchange.

A lot of potential arbitrage opportunities exist on smaller exchanges with relatively new, less developed tokens.

Now let’s move to a little advanced but exciting concept of triangular arbitrage. As the name suggests you might get the hint that there are 3 different currencies involved here. For this example, let’s take USD, Uniswap & Ethereum. It goes something like this :

• Buy Uniswap using USD

• Trade Uniswap with Ethereum

• Sell Ethereum

Seems simple but how do you actually make money?

You make money from the UNI/ETH exchange. This specific exchange tracks the price of these assets in relation to each other (Uni & Eth). There are three pairs of currencies here:

• USD/UNI

• UNI/ETH

• ETH/USD

Now, talking about some numbers which were picked while I was making this post,

USD/UNI rate: $16.88/uni

UNI/ETH rate: 237 uni/eth

ETH/USD rate: $4045/eth

Let’s say you have $1000 at the start and you buy Uniswap tokens.

• You get 59.24 UNI

• When you trade these 59.24 UNI with ETH, you get 0.25 ETH and

• When you trade this ETH with the USD, you get $1011.

So you made a profit of $11 which seems pretty less after so much hassle but prices change every second and it also depends on what exchange you use.

Now practically doing this all day long isn’t very realistic and hence crypto trading bots exist which do this task automatically.

Some important aspects to consider here are:

• Your timings of buying and selling

• Which exchange do you choose

• Taking the exchange fees into account

as being careless might make you lose money rather than making anything especially because of the fees.

That’s the end of this article, hope it was helpful in making you understand the concept. This thread by no means is giving any financial advice and it’s just for learning purposes only. As always, DYOR and WAGMI.

1/n It's a massive upgrade to Ethereum that we have now so that it becomes more SCALABLE, SECURE & ENERGY EFFICIENT.

Explaining these further :

SCALABLE: Current Ethereum blockchain can handle 15-45 transactions/second & hence, one has to pay a massive 'gas fee'.

2/n Now, what's a gas fee? A fee that you have to pay to make a transaction on Eth blockchain. It ranges from $50 to around $200 depending on the level of traffic on the chain.

But why do we have to pay this fee?

3/n Because right now there is extreme traffic on the Ethereum blockchain and this fee is to compensate for the energy required to process those transactions.

The upgrade would be able to handle up to 100,000 transactions/second or more, a massive increase.

4/n SECURE: The upgrade aims to be resistant to 51% attacks and offers a greater shield against them.

Understand that '51% attack' is a special kind of attack where miners try to take control of the network's mining rate and prevent other miners to take part.

5/n The protocol will automatically destroy their ETH if they tried to attack the network.

ENERGY EFFICIENT: Currently Ethereum is using the Proof of Work mechanism which is using tonnes of energy. It aims to shift to a Proof of Stake model soon which will tackle this issue.

6/n PoW and PoS are little complex topics and I'll dive deeper into them in another tweet. It will also cover points like Staking, who are Miners, Validators, and more.

For now, let's understand PoS only in simple terms.

7/n It means that a person can mine or validate block transactions according to how many coins they hold. This means the more coins owned by a miner, the more mining power they have. This is done so that you can be chosen as a validator who can produce a block and earn rewards.

8/n Eth2 introduces something called 'Beacon Chain'. What is it?

• A huge blockchain introducing the PoS mechanism to Ethereum.

• The backbone of Eth2.

• Responsible for selecting validators.

• A bridge between the current network & 2.0

• Will coordinate the entire network.

9/n The next concept being introduced is 'Sharding'. It basically means to divide or split the database into multiple portions(chains) so that the load is distributed.

Why is it being done?

• To reduce network congestion.

• Increase no. of transactions/sec

10/n These new chains are called shards. There's only one shard right now and the upgrade aims to have 63 more shards. Our current blockchain will become one of the 64 shards when this happens.

This process of merging 1 + 63 chains is called Docking.

11/n You might come across the term 'Merge'. The current chain that is being used is called Mainnet which is using PoW. The Beacon Chain which is using PoS is running in parallel to the Mainnet. When these will combine, it will complete the Merge.

12/n So, this is my attempt to make you understand the new Ethereum upgrade that will complete by 2022.