EPISODE 27: 1INCH and UNI (War is based on deception. Sun Tzu)

EPISODE 27: 1INCH and UNI (War is based on deception. Sun Tzu)

By SirGerardThe1st | Tokenomics | 9 Jun 2021


Many have probably not realized it yet. But we are at war.

It is a war that has no stealth bombers and no satellite missile guidance. Fortunately. But it is just as destructive. From both sides.

The war began in January 2009, but few realized the enormous disruptive process that was underway. In those days, it was just another little game for nerds and cyberpunks having fun on the deep web. "It's okay, the corporate-banking-government system is rock solid, let them have fun, they are harmless."

But ten years later they found out that they stayed in ZugsWang (see my previous post-Episode 26). ZugsWang is a situation that occurs in a game of chess when a player is forced to make his/her move, but whatever move he/she can make, his/her situation will get worse).

Seeing that it is no longer a little game and that cryptocurrencies are beginning to be accepted by large and small players in the market, and that in several countries citizens are beginning to use cryptocurrencies for their daily expenses, instead of using the mandatory printed toilet paper by their central banks, and that several countries are already thinking about making cryptocurrencies legal tender, ah, now yes, we are being attacked, so let's start with retaliation.

Well, war is based on deception. The first thing governments think about is to start "misinforming" through the mainstream controlled by corporations whose future is also uncertain thanks to decentralization. In this sense, they launched a great disinformation campaign that scared the common man who knows nothing about technology. Then the harshest measures began, prohibitions, persecution of miners, use of media figures like Elon Musk and others to discredit the crypto-sphere, and also the use of highly ignorant mercenary journalists, who, precisely based on that ignorance, write notes by all the big media saying that the crypto sphere is a casino, at best, a lottery in which some whales have fun and the fools put the money.

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Imagen de OpenClipart-Vectors en Pixabay 

War is based on deception.

Suddenly, governments and corporations have become aware of the environmental damage caused by carbon emissions. They all became Greenpeace fans, almost religious mystics in defense of the environment. A veritable gang of hypocrites, having preyed upon the planet for over a hundred years in pursuit of shareholder profitability.

It's ridiculous to think that because China bans Bitcoin mining, Bitcoin mining is going to disappear. What is going to happen is that there will continue to be Bitcoin mining, clandestinely in China, and in a "legal" way in other countries of the world that do not have dictatorial regimes and that the miners will be gladly received.

I read that in China they will not let transgressor miners leave the country, and that, furthermore, they will not be able to access a loan!!!! We are back to the Berlin wall. In the Blockchain era!

Well, actually, what criminal miners are not going to be able to borrow is a toilet paper-nominated loan issued by a retail bank, but in the crypto-sphere, they are going to be able to borrow all the loans they want. They will be very well received, and we will not have to explain to a miner how to ask for a loan in the crypto sphere. This is the ignorance of the authorities, they have not yet understood how the cryptosphere works. In reality, Bitcoin is teaching economists and governments how money works.

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Image by my best in collections - see and press 👍🔖 from Pixabay 

The economy works on its own, far beyond dictators. And the corporations, which love dictators, cannot do anything about the new generations who do not want more toilet paper printed by governments. Toilet paper printed by central banks is debt. Young people do not want to receive more “debt” for their work, as their parents and grandparents accepted. Young people want to receive “assets” for their work, such as cryptocurrencies.

But still, we shouldn't expect market forces to reorganize Bitcoin mining and other crypto projects. We have to act like Satoshi Nakamoto did without asking anyone's permission.

What we have to do is, taking into account that war is a hoax, then we too cheat.

We would have to coordinate to launch false projects and make all authorities aware of them soon and make them confused as much as possible.

We would have to infiltrate some of our own into governments and corporations and misinform from within the monster. The confusion is on our side because the officials' technology ignorance is total. They can hire hackers because they can print money and pay them, but are those hackers going to want to work from the corporate-dictatorial side? Or are they going to prefer to work on the side of decentralization so that, when it corrects their still gross imperfections, it allows them to live in a world without dictatorial hierarchies?

What is our responsibility to future generations? Accept conservative forces that say the crypto-sphere is a lottery? Or accept that we are at war and attack the enemy?

The enemy is a system that caused that, in the last 100 years, 1% of the world's population has more money than the remaining 99%. This system is clearly indefensible and must be destroyed, not modified, but destroyed.

BTW, I would like to have heard some comment from Steve Jobs about Bitcoin or the crypto sphere in general. He left us a while before. I can guess what he would have said. Surely he would not be aligned with a corporate and government buffoon like Elon Musk.

This blog of mine, Tokenomics, was conceived as a way to show weekly what is being worked on in the crypto-sphere, where the technology is going, what are the new challenges facing technological development. It was never intended to discuss the price of Bitcoin. Sadly, many pretend that the crypto-sphere is Bitcoin, and that's very sad. But it is logical that it happens, taking into account that we are facing a dramatic change that breaks the roots of the structures that have been frozen for decades by despots and slaves of money.

So many things we can do. Are we going to settle for what ignorant mercenaries disguised as "financial journalists" say, or bullshitters like Musk?

What are we going to say to our grandchildren when they ask us “grandfather, what did you do to end the dictatorship?

 

With that said, let's move on to today's two tokens.

 

1INCH

https://1inch.io/

Rank CoinGecko #118

1INCH is a company founded in 2019, during the ETHNewYork hackathon. 1INCH encompasses two very important solutions in the crypto industry, on one hand, a DEX aggregator in 1inch.exchange, and on the other, the liquidity protocol of 1INCH, Mooniswap. This combination of functionalities makes it one of the most promising projects on the crypto scene at the moment.

Mooniswap was launched in August 2020. According to the 1inch team, Mooniswap is the next generation of an automated market maker with virtual balances that allow liquidity providers to capture profits that would otherwise be captured by arbitrageurs. Mooniswap is designed to increase the profits of liquidity providers and prevent arbitrageurs from getting an unfair percentage of token swap slippages. The model adopted by Uniswap provides opportunities for arbitrageurs, often at the expense of liquidity providers (LPs). But Mooniswap addresses this problem by allowing LPs to act as arbitrageurs. Some estimates say this can increase LP earnings by 50-200% compared to Uniswap.

The 1INCH token is a token based on ERC-20 and in addition to its own exchange, it serves the government and as a utility for the entire ecosystem of applications that 1INCH has developed.

The most powerful part of this project is the decentralized exchange aggregator, which searches for the best prices for each pair of tokens in each one of them, allowing us to find the most efficient exchange routes so that operators can receive trading prices.

Let's say you want to buy Wrapped BTC (a synthetic version of Bitcoin) using Ethereum on a decentralized exchange. If you look at different DEXs, you will see that the prices vary, as do the commissions. The 1INCH algorithm finds the cheapest way to place that trade using all the different exchanges and liquidity protocols that can facilitate this trade. The cheapest way to place this trade may involve exchanging your Ethereum between several different protocols and for several different tokens before it reaches Wrapped Bitcoin. The advantage of doing this is that you can buy Wrapped Bitcoin at a cheaper price.

1INCH searches over 33 liquidity protocols to discover the most efficient exchange routes so that traders can receive the lowest prices. It would become a protocol like Uniswap, with its variants.

1INCH introduces a new way of governing called instant governance in which 1INCH token holders and key protocol stakeholders (e.g. LP) can vote directly on protocol parameters. One of the key features of instant governance is that LP or token users can consistently and dynamically vote to change protocol settings, without having to wait for proposals to be submitted or completed.

1INCH's total token supply is 1,500,000,000.

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Decentralized exchanges (DEX) like 1INCH revolutionized financial technology where merchants only need to connect their wallets, never giving up access to their funds or personal information to companies. DEXs allow users to maintain control of their funds while converting one token for another. DEXs provide more security and privacy than their centralized counterparts, which is why they have seen a substantial increase in activity in recent years. 2020 has been insane for the DeFi market as not only has funding skyrocketed on DeFi protocols, but innovations have also emerged to enhance the crypto trading experience. One of these innovations is DEX aggregators like 1INCH.

The project is the brainchild of Russian developers Sergej Kunz and Anton Bukov. They built the first MVP for a DEX aggregation protocol at the ETHGlobal New York hackathon in May 2019. This MVP later evolved into 1INCH Network, an ecosystem of decentralized protocols whose synergy enables the most lucrative, efficient, and secure operations in the DeFi space.

On March 16, 2021, 1INCH Network introduced version 3 of the 1INCH Aggregation Protocol, which facilitates lower gas rates. Currently, the biggest problem facing the Ethereum network is high gas rates, and the main improvement in version 3 is the ability to substantially reduce gas rates thanks to the optimization of the assembly code. According to 1INCH, exchanging ETH for DAI in 1INCH requires 10.3% less gas than the same trade-in Uniswap and 4.9% less than in 0x.

 

Conclusion. In decentralized exchanges, liquidity is a major concern. In general, not only is there little liquidity in DEXs but this liquidity is further dispersed across many different DEXs, making the problem worse. This leaves high-volume transactions vulnerable to considerable slippage, resulting in a weak trade execution price. By separating orders across exchanges, 1INCH solves this, thus keeping the trade within a transaction.

These types of solutions are the ones that surprise us every day. The creative effervescence of the crypto-sphere is overwhelming. We are heading into a totally new world in which each of us is going to rediscover ourselves and rediscover the scope of value transfer, as no other generation did in history.

 

 

UNI

https://uniswap.org/

Rank CoinGecko #10

UNI is an ERC-20 token on the Ethereum blockchain that offers control over the governance of the Uniswap protocol.

Uniswap is an automated market maker (AMM) platform, as well as a decentralized exchange (DEX), built on the Ethereum network, which offers a non-custodial trade of ERC-20 tokens. The first version (Uniswap v1) was released in November 2018, and the second (Uniswap v2) was released in May 2020.

Uniswap v1 only accepts ERC-20 token exchange. Uniswap v2 allows creating many groups like USDC / BUSD, DAI / KNC, or DAI / ETH. The aggregation of unique pairings can lead to fewer "trade-offs" from a user's perspective, ultimately improving price execution by reducing gas commissions, liquidity fees, and slippage.

Uniswap v2 also includes a protocol change, allowing UNI token holders to charge 0.05% of the exchange fee versus 0.25% for liquidity providers, and also a new pricing oracle logic, flash exchanges, and a change in the contract architecture.

UNI was born from the need for Uniswap to provide its users the possibility of earning tokens by injecting liquidity into the protocol.

The launch was made on September 16, 2020, through an airdrop to Uniswap users who had interacted with the platform before September 1, either through swapping tokens or providing liquidity.

The first use case of the UNI token is that it is used as a governance token. This allows all UNI holders to vote on key issues that can have a serious impact on the direction Uniswap takes, which will surely impact the price of the token. In addition, the management of the treasury will be in charge of the community.

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The UNI token also provides liquidity on Uniswap, as liquidity providers (LPs) can provide their UNI along with an equivalent amount of ETH.

Uniswap showed a marked growth after the launch of the second version of its protocol, where UNI is created with a genesis issuance of 1 billion tokens that will be distributed over four years. 40% goes to investors and advisers, and to the team members themselves. The remaining 60% goes to members of the project community. After that, the project will see an inflation rate of 2% per year. All users who had used any Uniswap service before September 1, 2020, received 400 UNIs, worth about $ 4.25, a total of about $ 1,700.

The Uniswap project starts after a series of posts made by Vitalik Buterin, founder of Ethereum, especially on his Reddit account, in the years 2017/18. With them, he suggested the possibility of creating a DEX on Ethereum, and also spoke of something unknown until then, which were the automated market makers, AMM.

These ideas were collected by Hayden Adams to create Uniswap and transform it into what is today, one of Ethereum's largest DeFi ecosystems. Hayden Adams is an expert in simulation and design in the automotive and aerospace industries.

UniSwap uses an algorithm that automatically assigns the applicable exchange rate based on the relationship between tokens and exchange demand.

What is an AMM? In traditional markets, there is the figure of the “market maker”, which is a person or entity that injects money into a market to activate it. Most often, it is a bank or financial institution. An AMM represents this figure but in a decentralized way. Uniswap's AMM works under an original design called CPMM, Constant Product Market Maker. A user can deposit his/her cryptos in a pool through a pair, for example, DAI / ETH, and that money can be used by another user to make another trade. In return, the liquidity provider receives part of the transaction fees in proportion to the money contributed. This was the basis for Uniswap's spectacular growth, giving rise to the phenomenon known as liquidity mining. The formula is very simple x * y = k, where "x" and "y" are the deposited amounts of the pair of cryptocurrencies, and "k" is a constant.

What is a liquidity pool? It is a reserve of funds created by the deposits of contributors who seek profitability for their cryptocurrencies. The objective of Uniswap is to obtain liquidity from some users so that others carry out their operations without depending on anyone. Uniswap design allows users to create pools of liquidity with which traders can quickly trade. A user can deposit his/her cryptocurrencies in a liquidity pool (eg DAI / ETH) and that money is used by other people who want to make exchanges. In return, depositors receive part of the transaction fees depending on the amount they have deposited.

This particular operation led Uniswap to reach incredible volumes, since this injection of liquidity means more profits for users, giving rise to a very fashionable phenomenon at the moment: liquidity mining. In this way, a win-win is generated: traders experience better transactions, and depositors in pools take commissions for providing liquidity.

These pools are configured so that the depositor must enter two tokens (eg ETH and DAI). The purpose of this is to create a liquidity system that is balanced and that allows the creation of interesting exchange options for the users of the platform.

Thus, for example, if liquidity providers open a DAI / ETH pool, they must deposit value in both DAI and ETH. Once the pool is created, it will be listed so that users can exchange that pair.

The advent of government tokens has not only incentivized members across the cryptocurrency industry to educate themselves but has also pushed the concept of DEX as a whole. In monetary terms, they are also the reason why the crypto industry has gone from $ 1 billion total locked value (TLV) in DeFi at the end of 2019 to well over $ 13.5 billion at end of 2020.

Uniswap was very timely in launching its UNI government token because DeFi faces a number of challenges. DeFi is the most competitive industry on the planet. Ethereum is enduring great pressures caused by network congestion, and the current price of gas is unbearable. If Ethereum 2.0 doesn't show quick results, the industry will surely be looking for new blockchains to trade on.

That is why the vote of the community is very necessary since the interested parties themselves will seek the best solution for their money.

The introduction of the UNI token and the massive airdrop, in a way, was expected by the market. This new asset allows the platform to have an internal governance mechanism. Something like a loyalty program mixed with company shares: Uniswap users receive rewards for contributing to the platform, as well as a vote on how the protocol is executed.

Uniswap grew a lot as a decentralized exchange (DEX) after the launch of the second version of this protocol v2, where UNI is created with a genesis issuance of 1 billion tokens that will be distributed over four years. In the initial stages of governance, UNI hodlers can submit a governance proposal, delegating 1% of the total UNI supply, i.e. 10,000,000 UNI tokens.

Several analysts consider that the launch of UNI by Uniswap is a direct response to its recent competitor SushiSwap, a protocol that copies Uniswap and took a lot of activity out of it. Uniswap and SushiSwap have the fourth and fifth-highest values blocked in their protocols, respectively.

Uniswap announced in August 2020, an $ 11 million Series A round led by Andreessen Horowitz with additional investments from USV, Paradigm, Variation A single, Variant, Parafi Cash, SV Angel, and A. Funds. The premise of the Series A round was to provide the team with the resources to "grow and build Uniswap V3, which will greatly increase the flexibility and efficiency of the protocol capital."

Uniswap v3, the third form of Uniswap, was launched on May 5, 2021, which has grown significantly in terms of weekly trading volumes. Immediately after its launch, Uniswap v3 was branded “Uniflop” by many, due to the complexity of certain operations and the fact that gas costs were in some cases higher than version 2. The platform appears to have exceeded this initial negativity and still has managed to attract investors and traders. The initial success of Uniswap v3, coupled with the continued dominance of v2, has led the platform to increase its market share to a new high in 2021.

 

Conclusion. Uniswap is undoubtedly one of the most important decentralized Ethereum applications. A decentralized exchange powered by an automated market-making system has quickly become the largest consumer of gas on the blockchain. Uniswap regularly processes more than 100,000 transactions with a volume of hundreds of millions each day.

UniSwap has proven to be one of the flagship products in an ultra-competitive environment such as DeFi. I believe that the team will continue to develop new solutions on an ongoing basis. Number One Hayden Adams has stated that the new v3 version “will eat UniSwap v2’s lunch”. I think UniSwap is going to remain at the forefront of the DEX race for a long time.

 

As usual, none of the things written in this post are financial advice and are not intended to replace personal research.

 

Thank you for reading!

If you have any questions or comments, please feel free to leave them down below

 

You can also contact me at gerardo.saporosi@gmail.com

You can also follow me on

 

 

 

 

 

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SirGerardThe1st
SirGerardThe1st

Franchise veteran, Dapps developer, DeFi evangelizer, Bitcoin and Ether since a long time


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Tokenomics

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