Centre’s USDC has become the second largest stablecoin in DeFi. While it has maintained its 1:1 peg with the US dollar well, its “blacklist” functionality comes with a heavy tax on users, amounting to, by my estimate, an extra $3.6M spent in transaction fees in December 2021 alone.
I propose a new version of USDC that preserves what I argue is the most salient feature of the blacklist--the ability to freeze funds--in a way that eliminates blacklist-related gas costs for users, which can be found in a pull request to the Centre token repo.
The free-rider problem arises when a good or service has private costs and non-excludable public benefits. A classic example is a firework show. Fireworks can be enjoyed by anyone in a particular area regardless of whether they pay for it (it’s hard to stop people from looking at the sky if they don’t have a ticket).
Lots of folks may want the firework show, but there’s not enough economic incentive to go through the effort and cost of arranging it if you only reap the private benefit (the enjoyment of getting to watch the fireworks yourself) and don’t reap some of the public benefit (everyone else’s enjoyment of the fireworks).
In May of this year, Vitalik created a post on the Uniswap governance forum called, “UNI should become an oracle token.” He argues that there is a need for oracles to provide off-chain data, and that UNI is in a good position to provide an alternative to Chainlink for high-value, latency-tolerant use cases.
While it’s an interesting idea, as I reflected on that post recently, I was thinking about how Uniswap already is an oracle protocol. It already provides a price feed from the largest DEX on Ethereum. UNI already is an oracle token, the UNI DAO just hasn’t done much with that fact, as of yet at least.
Ever since v1, Uniswap has been an oracle protocol, albeit a very crude one at the time. Uniswap v1 was a series of ETH-ERC20 pools with a simple
x * y = k pricing mechanism. You could query for the values of the ETH and the respective ERC20 token in any pool, and viola, you have a spot price oracle.
Disclaimer: this post and accompanying code is meant for educational purposes only. None of this is audited, and you should seek out audits before using contracts in production.
But how do they work on-chain? This post will walk through an example of setting up governance using a variant of the popular governance contracts created by Compound Finance. The task? Deploying the U.S. federal government as smart contracts on Ethereum.
So you want to write a Dune query for some quick and dirty analysis, but the contract isn’t verified on Dune! *starts sobbing uncontrollably 😭😭*
But degens aren’t deterred! With a little understanding of Ethereum events and a little effort, you can be on your way to querying.
Liquidity mining is the practice of distributing governance tokens to users that provide capital to a protocol. Announcing it in May 2020, the first protocol to put this into practice was Compound. Regarding the aim of liquidity mining, the post states:
“The distribution of COMP will become a core mechanic of the Compound protocol. All users and all applications built on top of Compound will continuously, and automatically receive governance rights, for free—in order to shape the future of the protocol.”
In other words, the initial goal of liquidity mining was to distribute governance tokens to users who would then become active participants in protocol governance.