As another week in the world of DeFi commences, more new projects that aim to further decentralize and democratize the world of finance emerge. Today’s focus is on a project called Bee2 which wants to move DeFi away from the clutches of the whales, and into the hands of the masses.
The current state of decentralized finance is highly stacked in favor of those with heavy collateral bags. Astronomical gas prices make smaller transactions on Ethereum virtually impossible. In the current state of things, many users end up losing money just by making a transfer.
Add to that the trading fees such as those imposed by Uniswap on each trade, or Yearn Finance’s fees for withdrawals, and it becomes clear that the rich get richer with most DeFi dealings.
A new incentive called Bee2 Finance has started an experiment using quadratic mining to try and make DeFi a fairer form of finance for everyone.
Busy Bees Building DeFi
The Bee2 project is taking a different approach to DeFi. The standard this year has been issuing rewards for liquidity providers, which only really benefits those with a lot of liquidity to provide, i.e. the whales:
Our team thinks that DeFi’s liquidity mining is falling into the Matthew trap. It makes the rich richer and the poor poorer, and many investors can’t even afford high gas fees on Ethereum.
Bee2 is building on the concepts from a book called Radical Markets by Eric A. Posner and E. Glen Weyl, taking specifically from a portion that deals with ‘Radical Democracy.’ DeFi project governance decisions and voting mechanisms have been weighted towards those with the most tokens so, as previously reported by BeInCrypto, most aren’t really that democratic.
The experimental project aims to use an innovative voting method called quadratic voting (QV) and take it a step further with quadratic mining. The quadratic mechanism has recently been applied to a number of consensus and funding operations such as Gitcoin Grants. Ethereum co-founder Vitalik Buterin was also very positive about the mechanism in an article he penned in December 2019.
The Bee2 project will use a quadrating mining function in combination with the liquidity farming incentive that most DeFi protocols are based upon. In current DeFi liquidity mining methods, earnings and costs increase linearly. That is, the more tokens staked, the more the reward, which is good for the whales, but not so good for the average user that doesn’t have tens of thousands of dollars in crypto collateral to throw at experimental projects.
With a quadratic mining mechanism, rewards and costs increase exponentially, which balances the power and is of greater benefit to those with smaller stakes.
Countdown to Launch
According to the Bee2 blog post and protocol dashboard, the project will go live on Sept 9 at 09.00 UTC. There will be two types of tokens distributed, BEE and HONEY. The former being the primary use token and the latter a bonus reward token.
There will be a total supply of 5 million BEE tokens, distributed across four liquidity pools of wETH, LINK, ANT, and YAMv2.
According to Etherescan, ANT has a market cap of $154 million and a circulating suppling of just over 33 million. The YAMv2 pool is the second iteration of the Yam Finance project which launched in mid-August.
The project has allocated 10% of all BEE tokens to go back into a development fund for future iterations and contract audits.
The second token, HONEY, is determined by how much BEE is generated by the liquidity pools and has no fixed supply. HONEY can be produced if the maximum number of staked tokens in the pools is greater than the constant value set by the protocol. The constant values of the four staking pools are 10,000 WETH, 500,000 LINK, 500,000 YAMv2, and 1 million ANT.
The second condition for HONEY generation is that the pools must be running for at least two days with a minimum of 69,120 BEE mined. The blog post added that HONEY tokens are worthless and there are no further mechanisms designed:
After multiple quadratic mechanisms, it will become more distributed, and the whale’s effect will be further weakened.
It also said that there is no pre-mine, no founder shares, and no VC interests, similar to that of Yearn Finance.
BEE will be used as the governance voting token, based upon the quadratic voting mechanism. The Bee2 team noted that this is not a perfect solution—but it does increase the cost of cheating the system.
DeFi Markets Cooling Down (For Now)
The $70 billion crypto crash over the past few days has taken its toll on DeFi markets with collateral being pulled out over the weekend.
Total value locked across all markets has dropped $2 billion from its all-time high of over $9.5 billion on Sept 2, to $7.5 billion on Sunday according to DeFi Pulse.
That value has crept up a little as Monday trading begins in Asia and is currently sitting around $8 billion. It has still been an epic month for decentralized finance with TVL gaining 70% over the past 30 days.
In terms of the most popular platforms, Uniswap is still at the top of the table with a market share of 19% and a TVL of $1.51 billion, up 36% on the day. According to Uniswap.info, volumes on the token swapping protocol have fallen from almost a billion dollars last week to around $620k on Sunday.
Aave is the second-most popular platform at the time of press with a TVL of $1.38 billion, while Maker sits comfortably in third with a TVL of $1.26 billion.
Curve Finance and Yearn Finance, which had a successful launch of its yETH vault, have both seen their collateral shrink by double digits over the weekend. Synthetix, Balancer, Flexa, and Nexus Mutual are performing well today with decent gains in total value locked.
Bitcoin Proponents Against Elon Musk Following Heated Dogecoin vs Bitcoin Tweets
Last week, Elon Musk and Tesla shocked the entire crypto industry following an announcement that the electric car company will no longer accept bitcoin payments for “environmental reasons.”
A Hard Pill For Bitcoin Maximalists
Giving its reasons, Tesla argued that Bitcoin mining operation requires massive energy consumption, which is generated from fossil fuel, especially coal, and as such, causes environmental pollution.
The announcement caused a market dip which saw over $4 billion of both short and long positions liquidated as the entire capitalization lost almost $400 billion in a day.
For Bitcoin maximalists and proponents, Tesla’s decision was a hard pill to swallow, and that was evident in their responses to the electric car company and its CEO.
While the likes of Max Keiser lambasted Musk for his company’s move, noting that it was due to political pressure, others like popular YouTuber Chris Dunn were seen canceling their Tesla Cybertruck orders.
Adding more fuel to the fire, Musk also responded to a long Twitter thread by Peter McCormack, implying that Bitcoin is not actually decentralized.
Bitcoin is actually highly centralized, with supermajority controlled by handful of big mining (aka hashing) companies.
A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound “decentralized” to you?https://t.co/Oom8yzGRNQ
— Elon Musk (@elonmusk) May 16, 2021
Musk Working With Dogecoin Devs
Elon Musk, who named himself the “Dogefather” on SNL, created a Twitter poll, asking his nearly 55 million followers if they want Tesla to integrate DOGE as a payment option.
The poll, which had almost 4 million votes, was favorable for Dogecoin, as more than 75% of the community voted “Yes.”
Following Tesla’s announcement, the billionaire tweeted that he is working closely with Dogecoin developers to improve transaction efficiency, saying that it is “potentially promising.”
Tesla dropping bitcoin as a payment instrument over energy concerns, with the possibility of integrating dogecoin payments, comes as a surprise to bitcoiners since the two cryptocurrencies use a Proof-of-Work (PoW) consensus algorithm and, as such, face the same underlying energy problem.
Elon Musk: Dogecoin Wins Bitcoin
Despite using a PoW algorithm, Elon Musk continues to favor Dogecoin over Bitcoin. Responding to a tweet that covered some of the reasons why Musk easily chose DOGE over BTC, the billionaire CEO agreed that Dogecoin wins Bitcoin in many ways.
Comparing DOGE to BTC, Musk noted that “DOGE speeds up block time 10X, increases block size 10X & drops fee 100X. Then it wins hands down.”
Ideally, Doge speeds up block time 10X, increases block size 10X & drops fee 100X. Then it wins hands down.
— Elon Musk (@elonmusk) May 16, 2021
Max Keiser: Who’s The Bigger Idiot?
As Elon Musk continues his lovey-dovey affair with Dogecoin, Bitcoin proponents continue to criticize the Dogefather.
Following Musk’s comments on Dogecoin today, popular Bitcoin advocate Max Keiser took to his Twitter page to ridicule the Tesla boss while recalling when gold bug Peter Schiff described Bitcoin as “intrinsically worthless” after he lost access to his BTC wallet.
“Who’s the bigger idiot?” Keiser asked.
Who’s the bigger idiot? pic.twitter.com/YopCoat33W
— 🍊💊 Max Keiser (@maxkeiser) May 16, 2021
Aside from Keiser, other Bitcoin proponents such as Michael Saylor replied to Tesla’s CEO:
The world needs a decentralized, secure, deflationary store of value like #Bitcoin much more than it needs the more centralized, less secure, inflationary medium of exchange that you describe above.
— Michael Saylor (@michael_saylor) May 16, 2021
Tesla CEO Elon Musk Explains Why ‘Bitcoin Is Actually Highly Centralized’
On Sunday (May 16), Tesla and Space X CEO Elon Musk attacked Bitcoin (BTC) for being highly centralized after podcaster Peter McCormack criticized Musk for supporting Dogecoin (DOGE) and for spreading misinformation about Bitcoin. As you probably already know, on May 12, Tesla and SpaceX CEO Elon Musk shocked the world by complaining about Bitcoin mining’s […]
On Sunday (May 16), Tesla and Space X CEO Elon Musk attacked Bitcoin (BTC) for being highly centralized after podcaster Peter McCormack criticized Musk for supporting Dogecoin (DOGE) and for spreading misinformation about Bitcoin.
As you probably already know, on May 12, Tesla and SpaceX CEO Elon Musk shocked the world by complaining about Bitcoin mining’s high usage of fossil fuels and saying that for this reason Tesla would not be accepting Bitcoin as a form of payment until “mining transitions to more sustainable energy.”
The next day, Musk revealed that has been working with Dogecoin developers to reduce the power consumption of mining of the meme-based cryptocurrency.
In fact, as Decrypt reported on May 14, according to Ross Nicoll, one of the part-time Dogecoin developers Decrypt talked to, Musk “started talking to the developers in 2019, he has ‘encouraged them to improve the higher transaction throughput,’ provided ‘lots of advice and input,’ and shared his vast Rolodex of contacts.”
Nicoll also said (1) that the dev team he is part of is hoping to reuce Dogecoin’s power consumption; (2) Musk has been with Dogecoin’s dev team since April 2019 (when he said that Dogecoinmight be his favortie cryptocurrency); and (3) that Musk had offered to fund the team, but his offer of financial support had been rejected (just as with offers they had received from other wealthy potential backers).
Yesterday, Dogecoin supporter “@itsALLrisky” said on Twitter explained why he thinks that Dogecoin, which Musk has referred to as “people’s crypto”, is better than Bitcoin. Musk said Dogecoin would beat Bitcoin “hands down” if its developers made three improvements: 10X faster block production time, 10X larger block size, and 100X lower transaction fees.
Well, today, McCormack criticized Musk for supporting meme-based Dogecoin, which he thinks could potentially result in ill-informed investors in $DOGE suffering big losses, as well as causing harm to Bitcoin’s reputation and its ecosystem.
McCormack’s accusations angered Musk, who seemingly warned that he might just “go all in on Doge.”
Musk then went on to explain why he believes that Bitcoin is highly centralized.
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
ETH Developers Calculated How To Defuse The Difficulty Bomb
ETH developers calculated how to defuse the difficulty bomb because if they leave it untreated, they will slow down the network as we can see more in our Ethereum news today.
Ethereum’s encoded difficulty bomb is set to explode this summer and James Hancock as well as Tim beiko said that the ETH developers calculated the time needed to delay the bomb and this could the last time the developers need to take that action. Ethereum developers agreed on Friday how to delay the difficulty bomb ad if that is left untreated, the entire network could be slowed down. The difficulty bomb is an old piece of code that makes mining on ETH slower and less profitable over time by increasing the lag between the production of blocks.
We just wrapped up #AllCoreDevs 113 😁
Recap below 👇🏻 https://t.co/wDU2vlNnBS
— Tim Beiko | timbeiko.eth 🦇🔊 (@TimBeiko) May 14, 2021
Ethereum 2.0 switches the network from proof of work as a way of validating transactions with powerful mining computers to Proo of Stake which rewards the ones that pledge the coins to the network. It takes an average of 13 seconds to mine a block on ETH right now and without delaying the bomb, it could take more than 20 seconds to validate the block by the end of the year. Ethereum developers agreed on how many blocks were quite necessary to delay the bomb until December. The calculation for the delay was proposed by the ETH core developers James Hancock as he said:
“The bomb’s always there, and we defuse it by turning the blocktime back just for the bomb.”
He later said that the proposal will delay the bomb by 9,700,000 blocks. Tim Beiko, the ETH core developer also said that the developers dismissed a proposal to delay the bomb next spring but that won’t be necessary. The developers expected that by December, the network will update to allow the ETH 1.0 the network that relies on PoW to communicate with ETH 2.0 as the new network relies on PoS and this is known as the Merge:
“If the Merge is ready by December, we won’t need to do anything about the bomb because we will move away from mining entirely.”
If the merge plans remain unimplemented, the Shanghai fork is expected to go live and will delay the bomb once again. The Bomb has been delayed three times so far.
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