Incoming @ellipsis_labs President @BlockchainUCSB Ex @bcap @notionaldao
Joined October 2022
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Check out my talk on Orderbooks and Automated Market Makers (AMMs) that wrapped the quarter for CS 190N Foundations for Blockchains and Cryptocurrencies at @UCSB.
youtube.com/watch?v=1Ewh5QCE…
TL;DR below 👇
To my knowledge, every centralized exchange waits until finality in order to deposit funds into user’s balance.
For example, if you deposit ETH from your non-custodial wallet on Ethereum, you’d have to wait approximately 12 minutes (2 epochs) for it to be shown in your account balance.
Some exchanges also have withdrawal delays, which don’t depend on chain finality, but rather on off-chain checks pipeline (risk checks, security checks, etc). This normally takes a couple of minutes.
If I worked at Binance after this incident, I’d propose a better way for handling withdrawals: funds from every withdrawal get immediately put into an on-chain escrow that gets spendable by a recipient after chain finality (or a longer duration, if necessary). Until the finality has been reached, funds can be clawed back by Binance. While finality is being reached, the existing security checks may be conducted, and the withdrawal could still be reverted if something was off in off-chain verification.
The UX would be similar. A normal user still waits a couple of minutes for a CEX to perform the necessary security checks. However, by having this required on-chain clawback period, CEXes can take preemptive action when a withdrawal is unauthorized (although, the window would be tight, and the compromise here is security vs UX).
If you are a CEX, there is absolutely no reason to have no timelock in your withdrawals pipeline.
$4 million hack.
I am sure this is nothing to Polymarket in terms of monetary cost, but bad in terms of reputation.
At some point, if you are a hacker of ill intentions, it would make more sense to chase bug bounties, rather than executing an exploit.
The incentive to report a bug would be higher than executing the attack. The incentive to create a bounty program would be higher than trying to solely maximize security.
It will be security-by-aligned-economics.
✅ 689 of 726 affected wallets have been refunded in full. The remaining 37 are being paid as each is verified.
We're also going further. Traders who lost money during our trading pause, or whose positions were taken, are covered too: $1.19M to 5.5K wallets, starting today.
In total, we’re returning $3.9M to traders: the $2.7M plus $1.19M to cover pause-related losses. No claims or tickets needed.
The attack came through a compromised 3rd party provider which we removed within the hour. We are in active investigation with law enforcement & will share a postmortem.
pysel☕️ retweeted
The SOL deposit limit on Phoenix has been doubled to 1,000 SOL per account to meet demand.
Deposit SOL and use it as collateral across crypto, stock and commodity perps. No USDC required.
phoenix.trade/try/sol-collat…
Many correctly noticed that this is very similar to Uniswap V2, where LP positions are tracked as fungible ERC-20 tokens.
It is true that this is not a new concept, but it is nevertheless an important example of flexibility in DeFi.
A similar idea can be applied to create fusions of more than 2 tokens. For example, you may have three tokens in a pool, like NVDA, ETH, and BTC, and the LP tokens would represent a “fused” NVDAETHBTC asset.
If you remember @Balancer ‘s weighted pools, you can apply this method to create an asset that would represent a tokenized basket of underlying tokens. For example, if you have a pool with top 10 crypto tokens weighted by their market caps, each LP token would be like a tokenized top 10 crypto fund.
This weekend I invented something new, a new type of token using Uniswap v4 hooks that I call a Pair Token.
A Pair Token is a new type of ERC-20. It is a fused, auto-compounding asset, a fusion of two tokens.
For example, the stock tokens NVDA and SPCX fused into a single tokenized version of the two, with the ticker NVDASPCX, or ETH with NVDA, creating ETHNVDA.
Each Pair Token represents a full-range Uniswap v4 liquidity pool.
So why mint these tokens?
These tokens are self-multiplying in terms of value, as at any moment anyone can call the compound function to compound the LP fees generated by the pair’s trading activity back into the asset.
The token represents a new financial primitive, as it represents a proportional value and moves as an LP position NFT would, except that it is auto-compounding and, thanks to its v4 hook, allows for compounding and self-growth.
Since it is an ERC-20, this token can be freely traded onchain, LPed, or even paired with a launchpad.
A new type of token for a new type of exposure and strategy.
Starting tonight, you’ll be able to mint or redeem Pair Tokens for any pair on Robinhood Chain via the StonkBrokers website.
Minting and redeeming are free, and the compounding process on the tokens incurs a 10% fee on the LP fees generated, which is used for $STONKBROKER buybacks.
I look forward to a new line of products and protocols on Robinhood Chain using this new financial primitive.
Only on Robinhood Chain, powered by Uniswap. @Hookrfun
In the last couple of months, I have tried market making on both AMMs and traditional orderbooks. With both mechanisms, I expectedly lost some money (I had no edge, like superior pricing or faster execution).
This led me to wonder: can there exist a trading mechanism, where passive liquidity providers don’t lose money?
A weaker form of this question is whether there is a trading mechanism that minimizes losses from passive liquidity provision?
I'm hearing rumors that an unreleased model at one of the top labs has decompiled the code behind ECDSA algorithm.
The implications are massive. Anybody who has access to it would be able to derive your public key in a matter of microseconds on an average laptop.
Stay safe...
I am amazed to the extent of how inactive the liquidity is on Uniswap. We saw a pretty big drop in ETH's price this morning, but the liquidity distribution on ETH/USDC pool still looks like it is concentrated around old price.
Maybe AMMs are not so bad for LPs, but LPs are bad at AMMs?
People thought that SaaS is dead because the cost of building software from scratch will go to zero.
In reality, the cost of decompiling the software will go to zero.
We are entering the world of SaaS distillation.
Today I’m wrapping my summer internship at @ellipsis_labs — the incredible team behind @PhoenixTrade.
This has been an amazing learning opportunity, and I’m grateful to have had the chance to work alongside such brilliant people.
Excited to continue the work in March.
Solana.
This is really cool, curious to see other interesting engineering cases where performance can be improved with small models.
Distributed systems and operating systems come to mind right away as potential candidates where this can help.
Composability has always been one of the most promising features of on-chain finance.
Excited about what might come next!
SOL is live as collateral on Phoenix.
Deposit SOL and use it to back perpetual positions directly across crypto, equities, and commodities. No USDC required.
Hold SOL. Trade anything.
phoenix.trade/try/sol-collat…