Ethereum 1.x Funding, Aave Lending Pool, Gnosis and Burner Wallet
Good morning defiers! Here’s what’s going on in Ethereum and decentralized finance:
Ethereum funding proposal
Aave lending pool
Gnosis partners with Burner Wallet
Ethereum Funding Controversy Highlights Precarious State of Open Source Projects
A new Ethereum funding proposal is being heatedly discussed right now, highlighting the dicey state of the current version of Ethereum, but also of open source projects in general as the crypto community continues to work on better ways to fund them.
Ethereum developer James Hancock in May proposed a change to the Ethereum protocol that would increase ether issuance by 0.0055 per block for 18 months to fund development of the current version of the chain with more than $3 million at current prices. This is as the Ethereum Foundation, the network’s main funding vehicle, is dedicating a large part of its funds on the planned overhaul of the network, known as Ethereum 2.0.
Hancock raised the proposal, called EIP 2025, on the Ethereum developers’ call on May 26, which EthHub’s Eric Conner brought up yesterday and said, “it appears that EIP-2025 is being seriously considered […] Absolutely absurd! This cannot happen.” And a Twitter debate ensued.
EIP 2025 is based on the same principles of a welfare state. It assumes that Ethereum community members aren’t willing to fund developers’ efforts because they won’t directly profit from that investment, even if the community will benefit indirectly, so the solution proposed is a tax.
This didn’t sit well in a libertarian-leaning crypto community, with many arguing it’s unclear how the funds will be managed and there’s no mechanism to ensure accountability. Many (but not all) of the detractors are investors, whose ether holdings would be diluted, and most of those speaking in favor of it, are developers, who stand to benefit from it.
It’s been an interesting debate and I’ve collected the best comments below:
James Hancock I am looking for Two things: 1: Funding Core Infrastructure RnD 2: To better know the communities sentiment on developer block rewards. These are separate and I am getting plenty of feedback on 2 so keep it coming.
Aftab 'DCinvestor' Hossain: The hubbub over EIP 2025 boils down to a request for ~$2M to fund Eth 1.x dev; however, alternatives to block funding haven't been exhausted. So here's my challenge to the 1.x teams- develop detailed budgets justifying these amounts, and let's discuss alt funding mechanisms.
If this cannot be done, then this entire conversation is occurring in bad faith. We are jumping to experimental and contentious funding mechanisms, rather than working through systems and funds which already exist.
Rocco: Issue 1: Development groups are not money-managers. Most project funding burnout has occurred due to improper risk management when dealing with volatile assets. Issue 2: There's plenty of difficulty in accountability when receiving such a subsidy for development work. How can an entire network act as an arbitrator for such a nuanced area like "development work?" Issue 3: If a block reward subsidy isn't set out in the initial social contract of a protocol, don't think that those securing the network will simply bow to the changes.
If you want to support these groups, go open a grant on Gitcoin and allow people to voluntarily support them. Don't force a network to adhere to some form of support funding when it was never implicit from the network's original principles.
Tom Shaughnessy: I'm against EIP-2025 for $ETH. I like on-going funding when its agreed by stakeholders for the LT, not for a one off project (debating a massive protocol change every time a group needs funding is insane). EF spending $8M for ETH 1.0. [There’s been] limited discussion on it. @MolochDAO [is an alternative].
Anthony Sassano: I am (obviously) not against funding important development work on Ethereum but I oppose EIP-2025. Here are some alternative funding options: DAOs (@MolochDAO, @meta_cartel), @gitcoin grants, @econoar's pooled DAI idea, @ethereum foundation grants.
Ameen Soleimani: 1. Eth 1.x is planned to be obsolete, value invested in it will only compound for a few years. 2. Increasing issuance will create massive negative memetic externality as the narrative of ETH as a SoV is weakened.
The 1.x devs supporting 2025 will, when 2025 fails, fork off and do Alternateth anyways, so we should prepare to replace them immediately. Any Eth 1.x devs attempting to use their status as volunteers to get support are dangerously misguided if they believe they are doing the network a favor with 2025. They are threatening our economic security for their short term gain. We must eliminate any leverage they have.
Udi Wertheimer: It's just ETH people virtue signalling. The proposal is a non-starter and is the equivalent of me tweeting that I "propose" gifting myself with 1M new bitcoins There's nothing in the dev call notes to show that EIP-2025 is being seriously considered. This is a marketing campaign.
Pedro Gomes I don’t support the EIP 2025 but the negligence around the lack of funding is insane Ethereum is currently built by missionaries. Be grateful of the devs we have building everything we have!
Ryan Sean Adams The Ethereum protocol does not support block reward funding on L1. There are plenty of funding options on 2nd layer some of which are managed (Moloch & MetaCartel). Chains such as Cosmos & Tezos support block funding on layer 1 but EIP-2025 is protocol-incompatible on Ethereum. Would need to add: 1 System for funding decisions 2 System for managing funds.
Bryant Eisenbach The problem here is that current capital allocators are frustrating and opaque enough to deal with that we have to resort to exotic fundraising measures to get it done.
Ethereum developers speaking in favor of EIP 2025 were fewer (and arguably less eloquent):
Dean Eigenmann If you don’t want it then fork and give us all them nice fork dividends. If I never built anything I probably wouldn’t want it either lol
Ainsley Sutherland eth devs at the door: hey man got $5 for the out of town bands? eth investors: wow are u taxing me? that is not punk
Aave Testing Decentralized Lending Pool
DeFi project Aave last week launched a lending protocol based on pooled funds on an Ethereum test net. While most decentralized lending models so far have focused on peer-to-peer loans, this system would incentivize lenders to pool their funds in exchange for interest, while borrowers will be able to deposit their collateral into the protocol and instantly borrow, without having to wait until the loans get funded.
Gnosis Safe Partners with Austin Griffith’s Burner Wallet
Gnosis Safe, a smart contracts-based Ethereum wallet, is partnering with Burner Wallet creator Austin Griffith to improve its onboarding process. While the integration’s details are still being worked out, once a user accumulates enough xDAI in their Burner Wallet, they will be able to create a new Gnosis Safe with the click of a button, they won’t even gave to buy ETH.