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Happy December folks. My birthday is at the end of the month, so please feel free to give the gift of relayer updates to any unsuspecting family members on my behalf.

Last week 0x Tracker, a project that analyzes trades in the 0x ecosystem, was open sourced by its creator Craig Bovis, a longtime community member. (Prediction market relayer Veil also open sourced its code).  We also hired another engineer to the 0x Core Team, Xianny Ng who comes from Mapbox. Welcome Xianny!

Finally, we have decided to move our external communications with the community from Rocket Chat to Discord. While it’s more catered to developers, anyone from the 0x ecosystem can join our Discord here.

Harbor Launches

Harbor recently launched their security token platform, with the first investable project coming from the real estate arm of DRW, a trading firm based in Chicago. Minimum investments in “The Hub,” a student property near the University of South Carolina, start at $21,000, with 955 tokenized shares in total on the market.

What stood out to me in the announcement was the number of related cryptocurrency firms that are involved in the Harbor launch. Custody experts BitGo (who incidentally are venture-backed by DRW and David Sacks, advisor to 0x and Harbor) deal with custody, 0x relayer The Ocean among others will list these assets so they can be traded peer-to-peer and over-the-counter, and finally, the possibilities with other protocols are endless, as shown in Harbor’s tweet storm about their launch:

ERC20-compatible #securitytokens unlock exciting new possibilities. Real estate examples: create levered longs and shorts w/ @dydxprotocol, create baskets/ETFs w/ @Setprotocol, create margin loans w/ @makerdao #defi

This ability to leverage multiple protocols to build a new financial instrument is something that has really been picking up traction recently, like the ETHSF project Primotif that I talked about in RR 12:

Primotif lets users buy sets of Augur and dYdX short tokens to get balanced exposure to synthetic assets like the S&P500. Synthetic assets are “a mixture of assets that, when combined, have the same effect and value as another asset” (Source). In this case, Augur tokens track the underlying asset (S&P500) while the dYdX short tokens provide a hedge on the ETH/USD price. The bundling of these assets is made possible by Set Protocol, and finally the exchange of this set for Ether is done using 0x.

While this interoperability is really cool, why create security tokens in the first place? Immutability, cheaper fees, transparent settlement, less regulatory overhead, and global access all combining to increase liquidity and efficiency seems to be the value proposition of security tokens as well as the DeFi movement.

Further reading:

Harbor White Paper

Security Token Ecosystem Infographic (The Block)

The Tokenization of Real Estate (Sina Habibian)

On Developing With 0x

NFT relayer Emoon published this post about building with 0x, giving some guidance on how to get started with the protocol. I particularly liked the “Gotchas” section at the end that listed tricky mistakes they encountered:

While the Emoon experience of integrating with 0x was positive, there were some gotchas for our particular use case that are worth calling out:

1. @0x/subproviders Doesn’t Work With Angular 6 When Doing Production Builds For Client or Server. Read more here.

2. Old Version of bignumber.js. Read more here.

3. If using the forwarding contract, remember that the taker (aka the buyer) pays any forwarding fees, not the maker (seller). As such, one has to factor that fee into the amount of ETH sent to the forwarding contract. This works differently than many other smart contracts that do atomic swaps, like Crypto Kitties for example, which take the fee from the seller.

4. Also, if using the forwarding contract, remember that the maker (the seller) gets paid in WETH. The buyer is nicely abstracted from WETH but the seller is not, which is important to communicate to sellers who may be surprised when their order is filled but their ETH balance remains unchanged.

5. Reading the 0x contracts is quite tricky, because of all the includes and nested files. Best bet is to actually print them out so you can bounce around between includes.

As 0x has grown, there are more options and abilities for relayers, meaning more education needed for any new dev or community member. Posts like this do a lot for the ecosystem, so thanks to the Emoon team.

Ecosystem

STAR BIT (James):

• Started adding Kyberswap function for one-click-buy function on the exchange

• Released STAR Wallet 1.0.3 with new featuring of STAR BIT EX-connect, accelerating trade transactions, trading pair customize support

• Developing an interesting Dapp on the exchange for Christmas - stay tuned

LedgerDex (Matt):

• We did a number of bug fixes and UI improvements

• LedgerDex attended the BlockShow Asia conference in Singapore

• The LedgerDex team will be in Singapore in the coming days. If you are also in Singapore and interested in getting connected, please feel free to email us at contact@ledgerdex.com

Ambo (Jai):

• Ambo is a project that aims to simplify the difficulties presented in decentralized financial applications through a simple wallet

• Read Ambo’s announcement here where we discuss the creation of Ambo

• If you have any questions you can reach out to Jack (our head of partnerships) directly at jack@ambo.io

Bamboo Relay (Josh):

• Completed Trezor integration

• Work on improving UX for signing and transactions

Radar Relay (Joe):

• Brandon explains why we built our own design system

• We now have a Chinese and Spanish community ambassador

OpenRelay (Greg):

• New Screenside Chat (Ep.15): How OpenRelay does 0xv2 Order Types

• Nearly complete: OpenRelay Order Pools

• Signature-required Terms of Use for Makers also ready soon

Lake Trade (Rishabh):

• Lake Trade SRA now live, optimizations in the works

• Interview with Mathew @ LakeProject

• Article addressing centralized exchanges published on Hackernoon

Hut34 (Tim):

• Pushed improvements to our Google powered Ethereum wallet, now allowing users to trade 'cross pairs' - direct ZRX to REP

• Data relay is close to a release with diaglog flow bots now sharing data objects along with exchange objects - releasing data portal soon

• Big thanks to Jacob, 0x's aussie dev, who's helped us lay the groundwork for integrating the Google powered wallet as a provider to allow our user base to access all relays - we're super excited about this one, and expect to hear more very soon

Veil (Paul):

• Revamped the Veil home page to show-off popular markets and highlight a new concept called channels, which are collections of similar markets like Memes or REP

• Added a public Augur Open Interest graph to help track macro trends on Augur

• Updated Veil’s alpha for better mobile compatibility

DDEX (Diane):

• DDEX will upgrade with the new features of Market Order Capability, flexible Maker-Taker fee, Price Improvement, HOT token incentive reward, and new UI

Links

ETH Locked in DeFi (Mike McDonald):

A visualization of the amount of ETH locked up in dYdX, Augur, Maker, Compound, and Uniswap. Spoiler: Maker dwarfs everything else.

Meet Bitski, The Single Sign-On Wallet Crypto Desperately Needs (TechCrunch):

The Bitski developer beta has been released for its single sign-on cryptocurrency wallet platform. The vision is to make dApp onboarding as simple as possible, with a sample video of the Bitski experience here. In other wallet news, Gnosis Safe will be releasing its mobile wallet in Q1 of 2019.

UX of DEXs (Jacob Evans and Clay Robbins):

Videos are out for the DeFi Summit in Prague, with Jacob and Clay from the 0x team giving a presentation on the UX of decentralized exchange.

USDC Ecosystem Spotlight (Circle Blog):

Five new projects, including OpenSea and AirSwap, have started listing USDC.

Fun Stuff

A NY Times profile on Vinod Khosla and his beach battle, a stubborn, principled man. Another profile on the career bromance of the two MapReduce creators, who are the only Level 11 Google engineers (funny convention, but hey it’s Google). One last profile on the triple jeopardy of a hedge fund quant.

The Space Jam website looks exactly the same as it did in 1996, an archive of the old Internet.

“Don't waste your time on jealousy; sometimes you're ahead, sometimes you're behind...the race is long, and in the end, it's only with yourself.” - Everybody Wears Sunscreen

A MasterMind game that can be implemented with zk-SNARKS.

Much love,

Rahul

Questions, comments, or suggestions? Message me on Twitter

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We have a few new relayers to announce — first we have Emoon, a peer-to-peer marketplace for crypto collectibles that also enables users to track and analyze the assets they’ve bought.

Hut34 is next, which is in the early stages of becoming a data marketplace relayer. The founders have worked on a variety of projects in the cryptocurrency space, including an easy-to-use cryptocurrency wallet, a stablecoin backed by the AUSD, and a version of wrapped BTC.

On the 0x side of things, we are excited to announce the 0x Launch Kit. We compare it to Wordpress, with anyone able to fork the Launch Kit and add token trading functionality to their project in a few steps.

EtherDelta Ruling

In case you missed it, the SEC charged EtherDelta creator Zach Coburn with a violation of federal securities law. Make sure to read 0x’s official statement, a regulatory update from Radar Relay, and OpenRelay’s take on the news.

The final order from the SEC is here, and worth reading.

Highlights:

-Coburn was ordered to pay $75,000 in penalty, and $313,000 in disgorgement plus interest, which brings the total to $388,000 (On a lighter note, at the end of the report the SEC details various payment options for Coburn, including paying by ACH transfer, check or mail. Obviously there’s no other way to do it, but paying SEC fines the same way you pay other things is a funny idea. Please Venmo the SEC @sec-gov)

-A lot of important dates in the report. 7/12/16: EtherDelta launches, 7/25/17: SEC releases DAO Report, 12/15/17: Coburn sells EtherDelta to foreign buyers. After the sale, EtherDelta was hacked and also announced an ICO — Spencer Noon talked about this in relation to the birth of ForkDelta a few months ago

-Lots of great links in the footnotes showing the SEC did their research, from linking to the ERC-20 spec on GitHub to Nick Szabo’s 1994 piece Smart Contracts. They also discuss maker / taker orders and even link to Coburn’s Reddit posts

There’s a lot more to be taken from this ruling, so check out this summary as well as a collection of resources below for those who want to dive deeper into the implications.

Resource List:

• SEC settlement with Paragon and and Airfox, along with a follow-up announcement about all their recent activity

• Great Coincenter article that gets into money transmitters vs security exchanges in the context of the ruling

• Bully on Twitter — read all his recent tweets

• Lawyer Priya Aiyar on why cryptocurrencies and DEXs are hard to regulate, as financial institutions target the regulation of intermediaries, something crypto wants to eliminate

• Etherscan address of EtherDelta contract — currently about $11 million, likely a fraction of the total fees collected. If anyone knows how to see the total amount of fees collected for this contract, let me know

• CoinDesk piece that brings up two key questions: the amount of liability a developer has for her code and whether this will push DEXs to change geographies

• In-depth reading of the SEC action from DLx Law

Compliance On The Blockchain

Back in April, Will released a post about compliant peer-to-peer trading, making use of the terms “permissioned token” and “permissioned liquidity pool.” Using a permissioned token, token issuers can enforce KYC / AML checks on any token transfers:

“Permissioned tokens place restrictions on transfers directly within a token’s contract code, limiting ownership to Ethereum addresses that meet certain requirements. Aside from transfer restrictions, these tokens can behave like any other ERC20 token that one may be familiar with. The most common implementation of a permissioned token is straight forward: every time the token’s transfer function is invoked, the token contract checks a Registry contract to see if the recipient is registered to a whitelist. The transfer will only complete successfully if the recipient is registered to that whitelist.”

A key part of 0x V2 was the introduction of filter contracts, which take 0x orders and check them to make sure they satisfy a set of conditions. With filter contracts, relayers can create permissioned liquidity pools, where a collection of 0x orders are only available to a select list of Ethereum addresses, thus allowing relayers to enforce KYC / AML on trades. OpenRelay is doing some work on this front with something called Order Pools:

“The idea of order pools is that we will create partitioned groups of orders within OpenRelay that have their own constraints in terms of what orders can be uploaded to the pool, and what orders should be visible through the pool.”

What’s also been popular lately in the relayer ecosystem has been Wyre, an API and SDK for compliance. Version 1 of Wyre is built specifically for decentralized exchanges — once a customer has entered her information, Wyre will mint an ERC-721 that verifies a user’s identity on-chain. This KYC token is universally accessible, meaning that each individual relayer would not need to create their own KYC token or process. The Wyre team compares this to the blue checkmark of Twitter, allowing a user to compliantly trade on a DEX. This “minter” role will initially be played by the Wyre team, but eventually, Wyre will have an open procedure for becoming a minter.

A key benefit of permissioned liquidity pools and Wyre is that market makers who need KYC / AML in order to comply with regulations can now do so. Wyre even has an an OTC trading team that will be market making on permissioned liquidity pools across decentralized exchanges.

Interview with ERC dEX’s Lindsey Renken

I asked longtime 0x ecosystem community member and CMO of ERC dEX Lindsey Renken a few questions about the progress of the 0x ecosystem thus far and the differences between relayer and protocol.

R: What it’s been like to watch the 0x ecosystem grow and mature?

L: I cannot really comment on the ecosystem as a whole, but my experience helping to operate a relayer has been really interesting. We have been around since the beginning, since 0x launched their V1 protocol. Radar and Paradex were the first to announce their presence in the ecosystem. We were just organizing our team at launch, but we announced our closed alpha shortly thereafter. It’s been a really interesting experience.. I’ve helped to found companies in different industries, biotech, travel, but my experience in crypto, and the 0x ecosystem, has been different because there are so many similar companies growing and competing so closely in parallel after this kind of “big bang” event. This phenomenon occurs whenever there is a significant innovation or market void discovered, and there is interest from a wide audience. We’ve seen this in other industries. When this happens, you get ideas from other teams, you see how you can be better, all in real time. It’s an exciting way to build a company, but it also means that you’re always on, 24/7, because you want to outpace the competition on every little thing. All companies have competitors, but this has been next-level.

R: How has the V2 experience been?

L: It’s been exciting to see V2 come out. Having developed a V1 product, V2 kind of allowed us to answer a lot of the questions and solve a lot of problems our users had been raising. We believe we’ve been able to develop a product that is easier and even better to use.

R: How does building a relayer compare to building a protocol?

L: Relayers have a unique experience because we share a protocol. We are competing with each other, but we’re also collaborating, especially those that are sharing liquidity. Because we’re built on 0x, we all want 0x to succeed, but we are also rooting for other relayers to succeed… so I would say it might be more similar than you think at this stage. We all have a shared goal: to help this market grow and mature.

R: How do you breakdown problems between what relayers need to solve and what 0x needs to solve?

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A few members from the 0x team are in Prague — say hello! The rest of us are enjoying the singing from San Francisco. If you’re at DevCon, you may have also seen DDEX’s poster in the Prague airport.

I’m also excited to introduce two new relayers building on top of 0x — Lake Trade and BlockSwap. Lake Trade is a team out of Toronto with no trading fees at the moment, so check them out. They eventually want to tackle roboadvising to become a crypto Wealthfront. Block Swap implements OTC functionality using 0x while also having a feature called Rooms, which lets communities of users transact peer-to-peer over any asset (be it CryptoKitty or niche ERC-20).

The Relayer Augur Needed

Last week I interviewed one of the co-founders of Veil, 0x’s first prediction market relayer, so I thought I’d get into Augur a bit this week, with a quick Q&A with 0x advisor Joey Krug below. I found a great profile about Augurreleased a few weeks ago, where I learned that the name Augur comes from Roman seers who could predict the future from reading the flight patterns of birds. Sounds like cool knowledge that could be used in some kind of Augur tattoo, which I looked up after I wrote this and actually found an Augur tattoo.

I also reviewed the Augur whitepaper and came across this paragraph: “All Augur assets — including shares in market outcomes, participation tokens, shares in dispute bonds, and even ownership of the markets themselves — are transferable at all times.” Any time I see the words asset and tradeable, I think relayer.

Q&A with Joey Krug of Augur

R: What’s exciting you the most in the Augur ecosystem?

J: The most exciting thing is just seeing people building on top of it to be honest! Seeing markets on celebrities’ success is pretty crazy and something I hadn’t seen before. An interesting vertical I haven’t seen targeted much would be markets on private companies, although the regulatory challenges for a company doing that would be hard.

R: What was your favorite project at ETHSF?

J: Augur Pro which was an iOS UI on top of Augur.

R: Augur was founded back in 2014, while 0x wasn’t founded until the end of 2016. There has been a lot of talk about prediction market relayers recently — did you envision some type of relayer-like vehicle for tradeable Augur assets when Augur was founded?

J: I thought people would build things on top similar to relayers, but of course didn’t know the term, and also hadn’t thought to do trading partially off-chain as a relayer way back then.

R: How would you compare and contrast Augur to more pure derivative projects (dYdX for example)?

J: dYdX is for derivatives on assets that exist on-chain as well as a protocol for margin. Augur is for everything, but probably best for assets that don’t exist on-chain. Since I believe blockchains will be a parallel financial system as opposed to the old one migrating over, I think there’ll be much more value in purely synthetic cash-settled contracts.

R: You had a great post about fees in Augur and how they’ll go down over time. Of the fees you mention in the article (fiat onramp, gas, volatility, market creator), which ones do you think will be the easiest to fix? Hardest?

J: On-ramp + volatility + creator fees will be the easiest, all fixable within the year. Gas costs and slowness of blockchains in general will take the longest.

R: What are you looking forward to in Augur V2?

J: Dai support mainly! As well as better UX that involves not needing to sync an app for hours haha.

Governance, Governance, Governance

Will and Peter presented “Building Self-Sustaining Ecosystems Through Governance” at DevCon. Our first governance experiment will be an elected committee of ZRX stakeholders who can decide where to allocate community funds. It’s important to note two things:

1. This is an experiment (on a highly experimental technology that is built on top of another piece of highly experimental technology)

2. The end goal is to decentralize power in the network and give ZRX stakeholders influence over how the protocol upgrades over time

Reading through this deck I was reminded of a picture from Chris Dixon’s article “Why Decentralization Matters”:

This S-curve has been the standard mode of operation for tech companies, but the 0x vision is to invert this, giving more and more power to stakeholders over time.

Ecosystem

LedgerDex (Matt):

• We have started supporting the EIP712 standard for typed message signing. Now when users use MetaMask to sign a new order, they will see the order details showing up on MetaMask

• To prepare for MetaMask’s upcoming security upgrade (which will stop automatic injecting of Web3), we have updated our web app so that users can still use MetaMask smoothly after the change happens

• We broke our record in daily trading volume: traded token value equivalent to USD $59,000 in a single day

DDEX (Diane):

• Wallet connect feature in development: connecting desktop DDEX to mobile Wallets using end-to-end encryption by scanning a QR code

• DDEX Wallet (iOS, Android) selective test for recovery words feature in development

• DDEX assists in the launch of WBTC (Wrapped Bitcoin Tokens) for bringing Bitcoin to Ethereum

Radar Relay (Beatrice):

• sETH has arrived Radar Relay, read more about it on our educational site http://shorttokens.io

• DNN token is now on Radar Relay

• The market order handler has been updated and is now denominated in the quote token rather than the base token, take a look before you place your next order

STAR BIT (James):

• STAR BIT EX 3.0 version and new homepage released with UI/UX renovated: STAR BIT EX

• Support EIP-712 and we could check order detail before signature

• STAR BIT EX 3.0 is able to set the trading pair based on different token or coin, such as SBT, DAI, TUSD

Bamboo Relay (Josh):

• Completed 0x v2 Standard Relayer API integration

• Worked on a draft implementation of bZx Standard Relayer API — you can now programmatically lend and borrow ERC20 assets

• Added logos, project details and links to each token pair with the view to enhance this further

Instex (Tim):

• Completing implementation of the SRA v2

• Testing relayer before beta launch

Paradex (Katie):

• Our team is busy at Devcon4 this week in Prague!

Veil (Paul):

• Revamped our data feeds infrastructure to automatically report on Augur markets and created a webpage to list and explore Veil supported data feeds

• Launched the first version of a leaderboard and user profiles, including an activity feed and stats (see @pfhas an example). We think of this as an important first step towards social markets

• Opened up Veil’s alpha, so users not using a web3 wallet can still view the product without having to first log in. We also opened up registration — now anyone can use Veil on Kovan

OpenRelay (Greg):

• We introduced OpenRelay in October 2017, and between from Flings(!) to MBGN Airdrops, and what a Massive first year it’s been

• What is an Instrument Token? Find out the surprising answer in Greg’s debut post on our official blog

• OpenRelay’s LitElement Widget Framework is now LIVE! (Follow the really long link to check out the interactive docs)

The Ocean (Monica):

• We’re hard at work revamping all things The Ocean! If you’d like to help provide feedback or contribute to our developer portal, reach out to us at hello@theocean.trade

• Our CEO, John, joined the Wyre team for their Wyre Talks podcast. Give it a listen to learn more about the infrastructural risk inherent in traditional finance and how cryptocurrency can be the solution

Jobs

Product Marketing Associate, Technical Support Associate @ Radar Relay

Links

Gluon Plasma: A Plasma Variant for Non-custodial Exchanges (Bharath Rao):

A company called Leverj, dubbed the decentralized leverage exchange, released their white paper recently, with the idea of using plasma sidechains for a high speed, low latency decentralized exchange.

Dex Research (Gnosis):

This Gnosis spec goes over a new kind of DEX design that involves batch transactions and STARKS.

WBTC: A Community Effort to Bring Bitcoin to Ethereum (Loi Luu):

Introducing Wrapped BTC, a collaborative effort by Kyber, BitGo, and Republic (with DDEX and Radar Relay as launch partners, among others.) All WBTC is fully collateralized by BTC, with atomic swapping between WBTC and BTC. While still very early, great to see more experiments on the cross-chain side of things.

Cute Cats Power Serious $15 Million Funding for CryptoKitties Creators(CoinDesk):

Dapper Labs (creators of CryptoKitties) raised another $15 million in funding, bringing its total to nearly $30 million. These are some phat cats. dYdX also raised a $10 million Series A with some of the best investors in the space.

How I Learned to Start Analyzing and Stop Building Inscrutability (Philip Daian):

Philip from IC3 tears apart security in decentralized exchanges (among other things), pointing out problems in front running, cancellations, and gas costs.

Fun Stuff

I read a really interesting interview with early free software pioneer Richard Stallman.

If you know anything about you me, you know I love watching documentaries on YouTube. Check out Nosebleed about the world of high stakes poker, and The Smash Brothers about the competitive gaming scene of Super Smash Bros Melee.

A tale of car companies and short sellers getting squeezed — Elon would love this.

Much love,

Rahul

Questions, comments, or suggestions? Message me on Twitter

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0x Is Hiring

We are excited to welcome our newest engineer Steve Klebanoff to the team (0x core is now at 25 people). The past few months has included a lot of hiring, and we still have some open positions — in particular we’re looking for a Head of Community and many engineers.

ETHSF Recap

For anyone in San Francisco this past week, the number of cryptocurrency related events was insane. It was a bit of an event overload, but here’s a rough recap of where 0x was for the week.

9/4 — DeFi Summit

What is DeFi? DeFi stands for Decentralized Finance, and it’s a collaborative organization with many of the cryptocurrency projects who are building the new open financial system. Tom our product lead gave a talk on the past, present and future of the DEX space.

For a full summary of the DeFi Summit, look here. Peter also sat on a panel about governance.

9/5–9/7: ETHSF Hackathon

The number of talented teams hacking at ETHSF was truly amazing to see. We awarded 2500 ZRX each to two teams that blew us away: Primotif and Fungible Non Fungible Tokens. Primotif lets users buy sets of Augur and dYdX short tokens to get balanced exposure to synthetic assets like the S&P500. Synthetic assets are “a mixture of assets that, when combined, have the same effect and value as another asset” (Source). In this case, Augur tokens track the underlying asset (S&P500) while the dYdX short tokens provide a hedge on the ETH/USD price. The bundling of these assets is made possible by Set Protocol, and finally the exchange of this set for Ether is done using 0x. Are you not entertained? Tom actually wrote about synthetic stock futures in his article “18 Ideas for 0x Relayers in 2018,” so cool to see someone put it into practice — with Primotif, anyone around the world can get access and exposure to US stocks. Then there’s Fungible Non Fungible Tokens, which lets anyone co-own NFTs like shares in a company. This means shareholders can vote on how the NFT is used and modified. The FNFT wallet also lets you trade NFTs (ERC721s) and their shares (ERC20s) directly on a DEX. Super cool stuff.

At ETHSF, our engineer Francesco gave a talk about tapping into 0x’s liquidity, with slides here. The slides get into a couple of our dev tools: the Standard Relayer API, an off-chain standard that lets relayers plug into a shared liquidity pool, 0x Connect, a JavaScript client for the SRA API, and 0x.js, a JavaScript and TypeScript library that has the meat of all things needed to interface with our smart contracts easily. He also gets into our Forwarding Contract, which abstracts away some complexity from making 0x trades, as well as Asset Buyer, an easy way to instantly buy assets from our open orderbook with Ether alone.

Will also sat on a panel about Building an Open Financial System with folks from Compound, Coinbase Wallet, Maker, and Dharma. The video is here (with the panel starting about 23 minutes in). Some highlights:

-This slide showing Coinbase’s ambitions from Coinbase Wallet:

-Will describes video game items as a Trojan Horse to get millions of people onboarded to cryptocurrency

-Nadav from Dharma discusses how the unbanked could make good first users for a lot of financial primitive protocols since there is less competition from traditional services (sounds like a classic Innovator’s Dilemma, where incumbents can’t or won’t tackle a subsection of possible users)

-Will says 0x’s full time job is for developers and relayers to be successful — we have customers and a responsibility to serve them. However, in contrast to normal businesses, 0x doesn’t have investors or revenue. This means that 0x is very mission driven, with a focus on doing what is best for users and developers

-Andy from Maker said he would love to see liquidity analysis from a project at ETHSF to determine what is real and fake liquidity, as well as a teardown of Coinmarketcap that subtracts cold storage hodlers to figure out the trading float in order to represent more accurate figures

10/8 — Epicenter Conference

Amir was at Epicenter on a panel about open financial systems, Will was on a panel about governance.

10/9 — New Governance Mechanisms and Cross Chain Activity Meetup

Greg gave a great talk about 0x in the context of blockchain interoperability. His talk covered how tokenization is the encapsulating of value in any form as well as the standardization of it (with standards like ERC-20). This encapsulation and standardization allows tokens to be traded freely. However, in the current blockchain landscape disjoint blockchains means value too is fragmented. Centralized exchanges form bridges between blockchains through deposit in a trusted escrow, though this comes with various drawbacks. While decentralized exchange is a better alternative, the missing piece to truly unleash DEX is blockchain interoperability.

10/11–0x Meetup

We revealed a really cool tool we’ve been building for a while! More about it next week. The Veil team also gave a presentation, but I’ll dive into Veil more below.

10/12 — NonFungible Summit

Tom presented on how the current NFT marketplace is very fragmented, and how 0x with its shared liquidity and open nature could be a good solution.

Behind The Veil

I’d like to introduce Veil to our readers — Veil is building a prediction market relayer leveraging Augur and 0x. Before reading further, check out the Veil website, Twitter, and Discord. I was messing around with the Veil alpha — here’s a look at it here.

My first question for a market like this was how the payout would change as time got closer to the date, as that would increase the chances of being right. Paul’s response: “For any contract/market that expires at X, as time approaches X, pricing of long/short shares should become more certain. For binary markets, a frenzy of trading may happen near the expiration of the market, because of the way payout works in binary markets (winner-take-all). That behavior may be less pronounced in scalar markets, where minute differences in value only have minute differences in payout.” If you want to build an Augur Relayer, check out our Rocket.Chat channel made for that purpose.

Q&A with Paul Fletcher-Hill of Veil

R: What’s the founding story of Veil?

P: Mert, Graham, and I have been working together for over 5 years, most recently via a blockchain-focused development studio we started called Hill Street Labs. We’ve been excited to see many primitives of the traditional financial system deployed to blockchains as open protocols — things like loans, exchanges, derivatives and prediction markets. But we’ve been disappointed with the lack of usage. So we decided to build Veil as a platform on top of these protocols, Augur in particular, to help many more people engage with this new financial system.

R: Why did you choose to use the 0x protocol?

P: One of the challenges of using Augur today is that every interaction is done on-chain. We wanted to make trading on Augur easier, cheaper, and faster, so we built an off-chain order book with 0x. We’ve been really impressed with 0x’s developer experience and have had a great time getting to know the team.

R: What have been your biggest technical roadmaps and challenges?

P: One notable challenge was writing order book logic for Augur markets. There are three types of Augur markets: binary (i.e. yes/no), categorical (i.e. one of many outcomes), and scalar (i.e. long/short, payout depends on where final value is between two bounds). Right now we support binary markets and scalar markets, so all markets on Veil only have two outcomes. One way of building a trading experience for these markets would be to have an order book for each outcome — buys and sells for short tokens and buys and sells for long tokens. We thought having multiple order books for each market was confusing for users, so we normalized orders and created just one order book using 0x’s matching model that shares liquidity between long and short tokens.

Sign up for Relayer Report here

It’s been a busy couple weeks at the 0x office, with updates on all fronts. We’ll be hosting some events at ETHSF, and really want to encourage as much hacking on our protocol as possible. For hackathon ideas read this blogpost here, and also check out this general event guide from CryptoWeekly.

Starting next newsletter we’ll be adding the Everbloom team to the Relayer Report, who are a dEX incorporating 0x V2 that wants to get a broker/dealer license. More info here, very cool to see relayers targeting new and unexplored verticals.

The Future of Gaming

As I mentioned in RR #10, 0x V2 has officially launched, with mainnet testing now complete. The key words for V2 are modularity and extensibility, which will allow devs to be creative with what they can build on 0x. NFT support has been a big part of V2, and we’re already seeing traction. Gods Unchained, an Ethereum based trading card game that recently sold 1 million cards, is building its player marketplace on V2, meaning when players trade their NFT-based cards they do it directly with each other as opposed to having a centralized intermediary in between. Check out an interview with Gods Unchained co-founder James Ferguson below.

Gods Unchained@GodsUnchainedIt’s official - we’re building our player marketplace on the new 0x V2! Huge congratulations go out to the team over at @0xProject for this recent release. We're thankful for your significant contributions in building a tokenized world where all value can flow freely.

September 25 2018

33 Retweets168 Likes

This is a small glimpse into the power of a protocol for decentralized exchange. Anything that was peer to peer in the real world is now getting a digital, blockchain based facelift, which VentureBeat reported on as well. I used to play Yu-Gi-Oh! a lot when I was a kid, and when I was helping my parents move houses, I found a huge box of cards that I had completely forgotten about. I thought to myself these cards would probably be valuable to someone, somewhere, but I hadn’t played in years and I didn’t know anyone who still did. Going to eBay, finding which cards were valuable, posting a hundred sell orders and shipping each card around the world sounded like a nightmare to me. So all my Yu-Gi-Oh! cards are still in the box, rotting away.

Now imagine instead I found on my private wallet a huge stack of Gods Unchained cards. I could immediately find out the going rates for all my cards, check the source code to see how many copies were ever made, and sell them across the world almost instantly. I would have complete ownership of a digital asset with computational proof of what it actually is and how many duplicates exist. I could even bring these collectibles with me to Gods Unchained 2 as a vintage legacy item, with the portability of these NFT assets letting game developers build networks and lineages into game play. And the best part is my holographic limited edition Blue Eyes White Dragon could never have coffee spilled on it (though I guess I could lose my private key… we need more user friendly wallet tech!). A very small use case, maybe, but then let’s take it a step further: in his talk at ETHBerlin, Nadav from Dharma mentions that Dharma would soon like to offer NFT-collateral based loans. So I could take my ultra-rare Gods Unchained card, use it as collateral for a cryptocurrency loan, and then use that money however I see fit. This is so freaking cool. This is the open Internet I was promised. (That being said, NFT collaterals sound great in theory but it sounds like a nightmare trying to analyze the risk profile of a Crypto Kitty. But maybe there would be a Dharma underwriter and relayer that focused on giving NFT based loans.)

Utility for the user is one angle to look at the blockchain and video game connection, but another is video games as a vehicle for mass blockchain adoption.

Clay Robbins@crabbylionsGames add 3 novel elements to the crypto ecosystem: 1/ Habitual usage through game mechanics 🔄 2/ Exchange as a secondary function of the product experience (enabled by @0xProject 😉) 3/ A MASSIVE entry point for new users log

0x@0xProject

0x leads the way for ‘tokenization’ of the world, and collectible game items are next @VentureBeat https://t.co/iHptIdGrAZ

September 24 2018

2 Retweets8 Likes

Loom Network had a great article on this titled, “Games Will Be the Catalyst for Blockchain Mass Adoption.” Here, Loom articulates its vision that a blockchain based game will be the first killer app of the Ethereum ecosystem, something I agree with. The explosion of PokemonGo and Fortnite are prime case studies in how fast video games can reach millions of users. With Epic Games’ partnership with MagnaChain (a blockchain built specifically for gaming), Fortnite on the blockchain might not be so far away. The asterik here of course is that the mainstream video game industry has shown absolutely no signs of slowing down, so competing against these giants with blockchain based games (like Loom Network might want to do) will be difficult.

The final interesting piece in all this is that gamer and crypto values are pretty aligned. The best example of this of course is Vitalik Buterin himself:

“In a life defining moment, Buterin remembers playing World of Warcraft in the year 2010. One day, Blizzard made the decision to remove the damage component of ‘… [his] beloved warlock’s Siphon Life spell.’ Crushed, he ‘cried [himself] to sleep,’ and ‘realized what horrors centralized services can bring’” (Blockonomi).

Think of mods, which are fan alterations to video games, and how similar that sounds to an open source fork. So here we have a huge industry with cryptocurrency like values and an insanely fast ability to evangelize new technology. This sounds like a recipe for disruption… and to any Dune fans sounds like Paul Atreides finding his army in the Fremen. If you can’t get enough of the latest in NFTs, Tom of 0x will be speaking at the NonFungible Summit on October 12th in San Francisco.

P.S. I also heard about a company named Blok.Party for the first time, which raised $10 million and is adapting Settlers of Catan to its blockchain game console. (More info here). 10 million is a lot of money, what is a blockchain game console, and then this quote:

“Most of the pieces are digitized too, and we used and traded our cards using smartphones. But there is a physical ‘robber’ piece, because Chen said this allows the robber’s movement to remain ‘a very visceral experience … that a digital version can’t ever capture.’”

I think I just have to be a VC here and ask what my six year old daughter thinks about this trend. If you’re interested also check out their promo videoand tell me if you would play this thing.

Clash of the Titans

At first, there seemed to be enough of a market for Coinbase and Binance to do their own separate thing. Binance with a regulation later, global, speed-first approach, Coinbase with the law-abiding, secure, US-centric approach. But now these companies are too big, and the curse of ever-increasing ambitions and growth has set these them on a collision course.

There was a profile on Coinbase by Fortune titled, “Coinbase Wants To Be Too Big To Fail.” The article has some interesting tidbits, like that Coinbase is making a big push into security tokens, as well as some amazingly ridiculous lines:

“Fretting about compliance didn’t endear Armstrong to the crypto world’s self-styled renegades, whose tastes run towards cocaine, Lamborghinis and anti-government diatribes.”

“He and a small retinue are gathered in a hotel restaurant near Dupont Circle, where the food is both expensive and mediocre.”

And some great ones: