Relayer Report #19—Extension Contracts, Ethfinex on V2, and Tokenary Interview

The latest updates from the 0x ecosystem: 3/12/19

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Relayer Report is moving to a monthly format! I say that with a heavy heart, but I am scaling back my thought leadership to focus on fewer but higher quality issues.

0x Recap

Ethfinex Moving to V2

Ethfinex, a first of its kind, hybrid relayer is moving to 0x V2! Ethfinex’s model is pretty interesting in that it gives users access to the liquidity of its sister centralized exchange Bitfinex, while keeping the secure, wallet-to-wallet trading functionality of a 0x relayer. Ethfinex had a few reasons for the switch:

  • ERC721 compatibility, meaning greater scope and flexibility with tokens getting added to the exchange

  • Increased reliability and speed with new, streamlined order-data formatting

  • The inclusion of a new signature type, bringing with it two main end-user improvements: more human readable data shown in Metamask when signing a message and more order creation flexibility for contracts

  • Easier integrations with the wider 0x ecosystem as a whole

Ethfinex also recently celebrated its first birthday, now a group of 25 located largely in London but having remote members in Copenhagen, Switzerland, Prague, and elsewhere. On the liquidity side, Ethfinex’s top token pair is ETH/USDT, with other Dai pairs gaining popularity as well. Stablecoins are a huge interest for traders at the moment due to various arbitrage opportunities.

Finally, easier wallet integration remains a focus for the team moving forward, with Ethfinex CEO Will presenting at ETHCC and highlighting the high friction of the current wallet landscape. Ethfinex has enabled a range of popular wallets on their platform, including Ledger, Trezor, MetaMask and Portis.

Tokenary Interview

I sat down with Tokenary, the winner of the 0x + CoinList Hackathon for a few questions about their team and project. Tokenary built a way to trade NFTs over Bluetooth and WiFi.

Q: What is your team’s background? How did you end up interested in cryptocurrency, 0x, and NFTs?

Our five-person team is purely technical. When we first started using the Ethereum network in 2016, we faced many usability problems common to new technologies. In an attempt to address them, during the Qtum hackathon in Moscow in the summer of 2017, our team developed a prototype of a simple wallet application. After that, we started experimenting with different product features to make interactions with Ethereum as simple as possible but without compromising on trust and security. We started exploring NFTs with the release of Crypto Kitties and developed a native interface for tokenized collectibles back in early 2018. We also experimented with different trading features and that’s one of the reasons why we come up with a P2P idea.

Q: What are a few of Tokenary’s use cases? Do you have plans to continue the project?

Tokenary is a user-friendly way to interact with DApps across different devices. We provide three options for that:

- A brand new Safari Web3 extension

- Tokenary DApp browser for iOS. We have a super simple interface that allows you to switch between multiple Ethereum accounts

- WalletConnect, which allows for using a DApp in a browser and sign the related transactions in the Tokenary iOS app

Q: What are a few things that excite you in the NFT space right now?

We are incredibly excited about new use-cases like gaming, fantasy sports, digital arts, charity, coupons that NFTs could support and bring to global scale. We hope that many new secondary markets will emerge and drive crypto adoption among the younger generation. It would also be great to buy NFTs through in-app or card purchases.

Ecosystem

LedgerDex (Matt):

LedgerDex is an open order book relayer that allows wallet-to-wallet trading of Ethereum-based token as well as next generation token management.

  • LedgerDex has integrated 0x Instant so that users can buy tokens more easily without the needs of ETH wrapping and setting allowances. For details, please see our blog announcement

  • Updated the LedgerDex web app and API server to use the latest version of the 0x.js library

  • Updated the popular trading pair list on our web app

Veil (Paul):

Veil is a non-custodial trading platform for blockchain-based derivatives and prediction markets.

  • Launched a redesign of the Veil market pages, which features multiple odds formats and a new concept called wagers (shareable limit orders). Try out the new UI on any binary or categorical market

  • Listed new markets. Now you can speculate on how much ETH will be locked in Uniswap or Compound or take 5x leveraged long or short positions in Maker (MKR) or Binance Coin (BNB)

  • Added notifications and orders page, so it’s easier to keep track of what’s happening across all the markets you’re participating in

OpenRelay (Greg):

Open Relay is an open order book relayer with a focus on scalable and open source backend infrastructure.

StarBit (James):

STAR BIT is a matching order book relayer based in Taiwan.

  • Added the wBTC trading pair

  • Looking into adding bZx function for the margin trade in the next version of the exchange, this is the bZx research article from STAR BIT

EMoon (Jim):

Emoon is a peer-to-peer marketplace for the exchange of ERC-20 and ERC-721 crypto assets.

Ambo (Jai):

Ambo is a mobile-focused wallet and relayer acquired by MyCrypto.

  • Putting the finishing touches on our iOS app

  • Getting ready for launch SOON

Bamboo Relay (Josh):

Bamboo Relay is an open orderbook relayer for ERC-20 tokens.

  • Improved mobile wallet integration. The following wallets should now work on both Android and iPhone: Trust, Cipher, Coinbase, imToken, Alpha Wallet, Opera

Mobidex (Abe):

Mobidex is a mobile first wallet and open orderbook relayer.

Radar Relay (Whitney):

Radar Relay is an open order book relayer made by an international team based in Colorado.

  • 0x.js libraries updates and troubleshooting bugs

  • Added tokens GOLD and ENJ

  • Added an indicator line to show where limit orders will land on the spread

  • Radar ION resources now include mainnet

Lake Project (Rishabh):

Lake Project is a Canadian relayer building user-friendly trading and investing tools for the decentralized financial future.

  • Adding in DAI support and 0x Instant

  • Refactoring for scale add adding in multi-wallet support

Token Mom:

Token Mom is a relayer based in Taiwan with no exchange fees and no minimum order.

  • Tokenmom has various programs like the referral and reward systems and is working on adding a trading competition airdrop and voting system for new token listing

  • You can find the link at landing page of tokenmom.com

Links

The Three Powers of Augur (Ben Davidow):

A nice, succinct summary of what Augur could do, which is quite a bit, and Ben has an Augur newsletter as well I just subscribed to.

Dai in Numbers (MakerDAO):

A #datadriven look into Dai.

Algorithmic Trading in Crypto (Kevin Zhou):

Great intro into all things algorithmic trading in the crypto world.

4 Takeaways from ETHDenver (Lake Finance):

Good post from relayer Lake Finance on their thoughts around ETHDenver.

Defi Pulse:

Snapshot of all things DeFi.

CoinCenter Against Surveillance Overreach (Jason Somensatto):

Our legal counsel Jason voices his support for a CoinCenter piece against the surveillance of developers and users.

Fun Stuff

A really good explanation of this abstract idea of “state” from Denis Nazarov of A16Z crypto.

The London Whale, who lost $6.2 billion for JPMorgan Chase & Co.

Charles Howard, the Porta Potty King of NYC.

Wealthy, Successful, and Miserable: why people aren’t happy at work.

A 45 minute documentary on The Black Lotus, the rarest card in Magic: The Gathering. Really interesting deep dive into the world of collectibles, and the quest of how to determine authenticity for said collectibles.

I read this extremely prescient piece from Bill Gates in 1995 when it was compared to Zuckerberg’s new privacy memo by Fred Wilson of USV. Bill Gates is explaining how Microsoft will pivot as a result of the potential of the Internet, and Bill Gates totally nails it. The thing is, this made me think if crypto takes off, how many thought leaders are going to come out and point to their former tweets and blog posts and tell everyone how they called it. They will have been right in this scenario, but, seriously think about that for a second, if crypto takes off there will be literally thousands of tweets and articles about how people called it. Like there are so many tweets.

Much love,

Rahul

Questions, comments, or suggestions? Message me on Twitter

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Relayer Report #18 — CDP 101, MyCrypto Acquires Ambo, DappBoi, The Donut Wars

The latest updates from the 0x ecosystem: 2/5/18

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For this week’s Relayer Report, I put some time and effort into the new Try DeFi section, explaining how to open a Maker CDP (big thanks to Matteo and Max for helping me write that). I would really appreciate some feedback / Twitter roasting.

Will was at AraCon on January 30th, and he gave a presentation titled “Using Metamodels for Cross-blockchain Governance.” The 0x + Coinlist Hackathon ends February 7th and we had some great workshops from Veil, Wyre, and Radar, among others. Our January Dev Update included a variety of interesting stuff: smart contract tools for the broader ecosystem, more Python packages, and a lot of research (TEC, Selective Delay, Continuous Time Matching, TEC Compatibility with Forwarding Contract).

DappBoi Radio

The coolest Instant Integration might have to go to designer Matthew Vernon, affectionately called Dapp Boi. Dapp Boi is selling the BOI token, which is redeemable for Matthew’s design and dev work. Before you say this is indentured servitude, Dapp Boi has a list of reasonable terms: he will not mow your lawn, he will not work on illegal projects, and he has the right to refuse anyone. The project was inspired by Dapp Boi’s reading into Personal Tokens, allowing people to profit share in individuals just like they do in companies.

One Donut To Rule Them All

Will had a tweetstorm on the whole donut debacle, but here’s the short story — on a popular cryptocurrency subreddit called r/ethtrader, karma (or the internal credit system, think likes, favorites, or upvotes) is represented in credits called donuts. There are two million donuts minted each week, and they’re awarded to users for upvoted content. Donuts are powerful signaling for people in the ethtrader subreddit — the more donuts someone has, the greater their reputation. Donuts can also be used to set the banner image on the subreddit.

A community member created donut.dance, a website that converted donuts into tradeable ERC-20 tokens. Users traded donuts on BoxSwap and Uniswap, enabling Will to quickly become a Donut whale….

And upload a custom 0x banner to the subreddit:

As a result of the tokenization of Donuts, the price of Donuts exploded. Last I checked, the subreddit was discussing how to decentralize the Donuts process. Super cool stuff.

MyCrypto Acquires Ambo

Ambo is a 0x relayer and mobile wallet led by a three person team out of LA, and they were recently acquired by MyCrypto. I sat down with Jai Bhavani, CEO of Ambo to dive deeper.

Q: How will Ambo fit into the MyCrypto vision? How will your role change?

At MyCrypto, Ambo will continue to work on developing the Ambo Wallet and build it out for all three major platforms (Web / iOS / Android). That being said, over the past month our goal has evolved into ‘making web3 accessible.’ With some upcoming projects, we hope to turn the investment motive surrounding trading beyond just pure “speculation,” and encourage the “utilization” of the these tokens that people are pouring money into.

Q: How did you hear about 0x? What made you interested in the ecosystem?

We started building Ambo on a centralized exchange and that required our users to input API keys which was an absolute user experience nightmare. After seeing Tom’s post, “18 ideas for 0x Relayers in 2018,” we realized we were building on almost half of his ideas and instantly we knew that we wanted to build on 0x. I emailed Tom and received a response within a day and we had implemented 0x within the next 2 weeks.

The updates to 0x are what have kept us here. Our team initially had issues with autonomous wrapping and token allowances and despite us fixing them, the 0x team created the ‘Forwarding Contract’ which ensured that no developer would suffer the same issues.

Q: A good user experience seems to be one of the core selling points of Ambo — how has Ambo made UX a priority? What are other crypto teams doing wrong when it comes to UX?

Our superb user experience is one of our proudest accomplishments. We leverage anonymized data on how our beta testers use the app in order to inform every decision that we make. We tried to make the broadest beta group possible (people in crypto, traditional investors, students) in order to ensure our app can capture all of these different users on launch.

Additionally, we find many other wallet products in the ecosystem fundamentally flawed. These wallet products rely on dApp browsers. Those browsers serve the dApp developer’s experience which inevitably clashes with the experience created by the wallet. At Ambo, we believe that protocols like Augur should be focused on producing the protocol and instead allowing people like Ambo, Veil, and Guesser to build on top of it rather than building their own interface. This will allow for protocols to build the best protocols possible, and products to build the best experience.

ForDex: A Stablecoin Relayer

The team over at Zenprivex has been hard at work building a stablecoin focused relayer called ForDex. ForDex will have a range of centralized and decentralized stablecoins in one place, from USDC to DAI to non-USD stablecoins like KRWb, the Korean Won. Additionally, ForDex will have a fiat on ramp for their services made in collaboration with Wyre, as well as key plugins to traditional forex markets.

While it is currently in alpha mode, if interested in partnering with ForDex contact partnership@fordex.co, and if you want to keep up with their latest updates, follow ForDex on Reddit, Twitter, Medium and Telegram.

Ecosystem

Bamboo Relay (Josh):

Bamboo Relay is an open order book relayer for ERC-20 tokens.

  • Token approvals and wrapping ethereum are now streamlined by batching these actions before placing or filling orders

  • SRA websockets now emit changes for orders that have their statuses changed, i.e. filled, removed, canceled

  • We have started improving UX for mobile wallets and small screens

Radar Relay (Whitney):

Radar Relay is an open order book relayer made by an international team based in Colorado.

  • Announced Radar as the parent brand that maintains Radar Relay

  • Click to copy amount for market orders — in testing

  • Added WBTC trading pairs

  • Minor layout updates and scroll bars — in testing

  • Backend, 0x libraries updated in preparation for TEC

Emoon (Jim):

Emoon is a peer-to-peer marketplace for the exchange of ERC-20 and ERC-721 crypto assets.

  • The four top ERC721 crypto assets available (CryptoKitties, God’s Unchained cards, Decentraland parcels, Etheremon monsters) for trading on the site

  • Asset explorer is complete: https://www.emoon.io/assetExplorer

  • English auction bidding platform released, enabling users to auction off assets, accepting bids for either ERC20 tokens or ERC721 assets (functionally a swap)

STAR BIT (James):

STAR BIT is a matching order book relayer based in Taiwan.

  • STAR BIT made a SLOT game for Chinese new year events and this time we support both ETH and SBT

  • Will support WBTC in near future

  • Developing a few Dapps for an upcoming event

Ambo (Jai):

Ambo is a mobile-focused wallet and relayer acquired by MyCrypto.

  • We have been acquired by the team at MyCrypto!

  • We are putting the finishing touches on our mobile app before it goes in for a security audit

Lake Project (Rishabh):

Lake Project is a Canadian relayer building user-friendly trading and investing tools for the decentralized financial future.

  • Revamping authentication and wallet service to support multiple wallets in the near future

  • Getting ready to add in DAI support

  • Productizing AI to be used within the 0x ecosystem in the near future

OpenRelay (Greg):

Open Relay is an open order book relayer with a focus on scalable and open source backend infrastructure.

Bit2Me (Ivan):

Getting its start in 2014 by connecting Bitcoin with thousands of ATMs in Spain, Madrid based Bit2Me is a matching relayer for ERC-20 tokens.

  • Full responsive support with app-like interface in the browser

  • Running full tests both in the back and the frontend to ensure support on launch day

  • Ending the final retouch of the interface

BoxSwap (Charles):

BoxSwap is an over-the-counter relayer made for swapping ERC-20 and ERC-721 assets in a network of marketplace communities.

Try DeFi: Opening A CDP

The MakerDAO CDP sounds like a CIA covert operation that just became public, but I’m here to break it down for you.

The Basics

  • MakerDAO is the organization behind Dai, a stablecoin that is pegged to the US Dollar. 1 Dai will (hopefully) always be worth 1 USD, but MakerDAO accomplished this without any centralized entity nonsense (like Tether, USDC, TrueUSD etc.) or shutting down (Basis)

  • A CDP stands for Collateralized Debt Position. In essence, you take out a loan with Ethereum as collateral (though in the future Maker is exploring more collateral options). Nearly 2% of all Ethereum in supply is locked up in CDPs, completely dwarfing all other protocols. Very impressive (Maker has a bunch of cool data visualizations at mkr.tools)

  • Maker has made opening a CDP as easy as possible — with the use of proxy contracts, locking collateral and generating DAI all happens in a single atomic transaction, without the tedious approving of allowances or wrapping of Ether. There’s a reason so many people are opening CDPs — it’s easy to do!

Collateralization Ratio

There’s a few numbers and ratios to keep in mind when creating a CDP. The first is the collateralization ratio, which is the value of your locked up collateral divided by the value of the amount of DAI you take out as a loan. The minimum collateralization ratio now is 150% percent, so if the collateralization ratio dips below 150%, your CDP is liquidated. In the liquidation process, a CDP is locked, the collateral is auctioned off to cover the CDP’s debt, and the remaining collateral is returned to the user (minus the liquidation penalty, which is described below. For a full in depth on liquidation, MakerDao had a good Reddit post).

Let’s say you have 1 ETH, valued at $150. To find the maximum number of DAI you can create, you solve for x: 1.5 (the collateralization ratio at 150%) = 150 (the value of collateral) / x (number of Dai). Here, x is equal to 100 Dai. The caveat is, however, that since your CDP is liquidated any time the collateralization ratio goes below 150%, if you take out a 100 DAI loan with ETH valued at $150, ETH dropping 1 dollar would liquidate your CDP (149/100 = 1.49, which is less than 1.5). As a result, it is best to overcollateralize your loan with a ratio above 150% (Maker recommends a ratio of 200% and above). At a 200% collateralization ratio, you would only be able to mint 75 DAI, but you would lower the risk of your CDP getting liquidated.

The global CDP collateralization is 282%.

Stability Fee and Liquidation Penalty

The other numbers to keep track of are the stability fee and liquidation penalty. Right now, Maker charges 0.5% APR per year in a kind of tax for keeping the whole system stable, and the revenue from this tax goes to MKR holders (eventually part of this tax will go to the Dai Savings Rate). The MakerDAO community recently voted on decreasing the stability fee from 2.5% to 0.5%, which was approved, with the latest governance call suggesting the stability fee will go up to 1.5% soon. Much like how the US government plays with interest rates to affect the economy, the reduction in the stability fee incentivizes the minting of more DAI. At the same time, the stability fee is paid in MKR (MakerDAO’s other token, used for governance) and then burned, so decreasing the stability fee increases the amount of MKR in the world, which (in theory) should decrease the price of MKR. Thus far, 530.64 MKR has been burned to date, visualized by Maker here.

The liquidation penalty for a CDP is the amount that will be subtracted when a CDP is liquidated — the current liquidation penalty is set at 13%. When compare to Compound’s liquidation ratio of 5%, for example, this liquidation penalty seems to be pretty high — the reasoning behind this is to incentivize CDP owners to maintain margin and keep the system stable, with any 3rd party able to liquidate a CDP a profit.

What’s the point?

It’s easy to see why a stablecoin like DAI is valuable to the Ethereum ecosystem — volatility in cryptocurrencies is very real, and for a decentralized finance system, a stable medium of exchange is absolutely necessary. What in the world, though, is the point of creating a CDP? Since CDPs are overcollateralized in nature, why not just sell the ETH you have for DAI?

1. Go long on crypto

The biggest use case for a CDP is leverage — taking the DAI that you mint and going out and buying more crypto. A great example of this is the Looping CDP launched by InstaDapp (the people behind MakerScan, a data analytics page for all things MakerDAO). Looping CDP lets you take out a 3x recursive leverage long on ETH, meaning in one click, the following happens:

a. You take out a CDP using ETH as collateral and receive Dai

b. You trade the DAI for ETH

c. You use the new ETH to create another CDP and receive Dai

d. You trade the new Dai for ETH

e. You create another CDP with your new ETH

If the price of Ethereum goes up, you profit. If it goes down, let’s not talk about that.

2. Take loans from yourself

Let’s say you have a $5,000 student loan at a 5% interest rate over the next 4 years. Instead of sticking to the terms of the loan, you could take out a $10,000 loan from a CDP, pay off your current loan in cash, and your new interest rate is 0.5% as opposed to 5%. You could even sell Dai for cash and put it into an index fund that returns 7% annually, meaning you are being charged 0.5% for 7% returns. The caveat, however, is that this only makes sense if you are set on maintaining your long exposure to ETH over this time period. If ETH falls more than 5%, this does not make as much sense. (Capital gains also need to be factored in to this simplified model. Thanks to this Reddit comment as well for the ideas around this).

3. Profit from demand for Dai

At various points, the price of DAI has exceeded $1 when the demand for DAI has been greater than the supply. In this case, a user can create a CDP, mint Dai, and sell it for greater than $1, meaning immediate profits. At the same time, when the demand for Dai is less than the supply, people with open CDPs are incentivized to buy back Dai at sub $1 prices and pay back their debt on the cheap. This ebb and flow keeps the price of Dai at $1. (Great post from James Seibel that digs into this a bit).

Aftercare

To avoid the dreaded liquidation of your CDP, it’s important to take care of it. Overcollateralization is a great first step to give you some breathing room, but especially if the price of ETH is going down, stay vigilant. In addition to the Maker CDP portal, check out this Telegram bot that sends you updates on your CDP.

Further reading

Chris Burniske and Alex Evans on MakerDAO adoption

Cyrus Younessi on the relationship between DAI, MKR, and ETH

Rune’s original post on r/ethereum 3 years ago

CDP tutorial from Crypto Bobby

Links

The thin crusty of liquidity: why crypto needs more market makers (Hummingbot):

A great post from Hummingbot, a market making as a service company, on the current fragmented liquidity landscape in crypto.

0x and English Auctions on Emoon (Emoon):

NFT relayer Emoon has implemented English Auctions for ERC-721 assets. An English auction is when bidders can see each others bids, prompting a bidding war.

Welcoming Predictions.Global to Veil (Veil):

Veil acquired Predictions.Global, a popular website for browsing Augur markets. Founder Ryan Berckmans will be joining Veil in an advisory capacity.

Dharma Labs Raises 7 Million (CoinDesk):

Dharma closed out their Series A with $7 million in funding from Green Visor Capital, Polychain, and Coinbase Ventures among others.

A Wallet For NFT Traders (BoxSwap):

NFT relayer BoxSwap with a portfolio like website to manage your NFT assets.

Fun Stuff

Spanish people complain that their new devil statue looks too nice.

zkERC20: the confidential token standard.

Accidentally Turing complete — not all things were meant to be Turing complete.

The coincidence of wants.

“Bitcoin investors may be out $190 million after the only guy with the password dies, firm says”

Much love,

Rahul

Questions, comments, or suggestions? Message me on Twitter

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Relayer Report #17 - Making Money in DeFi Now, Veil and Mobidex Launch, 0x Tracker Redesign

The latest updates from the 0x ecosystem: 1/18/19

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Welcome back to the Relayer Report. I took a break for New Years and it feels like I haven’t done this in a while. I guess I’m getting nostalgic now that we’re in 2019, but I still remember the first Relayer Report I wrote back in May from my college dorm room… Time flies. I got into the habit in that room of working from my bed, something that I still do now, is that bad for my back? Asking for some wisdom from the crowd.

0x ended 2018 with a bit of a bang, with the public unveiling of the ecosystem acceleration plan, a website redesign, the CoinList hackathon announcement, and the Coinbase Earn announcement. Since the new year started, we’ve had some big updates as well.

First, we added longtime community ambassador Brent Oshiro to the team. Brent’s been helping out the 0x team purely out of passion for a while now, so it’s exciting to have him join the team full time. Welcome Brent!

Next, we announced our Market Maker program, which will be providing onboarding, support, and monetary incentives for market making on 0x. Bringing liquidity onto our DEXs is a huge huge priority, and we’re doing everything we can to make it happen.

On the dev side. Leo published this piece about the release of a couple of our internal ethereum dev tools for the public. With the Unix philosophy of “each tool should only do one thing, and one thing well,” the tools can make compiling your Solidity easier, give you stack-trace like error messages, measure code coverage, and save you gas. They’re general purpose and built for the broader Ethereum community as a whole, and come with sexy documentation.

Steve published our monthly dev update, which has a lot of cool features we’ve been messing around with and adding to the protocol. We’ve been working on a Python SRA client, a robust data pipeline, and some extensions to our current contracts, like a Dutch Auction extension and testnet implementations of our Multi Asset Proxy.

Finally, Will published a post about the 0x Roadmap, detailing our three priorities for the year (data, liquidity, and DeFi), as well as the processes around our ZEIPs (0x Improvement Proposals). The ZEIPs are our chance to test and experiment with governance processes, and the first few ZEIPs cover the Multi-Asset Proxy, ERC-1155, and the TEC (trade execution coordinator).

0x Tracker Redesign

0x Tracker is a great tool from the community and recently got a fresh new look. Check it out and play around — it has a great snapshot of what’s going on in the ecosystem at the moment. Follow 0xTracker on Twitter to stay up to date.

Veil and Mobidex Launch

Veil, the love child of 0x and Augur, just launched on mainnet this week, in addition to announcing a seed round from Paradigm, Sequoia, and 1Confirmation. I interviewed Veil in RR#12, and they described the advantages of using 0x’s off chain orderbook model to make Augur faster and cheaper to use. Additionally, Veil has the power to instantly settle their markets, as opposed to the multi-week settlement process of Augur, meaning users can get their winnings faster. The Veil team published educational content around the company here.

Unfortunately, Veil is closed to to users in the US and a few other countries. Nick Tomaino from 1Confirmation details the difficulties of complying with regulations for companies like Veil:

“The regulatory landscape for Augur is unclear, especially in the United States. Entrepreneurs in the U.S. must consider the CFTC when it comes to derivatives regulation for binary markets, state regulators when it comes to gambling, as well as FINCEN and CFPB when it comes to money transmission. Until more clarity is given by regulators on how they view Augur and Augur-based services, it is important to tread carefully based on your role in the ecosystem and jurisdiction.”

In addition to Veil, 0x mobile first relayer Mobidex also launched this week. Download Mobidex on the Google store or App Store.

0x Team Spotlight: Greg Hysen (Blockchain Engineer, Office Canadian)

Q: What’s your role at 0x and what have you been working on lately?

I’m a Blockchain Protocol Engineer. As an engineer on the protocol team I focus primarily on smart contract R&D, which involves a variety of interesting research areas: interoperability, token mechanics, and generally how to make our protocol more accessible, flexible and extensible. The role more or less continuously evolves along with the industry, which keeps you wired in.

Q: How did you get into crypto? What were you doing before 0x?

I started doing web dev back in high school and kept running into questions that forced me to gradually work my way down the stack. I built a website and wondered: how does the browser work?; then it was, How does the server work?; and then How does the operating system work? Eventually I’d worked my way down to designing processors in Verilog, and that’s when I was finally ready to stop. You couldn’t trust me with a logic board and a soldering gun.

I eventually found my passion in operating systems. I co-authored a microkernel for autonomous navigation and spent a few years contributing to a distributed 3D mapping platform for drones.

I first learned about Bitcoin in a cryptography course at the University of Waterloo, but my interest really peaked after I discovered Ethereum. It was a new kind of OS with a ton of fascinating problems yet to be solved.

Q: What’s the weirdest / most interesting thing you’ve found when working with smart contracts?

You’re only ever one bad instruction away from losing everyones money and that keeps you on your toes.

Q: As a Canadian, what do you think of America?

There is but a fine line between us.

Ecosystem

BoxSwap (Charles):

BoxSwap is an over-the-counter relayer made for swapping ERC-20 and ERC-721 assets in a network of marketplace communities.

  • Went from supporting Cryptokitties -> supporting Cryptokitties, MLBCryptoBaseball, Decentraland Estates, Axie Infinity

  • Introduced a beta program where we guide users through a swap and give away crypto-collectibles

Bit2Me (Ivan):

Getting its start in 2014 by connecting Bitcoin with thousands of ATMs in Spain, Madrid based Bit2Me is a matching relayer for ERC-20 tokens.

  • Multi-language support in: Spanish, English, Portuguese, Italian and Romanian. More languages in the future

  • Native Ledger support in web implementation and future implementation for mobile.

  • Fiat support through Tikebit (Service to buy ETH in physical stores)

STAR BIT (James):

STAR BIT is a matching order book relayer based in Taiwan.

  • Optimize URL transaction order

  • Developing a new Dapp game for the Traditional Chinese festival

  • Redesigned a new homepage for the demand of business collaboration

Emoon (Jim):

Emoon is a peer-to-peer marketplace for the exchange of ERC-20 and ERC-721 crypto assets.

  • Listed 8 new ERC20 assets

  • New ERC721 assets in the works with deep metadata support

  • Working to enable relayer API with ERC721and ERC20 assets

Radar Relay (Whitney):

Radar Relay is an open order book relayer made by an international team based in Colorado.

  • Added Spanish and French to the user interface

  • Added an indicator line for limit orders to show where on the spread they will be placed

  • Added USDC and GUSD stable coins as trading pairs with WETH

  • Added a manual refresh to the portfolio drawer, along with minor bug fixes

Lake Project (Rishabh):

Lake Project is a Canadian relayer building user-friendly trading and investing tools for the decentralized financial future.

  • Figuring out a way to integrate multiple exchanges (centralized or not) to power algorithmic trading

  • Benchmarked AI across multiple time periods and weighting

Open Relay (Greg):

Open Relay is an open order book relayer with a focus on scalable and open source backend infrastructure.

  • New blog post re: vetting tokens for SEC compliance

  • OpenRelay awarded a 0x Ecosystem Acceleration Program grant (big thanks to the 0x team and community!!!)

  • Announcing OpenRelay Pools, a way for builders to define custom views of our order book

Mobidex (Abe):

Mobidex is a mobile first wallet and open orderbook relayer.

  • PAX and USDC tokens are now listed in Mobidex

  • Apple finally approved Mobidex for distribution in the App store

  • Mobidex is soft launching Thursday, January 17th, 2019 and will be available in the App and play stores

Veil (Paul):

Veil is a non-custodial trading platform for blockchain-based derivatives and prediction markets.

Try DeFi

As part of 0x’s focus to grow the DeFi pie, I’m adding a section in the Relayer Report to focus on up and coming DeFi projects. For this week, here’s a guest post from my friend Matteo, now a research analyst at The Block, on money making opportunities in DeFi.

How to Make Money in DeFi Now (Matteo Leibowitz):

Decentralized Finance (DeFi), Open Finance (OpFi) — call it what you will, the emergence of permissionless, intersectional financial primitives is the most exciting trend in the blockchain ecosystem right now, quietly threatening to chip away at Wall Street’s rent-seeking hegemony and promising — albeit ambitiously — to provide cheap access to financial services for the world’s 1.7 billion unbanked population.

While widespread, global adoption of these protocols is still some years away, and there remains plenty of work to do on the user experience front, enterprising and adventurous users have the opportunity to explore and leverage their utility today.

Additionally, because the markets created hosted by these applications are still in nascent phases, there are multiple inefficiencies to be exploited, and, consequently, real, hard ether to be made for those willing to go that extra mile.

Of course, before you go out and start playing with house money, it is worth noting that this is still highly experimental software, subject to vulnerabilities that may well cause you to accidentally depart with your funds.

Lending:

Compound is an Ethereum-based permissionless money market, a sleek platform for users to supply and borrow crypto assets on a variable yield basis. Borrow and Supply rates change over time based on supply and demand — if supply is high relative to demand, borrowing rates will be cheap, and vice versa.

If you plan to own ZRX over an extended period of time, you might wish to generate intermediate returns by lending it at an Annual Percentage Return (APR) of 0.10% — i.e. lending $100 worth of ZRX over a year will net you a return of $0.10. If you see a short opportunity, you can borrow at 5.85% APR.

Things get particularly interesting when you look at Compound’s DAI market, where Supply APR currently stands at 4.18%, having declined from 15.33% in December.

Considering anyone can seamlessly generate DAI by locking up Ether in a Maker Collateralized Debt Product (CDP) for an annual 0.5% fee, there is an attractive arbitrage opportunity to be executed by drawing DAI and supplying it at 4.18% for a 3.68% return. To reduce risk in your arbitrage strategy, you can open a short position to hedge against your CDP’s ETH exposure by borrowing the same amount of ETH you post as collateral, selling it immediately, and then returning it when you close out your CDP.

It’s also worth monitoring price discrepancies between Compound and alternative lending platforms, such as Dharma relayer, Bloqboard, which also offers markets across BAT, DAI, WETH, ZRX, and REP. While spreads are currently tight, we might expect to see some divergence in the future as users spread interest unevenly across the two exchanges.

As highlighted by Tony Waldschmidt, Compound’s margin maintenance mechanism, which allows any third party to purchase the collateral of an over-exposed contracts at a 5% discount, also presents a relatively low-risk and lucrative strategy to sophisticated users.

Like Compound, Maker employs a discounted liquidation feature — currently at 13% — in order to ensure that all contracts remain sufficiently over-collateralized. Monitoring and ‘biting’ overly exposed CDPs, or participating in the recently-launched secondary market for CDPs, can generate risk-free reward (if you can outpace the bots and/or frontrunners).

If you’re feeling particularly optimistic about the price of ether, you can also use Maker to lever up by 3x.

Market Making:

In addition to 0x’s Market Maker Program, Uniswap also employs an incentive scheme for liquidity providers, with a 0.3% fee on every trade split proportionally among participants, although analysis indicates that price volatility can cut into returns.

As more decentralized exchange protocols move to mainnet — Uniswap, DutchX etc. — and flash lending applications build traction, it’s also worth keeping an eye on lucrative cross-protocol arbitrage opportunities.

Predicting:

Permissionless prediction market Augur also presents multiple opportunities to generate income, ranging from: the creation of markets, which nets a ‘market creation’ fee; participating in the oracle dispute system, which nets an ‘oracle bond’ if the market resolves in your favour, and by arbitraging rates across Augur-based markets and centralized competitors like PredictIt.

In addition, with some risk appetite and a healthy dose of conviction, you can scoop up shares in contentious unresolved markets, such as ‘Which party will control the House after 2018 U.S. Midterm Election?’, which has ‘Democrats’ shares trading at a 3.5% discount due to debate over the semantics of the word ‘after’. Or, more simply, do your homework, build some information asymmetry, and buy/sell shares in one of many markets on offer.

Links

DeFi Games (NFTY News):

Big fan of NFTY News, and their thoughts on combining DeFi with games is really interesting. A game of Temple Run that ends with you creating a Maker CDP? Wild.

Abacus Raises 2 Million (TechCrunch):

YC startup Abacus raised 2 million, with a goal to “automate compliance for tokenized security transactions and keep track of the chain of custody of private securities.”

A Data-Driven Look Into Dapp Adoption (Dune Analytics):

A somewhat sobering deep dive into the numbers that matter for various protocols. Bloqboard also had a good data driven report on the decentralized lending protocols.

Integrating With 0x (Pixura):

The Pixura team talks about how they built their digital art marketplace using 0x. For more on art and blockchain, Forbes published an article on the topic.

Wyre Integration for 0x Exchanges (Kirk Ballou):

A step by step article covering how to implement KYC for relayers.

Fun Stuff

A cryptocurrency guy in Hong Kong dressed like Robin Hood going to Berghain made banknotes fall from the sky.

Dr. Elon and Mr. Musk — a Wired profile on Tesla and the gigafactory from hell.

Everything you need to know about Ethereum’s Constantinople.

The ugliest coin in the world commemorating 70 years of currywurst.

I’m a big Kobe fan and he just spoke at the Tron conference, I am not not jealous of Justin Sun.

An old article heard through Farnham Street, “Why Time Management Is Ruining Our Lives”.

Much love,

Rahul

Questions, comments, or suggestions? Message me on Twitter

0x + CoinList Online Hackathon Starts This Thursday

Register today!

0x is hosting a global, online hackathon with CoinList! The hackathon will run from January 10th through February 7th, 2019 and focus on improving the user experience in areas relating to non-fungible tokens (NFTs), compliance, and decentralized finance.

The purpose of the hackathon is to give anyone in the world the opportunity to learn about the emerging crypto financial stack, collaborate with other builders, and create well-designed projects that bring decentralized markets to the masses.

Learn more about the hackathon on our blog and register through the CoinList website. If you have technical questions about 0x or want to find a teammate, join our Discord chat.

Relayer Report #16–0x Instant, Ecosystem Acceleration Program, and MyCrypto Interview

The latest updates from the 0x ecosystem: 12/18/18

Sign up for Relayer Report here

Relayer Report will be on break for the new year. The next issue will be released mid-January.

I’d like to introduce a new relayer, Bit2Me that is based in Madrid. Bit2Me got its start in 2014 by connecting Bitcoin with thousands of ATMs in Spain, letting anyone easily convert Bitcoin into cash. They’ll be fully launching soon, but here’s a sneak peek at their sleek interface:

I also saw that Proof of Work, the inspiration for Relayer Report, started implementing brief bios for each project. I thought this was a great idea, so going to start doing that here (h/t Eric Meltzer). We also have an updated logo made by our amazing designers Ben and Chris. 

This was a particularly crazy couple of weeks for 0x. We released 0x Instant: with a few lines of code, you can seamlessly add crypto purchasing to any app or website (Forbes coverage here). We unveiled our Ecosystem Acceleration Program, which will be awarding $1 million per year to high-quality teams to grow the 0x ecosystem (application here). Our Ecosystem Development Lead Clay released “22 Ideas to Explore with 0x”, which digs into the plethora of possible use cases for our protocol. And finally, former 0x relayer DDEX is moving to the Hydro protocol, with a response to this news from Will here.

Integrating Instant

So far Instant has been integrated into NFT marketplaces (Emoon), dApps (Augur), price feeds (CoinGecko), and wallets (Coinbase Wallet, Balance, MyCrypto) — for a sample walkthrough, check out our ecosystem engineer Jacob’s walkthrough. I sat down with Taylor Monahan of MyCrypto to interview her about MyCrypto’s Instant integration experience.

R: How was your integration experience with Instant? What were the pain points and tricky implementation details?

T: The experience was overall very positive. It could not have been easier to add the script and get it working. As far as pain points, the modal-only design necessitated a hacky solution to bring it inline — the 0x team was nice enough to facilitate this by adding a classname. The other tricky part was handling the content security policy ramifications, with their external fonts and analytics.

R: How does Instant fit into your long-term strategy?

T: We strive to provide our users with easy ways to interact with the blockchain and core protocols and platforms on the blockchain and we want to do so via a unified experience. Including a way to easily swap Ether for tokens has proven to be a valuable feature for our users, and adding a decentralized option alongside ShapeShift only adds value. This is only the first iteration of the integration and we hope to make the entire experience more unified and simpler over the coming months. Eventually, we plan to support many tools and ways of using the blockchain, so the variety is very helpful.

R: Where is wallet tech going? What improvements need to happen in the space to increase user adoption?

T: We need to vastly simplify just about everything in the blockchain / cryptocurrency ecosystem. Right now it’s so difficult for a new user to enter the space as it is filled with entirely new concepts and systems that they haven’t experienced before. Education is important, but creating easy-to-use products that reduce the amount of overhead for a user is equally important. 0x Instant is a perfect example of a system that takes a fairly traditional financial concept (trading), decentralizes it, and removes the complexity typically found within both centralized and decentralized financial tools.

R: How do you think the benefits of self-custody can better be communicated to the average user?

T: Unfortunately, I think one way people truly learn about the importance of self-custody is when the companies controlling their data or funds royally screw up. When we hear about another exchange hack or data breach we instantly understand the risks trusting a third-party with funds or information. We can obviously do better at communicating the value of decentralized systems proactively, but the fear or loss experienced when a company is breached is [un]fortunately highly effective.

Art on the Blockchain

One of the coolest parts for me working with the projects building on top of 0x is that there are quite a few verticals and industries being tackled since the protocol is so flexible. Blockchain-based art startups have been using 0x to facilitate the exchange of goods — this includes Pixura, the team behind SuperRare, a digital art auction, Magik Gallery, a platform for AR content creators to sell their art directly, and Maecenas, a marketplace for selling shares of real art.

Maecenas’ strategy is to tokenize real-world art and sell fractional ownership to as many people as possible. They made headlines in September when they sold a 31.5% stake of Andy Warhol’s piece “14 Electric Chairs” to 100 participants, raising $1.7 million in total. They will be selling a tokenized Picasso during the first quarter of 2019, selling ERC-20 tokens that represent a fraction of a unique ERC-721 (similar to our 0x ETHSF winner, Fungible Non-Fungible Tokens that I covered in RR #12).

Pixura, the parent company of SuperRare, lets anyone set up an NFT marketplace with ease. SuperRare, developed by the Pixura team, is a platform to sell rare digital art.

https://twitter.com/DrBeef_/status/982689890621108224/

SuperRare published a post recently about “Auditable Social Metrics,” with the SuperRare team looking into how to measure the value of NFTs in different ways. Engagement data on the blockchain is also much more public and transparent than the status quo of opaque models like the big tech companies today. Currently, users can like and view different art on SuperRare, with this data eventually becoming much more robust and filterable (ex. View likes and views from Ethereum accounts with >5 transactions.)

Prediction market relayer Veil and SuperRare are working on a collaboration that will track the top 100 most valuable art pieces on SuperRare. Veil markets will then be used for people to bet on the price of each asset — crossovers everywhere.

Ecosystem

LedgerDex (Matt):

LedgerDex is an open order book relayer that allows wallet-to-wallet trading of Ethereum-based token as well as next generation token management.

  • The LedgerDex team attended the ETHSingapore conference

  • We have decided to stop serving U.S. users. U.S. IP addresses are now blocked from accessing our web app. Customer from other countries can still use our platform as usual

  • UI improvements and better error handling for setting token allowance

Instex (Tim):

Instex is a Ukranian open order book relayer with the goal of letting anyone trade digital assets with as little hassle as possible.

  • Our relayer is live on Kovan and Mainnet — https://app.instex.io/ — feel free to test it

  • Working on integration with other open orderbook relayers

Radar Relay (Whitney):

Radar Relay is an open order book relayer made by an international team based in Colorado.

  • Added Kovan tokens specifically for testing integrations with 0x Instant

  • New variable order expiration times through the UI for limit orders from 5 minutes to 9 months

  • With the next update the app will be available in Spanish

Veil (Paul):

Veil is a non-custodial trading platform for blockchain-based derivatives and prediction markets.

  • Open sourced two libraries: Veil.js (Typescript library for interacting with Veil’s API) and Veil’s smart contracts (Veil Ether and Veil Virtual Augur Shares). Announced the libraries in this blog post

  • Added support for Ethereum hash rate derivatives, ETH-settled scalar markets that let users trade on Ethereum’s future hash rate. We plan to experiment with more hash rate derivatives in the future as hedging products for miners

  • Upgraded Veil’s frontend to version 2 of 0x.js, which allows us to use Ethereum’s new signTypedData method (on new versions of Metamask)

Lake Trade (Rishabh):

Lake Trade is a Canadian open order book relayer that will eventually support AI-driven portfolio management.

  • Updating our API specification

  • Productizing our non-custodial AI-driven portfolio manager

  • Continued backtesting and benchmarking crypto markets

Ambo (Jai):

Ambo is a mobile-focused wallet and relayer that will eventually allow for in-app donations and payments.

  • We are looking into gas abstraction and new technologies that will help ease a ‘normal person’ into cryptos

  • If you missed it, we published a Medium post describing Ambo

  • Feel free to reach out to jack@ambo.io if you are interested in chatting

Links

Enabling Universal Market Access (UMA Blog):

UMA is a new crypto derivatives platform that believes “any oracle on a public blockchain can be bribed.” As such, they want to build a provably honest oracle where the cost of corruption is greater than the amount of profit to be made, Though scant on the details, UMA plans to open source their GitHub and release a second whitepaper in the near future.

Coinbase continues to explore support for new digital assets (Coinbase Blog):

Coinbase is looking to add a host of new assets to list, including the tokens of companies like Aragon, MakerDAO, EOS, Augur, and Ripple. For the ecosystem as a whole, the fact that such a compliance and regulation first company like Coinbase is listing more assets is a positive sign.

Uniswap — A Unique Exchange (Cyrus Younessi):

Uniswap is a new decentralized exchange that received a grant from the Ethereum Foundation. It is entirely on-chain, does not have a token, and takes no fees. As opposed to a traditional limit order book like 0x, Uniswap has automated market makers that follow the “Constant Product Market Maker Model.” In this model, the AMM can always provide liquidity no matter the order size, but the competitive price of large orders suffers as a result.

Augur Drama (Nick Tomaino):

In the Augur market “Which party will control the House after the 2018 U.S. mid-term election?”, the date the poll expires is 12/10/18. While Democrats won the house, they do not officially take over officially until January 3rd. Nick Tomaino recaps the debate on Twitter.

Fun Stuff

An interesting look into how the Bernie Madoff fraud changed the finance industry. Groups like Blackstone, for example, tripled its hedge fund investments because they chose to not invest in Madoff’s fund, winning switching customers as a result.

RiotCats: CryptoKitties with an edge.

The Tetris World Championship 2018 Final Round: 16 year old underdog vs 7 time world champ.

Much love,

Rahul

Questions, comments, or suggestions? Message me on Twitter

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