#34: Insuring Blockchain Risks
Insurance in blockchain protocols, state of adoption, Tendermint and Jae Kwon tensions.
|Chorus One||Feb 9|
This newsletter is supported by Chorus One, an operator of validating nodes and staking services on Proof-of-Stake networks.
Insuring Blockchain Risks
Insurance is traditionally an industry that relies on statistical models built using historical data to assess the likelihood of risks. In the blockchain context, there is little to no such data yet. Additionally, there are many risks that are hard to forecast due to the nature of early stage technology.
Nevertheless, insurance is an important part of the decentralized finance stack that so far has received only limited attention (e.g. Nexus Mutual). Unslashed is a recently unstealthed insurance protocol that will first focus on slashing risks in Proof-of-Stake networks. Check out the blog post covering why insuring blockchain risks requires full collateralization and give a listen to the Chorus One Podcast episode with founder Marouane to learn more about the implications of insurance protocols for Proof-of-Stake.
Corporate Structures and Building Decentralized Network Infrastructure
An established way to build a decentralized network is to have a foundation that funds one (or multiple) technology providers to lead the development of the software that the blockchain operates on. Examples include Cosmos in the form of the Interchain Foundation and Tendermint, and also other networks (e.g. Polkadot with the Web3 Foundation and Parity). In recent weeks controversies emerged around Tendermint allegedly dissolving the CEO role with founder Jae Kwon (also president of the Interchain Foundation) looking to focus more on his new project called Virgo. Virgo seeks to utilize the Cosmos tech stack to solve humanities coordination problems in areas such as climate change. Tendermint employees, namely Zaki Manian, have voiced concerns about how Jae has been holding back progress on the Cosmos project in recent months.
This is not the first incident in which drama unfolds on the road to decentralizing a network. As many know, Tezos and Ethereum went through similar struggles. As part of the Cosmos ecosystem in our roles as validators, we believe this situation should and will be addressed with clarity making this a temporary distraction in Cosmos’ history. We continue to trust that the flourishing Cosmos ecosystem and its many contributors will be able to deliver on the Cosmos vision of an internet of blockchains. Here’s an article describing the context of the situation. Also check out official statements from the Interchain Foundation and Tendermint’s roadmap for 2020.
State of Adoption Report
A thorough data-driven report written by IDEO CoLab Ventures and Decentral Park Capital in collaboration with many contributors that takes a look at crypto adoption from different angles. The 158 slides mainly show that crypto hasn’t found product-market aside from store of value and speculation use cases. At the same time there are first signs of traction, e.g. in the decentralized finance space on Ethereum. The report features a separate section on staking (slides 46-54). One thing is for sure, many networks with staking mechanisms launched in 2019 and there are more to come in 2020.
Trust-Less 2020 Online Staking Conference Recap
Dystopia Labs organized a remote conference with many sessions on operating validators and other staking-related topics. The agenda was filled with speakers from staking providers, protocol designers, and more. Felix moderated the panel The Future Of Staking-As-A-Service: Exchanges, 0% Fees, and Centralization and Chris moderated the Democratizing Staking So That Anyone (Not Just Institutions) Can Participate panel.
Overall, the sessions and panels covered all aspects of this part of the crypto stack. Checking out the recordings here is highly recommended if you weren’t able to attend.
Staking Economy EthCC Meetup
Are you attending EthCC in Paris this year (March 3-5)? Chris is thinking about organizing a Staking Economy Meetup during the event, similar to the one during DevCon in Osaka last fall. Drop us a line in the Staking Economy Telegram Group if you’re interested in attending.
Chainflow Co-Founder Search
Chris is looking for a Chainflow business partner. You can find his ideal co-founder description here. Please contact Chris if you’re a fit and interested or know someone who might be!
Staking Economy is written by Felix Lutsch from Chorus One with assistance from Chris Remus, operator of the Chainflow validators. Join us in the Staking Economy Telegram to discuss staking. Opinions expressed are our own and do not necessarily reflect the opinions of Chorus One. All content is for informational purposes only and not intended as investment advice.