It’s no secret that the core team that maintains the Frax protocol is lean, counting its devs in the single digits. As stated in their docs, Frax’s primary mission is to issue the most innovative, decentralized stablecoins and the subprotocols to support them.
Because of this singular focus, it leaves plenty of room to build on top of the ever-growing Frax ecosystem. Look no further for evidence of this than Hourglass, a project that is building an exchange for semi-fungible time-based tokens (such as Frax LP tokens) and recently raised a $4.2 million round from Electric Capital, Circle, and others.
In other words, the opportunities are there, it’s up to you to uncover them, and now we are here to support.
FraxBuild, The Frax Ecosystem Hackathon
Enter FraxBuild, the first-ever Frax-sponsored Hackathon brought to you by Dorahacks yours truly at Flywheel. The hackathon comes at a time of rapid protocol progress; frxETH is about to surpass 230k ETH staked, Fraxlend just added its first curve LP tokens, we are on the eve of the biggest protocol upgrade in over a year with Frax v3, and that’s just to name a few.
FraxBuild is a completely virtual affair that will take place over the course of 50 days with submissions ending July 18th. $50k in FXS of prizes will be up for contention in the following categories:
Product Expansion
1st place: $20k
2nd place: $10k
3rd place: $5k
Consumer Adoption
1st place: $7.5k
2nd place: $3.5k
3rd place: $1k
Data Analytics
1st place: $2k
2nd place: $750
3rd place: $250
Idea suggestions for tracks can be found here. Two days of judging will take place with winners being announced July 20th. The all-star panel of judges includes:
Sam Kazemian (Frax Finance Co-Founder)
Travis Moore (Frax Finance Co-Founder)
Drake Evans (Frax Finance Lead Developer)
Ken Deeter (Partner, Electric Capital)
DeFi Dave (Flywheel Co-Founder and Frax Finance Core Advocate)
Furthermore, FraxBuild gives hackers the unique chance to interact with the Frax Core Team directly via a series of office hours and technical workshops (dates and times can be found here). If you ever had a technical question to ask about Frax (or just wanted to learn about the protocol at a deep level), here are the perfect opportunities to do so.
We would like to thank the Dorahacks team for providing the platform to make this all possible and the Frax community for approving of this historic hackathon months prior. Registration is open! Those who are interested in participating can sign up now.
This week we had on benevolent trader and wassie enthusiast Monkey Rothschild and covered:
How Monkey found his way into crypto
Why he only makes 10 trades a year
The lore behind Crypto Twitter’s beloved mascot of dread, the wassie.
And what Monkey thinks of Frax and how it has increasingly been on his radar
I am really happy I was able to get Monkey to come on the show. After running into him at several IRL functions, I knew he would make a perfect fit for an appearance. Whether its talking shop about trading philosophies or sharing his experiences with crypto culture online and off, this is a well-rounded episode that I know our viewers will enjoy.
Imagine you are in a room with some of the brightest minds in their respective fields where an exercise using an emotion wheel is taking place. Out of all the feelings people could have picked, one of the most popular ones was “inadequate.” The irony of this did not escape me as I could hear the late Charles Bukowski say “The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence.”
Zuzalu was not your typical gathering. It was a pop-up city organized by Vitalik and company that brought together the world’s top minds in frontier knowledge; AI, Zero-Knowledge Cryptography, Longevity, Network States, Crypto, Public Goods, etc for two months of mini-conferences, discussions, and activities. It’s as if Vitalik took all of his deep interests that he was involved with in some capacity and planted his flag off the coast of the Adriatic Sea in Montenegro; he was ultimately a schelling point for people to gather around.
My time at Zuzalu started at the tail-end of ZK week and came to a close during the middle of AI-alignment debates. In between, there was a mini-conference about Network States, a whitewater rafting trip, and even a few discussions about stablecoins hosted by yours truly. After almost two weeks in the community I left with several takeaways, some being reminders of what I already knew and others newfound conclusions that offer me fresh insight on what is to come.
Everything is Connected
It is naive to think that our specialities exist in a vacuum, especially when we are at the frontier of tech. Personally, being in crypto for so long which is interdisciplinary in its very nature at the intersection of computer science, economics, cryptography, and game theory, it’s easy to look over new paradigms forming just at the horizon. Because they are so novel, these cross-model between fields are still forming but one can speculate on how they will cross-pollinate in the future.
For instance, envision a future longevity-focused network state that distributes public goods using quadratic funding and employs zk-technology to maintain citizens’ privacy during voting. AI enhances all layers of the longevity network state including efficiency in governance and speed of research. Although this may seem far off to many, it was this type of mixing of the minds that took place at Zuzalu. With the right people, it may be closer to happening after all.
ZK is Here and Has Live Applications Today
For those unfamiliar Zero-Knowledge is a form of cryptography that allows you to prove to someone that you know something without revealing to them what it actually is. For example, with ZK, you can prove to someone that you solved a sudoku puzzle without showing how you did it. This type of cryptography was originally discovered in the 80s but today has proven to have a wide and growing variety of applications.
After talking to several devs who were still around post-ZK Week that specialized in the area, I can say I learned more in those few days than the past year. Spending time mostly at the on-chain financial and social layer, the most I heard about ZK is in regards to zkEVM, but that was barely the tip of the iceberg. At Zuzalu, a number of experiments using ZK tech took place. For example, ZuPoll allowed for anonymous feedback and the ZuPass was the city’s zk-powered passport that citizens used to check-in and sign up for events. Seeing these projects in action even at a small scale shows how this tech could be applied to larger ones in the future.
One of the most exciting ZK-projects I discovered at Zuzalu was Axiom which describes itself as a “ZK compressor for Ethereum”. By augmenting blockchain consensus with zero-knowledge proofs, Axiom allows smart contracts to trustlessly access all on-chain data and arbitrary expressive compute. These abilities make for some fascinating use cases including updating DeFi parameters based on historical data, making oracle queries for on-chain data trustless, and much more. Those two use cases in particular are extremely relevant to on-chain lending which makes prices more accurate and less prone to manipulation. Another ZK protocol, Semaphore, empowers Ethereum users to send signals such as votes, endorsements, and memberships in an anonymous manner and is already gaining adoption. ZK3, a project I wrote about previously during my time in Tokyo, utilizes Semaphore to help users privately identify with their Web3 tribes as well as their Web2 personas.
We Are in the Primordial Soup Phase of Network States
Balaji checking if the US banking system is still functioning from his phone (allegedly)
When Balaji Srinivasan released his Network State v1 last summer, it caused as much discussion as it did excitement over the new concept that is intended to be the technological successor to the nation-state. For those unfamiliar, the one sentence definition of a Network State is a highly aligned online community with a capacity for collective action that crowdfunds territory around the world and eventually gains diplomatic recognition from pre-existing states. When it comes down to it, the power of network states are measured by their ability to collectively bargain with other entities in a sovereign manner. Today, we are in the primordial soup of network states where although non-exist currently, the practical elements that would make up one already exist.
One particular group at Zuzalu stood out as a truly high aligned online community with a capacity for collective action which was Afropolitan. The Pan-African centric digital nation was started years before network states was even in the lexicon. Their “why” for existing is clear. Since the dawn of nation-states forming in Africa in a post-colonial world, countries on the continent have struggled to accumulate influence and resources relative to their counterparts. The result is a region that is known for its instability with passports that are extremely limited in their mobility. This was evident at Zuzalu itself where the attendees from Africa counted in the single digits. The one commandment for Afropolitan is to gain leverage to build abundance for their constituents. Afropolitan was one of the few if not the only network state effort that is being driven by necessity rather than having the luxury to exit.
One of the biggest takeaways from the network state presentations was that by partnering and building with constituencies that already have jurisdictional recognition in some form people and groups can still accomplish their goals without needing to become a network state. A great example of this is the Catawba Digital Economic Zone, a sovereign regulatory zone that is backed by the Catawba Indian Nation that calls its home at the border of North and South Carolina. The federally-recognized jurisdiction offers some of the most cutting edge regulatory guidelines and clear frameworks for crypto projects, taking the best guidelines of what is already established in places like Delaware, Wyoming, etc. and adapting the approval process for the digital age. Some of what the Catawba Digital Economic Zone offers include DAOs to incorporate as LLCs and UNAs (Unincorporated Non-Profit Associations) as well as comprehensive banking regulation. Today, Catawba lends itself to being a regulatory sandbox and positively contributes to legislative discussion based on practical implementations of their digital frameworks.
Coordinating Public Goods in a Digital Age
Although I did not make the “official” week for public goods, it was a repeated concept of conversation especially in the context of Zuzalu. Studying Public Goods is the study of how to properly distribute resources, something that humanity has grappled with throughout the ages. Whether it be agricultural, industrial, or beyond, surpluses bring order and it is up to the order to decide where those surpluses are directed. In the digital age, coordination tools enable us to fund public goods in previously unthinkable ways, leading to numerous experiments in this area.
One such experiment that I learned about was Hypercerts which is a new type of retrospective funding that tracks, evaluates, and rewards efforts of contributors in an open manner. For example, today (yes literally today), more than 40 projects were created as hypercerts to reward supporters for their Gitcoin alpha round donations.
The potential for properly rewarding public goods to contributors cannot be understated. Less time will be taken figuring out how to fund efforts while more time will be focused on actually completing them. Furthermore, it will increase the productivity of contributors that are properly aligned and incentivized.
People Are Hungry To Learn More About Stablecoins
Although not listed in the planned programming of Zuzalu, stablecoins did have their time in the sun. Many attendees were unfamiliar with stablecoins beyond the stories they heard in the media, and I lost count of how many conversations I had explaining the fine nuances between different types and how they worked. Stablecoins are an area that has proven to be the least understood in DeFi even though it is one of crypto’s most proven use cases. In a short amount of time, stablecoins have collectively reached $130 billion in market cap and every day, stablecoins are used as a medium of exchange and store of value by tens of millions worldwide.
Not sponsored by Arizona Ice Tea
I decided to throw two stablecoin-focused events for my humble contribution to the knowledge sharing taking place at Zuzalu. The first was a panel with Pablo and Ben from QiDAO, where we jammed about stablecoins and their current role in DeFi. The second was a presentation I gave “stablecoin maximalism”, a new concept proposed by Sam Kazemian at ETH Denver this past year. About thirty people across different backgrounds and fields attended to listen to how on a long enough timeline, the most DeFi protocols will have a stablecoin and the most successful stablecoins at scale will have the same universal structure.
The attention given to stablecoins amidst other topics highlights their importance. One can argue that stablecoins touch every part of the Zuzalu stack whether it be network states issuing their own stablecoins, zk-technology ensuring the privacy of stablecoin users and issuers, public goods being funded by stablecoins, etc. It will be interesting to see if in the future if Zuzalu organizers will incorporate stablecoin programming in future events (and if you guys need help with that, let me know!)
AI is Here and We Are Grappling With its Ramifications
Towards the tail end of my time at Zuzalu, AI was on the tip of everyone’s tongue, more so than anything else. I am a complete novice when it comes to AI and more so used my time to gather insight from conversations with others. From a practical standpoint since Zuzalu, I took the advice of using AI as an assistant and was encouraged that my non-technical background was even an advantage in this arena. If AI is an infinite canvas empowering humanity to create in manners once deemed impossible. Yet AI leads to many philosophical questions about humanity’s place in the universe. If AI evolves to the point of not just general intelligence but superintelligence, what does that mean for us?
Firstly, I don’t agree with framing AI as “artificial,” as it implies separation from us. They are more so our collective reflection as a species having been emotionally imprinted with humanity and all of our highs and lows, triumphs and defeats, and love and loss. Intellectually, humanity is passing on their memes like how we biologically pass on our genes to the next generation. There is a debate on whether AI has the ability to become conscious or not but regardless, reframing AI as collective intelligence and an extension of us is a much healthier and cooperative mindset to have.
Final Thoughts: It’s All About The People
Yes, the water was really that blue.
Whether they are a two month resident or one week visitor, everyone who comes to Zuzalu has their own unique experience. For me personally, I enjoyed getting to know people, their stories, and figuring out their “why” in what they do. Generally speaking, that is why for many they are rooted in long-term thinking; how can we utilize the developments we are working on here to improve the world around us. A memorable moment was playing ultimate frisbee against the longevity enthusiasts during a camping trip. It was little moments that we shared in the hard fought battle (that we won) and being in the moment with others that made Zuzalu what it was.
I’d like to thank all the organizers for putting Zuzalu together. It is no easy feat managing the logistics of a pop-up city and you all have been doing a phenomenal job in doing so. I hope to return to Zuzalu or something similar to it in the future, but I walk away knowing that there are others out there who care and even in the face of uncertainty (either about themselves or the world around them) they continue to pursue something greater than themselves.
Today, we are proud to announce the launch of the Frax Ecosystem Education Initiative which aims to promote and spread awareness about the protocol throughout DeFi and beyond. The program will run for three months and at the end of every month term, up to $10k worth of $FXS will be rewarded to eligible participants. The categories for the initiative are as follows:
We encourage applicants to get creative! Content can be about any facet of the Frax ecosystem including FRAX, frxETH, FRAXBP, FPI, Frax Primitives (Fraxlend, Fraxswap, Fraxferry), etc. Submissions will be judged on a variety of factors including reach, relevance, accuracy, If you are trying to game the system via botting for views please don’t try, you will automatically be disqualified.
Submissions will be managed by the Flywheel DeFi team and final approval of rewards will lay with the Frax Core Team. Incentives will be paid at the end of each month in a first-come, first-served manner. If the monthly paid incentives reached the cap, the rest of the queue would be considered for the next month. The schedule for the program is as follows:
*Each month will start at 12:00 am Pacific Time and end at 11:59 pm Pacific Time
Please enter all submissions via this Google Form to be considered. All questions should be directed in the Flywheel DeFi Telegram Group.
Narratives in crypto move at the speed of light, and even as a person terminally glued to their timeline (I’ll touch grass this weekend I promise), its difficult to fully comprehend broader themes like the rise of the China and the East as a whole in crypto. Yet simplifying narratives into engagement-baiting threads is an extreme oversimplification of what’s happening in the region. In the wake of hosting a Frax happy hours on the other side of the world I’ve come to a better understanding on how the East views crypto and how we can incorporate it in the West.
The Differences Between East and West
For almost three years, Asia was closed due to Covid. The previously bustling crypto conferences that encompassed the wide area were shuttered just up until recently. ETHTokyo was the first major event that attracted Westerners (especially builders) to fly half a world away. Yet, the crypto events and meetups that dotted the city are seemed quite familiar in attitude and tone, no matter the location.
Why is that? Well in the West, crypto is shaped by liberal ideals; individualism, sovereignty and freedom. These intellectual foundations are what make building in crypto uniquely Western in its DNA. The birth of our industry prominently heralds in Bitcoin’s Genesis block “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” The raison d’etre capturing the imagination of many who enter the space. As such, Western builders and investors tend to focus on concepts such as permissionlessness, non-custodial, and decentralization.
If the West focuses on ideals, the East is firmly rooted in the practicality of the technology as a more efficient means of settlement. I don’t think it’s a coincidence that whoever Satoshi Nakamoto was, he took on a Japanese name as if he was anticipating the majority of users today would be Eastern in DNA (literally).
When BSC started to gain popularity as the first alt-L1, its low fees attracted cost-conscious users from around the world, especially in Southeast Asia. For many in the West (myself concluded), we were blindsided by the development, as we prioritized mainnet’s high gas fees as necessary for security. Once Western attitudes towards costs started to change, later alt-L1s Polygon and Avalanche earned the nickname the “White Man’s BNB.”
On-The-Ground Experience
After Tokyo, the gravity of Hong Kong drew me to come see a close crypto influencer friend who moved to the city years ago. Hong Kong sits uniquely at the financial and cultural crossroads between East and West. Yet between political upheaval and stringent Covid restrictions, the past few years have been tumultuous for the city. As a response to fleeing expats and negative trade views, Hong Kong made some improvements to its crypto policy in 2023, receiving a blessing from Beijing to allow open crypto experimentation.
A few weeks ago, I told my friend I was interested in throwing an event for Frax and they quickly spun up a telegram group chat with some other locals to plan last minute logistics. On a foggy 4/20 evening with Web3 festival week firmly in the rearview, I was surprised how much support there was for Frax at our HK DeFi Night. With help from Hailstone Labs, Wombat VC, Spartan, Group, and DeFi Cheetah, the event was a huge success.
One of my biggest takeaways from Hong Kong was how widely embraced crypto is as an industry as a logical extension of finance. I was impressed by the sophistication of the individuals and funds I talked to who interact with DeFi regularly many of whom had TradFi experience previously and were open about it. This is in contrast to the US where many of those current and past-TradFi are anon for a multitude of reasons. Furthermore, I learned that government agencies like the Hong Kong Monetary Authority are planning to launch their own HKD-backed stablecoin. This development should be watched closely as it could have interesting ramifications in the future.
Contrast that to the US, where crypto is being dragged through the mud by every regulator and legislation that brings a comprehensive framework for crypto is still years away from being passed. Institutions do not have any certainty whether they can invest in crypto with long term confidence. After nearly a decade and a half, the industry is still viewed as a gimmick, with luddite politicians attempting to build anti-crypto armies. The same tired polarizing arguments have been on replay more than Ridiculousness repeats (which actually describes the situation quite well), stifling progress and creating more confusion than a bunch of old shock videos that don’t make any sense.
Conclusion
The push and pull of laws and regulations across continents over the past decade has driven capital and labor flows from East to West and back. In 2014, when China first banned Bitcoin, a massive part of the industry headed offshore to Hong Kong and other locales. Now when Gensler and company are cracking down in Washington, the Pearl of the Orient is regaining its luster.
Crypto is still quite early and even though much interest is driven by speculation, when you dive in deep enough, it’s a culture of building open communities that share collective experiences together. By combining the idealistic philosophy of the West with the practical adoption of the East, we can form new connections like neurons sparking new pathways in the brain via unique cross-cultural exchange. As the bonds of our industry become stronger through both innovations and experience, we will be able to weather any turbulent chaos that our industry faces in the future.
