FraxBUILD Hackathon Concludes: Here Are Our Winners!

The first FraxBUILD Hackathon has proven to be an incredibly successful effort in bringing together builders across DeFi to contribute to the growth of the Frax ecosystem. The event came at a time of great fanfare for Frax. The protocol taking major steps on its road to decentralization with the deployment of FraxGov and a myriad of upcoming releases including Frax v3, frxETH v2, BAMM, and of course Fraxchain. As Frax Co-Founder Sam Kazemian said recently in a Twitter Space, “the next year of shipping for Frax is going to look like the past year that Frax has been slacking. With vibes high and excitement evident for the ecosystem, developers inevitably were attracted to FraxBUILD, which offered them the perfect opportunity to explore Frax adjacent projects.

Our collaboration with Dorahacks for the hackathon allowed us to host a variety of workshops and office hours where hackers were able to interact with the core dev team and even get tidbits of alpha along the way. Most notably, during the first workshop back in June, Sam Kazemian presented the full architecture of frxETH v2, the first lending market for validators. Entries flooded in with hackers competitiing in the categories of product expansion (build on top of Frax products), consumer adoption (build Frax products for end users), and data analytics (build dashboards keeping track of the Frax protocol and ecosystem on-chain).

Methodology and Winners

For the judging, we were able to band together an impressive list of individuals including members of the Frax Core Team (Travis Moore, Nader, and Dennis), Redacted Founder 0xSami, and myself (the least impressive) to go over the final list of entries. Applicants were judged in four different categories including business model, innovation, technicality, and alignment went Frax. After tallying up the scores and applying points to 1st place (3 points), 2nd place (2 points), and 3rd place (1 point), we were able to come up with the winners:

  • Product Expansion

    • 1st Place: Fraximal

      • Fraxlend Optimizer that uses a $FRAX-Based ERC4626 vault. The product is fully audited and deployed and currently holds nearly $3 million in TVL.

    • 2nd Place: Revest

      • Allows users to deposit FXS/FPIS into the veFXS/veFPIS vault and receive an FNFT (Financial FNFT) as a record of their deposit and claim yield natively from their FNFTs.

    • 3rd Place: Zaros

      • Existing at the intersection between perpeutal futures and LSTs, Zaros is a derivatives DEX that uses sfrxETH to back zrsUSD. Traders can buy zrsUSD to create leveraged positions on Zaros’ perpetual futures markets.

    • Honorable Mention: zkFrax

      • zkFrax is a non-custodial solution that uses stealth addresses which enables users to receive Frax Ether(frxETH) Stablecoin on Ethereum Blockchain without revealing receivers real address

  • Consumer Adoption

    • 1st Place: Sticker Protocol

      • the sticker protocol is a public good, fully permissionless, and a open hyperstructure for selling, printing, trading, and redeeming digital stickers backed by frxETH

    • 2nd Place: FraxSurance

      • Decentralized insurance coverage utilizing FRAX to protect against inflation.

    • 3rd Place: Frax Lend Bot (Telegram)

      • Frax Bot is a Telegram bot powered by RASA that provides convenient access to the status of Frax wallets. Users can effortlessly view the current status of their Frax wallet and subscribe to receive daily notifications about subscribed wallet(s).

  • Data Analytics

    • 1st Place: Curve AMO

      • Dashboard that breaks down the major actions of the CurveAMOs according to their spec.

    • 2nd Place: N/A

    • 3rd Place: N/A

*Note: Because there were was only one submission for Data Analytics, we are allocating the unused prize money from that pool and rewarding it to the Honorable Mention in the Product Expansion category.


Fifty-thousand dollars of FXS will be distributed to our winners in the coming days. We would like to give a special thank you to Brian, Claire, and the entire Dorahacks for facilitating the hackathon, the Frax DAO and community for approving our grassroots effort, and of course each and every one of our participants who entered the hackathon.

With Fraxchain confirmed for 2024, it is likely we will see another FraxBUILD in the future. Stay tuned!

The Vyper Cuts: How DeFi Came Back From The Brink

Snakes have a special place in humanity’s collective unconscious. They symbolize transformation, rebirth, immortality, and healing. This week, one can say that DeFi had its own rebirth. A venomous 0-day exploit cut deep into the compiler of the Vyper programming language that would reverberate up the stack and throughout the market, making shorters salivate at the lips.

One of the stalwarts of DeFi, Curve Finance, was front and center throughout the whole episode, putting the protocol to its most challenging test yet. There was no time for virtue signaling, unprecedented action was needed to mitigate potential damage from the exploit at all levels. Battles were fought on-chain between whitehats trying to recover and blackhats attempting to extract millions of dollars worth of liquidity. Meanwhile, steadfast builders like Curve founder Michael Egorov and others dug their feet into the ground and built novel incentive mechanisms that utilized their closest collaborator Frax, which along with some OTC deals with some allies would seemingly save the CRV token from death spiraling.

As with every crisis, protocols are stress-tested under the most adverse conditions. Those who survive gain strength and lindy while those who don’t simply perish. DeFi is no stranger to tens of billions evaporating into thin air as what happened with Terra Luna last year. There are no sacred cows, only codes and incentives. As much we talk about protocols, protocols are made up of people. It is in these times of hardship that we see tribes and individuals step up to the plate for all the world to witness and either knock it out of the park or strike out completely.

With the smoke from the fog of war finally clearing, we can contemplate on what happened, why it happened, and what it means for the future of DeFi. Make no mistake, even though the worst is over mostly, some self-reflection is indeed in order.

The (Forgotten) Ghost in the Machine

Vyper is a programming language for EVM that is Pythonic in nature and was launched in 2017. Although less popular than Solidity, Vyper gives EVM more language diversity, essential in avoiding monoculture. I don’t even want to imagine if only one language existed, things would be even more fucked. Anyways, Vyper would most notably be used by Curve in creating and deploying their smart contracts. In fact, as a nod to its importance, last year the Curve community approved having a vender gauge that funded Vyper development.

The vulnerability ultimately came down to incentives around auditing compilers. Compilers are magical software devices that transform computer languages that humans write into code and machines can read. They exist in a part of the stack that is wrongfully assumed to be safe and hence not looked at by auditors who primarily focus on the smart contract level. In addition, because of how it is structured, Vyper is much simpler to read compared to Solidity making it easier to find exploits. In the days after the Vyper hack, multiple calls have been raised by members of the community to create the proper incentives to prevent such an exploit from repeating itself.

Yet, the incentive was clear as day for blackhat hackers who were pushed to hunt deeper into the virtual machine as the potential bounties for vulnerable protocols dried up. For the years the bull market raged on, non-name projects were gaining nine figures and TVL making them juicy targets in the wild. As the opportunities started to become few and far between, sophisticated operators were forced to get creative which eventually led them to go where it is often forgotten, to the c o m p i l e r. 

To give a sense of how long this bug went unnoticed, the exploit had been live since 2021 and just by sheer accident, was patched in the latest version of Vyper 0.3.1. Yet, those contracts of liquidity pools that contained native ETH and were written in versions 0.2.15, 0.2.16, and 0.3.0 still went on with their business with an invisible death warrant front and center. It was a Sunday that the first blood was drained and when it was all said and done, $69 million worth of value was exploited. The hardest hit from the attacks were the Curve liquidity pools of JPEG’D, Alchemix, Metronome, and even Curve itself.

When it comes to vulnerabilities, time is of the essence, and privacy is even more so. In the heat of the moment with so much at risk, whitehats banded together to create war rooms to find solutions. Heroes arose such as 0xc0ffeebabe whose efforts and actions would save millions in funds. Unfortunately, not everyone was on the same page. As Otter Sec auditor Robert Chen puts it “Auditors don’t pay for externalities created by their reporting. Instead, they get rewarded with likes, retweets, and publicity.” It is here we find yet again incentives rear its head but instead of blackhats scavenging for scraps, its auditors valuing retweets over the retrieval of funds. Yet clout is thin as it is fleeting and those who prioritized it would feel the wrath of shame.

X, the Hypersigil Hive-Mind

Formerly known as Twitter, X is a unique social media platform in how it has positioned itself as a digital public square. Instead of our bodies, we enter it with our thoughts and intentions, being rewarded with dopamine feedback loops that are decided by an almighty algorithm. It is those incentives brought about by the algorithm that leads to behavior that may benefit the individual at the moment but spell drastic consequences down the line. As seen time and time again, Twitter is as much a spiritual device as it is a conduit for information.

Those who dare put themselves front and center feeding their ego with the energy of thousands of lurkers are all too often smitten by the gods. Who could forget Avi’s infamous “What are you going to do, arrest me” or Do Kwon’s “By my hand DAI will die”. The main character trope is one repeated all too often on CT and all too often the mortals who think they are infallible receive the rudest of awakenings.

That’s why it was curious to see Michael who barely tweets at all post a seemingly harmless response to a friend “Still shocked that I haven’t yet been ever affected by DeFi hacks 😅”. As if it was a call for the gods to test him, It was barely a week later that Michael and his baby Curve would face their biggest test yet. Patching the exploits on-chain was only half the battle, the next theater of battle would be in the markets themselves.

Sharks Circling Around CRV

CRV is a governance token that is uniquely intertwined with the Curve protocol. Its importance lies in the action that it incentivizes, deep liquidity. Those who lock their CRV for veCRV can vote on the direction of emissions toward LPs. This pioneering model gave forth to an intricate vote-incentive ecosystem and would help Curve earn the nickname of “The Liquidity Black Hole”.

One of the largest pools affected by the Vyper exploit was the CRV/ETH pair on Curve which was the primary source of liquidity for CRV on-chain. This seemingly spelled trouble for Michael who had much of his own CRV (and a large portion of the supply in various lending protocols such as Fraxlend, AAVE, Abracadabra, and others. If he were to be liquidated, it would send CRV to near zero and put the entire incentive structure Curve built into disarray. 

Michael is no stranger to managing lending positions. In fact, according to Curve Cap, Michael has been utilizing on-chain money markets since 2018 having a record of never being liquidated, not even once. It was through interacting with lending protocols that Michael was inspired to build Curve to smoothly swap between stables which would later drive him to deploy crvUSD which offered a softer liquidation mechanic. Now with sharks swimming around his bleeding collateral position, Michael needed to act fast to prevent them from swallowing his CRV position whole, he did what he does best. He built.

Out of all the lending protocols, the one that needed to be prioritized was his Fraxlend position. Michael had a $17 million loan with $24 million worth of collateral and the pair was near 100% utilization. The way Fraxlend is designed is that when the utilization ratio reaches a maximum point, it automatically multiplies the interest rate doubling every 12 hours if at 100%. If left unattended, the pair would reach thousands of percent in APY and surely would have been liquidated.

In an unprecedented move, Michael would create a first-of-its-kind gauge that rewarded CRV to those who LP’d crvUSD with fFRAX for CRV/FRAX (the receipt token for lending FRAX in Fraxlend CRV pair). The goal of this gauge was to incentivize people to lend FRAX to lower the CRV/FRAX utilization rate. As a secondary market for Frax debt, this type of incentivization mechanic could have other interesting use cases in the future (incentivized bond markets, cough cough). 

The only thing stronger than rock-solid incentives is rock-solid relationships, alliances that can be relied on even in the most extreme. Support came across crypto from OGs and current leaders alike with even Jihan Wu tweeting that he BTFD. Hours after he released his fFRAX/crvUSD incentive gauge, millions of CRV were sold OTC to the likes of Justin Sun, DCF God, CT2P, unknown anons, and others. Once the news of the sales started becoming public, CRV’s price would recover and millions in shorts would be liquidated. With OTC sales still ongoing, it seems that CRV and Curve will survive another day.


With the most pressing dangers almost behind us pending safely managing lending positions, what can we conclude from such a tumultuous sequence of events? First of all, those who say “DeFi is Dead” are wrong and it’s in fact stronger than ever.

If this type of crisis were to have happened in the opaque world of traditional finance, we probably would not have heard the full details until years later. Since the story was written on-chain with all eyes to see, we were able to dissect what happened one transaction at a time. This unparalleled transparency allowed us to monitor the health of lending protocols and liquidity pools one block at a time and see why certain actions were taken.

We must remember though that although DeFi has allowed the equalization of opportunity and lowered the barrier of entry for people to participate, that does not mean there is equality of outcome. Incentives don’t care about feelings, they care about accruing more value. Whether it’s the monetary value of a hack, the social standing of orchestrating a recovery, motivation in recommending a parameter to a lending protocol, or the economic game theory behind paying back lenders, every single action that transpired over the past week was a result of cold-hard incentives.

If DeFi is to truly reach the levels of TradFi especially as more value becomes at stake, it must wrestle with the reality of an incentive-driven world and build accordingly. This is how Satoshi thought and we must do the same for us to thrive.

Re-Architecting Trust Goes Back to Crypto’s Roots

It’s been almost 15 years since dawn of Bitcoin when the idea digital scarcity became a reality. Programmable trust gave rise to the mantra “code is law.” Although it recognized the infallibility of humanity, it failed to eliminate it. We instead developed a blind spot to the human elements that underlies all transactions, a social “layer zero.”

In his book “Re-Architecting Trust: The Curse of History and the Crypto Cure for Money, Markets, and Platforms Omid Malekan explains how people have people have economically organized themselves throughout history and how crypto marks a new age in money, markets, and platforms.

As someone who background is in the soft sciences, I was ecstatic and relieved to see a book that covers crypto from a humanities perspective. All too often we get wrapped up in the code and fail to ask the basic questions of “how did we get here” and “what are the ramifications of this technology”. I took it upon myself to read Malekan’s book in order to let his ideas that he has been pondering on for the past decade marinate properly and the result has been one of my favorite interviews to date.

It’s Trust All The Way Down

The overarching theme of Malekan’s book is “trust” and how it has evolved over the ages. To put it simply, humans stand to gain more when they trust one another whether it be another individual or to a society. Yet it at the same time a paradox emerges, the more trust you give to the group the more vulnerable you become to the “free-rider” problem aka being taken advantage of. Free-riders are a natural consequence of systems that have developed trust over time and like rust coating metal, they chip away at the strength of the entire system until it collapses all together.

Money is the lowest common denominator that represents trust in economic form, offering a humanity a way to store their wealth, keep track of balances, and exchange goods and services with each other. It does not matter your race, religion, nor creed. Money transcends the dollar as an immemorial function for a collective social agreement to transact with one another on equal terms.

Money, Money, Money

Throughout the ages, money tool different forms. Initially, money was token-based, gold, silver, copper. Later it became ledger-based, authenticated via intermediaries. The rise of commercial banks that served as the foundation of ledger-based money corresponded with the rise of fiat-money which eventually gave rise to central banks, the arbiter of last resort that commercial banks settle with.

Yet, no matter if a system is token or ledger-based, each one is still susceptible to the free-rider problem. Seigniorage aka the fee the mint takes for creating money is the problem. The larger the cut, the heavier the dilution. For token-based money it comes in the form of dilution of metal coins. In the Roman Empire, silver coins started with 95%, only to be diluted to 5% as society collapsed. For the US dollar, inflation is the problem. It is only because of the dollar’s global reserve status that it is able to take such action with little consequence… for now.

Now decades into the information age, we have finally been able to combine peer to peer token-based assets with ledger-based money as a blockchain. Bitcoin created a digital system that as Malekan puts it “invites the criminals to become cops” because it is ruled by incentives. And 14 years in, not only do we have “digital gold” but with Ethereum, we have been able to build permissionless markets and platforms. Look no further than the hundreds of millions of dollars transacted on-chain everyday in DeFi that normally would be cloaked in opacity and bureaucratic friction in traditional finance.

Malekan’s Words of Advice

In the interview, Malekan offers advice and warnings to crypto founders. First, he states that projects should be cautious in allocating too large portion of tokens to founders which risks misaligning incentives. When it comes to token distribution, protocols should focus on fostering the widest and fairest distribution possible. This does not mean that founders should not get allocated tokens at all since this would be the pendulum swinging to the other extreme. Rather, there should be a goldilocks zone that rewards successful founders and lifts up the community along with it.

Furthermore, Malekan advises DeFi not to scuff at our TradFi counterparts and the lexicon they have developed over the centuries. He states that if we are to reach the scale that TradFi stands at today, we must develop a level of sophistication that is equal to it. DeFi in its current state can be best conceptualized as computer nerds relearning the laws of finance and economics. Once the financial and economic infrastructure reaches an infallible level of resiliency, only then DeFi will be able to graduate to the next level.


Re-Architecting Trust presents history through the lens of economic transactions and it is often the political that influences the financial. Just because we have code in the mix now does not rid the politics of it all, far from it. We will still see policy debates for protocols and power-struggles within DAOs, the sooner we accept this reality the better. The challenge that faces crypto in the future is two-fold; how do we fight back against the free-rider problem and how can we build more positive flywheels that distributes rewards to those that contribute to its success?

Let’s find out.

Frax Ecosystem Educational Incentives Extends For Another Six Months

After a successful first quarter proliferating Frax content and educating the wider crypto community about Frax, the Frax Ecosystem Educational Incentives was approved to be extended by another six months! Along with the extension, several amendments were made to the program such as increasing the payout to from $10k to $12k a month and modifying the payouts into the following categories:

The dates for submission are as follows:

  • Month #4: July 15th-August 13th

  • Month #5: August 14th- September 14th

  • Month #6: September 15th- October 15th

  • Month #7: October 16th- November 16th

  • Month #8: November 17th- December 17th

  • Month #9: December 18th- January 18th

In order to maintain relevancy and encourage fresh content, we have decided the only written content we are accepting are articles that cover recent developments in the Frax ecosystem. Examples of coverage of recent developments can be found in the articles below:

Submissions for all categories will be judged on a variety of factors including reach, relevance, accuracy, If you are trying to game the system via botting for views or plagiarizing, 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.

Please enter all submissions via this Google Form to be considered. If you are a submitting a dashboard, you must fill out this form first. All questions should be directed in the Flywheel DeFi Telegram Group

From Loyalty to Pragmatism, Kain Warwick Tells All on the Eve of SNX v3

This past week, we hosted Synthetix Founder and DeFi OG, Kain Warwick, who shared an array of stories and lessons he learned throughout his half a decade building in the space. One aspect that clearly stands out is Kain’s warrior mindset which was evident from the language he used to describe the participants and the environment in the early days of the protocol. Therefore, it’s no surprise that community members have enthusiastically identified each other as “Spartans.” Yet today, Synthetix and Ethereum for that matter is in a much different place than a cycle ago being more mature in its development and evolution. Ultimately learning from the missteps of the past will lead to more favorable outcome in the future for the entire ecosystem.

Reflections on Ethereum and the Emergence of a Multichain World

One evident characteristic in Kain is his brutal honesty. He doesn’t mince his words, openly stating how Ethereum dropped the ball in the past cycle by underestimating the impact of alt-L1s that frankly were much quicker to scale and onboard the next mass cohort of users. He points to the rise of BSC (now BNB Chain) as the canary in the coal mine of this phenomenon and how dogmatic echo bubbles and purist mindsets laid the foundation for such blind spots to form. As we move forward into a multichain world, the question remains will rollups be enough to attract future classes of users onchain or will they once again choose alt-L1s? As long as Ethereum continues to improve its scalability, have rollup solutions such as L3, and not get to comfortable, I am optimistic (pun intended).

DegenSpartan’s and Early Contributors’ Influence and Evolution

The alumni of the Synthetix community, both public and private, are impressive, to say the least, and have played a pivotal role in shaping DeFi itself. Kain shared stories of the most well-known spartan, DegenSpartan himself, whose name references the community he originated from. Kain acknowledges DegenSpartan’s contributions in shaping the financial policy and culture early in Synthetix history and notes that he was a positive-sum member of the community, a far cry of how he presents his psyops and casual trolling on Twitter. However, DegenSpartan grew apart from the protocol and went on to make a name for himself in his own right. Yet he wasn’t the only one, Kain even mentioned that out of the 10 original core contributors, he was the only one still around. One of the values Kain holds dear is loyalty and a sense of duty, perhaps explaining why he continues to return. Kain has the utmost respect for DegenSpartan and all those who weathered the cold, desolate winter of 2018/2019 but is baffled by the fact that none of them stuck around. Granted, no one owes anyone anything, especially in crypto, and maybe it was the more individual pragmatic move to seek newer pastures, but the act of paying homage to one’s roots makes it all the more special.

Synthetix’s Progression and Future Vision

Kain recognizes the need for Synthetix to evolve and meet users “where they are.” Early liquidity providers (LPs) in the Synthetix system took on considerable risk, likened by Kain to giving someone an AK-47 and instructing them to charge into the heap of battle. This approach made sense early in Synthetix’s history since those in DeFi at the time were the type of individuals comfortable with such risks and had the fortitude to stand volatility. Today, however, Kain envisions a future with more passive LPs who wish to test the waters before committing further. Regarding LPs, Kain firmly believes that SNX is the only collateral needed for Synthetix’s system. Although some may argue better collateral exists, Kain’s reasoning for SNX exclusivity is its proven functionality and accrued lindy over time. He believes only when it’s absolutely necessary should Synthetix become multi-collateral, and when that time comes, this capability could be activated in Synthetix v3.

The Journey from Synthetix v2 to v3

One cannot understate how influential Synthetix v2 was when it came out. As one of the first derivatives protocols onchain, much of the optimizations and tooling that developers took for granted simply did not exist. Much of the infrastructure for Synthetix v2 had to be built from scratch. v2 has weathered an unforgiving onchain environment for years now, yet as time passed, more and more components of the protocol were pieced together in a makeshift manner. As Kain describes, one must be extremely cautious when implementing upgrades because a single misstep could be as dangerous as stepping on a live wire. Now, with all the advancements Ethereum has made, the time has come for the next phase of Synthetix’s development.

The Dawn of Synthetix v3 and Its Promise

And here we are at the dawn of Synthetix v3, a permissionless liquidity platform where anyone can bootstrap their own market. From perpetuals to insurance to everything in between, v3 aims to solve the “cold-start problem” that often plagues markets at their genesis and allow anyone to plug into Synthetix’s liquidity layer. Kain points out that with Synthetix v3, market forces can determine if an idea for a market holds up much faster than before with natural selection overtime weeding out the undesirable ones. For those curious to learn more about v3, Synthetix’s product lead Cavalier outlined the ambitions he had for the protocol.

Kain’s Anticipation and His Role in v3

It’s hard to predict what interesting markets and ideas will come out of v3, but Kain did hint that he is cooking something up in the Synthetix ecosystem. Although Kain admits his SNX stack makes up bigger percentage of his portfolio than ever before, he is not involved in the core development of v3 but is far from a passive observer as well. Playing on the themes expressed earlier in the interview, Kain described his latest endeavor in one word as “pragmatic” and that it would be out very soon™️.

If there is one thing for sure, whatever it is, you know that Kain will be coming out the gate with his heart on his sleeve ready to take on whatever challenge awaits him next.

I Spent 48 Hours in Waterloo, Here’s What I Learned

Ah yes, Waterloo, Canada, the home of the University of Waterloo. Located a little over an hour drive from Toronto, this seemingly unassuming venue has played a pivotal role in the history of Ethereum. It is where Vitalik Buterin went to school before he dropped out to pursue what would become his life’s mission (Ethereum itself), and in 2017, it was the birthplace of one of the first viral NFTs, Crypto Kitties. Now an entire cycle and a half later, hackers of all skill sets once again descended upon the college town to participate in one of the more builder-driven events I’ve seen.

Waterloo is the ideal location for a hackathon because it’s accessible for builders to venture to and out of the way enough to repel the typical extractive class of conference goers that you often find in more major city affairs. What’s the point of paying thousands of dollars for a ticket just to see the same faces over and over again? In addition, ETHWaterloo’s bear market timing added another filter to the event; the participants were there not because of mania in prices, but rather for having genuine interest in building.

The Toronto blockchain scene was out in force at Waterloo which was shown at the “Were So Fkn Back” Happy Hour that Frax and Flywheel hosted with others that Friday. Berachain, Redacted, and BadgerDAO that all call Toronto home were in attendance there. It’s no surprise that the city has such quality caliber of projects, especially with the pipeline of talented devs that exists between Toronto and Waterloo. With all this momentum in the area, it’s no wonder why the 6 is a hotbed for development.

The Time For Real World Applications Has Come 

In his opening speech, Vitalik emphasized that Ethereum has reached a point where applications are ready to take center stage. As one of his first slides stated, if the 2010s in Ethereum’s were about theory, then the 2020s are going to be about practicality. Yet, in order for applications to be built, there must be a way for people to use them easily which comes with scalability and usability. With that in mind, it’s no surprise that Vitalik encouraged hackers to focus on building wallets with privacy in mind as well as utilizing cross-chain communication between L2s. Speaking of scalability, one of the more interesting finalists from Waterloo was Roll a Mate, an application that allows users to send transactions on Ethereum mainnet for just a few cents.

ERC-6551, the Russian Doll of Accounts

ERC-6551 is a new primitive that automatically turns any NFT into a token-bound account capable of sending and receiving ERC-20, ERC-721, and ERC-1155 tokens making them essentially the reverse of a soulbound NFT (instead of NFTs permanently tied to an account, they are accounts permanently tied to an NFT). Without requiring any change or upgrades at all, ERC-6551 makes organizing and managing wallets a hell of a lot easier. For example, have a Remilia collection you want to organize? Dedicate a Milady be the Russian doll for all of your Remilios, Bonklers, etc. Or want to dedicate an account that is solely for aping memecoins? Designate a Lo-Fi Pepe to that as well.

The current status of the primitive is that it has not been enshrined as an open standard yet, but is currently up for discussion in the Ethereum community. At Waterloo though, the versatility and usefulness of ERC-5661 was clearly on display with three finalists utilizing the primitive for their projects; Fukuro utilized it to create an auction marketplace, Piggybank made an ETH savings account, and Tokenbound Titans implemented it for NPC gaming.

Hyperlane Brings Modularity to Modularity

Hyperlane is an interoperability framework that allows developers to customize cross-chain experiences. Modularity has been a concept growing in popularity and for good reason. It’s beyond obvious that the we are heading to a multichain world, yet the question remains, what is the most effective and safest way to connect them? Instead of having “one size fits all” approach, Hyperlane gives developers the optionality of which type of interoperability is best for their project. Whether it’s optimistic, light nodes, or something in between, Hyperlane provides developers with API and SDK support to craft custom solutions.

Worldcoin is Building a Global Identity Framework

I took a moment to stop by the Worldcoin booth because I was distracted by the cute orb kitty (how could you not though). Yet, like many, I feel a sense of uneasiness having my iris scanned and with generally how Worldcoin brands itself. That being said, Web3 identity is a massively unexplored frontier that will be essential in onboarding users and Worldcoin is presenting intriguing solutions.

For one, Worldcoin’s World ID (the iris scan) is effective for preventing sybil attacks and attesting to humanness. Iris scans are a balance between being more unique than fingerprints and not as invasive as DNA tests. To alleviate privacy concerns, Worldcoin deletes iris scans and decouples proof-of-personhood from wallets using Semaphore, a zk-powered privacy layer for Ethereum dApps. Furthermore, the World App is both a global identity and finance app that although not required, combines World ID with a SAFE wallet that allows anyone to access Web3 and prove their personhood with ease. Much of Worldcoin’s activities are open-source, yet I am curious to see what their communication efforts will be to temper people’s privacy concerns. Today, almost 2 million people have had the eyes scanned by the orb and with an airdrop allegedly on the way later this year, that number is destined increase.

A Sign for Things To Come

Overall, the mood at Waterloo was positive and pragmatic. Builders are less distracted and are focusing on what will actually be useful. It will be interesting to see if anything from this hackathon will be integrated into Frax or the wider Ethereum ecosystem. For example, having ERC-5661-powered NFTs on Fraxchain would make keeping track of interactions a lot easier and the World App may prove to be a proper wallet solution for the on-chain world. With ETHcc around the corner, it will be interesting to see how these trends towards practical Web3 applications are going to be presented and further play out in the future.

FraxBuild Hackathon Launches! Here is What You Need To Know

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.

Happy hacking!

Enter the Wassieverse (and More) With Monkey Rothschild 🐸

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.

Follow Monkey:

Follow Flywheel DeFi:

I Spent Two Weeks at Vitalik’s Pop-Up City Zuzalu, Here’s What I Learned.

Kick-off of AI X Crypto Week

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.

Announcing The Frax Educational Incentives Kick-Off

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

Hong Kong Reflections: What The East and West Can Learn From Each Other

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.


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.