Can Gurel

Can Gurel


Delphi Digital


I read, think, and write about blockchain infrastructure: scalability, UX, and privacy.

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"Bitcoin’s tx volume, which measures the total amount of successful BTC transfers on the chain, is down to levels not seen since 2020 and looks to continue decreasing."

As data is inscribed to a sat, wouldn't users need to transfer sats (contribute overall tx volume) to do anything meaningful with inscriptions?

I would have expected inscriptions to contribute to overall tx volume.

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"Tips add up to users’ DEGEN points taken into account for on-chain $DEGEN airdrops."

it seems amonsgt the most popular erc20s but its more of representative token for the DEGEN channel (think sub-reddit) and not Farcaster as a whole.

Personally i think Farcaster OG NFTs are the best way to get exposure. They have been created by core Farcaster team and airdropped to select ealry OG members. Expect others to airdrop to OG NFT holders.

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"Last bull cycle, Rune was mostly a speculative play. Now it’s transitioning into a fundamentals play; one that provides real value to the crypto industry"

unique offerings with the largest TAM imo are

  • censorship-resistant, KYC-less access to BTC at scale (spot trades in BTC<>ETH, BTC<>BNB etc. pathways)
  • BTC "interest account": earn BTC over BTC via savers
  • BTC lending (it's a very large market but TC lending has yet to prove its market fit)

affiliates are already significant revenue, especially since the launch of streaming swaps. To put into perspective, a $1m stream swap can execute around 5bps with TC only charging around a 500$ liquidity fee. Since this is so cheap compared to all alternatives (even the largest CEXs), affiliates can charge users several thousand dollars and still remain competitive.

e.g. here affeliate fee is $7k for a $1m stream swap

THORSwap has been benefiting from this for a while now. Recently Trustwallet switched on aff. fees. Total aff. fees are ranging between $0.5-1m$ per month. See the below dashboard for more details.

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"multi-chain atomic settlement"

also possible across multiple chains.

we talk more about this on part 2 and 3

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the cross-chain section is entirely focused on value transfers and argues users will increasingly use intent-based bridges to transfer value.

that is; the user signs a cross-chain transfer intent, and solvers identify the intent and fulfill it by giving them tokens at the destination.

After solvers fulfill requests at the destination, there is a need to validate what happened on the destination chain and relay it back to the source chain. solvers get compensated for their efforts only after validation.

this is where messaging bridges (chain's canonical bridges, UMA's optimistic oracle, Circle CCTP, Chainlink CCIP LayerZero, etc.) 
come into play.  

where does CCIP sit in this competition?

when it comes to value transfers, i think the vast majority of validation will happen via CCTP, canonical bridges, or optimistic validation methods.

CCIP is likely to capture the market for RWAs and defi apps where chainlink is already the oracle. also can be very relevant for non-value transfer use cases (e.g. governance voting).

however, I expect the lion's share of cross-chain value to accrue to intent-based bridges/DEXs and their solvers given they are user-facing apps and users transfering tokens consitute the vast majority of demand for bridging.

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possibly but don't see it happening anytime soon.

tho in near term, they may decide to remove USDC on the highest traffic pathways. for example, they can decide to have a direct BTC<>ETH pool w/o USDC.

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"it’s possible that at maturity, there won’t be any passive LPs; all liquidity will be of value-in-flight rather than value-at-rest"

yes exactly.

as apps become intent-based, there will be less need for passive on-chain pools, bc solvers will provide liquidity only when it's needed. especially for major assets.

a good example of this is deBridge's DLN which has 0 TVL by design.

I think on-chain vanilla AMMs will mostly be used for long-tail assets as it's the easiest to bootstrap liquidity

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if I understand ur q correctly...I'm not sure to what extent GSR does market-making for Rune tbh. any particular reason ur interested in this?

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"If a filler is too greedy, they risk losing the order to another filler willing to take a smaller profit."

curious if there is any discussion on fulfiller coordination in solving process in UniX.

think this will be important to maintain long-term censorship resistance.

to elaborate...

fulfillers aggregating their liquidity to collectively fill an order with each earning their fair share of fees vs. an every fulfiller for himself type of competition (only one gets to fulfill and others lose out in competition)

the latter is more vulnerable to EOF and thereby centralization where in the worst case there are 2-3 giant fulfillers that fulfill all orders thus they can gauge prices.

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"The current UI (a simple 1-to-many chat with text messages and images) doesn’t seem suitable for hundreds if not thousands of people per room"

good point. on-chain part is the toughest to change. also agree that UI has been getting better / can be changed rather easily.

this will be based on the specific application implementation.

  • users may set a price and an expiry date such that their intent gets invalidated if no one fulfills it by that time
  • there may be apps where all solutions are somehow collected and ranked and the best one is picked based on ranking criteria (e.g. could be price, timing or a combination etc.) This is how CoWSwap works.
  • there may be apps where users sign a decay function such that the price they want starts at a higher price than what's offered in current market condition and drops over time. in this case, u may not need to rank solvers as they will compete to be the first to settle. This implementation is discussed in UniswapX paper.

in any case, nodes in the network (not just solvers but also gossip nodes etc.) are likely to rate and police each other, and will maintain local trust graphs of whom to trust, whom to communicate with etc.

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"In certain cases, solvers may want to coordinate with each other by forming a consensus protocol and/or running MPC among each other."

there is an interesting dynamic here, which is analogous to mining in some ways.

solvers race against each other to be the first to settle intents bc the solution that gets settled first invalidates all other work-in-progress solutions.

(similar to how the first solution to PoW puzzle invalidates others. every miner moves on to find the solution to the next block as soon as a solution is found.)

also, only the solver(s) that settle a solution first get compensated for their efforts (i.e. collect fees on-chain).

Other solvers, who are late end up doing a bunch of work for free.

(once again this is analogous to a a solo PoW miner failing to find a full solution on it's own)

To reduce this risk, solvers are likely to work with each other to solve intents, and earn their fair share instead of one of them winning the whole pie and others getting none.

Now, how exactly that may play out is hard to tell. But we have a good solution for coordination; which is consensus protocols.

A few solver for example can form a "Solver DAOs" and run a consensus protocols (could be PoS, PoA, a hybrid or other models) to coordinate.

These consensus protocols won't run complex computations (actual solving will still be done off-chain on the client side) but may be used to determine whose turn it is to publish a solution for example.

Can Gurel has not authored any research reports yet.