of dApps not getting enough love from users, developers, ecosystems, and VCs. Users don't love trying new dapps because of smart contract risks. It's way safer to just trade memecoins on known DEXes than signing random messages that look like gibberish.

VCs don't love funding dApps. The belief of fat protocol (not necessarily true in the future but definitely true for now) means fees accrue to the infrastructure, making it more like a sure bet to invest in infra versus dApps.

It's difficult for ecosystem to support dApps. They carry reputation risk for promoting dApps because dApps can rug or be hacked. Thus making it hard to justify the "reputational" investment (arguably more expensive than capital, because reputation is finite and non-renewable).

Developers don't love building dApps neither. It's difficult to raise money. It's difficult to acquire users. It's difficult to receive ecosystem support. This is why we are seeing the same group of developers over and over again: new devs don't have a chance to build dApps.

We used to pride ourselves for being innovative, for building the future of france. But now it's the same people building the 42069th AMM/lending with minor twists here and there. How do we change this? How do we Make dApps Great Again ??

One, we need better dApp security. Audit/bounty are not enough. We need 1. active protection like hacker TX front-running @hackthedefi 2. token delegation @delegatedotxyz 3. circuit breaker (yet to see). Being hacked is inevitable, so build dApps that are resilient to hacks.

Two, we need better value accural/capture for dApps. dApps are only aware of execution layer and can only monetize activities happening on execution layer, by charging a % of the swap fees or % of AUM.

dApps need to be aware of layers such as transaction layers to start monetizing order flow, and in the future, maybe start monetizing attention/community too. Many infra (my own @SemanticLayer included) like @AstriaOrg @atlasevm @SkipProtocol are all giving dApps this ability.

Three, we need to solve the ecosystem <> dev deadlock, where ecosystem ask devs to show development/deployment before support, devs ask ecosystem to show support before deployment/development. Incubation models like @AtriumAcademy (for UniV4) might be an answer.

Devs spend two months in workshops, working with mentors, building a prototype. Ecosystem gets the opportunity to select qualifying devs to continue the support. Both side starts with low-commitment and gradually ramp up for full support.

Hopefully I have explained well the reason behind "we don't have enough dApps" is actually not "we have too much infra," but multi-faceted reasons from multiple stakeholders: users/VCs/infra/ even devs themselves.

We need all stakeholders to be locked-in and committed to make it easier to build dApps. Otherwise, we as an industry will be losing the most innovative talents, as we already observed from the recent ETHCC with few new blood. We need to Make dApps Great Again!

The Neglected World of dApps

Not a while ago @vestafinance is undergoing a rage quit process. Now the rage quit redemption contract is live, and you can redeem your $VSTA for the treasury. Here is how 👇:

Step 1, you have to figure out how many VSTA you have (in raw number that smart contract understands). Go to https://arbiscan.io/token/0xa684cd057951541187f288294a1e1c2646aa2d24#readContract and follow the guide

Step 2, you have to approve VSTA for the redemption contract. Go to https://arbiscan.io/token/0xa684cd057951541187f288294a1e1c2646aa2d24#writeContract and follow the guide. The redemption contract address is available at https://arbiscan.io/address/0x8dAa1a76F7D8490e268e032570027c31780ED5E4

Step 3, now you have to call exchangeAndWithdraw on the redemption contract. Go to https://arbiscan.io/address/0x8dAa1a76F7D8490e268e032570027c31780ED5E4#writeContract and follow the guide

That's it. Now you should have the redeemed $ARB and $USDC in your address.

You can read more about the rage quit on https://twitter.com/DLNewsInfo/status/1701664561101930707

Redeeming $VSTA with Rage Quit Redemption Contract

Milady civil war is breaking out. Here is a quick summary of the core argument, and some takeaways for Web3 founders and co-founders

Both @CharlotteFang77 and @Milady_Sonoro wrote some long-ass posts which I bet you won't be reading. So I boiled it down to one core argument: who has ownership in @remiliacorp ?

@CharlotteFang77 claims to be the sole owner and only founder of @remiliacorp citing multiple pieces of evidence including always holding unilateral control of the treasury and personally funding the development before the LLC was formed

The board of directors and shareholder registration can easily prove these. Yet, a counter-argument could potentially be made that Milady and its IP are not owned by the company but a DAO, which @CharlotteFang77 argues he intended to make a corporation from the start.

@CharlotteFang77 also argued that the theft accusation is inaccurate, as the treasury is owned by the LLC, he has full discretion on the usage of the fund. The argument holds valid from a legal point of view, yet I found the word "personal income" used here disturbing

Meanwhile, @Milady_Sonoro argues that he and others were promised the title "co-founder" and entitled to equity compensation, as noted in the employment offer shared below. But @CharlotteFang77 refuted it by saying it's a "drafting error"

My view is that the claim is comical. If there is a drafting error in the offer, then an amendment should be made and mutually signed by both parties. We have yet to see such an amendment. Thus it's likely that @CharlotteFang77 consents to accept the terms set in the offer.

Seems @Milady_Sonoro joined the team with the expectation of receiving equity, yet later @CharlotteFang77 had another plan on equity distribution, which deviated from @Milady_Sonoro 's expectation. Hence the Milady Civil War all started from a poorly written employment letter.

So, what's the takeaway from Web3 founder/co-founders/contributor? First, if you are promised as a co-founder, be sure to have the terms (% and vesting schedule) written clearly in the agreement. Don't be shy to ask for clarification.

Second, the title means nothing if you aren't on the board or multi-sig. The board seat and shareholder agreement protect you off-chain while being on multi-sig protects you on-chain.

That's the summary of the MCW (Milady Civil War '23). Whether which side you join, hope you have enough popcorn

Ownership Dispute at Milady Corp

1/ What's common between @hpos10iETH ($BITCOIN) and @SankoGameCorp ($DMT) that have both seen 10x recently? According to @ZoomerOracle, they share a key trait: cult-like communities. Here, I'll explain how to visually identify such projects. https://twitter.com/ZoomerOracle/status/1682745880590336000

2/ A hallmark of cult projects is a coherent theme that permeates every aspect of the project. At the most basic level, coherence is a sign that devs give a shit. On a more meta level, it enables participants to better immerse themselves in the project's 'character'

3/ However, beware that a theme's value may dilute over time as the project attracts a wider, mainstream audience. Hence, it’s crucial to start with a niche theme to attract a dedicated core audience while retaining the project's uniqueness

4/ This is why copypasta projects (think of Azuki-inspired anime PFP projects) see decreasing performance, in terms of price. Visual fatigue and an insincere vibe that feels like a quick money grab repel potential enthusiasts (pic related, BAYC but facing left)

5/ So, a project should have a coherent and unique theme, but it must also resonate with a wider audience eventually. The perfect counter-example? Many Art NFTs that retain their uniqueness but fail to expand their reach due to strong authorial influence

6/ Judging coherence and uniqueness is straightforward, but assessing relatability is trickier. A theme that evokes emotions, particularly nostalgia, is often relatable. This is why I often explore past aesthetic themes for inspiration

7/ Past aesthetic themes offer a unique blend of being both unique and relatable. They reflect a time gone by, invoking feelings of nostalgia, yet their rare usage in the present day gives them a fresh appeal

8/ Both $BITCOIN $DMT (and the wider Milday ecosystem) tap into the Y2K and weird-core aesthetic. These aesthetics are unique as they're currently underutilized, yet relatable to the core Web3 participants who grew up during the late 90s and early 2000s

9/ In contrast, many VC-backed projects often exhibit a soul-less corporate style. This lack of authenticity and personality can impede the formation of a dedicated following, limiting the potential for exponential growth in attention

10/ In conclusion, to find a promising cult project, look for coherent, unique themes that resonate with a wide audience. I hope this thread provides you with insights to discover your own soulful gems

Meanwhile, please share any interesting projects with unique aesthetics that I might have missed 💎🙏

Identifying Cult-Like Crypto Communities

Ledger's recovery update sure caused a lot of panic recently. I'm always paranoid about my opsec and has been following the situation ever since. Personally I have been using Ledger since 2018 and recommended it to all of my friends. Here is what I found about the situation:

After listening to Ledger's spaces:
https://twitter.com/Ledger/status/1658463730676518920, I think this recovery update might not be that big of deal, if the recovery mechanism is designed carefully.

Please note that I conjured up the mechanism based on what's publicly available about the recovery service and what I deemed "rational" design choices. I still got some questions about the mechanism and hopefully Ledger team can correct or confirm my understanding.

For setting up the recovery service, the Ledger MCU (control unit) will request the SE (secure enclave that holds your private key) to encrypt the private key.

The encrypted key is then passed to MCU, which performs Shamir's secret sharing algorithm to shard the encrypted key into three shards. The shards are then transmitted to custodian partners, which performs their own encryption on the shards again.

A summary of how the recovery setup works (possibly)

My questions are: 1. is it true that the MCU never sees the private key but only the encrypted private key 2. how does the SE encrypt the private key 3. is it possible for a malicious firmware/application to trick the SE to pass unencrypted private key?

If the assumed mechanism is true, I don't see a huge issue coming from the recovery update, as the only thing that exits SE is encrypted private key.

For the recovery process, the shards of encrypted key are sent to the MCU, which assembles the shards back to encrypted key by reversing SSS. The encrypted key is then passed to SE for decryption, and the decrypted private key is stored in SE. Here is how it might work:

My question for the recovery process is how does the SE perform decryption? And this is related to how SE performs encryption during the setup process. Possibly the user needs to pick a passcode during the setup process that serves as the encryption key.

The recovery program could be valuable to crypto newbies, and it can even achieve same level of security integrity as before, if designed carefully. Unfortunately there are scanty details about how the recovery program works as of right now.

I really look forward to someone from the Ledger team or the wider security community to help answer these questions and maybe correct or confirm my understanding of how it works.

Tagging Ledger team @Ledger @iancr @P3b7_ @BTChip @_pgauthier
@AWengroff @Ledger_Support @Mo_RELS @_MontyPreston @sebadault

Tagging the wider security community @Mudit__Gupta @officer_cia @0xfoobar @samczsun @shunduquar @DefiIgnas @sethforprivacy @adietrichs @eking0x @MTorgin @udiWertheimer

Understanding Ledger's Recovery Update

@fuellabs_ has recently announced their beta-3 testnet, and there is a surge in interest for @SwayLang as we move closer to main net launch. Folks at @fuellabs_ @swaylend @compolabs have been producing awesome tutorials for the Sway language.

One of the features for @SwayLang is predicate, and I will explain how this feature allows developers to build a low-cost, and fully composable order-book DEX.

First,what is predicate? A predicate is a script that can read data from the transaction itself but not the blockchain and evaluate to either true of false. If the predicate evaluates to true, then tokens locked in the predicate can be unlocked and spent.

How does predicate help building a low-cost order-book DEX? A maker is posting OTC offers for takers to trade. The predicate will evaluate to true if the transaction sends X amount of tokens to the maker.

Thus any interested taker can send a tx that sends X amount of tokens to the maker and the predicate in the same tx will evaluate to true. Therefore sending the proceeds to the taker

A order-book DEX built with predicate needs to track all the offer predicates and operate a match engine. The nice thing is that predicates can't be deployed on-chain, thus it does not require a on-chain transaction to place an order.

Alternatively, some order-book DEX are built on their own rollups and thus users don't have to pay a transaction fee for placing orders. However, these DEXes aren't composable with other DeFi applications as they are built on their own rollups.

Therefore, an order-book DEX like @allsparkgg can offer no order placing costs (with predicate), while still remain composable with other DeFi applications launched on Fuel Network.

While @allsparkgg is still under development, @fuellabs_ has provided an example OTC-Swap built with predicate: https://github.com/FuelLabs/sway-applications/tree/master/OTC-swap-predicate#readme

In this example, a maker is posting OTC offers for takers to trade. The predicate will evaluate to true if the transaction sends X amount of tokens to the maker, here in L50-L57 https://github.com/FuelLabs/sway-applications/blob/master/OTC-swap-predicate/project/swap-predicate/src/main.sw#L50

The example also included a refund situation where the maker wishes to cancel the order and withdraw funds. The predicate will also evaluate to true if the transaction has an input from the maker, here in L32-L38 https://github.com/FuelLabs/sway-applications/blob/master/OTC-swap-predicate/project/swap-predicate/src/main.sw#L32

More on predicates being not deployable on-chain nor writing to chain. These are features designed as such, making it impossible for predicate to consume resources.

Predicate not being able to read from on-chain is also a feature, designed to prevent DoS attack. On-chain state might change due to temporary non-consensus.

Thus if the predicate can read from on-chain, it is possible to spam predicates and cause DoS on validators (more on https://medium.com/blockchain-capital-blog/the-power-of-predicates-73f874cfa9a5)

@dervoiedk @compolabs @SwayLang @IAmNickDodson @ManOfFrogs @Rubenevolent @0xGoldzn @camiinthisthang

SwayLang's Predicate: A Low-Cost and Composable Order-Book DEX

This Dinero litepaper is the proof that alfafa often can be presented without using word salads. The paper itself is only five pages, concise and simple. Give it a read if you haven't https://twitter.com/redactedcartel/status/1643994653325156353

Dinero Protocol will be the latest addition to the @redactedcartel product suite. The core functions are similar to a CDP, where you deposit a collateral (i.e. ETH) and mint a stablecoin (i.e. DINERO).

The two most important things about CDP or any stablecoins, in general, are liquidity and full collateralization. As for liquidity, @redactedcartel sure owns a lot of $CRV and $CVX, which can be used to incentivize DINERO liquidity on @CurveFinance.

As for full collateralization, the price stability module and auction mechanism help liquidate unhealthy borrowing vaults and keep the stablecoin fully backed. In DINERO's case, USDC can be used in PSM to facilitate arbitrage, which will correct the market price of DINERO to $1.

So far it seems like another CDP stablecoin, but what distinguish DINERO Protocol from other CDPs is how it plans to utilize the ETH deposited as collateral. The ETH deposited into DINERO will be used to power Redacted Relayer

Redacted Relayer is an RPC service that offers meta transactions payable with DINERO stablecoin instead of ETH, which greatly improves the UX of interacting with dapps and will help onboard new users to Web3.

In addition, Redacted Relayer also provides private transaction services, where users tx is not exposed to the public mempool. Private transaction proves to be a valuable service, as currently it helps shelter transactions from malicious MEV and helps whitehat execute rescue tx.

What's not mentioned here is that private transactions can bring a lot of revenue to the DINERO Protocol. Not all MEV opportunities are malicious. Some such as back running actually make the market more efficient, all while rewarding the searcher for the work.

Therefore, DINERO Protocol could monetize benign MEV opportunities by either selling the access to order flow to other searchers or even operating its own searcher.

That's a summary on the DINERO litepaper. I look forward to the full-blown whitepaper. Tagging some Redacted folks here: @0xSami_ @0xcarnation @dinerobull1 @DefinedNever

Dinero Protocol: A Concise Litepaper

Did the $ARB airdrop pique your interest in Arbitrum DeFi? Good,   you should pay more attention to @fluiditymoney, as they might change how incentivization is done for DeFi protocols, where the last big innovation on incentivization is protocol-owned-liquidity by @OlympusDAO

Liquidity is (and still is) the lifeblood of a DeFi protocol. Total value locked is the metric that many DeFi protocols optimize for, MkCAP/TVL is often used by many as a valuation metric.

Mechanisms such as liquidity mining have proven to be effective in attracting liquidity providers, and POL, pioneered by @OlympusDAO , helps to lock the liquidity onto the platform.

Yet besides liquidity, projects also need to incentivize the usage of its protocols and assets. This is especially true for stablecoin issuers, where the major utility of a stablecoin is to function as a medium exchange.

This is where @fluiditymoney comes in. What Fluidity created here is a market helping asset issuing protocols (i.e. stablecoins and LSDs) incentivize the usage and volume of their assets.

Users can deposit their assets such as stablecoins (USDC) and convert them to fluid assets (i.e. fUSDC). The deposited USDC is put to generate yield on lending platform, meanwhile Fluidity rewards users by randomly selecting from users who transacted with the asset.

It's easy to promote liquidity growth for your protocol, but it's difficult to incentivize usage of your protocol. Incentivizing usage is often done via creating an expectation of airdrop for early adopters. But airdrops are both dilutive and often one-hit wonders.

Now @fluiditymoney just made it more sustainable for protocols to promote usage. Protocols can partner with Fluidity and provide additional rewards to the rewards pool, which rewards the usage of the protocol's fluid asset.

I expect CDP stablecoin and LSD protocols to partner with @fluiditymoney at start, as adoption/usage of the assets is most important to these protocols. In fact, @vestafinance just announced its partnership with @fluiditymoney https://twitter.com/Definews_Info/status/1642682808656338944

Now you have heard enough about @fluiditymoney might change how incentivization is done for DeFi protocols. In the following days, I will write about how individual users can benefit from using Fluidity, and how it compares with other DeFi products.

tagging all the fluidity frens: @fluiditybull1 @fluid3njoyer @IvanSN_ @shahmeerx @yneas_

Innovations in DeFi incentivization with Fluidity and OlympusDAO

This week, almost all of the peg insurance on @y2kfinance is triggered. Everyone flocked to "decentralized" stablecoins only to find out they are just wrapped USDC. How can we build a better-decentralized stablecoin that is fully backed and with great capital efficiency?

@YamaFinance team is building a better stablecoin on ecosystems such as @arbitrum @fuel_network @EclipseFND

What is Yama Finance? Yama Finance is a CDP (Collateral debt protocol). The CDP part works similarly to Vesta, MakerDAO, Liquity, where you deposit collateral, and you can mint a protocol-branded stablecoin.

For example, you can deposit $OHM on Vesta to mint $VST, or deposit $ETH on Liquity to mint $LUSD. But that's where the similarity ends. Yama Finance is different from existing CDP and improves the CDP protocol in many ways.

First, Yama is interoperable across the chain. You can deposit collateral on A chain to mint $YAMA on B chain. The cross-chain security is provided by @Hyperlane_xyz

In the context of interoperability, it’s similar to $USDC, where the stablecoin can be issued on-chain using off-chain collateral. Here Yama stablecoin can be issued on chain B with chain A collateral.

Yama accepts yield-bearing collateral such as ETH liquid staking derivatives. The yield of the collateral can be either or both diverted as protocol revenue used to pay down the borrowing position’s interest and principal.


In other CDP protocol, PSM only take the protocol’s own CDP token, which is then used to liquidate collateral to restore the peg. Therefore, additional liquidity mining incentive is needed to provide good liquidity for swapping the stable asset to other liquid assets.

On Yama, you can directly lend $USDT or other stablecoins into the Yama PSM. The $USDT in the PSM module directly supports the buy-side liquidity, thus there is no need for value-diluting liquidity mining programs.

To summarize, Yama is a new kind of CDP protocol that has native cross-chain support, the highest capital efficiency, and no value-diluting liquidity mining program.

Yama will be coming to @arbitrum @fuel_network @EclipseFND. Given that there is no headwind from a value-diluting liquidity mining program, I’m bullish on its token’s ability to accrual value.

Be sure to set your reminder for the upcoming spaces with @YamaFinance team and others building on @fuel_network https://twitter.com/verilog_audit/status/1633572156671148032