Vitalik hitting three birds with one stone here:
- solves one of the biggest risks plaguing Ethereum's app layer (ie defi) - our reliance on fast oracles
- gives another example of why onchain composability is still extremely valuable
- proposes a design oriented around the post-AI-agent world we now live in (leaving behind the monolithic "world computer" protocol design paradigm)
I would like to wish everyone, including all haters and losers (of which, sadly, there are many) a truly happy and enjoyable Ethereum revival
Building index-tracking assets on top of options instead of debt
https://t.co/gFNEvCbHct
What if the use options as the base of defi, instead of CDPs and liquidations? So instead of extreme price movements creating a sharp and global "you get liquidated" effect, instead your exposure to the index diverges quadratically from your preferred exposure in a smoother way?
A key benefit is getting rid of the need for instant oracles, and instead making everything work on top of "slow oracles" (ie. the type that prediction markets use)
This design has a significant downside - the need to do regular rebalancing - and an open question of whether and how this rebalancing can be made slippage-resistant enough. But it's worth considering and trying IMO. I would feel much safer holding algostables inside something like this, than in something that depends on an oracle that has to give real-time answers (and therefore could be tricked into giving wrong real-time answers with no time for human recourse).
We must, then, avoid the “Babel syndrome,” namely the idolatry of profit that sacrifices the weak, a uniformity that neutralizes differences, and the pretense that a single language — even a digital one — can translate everything, including the mystery of the person, into data and performance. This is the risk of dehumanization: building a future that excludes God and reduces the other to a means.
One could argue Ethereum’s territory among Turing complete chains (prioritizing certain resiliency properties) isn’t actually that highly contested at all
For example right now the important territory seems like payments and trading - foregoing some properties of Ethereum in favor of performance improvements for those use cases
Considering Bitcoin is unlikely to ever get to the same level of expressiveness as the EVM, there are good reasons why the Bitcoin-ish route can be quite fruitful as a place where assets can get issued and used as collateral in more performant spaces
Personal update: I've joined Anthropic. I think the next few years at the frontier of LLMs will be especially formative. I am very excited to join the team here and get back to R&D. I remain deeply passionate about education and plan to resume my work on it in time.