TheoRomano

head of partnerships @melonpodcasts / conversations are the new distribution

[Melon Podcast @MelonPodcasts]

1/ there's a war brewing in bitcoin world over whether arbitrary data — non-financial stuff like images and text — should be allowed on the blockchain

analysis by @lotus4068

2/ this is the same debate that's been going on since @ercwl and @udiWertheimer trolled a large part of the bitcoin community with their taproot wizards project, which productized the extra space in blocks and let anyone inscribe their magic internet jpegs forever

3/ the opposition is fighting back, and we now have a name for this camp: bitcoin knots

4/ this is the camp of @LukeDashjr, perhaps the most hardcore bitcoin monetary maximalist and anti-shitcoiner. the "knots" name is an explicit biblical reference to the whip of knots jesus used to expel the money changers from the temple

5/ the knots camp's argument: arbitrary data in the bitcoin blockchain is an irresponsibly risky use of bitcoin resources. bitcoin code should exclusively serve the use of btc as money

6/ if arbitrary data is allowed, an attacker could flood bitcoin with transactions that include illegal data (namely child pornography) that would cause anyone running a bitcoin node to be prosecuted

7/ in theory an attacker could load cp into bitcoin transactions, meaning bitcoin nodes would all download this arbitrary data, and anyone running a node would find themselves transmitting and in possession of it. this would make running bitcoin illegal and would be a censorship attack on the network

8/ it might sound farcical, but this is actually how the argument goes

9/ the tradeoff bitcoin knots want is to censor the types of transactions that bitcoin users can make so that node operators are protected from censorship due to processing arbitrary non-btc-spend data

10/ bitcoin core, on the other hand, is saying that morality and policy should not be conflated, and that bitcoin core ought to be neutral software and unopinionated about the data that the market decides to place in its utxos. core is also the default mode of what bitcoin is today

11/ i do find elements of the knots side compelling. not because the state-level censorship and cp transmission worries are valid, but simply because bitcoin is ultimately just an app-chain for btc, and taking a monetary maximalist approach seems right

12/ bitcoin is for bitcoins, always has been, always will

13/ but the point of this is to highlight that ethereum has taken a radically different approach to essentially the same issue

14/ ethereum's fork-choice enforced inclusion lists (focil)

15/ focil is the mechanism that ethereum core devs want to implement to solve ethereum's censorship problem

16/ with the ofac sanctioning of tornado cash, parts of the ethereum tech stack started censoring tornado cash transactions

17/ focil makes sure important but ignored transactions still get into blocks, even if a builder or proposer would prefer to censor them

18/ in each ethereum slot, a small committee of validators scans the mempool and publishes inclusion lists of transactions they think should be included

19/ the next slot's proposer builds the block and can order transactions as they see fit, but must include the il transactions

20/ attesters can only vote for blocks that satisfy the ils. if they don't see the il transactions, the block won't be voted on, won't be built on, and the block builder doesn't get the reward

21/ this removes the exclusive power of transaction inclusion from just block builders to a wider variety of staking participants

22/ so in stark contrast to bitcoin knots, ethereum's strategy is to force everyone to download all the data

23/ rather than attempting to censor data, ethereum is forcing the entire network to download all fee-paying transactions, regardless of the data contained in them

24/ it's worth pausing and reflecting on how hardcore this is

25/ there are different ways to be a cypherpunk, and some are more radical than others. ethereum's strategy of forcing transaction inclusion is pretty hardcore

26/ ethereum doesn't give you an option. you include the transactions, or you don't get the reward. and if you don't get the reward, why are you bothering to stake at all?

27/ include or die

28/ to what degree all of this matters, or is deep-crypto-tech nerd shit... idk it remains to be seen. maybe this attack vector never comes to fruition and the choice to include arbitrary data is more innocuous than luke dashjr makes it out to be

29/ after all, we've had arbitrary data in bitcoin and ethereum since their respective genesis blocks, so why would this all start now?

30/ i'll leave this all for the reader to ponder. meanwhile, please appreciate one of my favorite bits of arbitrary data in bitcoin, which is the first ever bitcoin inscription, inscribed in block 767753:

dickbutt

[Melon Podcast @MelonPodcasts]

1/ one month since HIP-3 went live on Hyperliquid. anyone who stakes 500k $HYPE (~$19.3M) can now launch custom markets backed by the platform’s full liquidity

analysis by @JordanV4le

2/ the result is an exchange where you can long or short almost anything: stocks via Trade and Felix, commodities, bonds via Aura, pre-IPOs via Ventuals, even Pokémon cards via Trove

3/ how it works. a deployer stakes 500k $HYPE, gets three markets free, then enters an auction for extra slots. they set leverage, configure the oracle, and manage risk. bad performance can get the stake slashed (temporary mechanism)

4/ the deployer takes 50% of fees from their markets, Hyperliquid takes the other half. HIP-3 fees are set at double the standard rate so the protocol’s cut stays roughly the same

5/ most deployers are still building, but one live HIP-3 market has already done $1.3B in volume. early signal looks solid

6/ what this does for $HYPE. three clear effects:

➢ permanent lock-up of 500k $HYPE per deployer → sustained buying pressure
➢ new fee flow into the Assistance Fund (97% used for buybacks)
➢ incentive wars between deployers for trader flow and between stakers for a cut of the new economics

7/ Trove already raised $20M just to buy $HYPE for launch. DATs like @HyperionDeFi and @HypeStrat are looking at HIP-3 instead of dumping

8/ the risks. permissionless listings don’t equal quality. a market is only as good as its deployer. weak oracles, bad leverage settings, thin liquidity — traders leave fast

9/ demand is the harder part. the vast majority of Hyperliquid volume still sits in five major markets. niche assets face a cold-start problem

10/ no early liquidity → traders stay away. no traders → LPs leave. incentives can bridge the launch, but the market still has to stand on its own

11/ HIP-3’s success comes down to two things: quality markets launching and those markets generating real, sustained demand. the framework is ready. the rest depends on the deployers

12/ if just a handful of markets work well, the impact can be material. FalconX estimates $0.8B in extra fees even if HIP-3 captures less than 1% of Mag7 derivatives volume

13/ HIP-3 is another structural bet on decentralization. Hyperliquid is shifting growth responsibility from the protocol to its participants

14/ for a platform that already captures up to 35% of all blockchain revenue in some months, betting against HIP-3 feels like the wrong side of the trade

[TheoRomano @th3oromano]

@GoldenL92116321 Token airdrop is the only part that sounds concrete

[TheoRomano @th3oromano]

@catalinaossa68 So every dapp ends up needing the same middleware

That makes the oracle layer a bottleneck worth watching

[TheoRomano @th3oromano]

@copyfxc The risk management line hits harder than most trading advice out there

[TheoRomano @th3oromano]

@TChainObserver Crypto projects closing shop as a sign of maturity is a take I havent seen before

Usually its framed as the opposite

[TheoRomano @th3oromano]

@UAFinance_ae Jackson Hole could be the real mover here

All eyes on the Fed

[TheoRomano @th3oromano]

@conorfkenny What does AI-powered commerce actually look like in this partnership?

[TheoRomano @th3oromano]

@cyb3rtrex @CNPYNetwork Infrastructure is the layer everything else depends on, so keeping an eye on projects like this makes sense

[TheoRomano @th3oromano]

@kraushaarcngof @sleepagotchi @quipnetwork The real-world part is what separates noise from actual use

Most projects stop at the narrative

[TheoRomano @th3oromano]

@Eminweb3 What would be the first use case you'd want to see built on this combined AI and blockchain infrastructure?

[TheoRomano @th3oromano]

@GecoCapitalEE renewed demand or just the same money rotating back in after a nap

[TheoRomano @th3oromano]

@AboveIG @hz_hann @BAXSCTO @princeofweb3 @Meichin333333 The storytelling angle is a fresh way to onboard people into Web3 without the usual jargon dump

[TheoRomano @th3oromano]

@HeyTaiZen What does the blueprint actually give you that a conference doesn’t?

[TheoRomano @th3oromano]

@halfdarken What part of crypto are you trying to keep in the balance?

[TheoRomano @th3oromano]

@ImThat84499120 Is the airdrop tied to holding $MCDx or just a snapshot of Solana wallets?

[TheoRomano @th3oromano]

@TheSolchief Every club will be doing this in five years

[TheoRomano @th3oromano]

@actresszon77218 Solana keeps getting these AI narrative plays

If the airdrop actually pays out it could pick up fast

[TheoRomano @th3oromano]

@MattiaC the printer emoji doing a lot of heavy lifting for the contest part

[TheoRomano @th3oromano]

@BlackBull_ANSEM What makes the airdrop worth claiming beyond the Solana angle?