Weekly Rollup #19
Modular Media
0x061A
June 20th, 2023

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This week’s issue covers:

  • Uniswap Announces V4

  • EigenLayer Initiates Testnet

  • Polygon 2.0

  • The Cosmos Rundown

  • More News & Announcements

  • More on Polygon 2.0

  • Cosmos vs. Ethereum social alignment

  • More Discourse & Education

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📣 News & Announcements

Uniswap Announces V4

On June 12th, the Uniswap Labs team announced the upcoming launch of Uniswap v4, introducing a new, modular approach to the Uniswap application.

Why v4?

According to Hayden Adams, Uniswap founder, a lot of teams were launching new Uniswap forks with updated parameters, such as a new fee model. So, v4 introduces a way for developers to continue launching new innovations in the AMM space (as “hooks”) within Uniswap itself, rather than deploying a completely new AMM with minimal changes.

What’s new with v4?

V4’s flagship feature is “hooks”.

Hooks are modules, or customizations, that any user can build or implement when deploying a new pool on Uniswap. Specifically, hooks are code that runs at certain points of the lifecycle of a transaction. These hooks can be added before a swap, after a swap, at the moment you create a new pool, remove liquidity, etc. For example, “run this code (hook) that checks for an oracle price feed before executing a swap”.

So, similarly to how existing solutions such as Eclipse or Caldera allow developers to deploy custom rollups by allowing them to mix & match different modules (choose your settlement, your DA, gas token, etc.), Uniswap v4 will enable anyone to create custom pools by allowing them to select whatever modules (hooks) they’d like to use. In other words, you can use hooks to modify parameters within a pool.

  • Dynamic fee hook

  • Limit Order hook

  • Time-weighted average market maker (TWAM)

  • use out-of-range LP deposits to accrue extra yield through lending protocols

Another added feature to Uni v4 was the addition of the Singleton contract. With previous versions of Uniswap, every time someone deployed a new pool, a separate contract would also deploy. So if I wanted to create a new USDC<>ETH pool, I would have to spin out a new contract, even though this contract was basically the same as any other Uniswap pool contract (just different tokens involved mostly). In other words, the same code gets duplicated across all pool smart contracts. Now, rather than each newly created pool being its own smart contract, pools now live within the singleton contract. This reduces the cost of deploying a new pool by about 99%.

Overall, for end-users the main advantage with v4 will be an even greater decrease in gas fees, while developers benefit from an increased developer experience that allows for an increased rate of AMM innovation.

What’s Next

According to Hayden Adams, Uniswap founder, users can (probably) expect to start using v4 sometime after the next Ethereum upgrade, Cancun. However, developers can start experimenting with v4 today - of course, keep in mind that the new contracts have not been audited yet, so use with caution!

You can read the team's official blog post to dive deeper into this latest Uniswap version launch.

EigenLayer Initiates Testnet

This past week, EigenLayer launched “Stage 1” of its mainnet rollout.

Altogether, the protocol’s mainnet rollout is expected to happen in three stages:

  • Stage 1: onboarding restakers

  • Stage 2: onboard operators who perform validation tasks for AVSs built on Eigen

  • Stage 3: several AVSs will launch on Eigen

During this stage 1 phase, three liquid-staked ETH tokens were able to be deposited into the EigenLayer’s restaking protocol:

  • Lido’s stETH: this pool’s max cap was reached within the first hour!

  • Rocket Pool’s rETH

  • Coinbase wrapped staked ETH (cbETH)

That being said, the 3.2K max cap per asset was reached within just the first day, meaning the protocol is closed off for now, until the cap increases.

This just goes to show how excited the Ethereum community is for EigenLayer. As a developer, you get to leverage $ETH security for your own application/chain, while ETH restakers will get to benefit from increased token rewards from the different applications their ETH will be securing.

For anyone interested in keeping up with EigenLayer stats, both the Parsec Finance, and Nethermind teams have each built a dashboard that keeps track of metrics like total deposited staked ETH per each asset, token withdrawals, and more. Of course, there is not much to keep up with as of now, considering the 3.2K cap.

Polygon 2.0

This past week, Polygon Labs introduced Polygon 2.0, which lays the blueprint for how Polygon aims to become the “value layer of the internet”.

TLDR: this was an announcement about the upcoming announcement of what Polygon 2.0 will entail.

What is Polygon 2.0

According to the team, “Polygon 2.0 is the blueprint to building the value layer of the internet (something Ethereum set to accomplish) - it is a set of proposed upgrades that radically reimagine every aspect of Polygon, from protocol architecture, to tokenomics & governance”.

Specifically, 2.0 is “a network of zk-rollups unified via a novel cross-chain coordination protocol“. The vision is for Polygon to be able to host an unlimited number of chains, without sacrificing liquidity, efficiency, and the overall user experience (feel as though you’re using a single chain).

Wen Details?

Over the following weeks, the Polygon Labs team will be publishing blog posts, AMAs, and more in order to explain the details behind 2.0. Changes we can expect to see include:

  • Polygon PoS

  • Utility and evolution of MATIC

  • Transition to community governance of the protocol and treasury

In fact, here is a rough schedule as to when we can expect more information:

What’s Next

About two years ago now, Polygon announced their $1B investment into zk-technology. This has culminated into the addition of four different zk-rollups across the Polygon ecosystem (expanding beyond the single PoS chain it started as), including Polygon zkEVM (prev. Hermez), Polygon Zero, Polygon Miden, and Polygon Nightfall.

That being said, this has led to some questions and concerns for the Polygon community, such as, how will MATIC be used across all Polygon solutions, and wouldn’t having five distinct networks under a single ecosystem hurt liquidity, efficiency, and the overall user experience? It seems like 2.0 will look to address these concerns and lay the blueprint for how Polygon is looking to unify all of these networks.

You can read Polygon’s official blog post here. For anyone interested, the team held its first community AMA (“Why Polygon 2.0”) regarding 2.0 a couple of days ago - you can check that out here. We look forward to learning more about the 2.0 specifics over the coming weeks. & don’t worry, we’ll make sure to highlight everything for you through our newsletter ;)

The Cosmos Rundown

There were quite a few governance proposal updates for the Cosmos Hub community this past week.

  • **Prop #797 passed,** which voted to increase the Cosmos Hub validator set from 175 to 180.

  • Of course, the big one was proposal #799, which votes for the transition of the Stride network to adopt interchain security (ICS), thereby becoming the second chain to join the Cosmos Hub Economic Zone.

  • There is also a second proposal related to Stride’s adoption of ICS, prop #800, which votes to “provide 450K ATOM to the stATOM/ATOM liquidity pool on Neutron (also achieved social consensus).

  • & lastly, **the voting period is now open for proposal #801:** “Gravity Dex Liquidity Module Removal”. “This is a signaling proposal to remove the unused Gravity Dex Liquidity Module from the Cosmos Hub and to return the funds contained therein to the rightful owners”.

Let’s quickly look at some of the details for Stride’s adoption of interchain security (ICS).

Stride to adopt ICS

As a reminder, Cosmos is an ecosystem of appchains, or sovereign L1 networks, the first of which to launch was the Cosmos Hub. One of the ways in which the Cosmos community is looking to grow the Hub is through replicated security. In other words, allowing other blockchains to start leveraging the Cosmos Hub validator set, along with the staked $ATOM, in order to secure their own network.

Replicated security involves two parties:

  • the provider chain (Cosmos Hub): the hub provides its 175 (will be 180 now following prop 797) Cosmos Hub validators, along with the (roughly) 190M $ATOM staked on the hub, to other appchains

  • the consumer chain (Stride in this case): the appchain adopting replicated security from the provider chain

With ICS, appchain deployment can be done far more quickly, as you wouldn’t have to worry about bootstrapping your own security at all. Rather, you’ll borrow the validators set and all that staked ATOM from the Hub for your own network. You can check out one of our previous issues, here, to learn more about how ICS works.

What makes this ICS adoption more special, is the fact that it will be the first time we see an existing chain transition to a new validator set. Neutron, on the other hand, was a new chain altogether, meaning it adopted ICS from day 1, whereas Stride had already been live and running for quite some time now with its own existing set. Once the transition happens on the 19th, the existing Stride validator set will transition to solely the role of governance.

To pay for this Hub security, Stride will share 15% of its staking reward with Cosmos Hub.

As mentioned earlier, if the proposal passes (which is expected to happen), then the transition will occur on July 19th. We’re excited to see the biggest liquid staking solution on Cosmos transition to Hub security.

More News & Announcements

📚 Discourse & Education

More on Polygon 2.0

In their Polygon 2.0 announcement, Polygon Labs uses terms like “value layer” and “unlimited scalability”. What do they actually mean? The Polygon team hasn’t shared much about their concrete plans, but some common questions have been answered.

What is meant by “value layer”? Is Polygon competing with Ethereum now?

In this Twitter Space, Brendan Farmer offers clarity (~minute 13:50). He emphasizes that Polygon is the “execution layer for Ethereum”, which he equates to the value layer of the internet.

What is meant by “unlimited scalability”? What is the claim based in?

Brendan also explains this (~minute 43:40). Polygon Labs believes ZK uniquely enables unlimited scalability when compared to other multi-chain approaches seen in Cosmos, Polkadot, Optimism, etc. They see clear limitations with other trust models (committees of validators, fraud proofs) when scaled to many chains. This is in contrast to ZK-based systems, where “no matter how much we scale blockspace, it’s cryptographically impossible to introduce an invalid transaction”.

That’s all for now, but stay tuned 👀

In the meantime here are a couple of third party takes:

Cosmos vs. Ethereum social alignment

Larry from Delphi Digital poses a social question. Why does the Cosmos ecosystem have so much drama? Is this rooted in architectural decisions or something else?

Jon Charb contrasts Cosmos and Ethereum + rollup ecosystems. Rollups are chains, just like Cosmos chains, but have much less drama. Why? This is most likely due to the central point of focus and rallying cry - Ethereum as a base layer.@

In crypto we focus a lot on technology, but it’s important to always remember that blockchains are social coordination tools. Layer 0 is social consensus, and what’s interesting is that modular architectures have so far created more unified social consensus across technical layers of the stack - vertically but even horizontally among competitors.

More Discourse & Education

That's all for this week! Thanks for reading 🧱🎬

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