Explained by Mercuryo #35

The 35th edition of our curated newsletter.

In today’s newsletter we look at:

• Bridging Issues

• Secrets of Cross-chain Communication

• Fei V2: An Improved Stablecoin
• Outsourced Stakes and Higher Yields
• New OpenSea Competitor

Bridging Ethereum Domains

The Interoperability Trilemma

Multichain Ethereum is working in full swing, paving the way to dozens of new bridges and interoperability protocols. The projects are eager to enable this functionality for DeFi, but we can see some red flags already. A few recent high-profile hacks and scams signalized that users might start losing money in the cross-chain bridges. 

Similar to Ethereum’s Scalability Trilemma, there is an Interoperability Trilemma of balancing trustlessness, extensibility, and generalizability. The post by Connext dives into interoperability issues between Ethereum domains and comes up with a possible long-term solution for the ecosystem.

Clusters of Chains 

How Trusted Bridges Shape the Multichain Landscape

The multichain ecosystem is the new reality that everyone has to accept, as using the same shared smart contract is not an option. Ethereum-based apps will soon have their rollup chains while multichain ecosystems and layer one chains are on the rise. Thus, interoperability, composability, and other forms of cross-chain communications are as relevant as ever.

The blog article by Celestia explores the idea of the cross-chain communication space powered by clusters of chains. The vision is a model of the blockchain ecosystem where chains that share the same cluster can compose with each other in a trust-minimized way. 

Mercuryo Co-Founder’s Piece

Decentralized Payment System for Business

Opinions and curated pieces by Mercuryo Co-Founder Greg Waisman – Follow on Twitter

The Ultimate Stablecoin

Introducing Fei V2

Fei Protocol is building a highly scalable, decentralized stablecoin. Fei v1 introduced the concept of Protocol Controlled Value (PCV), which has proven to be an essential value driver. It defended the FEI peg and deployed hundreds of millions of dollars into DAO-to-DAO partnerships approved by major DeFi platforms, including Aave and Compound.

Followed by an inspiring first version, Fei v2 is meant to improve the stability, efficiency, and scalability of FEI. V2 will double down on DAO-first use cases and carve out new ones such as Liquidity as a Service (LaaS). The introduction article sheds light on other improvements.

BitMex Research

Outsourced Stake

What if one could outsource stake to third-party validators in the Proof of Stake process, potentially decoupling the coin holders from the consensus agents? The BitMex research explains why such services can become very popular and highlights some advantages for users like token issuance and higher yields. 

Also, the research examines Lido, a large staking service accounting for around 18% of the Ethereum at stake and looks into Lido’s staking pool opponents. According to BitMex, critics of Proof of Stake systems are likely to focus on the popularity of outsourced staking models that can potentially centralize the ETH 2.0 network.

New NFT Marketplace

Challenging OpenSea with a Token

The NFT market is well regarded, with OpenSea leading its marketplace battle. A newly launched Infinity marketplace is ready to challenge the leader with a few curious tricks. 

Infinity opposes itself to mainstream platforms and aims to build a strong community. The project’s first step of eating into some of those attractive NFT volumes is to airdrop its tokens to OpenSea users. The second step is to reuse OpenSea’s smart contracts, building a platform that incorporates more integrations and tools for evaluating, providing liquidity, and adding more utility to NFTs. While some already criticize this plan, time will tell if it works out.

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Something You Could Have Missed

• Evolution of Crypto Regulation Policy in Europe Over Time
• Where Does European Fintech Lag Behind?

This is a weekly newsletter curated by our Blockchain Lead Vyacheslav Akhmetov. We cover the most sparkling events in the industry and sharing more about our journey.