Meet me there.

“Can we orchestrate an attack on the bot ruining the fun in Gladiators KoC Grape tournament? @Andy_Tomb and myself took him for a fair few grape last night but he's restocked and we don't want to have to have that fight again on our own!”

Bot? Ruining the fun? Not on my watch!

For some context, Gladiator King of the Colosseum is a sort of game where you have to hold your position as “king of the Colosseum” straight for a time duration (3 hours for the GRAPE KoC).

Any player can just send a transaction, pay a small amount of GRAPE (currently 1.08 GRAPE) and become the new king, so you have to defend your position day and night, stopping others from winning the grand reward pool.

However, the fun was ruined when one person decided to build a bot to do this. People had to defend their positions against a bot that didn't need to sleep, eat, touch grass or take a break in any way. It just kept entering.

Game plan: Counter the bot WITH a bot

I brainstormed ideas with people in the #ama-live-chat channel. We had a game plan: outbot the bot, make them give up.

Idea 1

Build a Node.JS bot to watch transactions, test the bot, rent a VPS, maintain this VPS... nah. This idea got scrapped because it's just too much effort and too much cost to just fuck over a bot messing with a game.

So then what?

Eureka! Using Gelato Network to automate transactions

We thought a lot and talked a lot in the chat which we now moved to the top secret OG-only #og-chat. Suddenly, it came to me and I sent a message in the thread.

https://gelato.network/ can be used to outsource the execution of tasks, i believe it's reliable enough to be able to send a transaction within a 3 hour range

Gelato Network. It's a system of bots that send transactions at specific times or whenever possible. These automated transactions are incredibly important for this!

Now, I didn't have to code in JS with a blockchain library like ethers.js which I didn't know so well. I could just code in Solidity, a language I've gotten very accustomed to!

It worked on the first second try

The code is very simple, the logic is only about a hundred lines (the interfaces don't count of course) In fact, you can check it out here at this address: 0x34521c12104f8af6c5cfe139a107e6d7f49ebd7e

I then hooked it up to Gelato Network, so it would scan every block, check if my transaction would execute, then if it did, run it to go kick out that piece of sh enemy bot.

Currently it's at about 5 executions on Gelato (and one test execution to kick that bot out manually!) at the time of this writing. You can see them all in the Events tab on Snowtrace.

Grape go brrr! https://grapefinance.app

#defi #bots #autonomy #gelato #p2e

NOTHING HERE IS FINANCIAL ADVICE AT ALL. PLEASE DON'T SUE ME IF THIS GOES WRONG

TL;DR: Buy seigniorage tokens (GRAPE, CASH) close to peg, stake them in the single stake (or create an LP, even less volatile), earn ridiculous yields.

Risks

First and foremost, the main risk is that the protocol gets underpegged. This can happen, so try and minimize this by going with protocols that have a track record of hovering around peg.

Another risk is rug pull/smart contract hack, so make sure the project is audited, and follow the rug spotter guides in the Seigniorage Circus.

Alright, let's get on to the strategy

It's honestly very simple. Find a trustworthy stable-pegged seigniorage protocol, for example Grape Finance, DYOR.

Swap some of your coins for the pegged token (GRAPE, in this case, not WINE, that's a different strat).

Stake your delicious GRAPEs in the Vineyard, you can go with single stake or GRAPE-MIM Liquidity. At Grape Finance, it doesn't give too much of a difference, but for most protocols single-stake yields less than LP, and the LP is less exposed to the fluctuations of the pegged token.

Then... just leave it be. If you want, a helpful but optional part is to put it into an autocompounder (which does create sell pressure on the reward token though, beware).

Passive income! (but do check in once in a while of course)

Honorable Mentions

Here is a list of great resources and protocols to start with on your new degen strategy!

• Grape Finance, a stronk algostable, audited by 0xGuard (MIM pegged, Avalanche C-Chain)
• BRR Finance, a newer but still good algostable developed by one of the most trusted devs, DNN. (BUSD pegged, Binance Smart Chain)
• Seigniorage Circus, a group dedicated to finding and saving protocols that are way underpegged. Has lots of great resources inside and seigniorage experts in there.

iKeen is a Tomb Finance fork. You can see our docs at https://docs.ikeenfi.app (https://ikeenfi.app for now redirects to our docs!). Please shill to some servers. Thank you.

Nothing more.

Autonomy Network

Autonomy Network is a system that allows smart contracts to queue Requests in the Registry contract, with a trigger (e.g. price of ABC goes above 500$). The system then, when the condition is met, calls the contract to do whatever it needs to do.

It works by a sort of Proof-of-Stake system. “Validators” (bots) can lock their AUTO (in the StakeManager contract) to get the exclusive right to execute Requests for a certain period of blocks.

In exchange, the smart contract has to pay enough ETH or AUTO to cover gas fees and a little extra to make it worthwhile for that validator.

Autonomy's PoS structure vs. “Free-for-all” incentives

Current ways of trying to achieve autonomous transactions is to incentivize bots to do it, for example, the compounding of an autocompounder.

This is like putting a small pile of money that is just about worthwhile for somebody to grab, so 100 bots will try and lunge for it before the other ones, and one random lucky bot will win the grand prize of... 5 cents after gas, probably, while everyone else fails.

This works, but is inefficient, prone to frontrunning and this free-for-all battle can make it not worthwhile for the bot, as there is a high chance of loss and a tiny chance of earning (and tiny earnings).

Frontrunners

Bots aren't instant, they have to pay for gas and their transactions will sit quietly in the memory pool. Generalized frontrunners can scan the memory pool and copy profitable transactions with a slightly higher gas price, and so the bots trying to grab the pile of money end up being outpaced by those frontrunners.

Inefficiency

For every lucky bot that succeeds, there are at least 5 more who fail. The model of a free-for-all means there can be only one.

The combination of all these factors causes bots to slowly become disincentivized as more bots join in, with extremely tiny profit margins and high chances of loss. This causes bot makers to just “give up”, turning off their losing bots. This also leads to centralization, as certain people have an “edge” over others, such as well-connected nodes or an agreement with a miner.

To contrast, Autonomy Network is more structured, with each validator bot having the exclusive rights to grab these piles of money at different times. This stops these cycles of bots bumping into each other as they wrestle for this tiny pile of money, saving a lot of time, gas and having better economic guarantees that your request will be executed (if you pay enough).

What can Autonomy be used for?

Right now, Autonomy Network hasn't launched most of its stuff yet, like the AUTO token, or its documentation. It's in beta currently.

The current main usecase of Autonomy is trading. Autonomy's request architecture allows for limit orders and other stuff available on a CEX, on AutoSwap.Trade.

It could potentially be used in the future to create blockchain life, or NFTs that can run transactions on their own and be autonomous, these things could be used in the Metaverse too. Who knows?

I think Autonomy's really cool and I'll definitely be buying the token when it launches. Not financial advice by the way.

🚀

tags down here as to not interrupt your reading: #autonomy #defi #dapp #dev #nft #pos #dex

For example, I put 1000$ in a no-loss lottery, and within a bit it generates 10$ of interest. The no-loss lottery takes a small bit of it, for example 5% (50 cents), then puts it into a pile. It does this for all of the people in the lottery, taking a cut and putting it into a pile.

Let's say the total pool is about 1 million $, so the pile is 50,000$. This 50 thousand is given to a lucky winner! (the more assets you deposit, the higher chance of winning)

Now, that's great, but it's only theory. Let's get into the no-loss lotteries that you can actually deposit your money into!

PoolTogether

PoolTogether is the first and biggest (decentralized) no-loss lottery. Most other no-loss lotteries are forks of PoolTogether, which really shows its success. It's been audited by CodeArena, OpenZeppelin, CodeArena again and CodeArena yet again.

They also have a bug bounty program that pays out up to 50 thousand dollars for big vulnerabilities in their code, and insurance coverage from Nexus Mutual, for those who are even more cautious. It's permissionless too, meaning anyone can create their own custom prize pools at any time.

Overall, PoolTogether is the OG no-loss lottery, but I personally haven't used it before. It's on 3 blockchains (Ethereum, Polygon, and Avalanche).

Moonpot

Moonpot is a fork of PoolTogether on the Binance Smart Chain, powered by Beefy Finance, a yield aggregator (we'll talk about these later).

It was created by some Beefy developers and, according to them, has the same standard of safety that Beefy has. It's also been audited by CertiK.

Moonpot is sadly only on the Binance Smart Chain, I've used it before when I did yield farming on BSC, but it's pretty secure and is a “sister project” to Beefy.

And that's all...

Well, there are probably more no-loss lotteries out there, and when I find more, I might update this article.

Tags here so they don't bother anyone #moonpot #pooltogether #defi #lottery #nolosslottery #beefy

Set Protocol

Set Protocol is one of the biggest index protocols out there, powering indexes like the DeFi Pulse Index. It allows for “tokenizing portfolios”. In Set Protocol, according to their docs, there are 3 different groups: asset managers, investors and developers.

Asset managers are those who create Sets and manage them, taking fees from investors. Investors are, well obviously, investors. Developers are people who use existing tools to build amazing stuff through code, using the Set Protocol as a base.

Set allows you to diversify your portfolio easily, such as with the DeFi Pulse Index (not run by Set but powered by it), or use structured products like Ethereum x2 leveraged tokens. It's audited and reputable, and it gives all the tools needed to developers to build cool things, for asset managers to manage assets, for investors to easily invest into another person's portfolio. It's the most feature packed protocol I know that does this stuff.

Use this if you're on Ethereum, Polygon or Optimism. If you're on Avalanche, you're out of luck and you'll have to use..

Cook Finance

Cook Finance is a smaller but still trustworthy protocol. Unlike Set Protocol, Cook Finance is specifically designed for index funds. It's been audited by CertiK and SlowMist and the project is generally pretty reputable.

There are 2 parties: Index Selectors (investors like you and me) and Index Creators. It isn't as permissionless as Set though, because you need to be approved by the DAO before you can become an Index Creator.

At the time of this post, it's the only option available on the Avalanche C-Chain. It has many different indexes to choose from, not as many as Set Protocol, but enough for most of us.

So which one do I pick?

You can pick whichever you want. In my opinion, I would choose Set as it's more polished, feature-packed and permissionless, however Cook's approval process for becoming an Index Creator filters out a lot of bad indexes and it's planning on entering Binance Smart Chain in the near future.

tags are here, because i dont wanna cram them into the post cuz it looks weird #defi #indexes #tokensets #cookfinance #diversify #investing

Inflation

Inflation is like a silent tax on your savings, where the central bank (like ECB) or an institution like the Federal Reserve prints more money quicker than the economy can grow, causing prices to rise as the value of your currency to drop over time. Generally, governments and central banks want to keep this at around 1% and 2% per year to stimulate the economy, incentivizing people to spend.

At the time of this post, the US Federal Reserve is having trouble managing inflation, with levels as high as 7% (according to CPI), and the European Central Bank is reporting levels of 5% inflation.

Savings rates are too low

We are at a point where interest rates on deposit-insured savings accounts are at a historic low, at 0.06% per year as the average in the United States, or even negative in the case of the ECB. Hell, even “high-yield” offers like checking accounts, certificates of deposit, money market funds return less than 2% per year. To really see how much of a slap in the face these current rates are, you can look at Bankrate's “best savings accounts”!

Taxes

And finally, taxes. When you earn interest, in the United States it is taxable income and the government takes a portion of it. I have nothing against taxes, I feel they're needed for a healthy society but this combination of factors on savings makes you go net negative.

So what do I do then?

There are many ways of safeguarding your money from inflation. I must admit I am biased against the current financial system, and so I will most likely favor decentralized systems over centralized banks and institutions. It really depends on your risk tolerance and I am in no way giving financial advice please don't sue me

DeFi lending platforms

And by DeFi, I mean decentralized finance, not just stashing your cash in Nexo or whatever and earning interest on it. Decentralized finance is a new sector of fintech, without human intervention needed.

DeFi lending platforms, even for stablecoins, generally have higher rates due to their efficiency and the free market nature of DeFi. Just stick with reputable, audited, battletested DeFi platforms like Aave, BankerJoe, Compound, Yearn, etc. and you'll generally be fine (Again, not financial advice! Don't sue me!)

However, DeFi comes with some risks. The biggest one is the fact that you solely are responsible for your money, and that can be a good and bad thing. There is no central authority to restore your money when you lose your seed phrase or get hacked, but there is also no central authority to stop you from doing things with your own money, and no central authority to abuse this power they have and take your money.

Another is smart contract risk, where your lending platform gets hacked or you get rug pulled (the developers take your money and run). This risk is very minimal with audited and battletested contracts.

The last major risk is that you have to trust the token you're lending. Generally, if you trust the dollar (too bad for euro gang, very little euro stables out there), you could choose a dollar-pegged stablecoin, whether it be Binance USD or USD Coin or even the shady Tether.

However, DeFi lending can give large rates compared to traditional finance, in the range of 5-30%. These rates do fluctuate time to time but are generally way higher than traditional institutions. Personally, I have a high risk tolerance but you might not. DYOR and NFA.

Treasury bonds

Treasury bonds are debt issued by the US Treasury and are effectively riskless ways of earning interest. They are only taxed on the federal level and pay semiannually. I don't know too much about these, just that the maturity of the bonds are really long, 20-30 years, but there are liquid secondary markets where you can trade them freely.

TIPS (Treasury Inflation-Protected Securities)

The value of the principal on these bonds adjusts with inflation (measured by CPI). The interest on these is low due to their ability to keep up with inflation. They can mature in either 5 years, 10 years or 30.

You can buy them from the TreasuryDirect website. or from your broker.

Investing

For new investors, it's generally recommended not to go chasing after the next moonshot and instead, just investing in an index fund. You can invest however you like, honestly. NFA.

I think you should buy either the DeFi Pulse Index or one of Cook Finance's indexes for exposure to crypto, or if you want to go the old-fashioned stock route, just get some SPY.

NFA, you may lose money. DYOR before investing.

tags are here as to not bother anyone: #defi #savings #taxes #lending #investing #tradfi #cefi #inflation

However, one mistake many people make is to associate the entire cryptocurrency space with Bitcoin, believing that all cryptocurrencies are inherently energy-wasters and horrible for the environment.

Let me explain why cryptocurrency isn't the coal-burning, oil-guzzling polluter that it is often portrayed as.

Proof of Work

Once upon a time, there was an incredibly smart person (or group) who went by the pseudonym Satoshi Nakamoto. Satoshi here found a way to solve the double-spend problem using computational work, and released the Bitcoin whitepaper, introducing both blockchain technology and the Bitcoin Core implementation.

It all relies on cryptographic hash functions. I'll break this down.

A hash function is a program that turns text into another “hashed” form, examples include MD5 and CRC32, usually used for checksumming.

Cryptographic hash functions are just hash functions, except they are extremely secure. They are one-way, meaning you cannot get back the input from its output, the best way is just to guess and check. Cryptographic hash functions make up the backbone of all of Internet security, examples including SHA256 and Blake2b.

Miners take transactions sent to them by users of the Bitcoin network, and arrange them into a block. (the block in blockchain!) Now comes the hard part: this miner needs to find a special nonce, that when hashed with the rest of the block, the resulting number starts with a certain amount of zeroes, determined by the difficulty.

There is no better way than guessing and checking, so this miner has to guess and check numbers billions of times, even trillions, just to find this specific special nonce. That is what wastes so much energy and that is what secures the Bitcoin network.

Proof of Stake

Many (and I mean many) blockchains use Proof of Stake or some derivative form of it, such as Avalanche, Cosmos, and Polygon. These chains require validators (not called miners anymore) to stake a certain amount that can be “slashed” for bad behavior.

I'm no expert on PoS, so you should check out the Ethereum Foundation article for more details.

And so...

Bitcoin will probably not fade away, but new, more secure, faster and more efficient chains will overtake it like Avalanche. Ethereum, one of the biggest blockchains, is switching from Proof of Work over to Proof of Stake. Bitcoin will probably never switch. Who knows?

The climate crisis is a big issue, but we shouldn't condemn a new revolutionary technology because a few implementations are bad.

tags are down here to not bother anyone #blockchain #consensus #pos #pow #environment

The main risk you've probably heard all around the place is the dreaded impermanent loss (😨), a mysterious part of how liquidity pairs work and can lose you tons of money! The thing is, impermanent loss is actually not that bad, and in fact can be good for you!

Liquidity Pairs (I'll shorten it just to pairs later) are composed of 2 tokens, token A and token B.

When you make an LP, you put 2 amounts of those tokens with equivalent value and you receive a share of the pool. These tokens are put into liquidity pools to help other people trade, and you get fees in exchange for doing so.

What is impermanent loss even?

Impermanent Loss (IL) is a term used to mean the difference between the value of holding 2 tokens in your wallet and holding 2 tokens in an LP.

Due to asset rebalancing (a trait of Uniswap-based LPs, keeping the market value of those two tokens equally balanced)*, you earn less than you would just by holding those 2 tokens.

Asset rebalancing can be used for DCA

Asset rebalancing is the cause of Impermanent Loss, but how does asset rebalancing work? The truth is much simpler than you might think. Let’s say you have an LP pair of BTC-BNB at a starting ratio of 50:50 at entry. The actual prices of the assets are not important when considering asset rebalancing, only their relative price to each other. So instead of 50:50, let’s simplify the ratio to 1:1. If BTC price rises 10% more relative to BNB price, then 1.1:1 becomes the new ratio before asset rebalancing. Now, the AMM needs to rebalance this into 1:1, so how does it do that? Simple: it sells BTC and buys more BNB, until the value ratio becomes 1:1. As BTC price continues to rise relative to BNB, the AMM continues selling BTC and buying BNB. When the price of BTC moves back down relative to BNB, the AMM does the opposite; it sells BNB and buys BTC. – AlpacaFinance

This is similar to a strategy for investing: dollar cost averaging! When BTC price goes up compared to BNB, the AMM is rebalanced by arbitrageurs and sells some BTC to put into BNB, and vice versa.

This is also a way of automatic portfolio rebalancing where you earn fees for doing so!

I'm going to provide liquidity now! Woohooo!

If you want to, do it! It supports your project of choice by giving them liquidity, it earns you fees (that usually outpace any IL) and if they have a farm for earning extra yield (sometimes platforms subsidize liquidity providers by giving them extra money), that's awesome.

However, you should be careful of massive yields from farms, as it is a sign of an inflationary token which is designed to go down over time. Exercise proper caution, DYOR, look for audits and use trusted platforms like Autofarm or Beefy.

Tips for beginners providing liquidity

• Pair it with a trusted stablecoin for easier tracking
• Enter pools with enough liquidity (>500K$ or so)
• Do your own research, especially look for audits
• Use yield optimizers like Beefy which compound farm yields
• Don't put in more than you can afford to lose
• Have fun!

Source

https://docs.alpacafinance.org/alpaca-academy/lesson-5-the-truth-about-impermanent-loss-and-common-misunderstandings

Footnotes

*originally said it was arbitrageurs balancing it, this is actually an intrinsic trait of uniswap LPs. arbitrageurs balance the price between 2 exchanges when there is a difference, that's arbitrage

tags here to not bother anyone: #defi #dex #uniswap #investing #liquidity #farming