People usually do not get the point outside of their own belief system. - xh3b4sd

Markets are some of the most powerful concepts in human history. Our ability to leverage markets has enabled trade and wellbeing on a global scale across the centuries like we have never seen before. We can get lost amidst the marvellous progress that we accomplished in aggregate as all of mankind, thinking we have figured it all out. The thing is, we haven't. There are so many questions left to answer and there is so much progress yet to be made, to everyone's benefit. I have spent the past couple of months working on a proof of concept for a new type of onchain information market called Uvio, now deployed on Base Sepolia. The idea behind Uvio is rather simple. I want to surround myself with the most competent and most honest people in the world. And Uvio can be one way to do exactly that. Let us play long term games with long term people, I say. On Uvio, you can say anything you like, but you have to stake some tokens together with your claim in order to prove your conviction about your expressed belief. You are effectively staking your reputation in concrete ways with whatever you believe in, and allow the community to validate or invalidate your believe based on the community consensus. You may wonder why somebody would want to do this. And the answer is that most people probably wouldn't. Most people on the internet today are neither competent nor honest. The few people who would want to use Uvio may use it to prove what is right and what is wrong. Those few kinds of characters may want to build a track record of competence for themselves onchain or monetize their authority in any given field of the economy. It has now become possible to build information markets using social networks and cryptography in order to make better decisions collectively. The way this better decision making is supposed to work is due to the added incentive of potentially winning money in the case that you end up being right, or losing money if you end up being wrong in your belief. Whether the user chooses to stake real or fake money tokens is entirely up to them and in the future it will be possible to decide who to play with inside of those information markets. There are other governance like aspects to Uvio that I plan to work on in the future. Go give it a shot!

Apart from introducing Uvio here to the world, I wanted to talk about the difference between staking and trading. A common theme in the crypto industry is to take any idea, add a token to it, and allow people to trade shares of that token in one form or another. I have grown to feel like this crypto reflex of making everything a trading app will end up being a net negative for the industry. Because trading is fundamentally a mechanism to exchange one value for another wherever there is a need for it. And the pendulum in our capital markets has swung a bit too far in one direction for my taste, since the centralized systems we have built throughout society created an incentive to trade even if there is no real need for it. This is not a communist take. I am all for leveraging the free market as a tool to surface competence and integrity, which is exactly why I set out to build Uvio now in the first place. At Uvio, our north star is to surface who is right and who is honest, using information markets. And one point I wanted to make here is that markets can be useful, even without trading. Instead of allowing people to trade on Uvio, we allow people to stake. If you think about how markets can be facilitated, you can see how different the action space of any given market may be. The way in which those various mechanisms may differ is based on the rules of their action space. You can think of those different action spaces as the difference between high frequency trading, which allocates capital in the orders of milliseconds, and venture capital, which allocates capital in the order of years. High frequency trading hasn't brought mankind that much further along the arch of evolution as far as I can tell. Venture capital has been one of the driving factors of basically most of the progress of mankind. High frequency trading is the exchange of value just because value can be extracted. Venture capital, if it doesn't destroy itself, stakes its own reputation and money on its own believes over time. At best, the difference between trading and staking is conviction associated with an idealistic believe in a better future version of this world. I might be leaning too far out of the window here now, but I think that allowing your users to trade in your crypto app only to facilitate your actual product is idiosyncratic, and at the least not net positive. Friend Tech was a glorified crypto consumer app that allowed users to trade, which in my mind had nothing to do with the app itself. The core team behind this project earned many millions in trading fees, while the project itself can be considered dead today. Polymarket allows users to trade on prediction markets. I think Polymarket as it stands today is not the last word spoken on how we build products based on information markets. I think trading on prediction markets introduces more toxic flow than it helps the product to serve its users, because Polymarket is usually not predicting anything. The perverted form of trading that is frankly omnipresent in the crypto industry today has replaced conviction with the desire to extract value. On the upside though, all of this negative emerging behaviour could not prevent our industry to grow and flourish in other productive ways. You just have to realize and understand that there is often a lot of noise everywhere. We should lean more into staking as an industry and I at least intend to do exactly that with Uvio.

Above I mentioned that Uvio is deployed on Base Sepolia. The name Sepolia indicates that it is the Base testnet. So we are working with alpha software here. Testnet or not, there are almost 200 L2 rollups out there today. Whether or not all of those L2s are useful is a different conversation. I think long term the notion of a chain might as well be abstracted away for most users. When you are watching a video on YouTube you have no idea which underlying substrate is serving you at any moment in time. Some of the YouTube engineers may care a great deal about that substrate, but we as ordinary app consumers have no notion of infrastructure beyond the mythical cloud. Onchain will eventually just be another part of the internet. Today though, there is still arbitrage to be had when it comes to choosing a chain as an app developer. I chose to start Uvio on Base because of my belief that Base will become one of the largest L2 rollups across all of Ethereum. Short of regulatory intervention, Coinbase will eventually move all of its consumer centric exchange business onto Base and run everything that it possibly can onchain. Being an L2 and having the largest crypto exchange in the western world supporting your business couldn't be more bullish for that particular ecosystem. Base has just now breached its L2 market share by TVL of over 20% for the first time. Base has plans to support up to 1 giga gas in block space in the future, which will be a 100 times increase of today's economic capacity. Having said all of that. Base being successful doesn't have to take away from the success that other L2s may have in their own right. And despite all of the above, Uvio will be chain agnostic. In fact, when you login to Uvio with your Farcaster account, you do not have any notion of a chain, because Uvio provides every user with account abstraction and gas sponsorship, so that everyone can simply use the app by clicking buttons, and not be concerned about any of the underlying technical details. And then one last word about building anything onchain anyway. Why do we as enthusiasts swim against the current and believe in anything that is trustless and permissionless and decentralized? What does any of that mean anyway? Using blockchain networks fundamentally removes middlemen and gatekeepers. And using blockchain networks allows any form of money to be stored and used onchain without having to rely on opaque third parties. Building onchain can deliver safer, easier and more transparent user experiences for anything where its users want to have the notion of ownership. Whether it is about owning money, profile pictures, privacy or connections to online friends. What you own onchain today is mathematically linked to your own private keys and cannot just be taken away from you tomorrow. All of the above, and frankly way more, is why we are building in this industry today.

At last, there is now 1 billion USD in commodities onchain. Virtually all of it is facilitated on Ethereum mainnet. Paxos gold is an onchain fund allowing to trade gold on Uniswap. At the end of the day the property rights of those commodities are only as strong as the weakest link in their bridge, because somebody has to hold real gold for your money onchain anyway. So those types of assets are only IOUs after all, but I am sure there are other administrative benefits managing this kind of capital onchain. For now it is simply great to see that commodity TVL is rising on Ethereum mainnet, and to my knowledge not anywhere else.