After years of research & development, we are finally in a multi-chain market structure. There are over 100 active public blockchains, many of which have their own unique applications, users, geographies, security models, and design trade-offs. Despite what individual communities believe, the reality is that the universe tends towards entropy, and the number of these networks will likely continue to increase into the future.

This type of market structure necessitates the need for interoperability between these distinct networks. Many developers have realized this, and the last year has seen an explosion in blockchain bridges that attempt to unify an increasingly…

While non-fungible tokens (NFTs) have been around since early 2018, they were initially used for a fringe use-case (collecting digital cats) within a fringe community (cryptocurrency enthusiasts). Three years later, we are witnessing the adoption of the technology from artists, designers, game developers, musicians, and writers.

This is because NFTs, like Bitcoin and Decentralized Finance (DeFi), are a financial, social, and political movement. They enable the ownership & provenance of digital content and allow people to buy that content from creators around the world with near-instant value transmission. …

Pioneered by IDEX in October 2017, refined by Synthetix in July 2019, and implemented at scale by Compound in June 2020, liquidity mining (LM) has captured the imagination of dozens of protocols as a better way to distribute tokens.

A non-exhaustive list of liquidity mining programs from June-September 2020

The effect on the DeFi sector has been electrifying — Total Value Locked is over $10 billion at the time of this writing, up from just over $1 billion on June 16th, 2020. It has also put a strain on the Ethereum network, with gas prices and transaction fees at all-time highs as users rush to capture and realize profits. …

Photo by Elizabeth Explores on Unsplash

In many markets, there may not be enough organic liquidity to support active trade. Market makers are agents that alleviate this problem by facilitating trade that would otherwise not occur in those markets. “Automated market makers” (AMMs) are algorithmic agents that perform those functions and, as a result, provide liquidity in electronic markets.

While automated market makers have been studied in both theory and practice, “constant function market makers” (CFMMs) are a “zero to one” innovation for both academic literature and financial markets. …

The past two years have been filled with much hype but little traction around blockchain games.

In addition, while many “general purpose” smart contract platforms, such as Ethereum, have launched, the market is trending towards use-case-specific platforms, as in the announcement of Flow by Dapper Labs and Immutable by Gods Unchained. These “first-generation blockchain gaming platforms” exhibit similar characteristics to the early days of gaming consoles (a new creative industry, a two-sided market, and constraints around compute and storage).

The console gaming industry has been around since the 1970s and offers rich data for anyone seeking to gauge the success…

While the primary use-case for cryptoassets continues to be speculation, I don’t believe this is a bad thing. Speculation was a key driver in the development of traditional financial markets and continues to play an important role in the industry today. Most importantly, speculators provide liquidity, allowing participants to more easily enter or exit the market. This reduces transaction costs and increases access for market participants.

The cryptoasset market today remains immature and suffers from a lack of liquidity; unlike assets within the traditional financial system, which have built a baseline of liquidity over multiple decades, most cryptoassets are less…

If you told a Bitcoiner in 2009 that Facebook would be developing a cryptocurrency, you would have been laughed out of the room. At the Bitcoin 2019 conference in San Francisco, Libra was an inevitable topic on most panels.

Libra is a stable cryptocurrency that’s backed by a reserve of assets and governed by an independent association that’s comprised of multinational corporations, non-profit institutions, crypto-focused companies, and investors.

Announced Libra Association Founding Members

While Fidelity, Square, and JP Morgan have made meaningful contributions over the years, I think the breadth and size of the Libra Association marks a milestone in the legitimacy of the cryptocurrency…


P2P networks and blockchains are tales of many converging roads. While blockchain was invented in 2009, it combined multiple technologies from prior decades, such as Merkle trees (‘80), fault tolerance (‘89), linked timestamping (‘90), and proof-of-work (‘92). Similarly, the underlying components of P2P networks have also assembled themselves throughout the decades (e.g. Ethernet (’73), TCP/IP (‘83), distributed hash tables (‘01).)

It turns out that these are complementary technologies. P2P networks are a key component of cryptonetworks like Bitcoin, which describes itself as a “peer-to-peer electronic cash system”, since nodes need to broadcast transactions and blocks throughout the network.

While there…

In July 2018, I published a market map of the various state channel projects in development. In this post, I will provide an overview of where we are with this technology today and a summary of the projects below. In a nutshell, we’ve come a long way this year. While there are still many technical challenges that need to be addressed, teams are diligently working on solutions that are moving the industry towards wide-spread adoption.

“Wait, what are state channels again?”

To provide an overview, state channels are, at the core, an architecture choice that says “let’s not go to the blockchain if we don’t have…

What do railroads, credit cards, and CryptoKitties have in common? The answer is that they were all enabled by industry standards. As a definition, industry standards are established norms or requirements followed by the members of an industry. Many industries have embraced standards as a way to unlock value from emerging technologies. I believe that cryptoassets, and specifically non-fungible tokens (NFTs), will follow a similar path.

Historical examples

Very railroad. Much symmetry. Wow.

Standards can be physical. The invention of the railroad was a fast, cheap and effective way of sending products cross-country. This was made possible by the standardization of the railroad gauge in 1886, which…

Dmitriy Berenzon

Research Partner @ 1kx // Alum Blockchain@Berkeley, Berkeley-Haas

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