1) For what purposes of Ethereum do users pay Gas fees?

The data analysis platform Glassnode analyzed Gas fees, trying to find out what is the main purpose of the Ethereum network?

The data shows that since its establishment, the Ethereum network has been used less and less for EOA (external account, defined as having ETH balance, can send transactions: transfer ETH or trigger contract code, controlled by private key, no associated code, A payment system that transfers ETH between ordinary accounts) by sending ETH and messages via the private key associated with it.

As of May 2020, 34.2% of network transactions were used to transfer ETH between multiple ordinary accounts, but only 10.7% of fees were used for transactions that sent ETH to ordinary accounts. These numbers suggest that ordinary money transfers between users is not a primary use case for Ethereum.

The transaction categories in the above figure are:

• ETH (EOA): A transaction that transfers ETH to a regular account

• ETH (EOA, 0): A transaction that transfers 0 amount of ETH to a normal account

• USDT: Transaction to transfer USDT

• Stablecoins (w/o USDT): Transfer non-USDT stablecoin transactions, including PAX, USDC, etc.

• ERC20: Transactions calling ERC20 contracts

• ERC721: Transactions calling ERC721 contracts

• Other Contracts: Call other contract transactions that are not ERC20 & ERC721

In 2020, more than half of all Gas fees are used for contract calls that are neither ERC20 nor ERC721 (in this category, the top contracts are all contaminated with Ponzi schemes), followed by USDT transfers, up from 2019 in early 2019. Almost zero growth to the current 20%, other ERC 20 contract calls accounted for 12.6%, while ETH transfers between ordinary accounts accounted for 11.5%, while other stablecoins (non-USDT) transaction fees accounted for 1.4%, ERC 721 The gas fee generated by the contract call is 0.8%.

2) Bitcoin enters DeFi

Gavin Andresen, former head of Bitcoin Core development, said:

Scale BTC in three simple steps, A) Scale Ethereum; B) Mint BTC in a trustless way (on Ethereum); C) Use mapped tokens for transactions on ETH 2.0.

Integrating Bitcoin into Ethereum is the holy grail of DeFi, and related products and services require on-chain assets to be traded and used as collateral. Bitcoin is the most widely traded crypto asset, securing billions of dollars in mortgages.

Of course, users need financial incentives to be willing to transfer BTC to Ethereum, and even then, concerns about centralization and security need to be overcome.

Since May, WBTC and renBTC have shown exponential growth. The growth of WBTC can be attributed to being an acceptable collateral for MakerDAO...Meanwhile, renBTC just launched its mainnet this spring, and while much smaller, it is the first trustless, KYC-free blockchain connected to Bitcoin Bridge (another trustless Bitcoin-rivet asset, tBTC, plans to restart after an emergency press of the pause button last month). It's liquidity mining and yield driving their growth...

3) How does DeFi cross the chasm?

This short but meaningful article from Jesse Walden of A16Z.

#DeFi# growth is impressive for a category that was unnamed and barely existed two years ago. But in the crypto community, I don't think the accusation that DeFi is "mainly used by insiders and enthusiasts, and mainly speculation on crypto assets themselves" is controversial.

In fact, speculation is productive because it allows this nascent category to lead to something more important. Yes, the next behemoth often looks like a toy.

Still, this begs the question, how will DeFi bridge the chasm?

There is no doubt that the user experience needs improvement, but I don't think there is much else to improve. To attract mainstream users, DeFi needs to solve a real problem (and do it 10x better than other solutions).

Here are three prevailing narratives from the crypto community on how this happened. Personally, I'm not too impressed with the first two and most excited about the last:

• Global adoption - financial inclusion (banking financial services to the unbanked)

• Institutional Adoption - DeFi as the Global Casino, Welcome to Wall Street!

• The True Crypto Economy: Non-Financial Consumer Apps Lead the Way

This is an economy that does not serve crypto speculation per se, but rather with real goods and services, the economic layer of which is coordinated on-chain. Products like Foundation aim to introduce mainstream creators and their audiences to the crypto world by allowing them to fund creative projects and generate new revenue streams. Reddit hopes to use community currency to increase engagement by making users truly owners of its internal economy. Imagine a user taking out a mortgage with a pair of tokenized Yeezys. Or a Reddit user converts their BRICKS into dollars and opens a savings account.

All of this is possible due to the composability of smart contracts. Neither Foundation nor Reddit needed to build this functionality themselves. The open, user-controlled nature of blockchain computing allows any developer to embed these ecosystems and provide financial services to users. The result could be a rapid shift from non-financial applications to DeFi.

My point is that once mainstream users engage in real on-chain economic activity, not just crypto speculation, DeFi will become more interesting.

4) Demystify digital identity

From 3Box's masterpiece on digital identity, it introduces the role of identity in digital products, common identity solutions, and ideal digital identity solutions.

In the blockchain ecosystem, the limitations of relying on a single key pair for identification are well understood, leading to attempts at smart contract-based authentication and network-specific identity standards. uPort has pioneered approaches such as Ethereum smart contract-based authentication in 2016, social recovery in 2017, and EIP 1056 (Joel Thorstensson, Pelle Braendgaard) in 2018. Fabian Vogelsteller wrote several versions of ERC-725, and there are many others that attempt to build a multi-key identity model for Ethereum or other blockchain networks.

Problems with using on-chain, network-specific identifiers as identities:

• Leakage of privacy: Using on-chain registries or smart contracts to store identity information (such as ERC-725 or ERC-1056) is likely to compromise user privacy or control

• Network lock-in: Need to create a different identity for each network that you or your users use, which leads to poor developer and user experience in a multi-chain world

• Technology lock-in: As new blockchains, technologies and user models emerge, more time, cost and complexity are required to manage

• Limited interoperability: no easy access to data or identities in other networks

While improvements in the use of keys have been made, identity standards built for a single network (relying on a single blockchain, such as Ethereum), will lock us into new silos and provide more Worse user experience.

We are moving towards a multi-chain future, with networks like Filecoin, Arweave, Flow, Near, Celo, and Solana all live and complementing the value built on top of Ethereum. A better system would need to separate identifiers (or identities) from any particular network so they could be used with keys across networks.

5) REN hits a new high, what is driving its rally?

A data report on REN from the data analysis platform Santiment. Initially, REN was conceived as a solution to facilitate dark pool trading of crypto assets, but the project’s focus eventually shifted to blockchain interoperability. REN now describes itself as "an open protocol that enables the permissionless, private transfer of value between any blockchain.

It takes 100,000 REN to become a node. Since the launch of the mainnet, a total of 638 transfers of 100,000 REN have entered the Darknode registered address, most of which were concentrated in the first five days after the launch of the mainnet.

This report analyzes the number of tokens transferred to Darknode registered addresses, historical balances, token holding time, daily active addresses, etc.

[The copyright of the above articles and pictures belongs to the original author, and the head picture is from David Mihal]

This is the end of this issue of Satoshi Mamoto's Notes, see you next time.