The document provides an extensive overview of decentralized technology, focusing on key elements such as blockchain, smart contracts, tokenization, NFTs, stablecoins, and DeFi. It discusses the implications of self-sovereign identity, public adoption of blockchain, and the potential shift from traditional banks and companies to decentralized economies and organizations. Additionally, it highlights the necessary infrastructure, layer 2 solutions, and opportunities for blockchain analytics and consensus participation.

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DECENTRALIZED
TECHNOLOGY
a short survey

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@stadolf
BLOCKCHAIN
Unfailable consensus
Globally distributed state machine
Governed by consensus protocols
PoW, PoS, BFT
Uncontrolled and Unstoppable
Public and Permissionless
Accessible to everyone
PoA chains mostly useless
controls unique / rare digital “assets”
Guarantees transaction ordering
Mostly useful to build trustless systems
SPoF
controlled accounts
“cloud” provider
Database admin

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SMART
CONTRACTS
Uncompromisable Rulesets
Unstoppable code
deployed on chain
Triggered by transactions
executed during block validation
Ethereum Virtual Machine / EVM
Keep local, distributed state
Solidity: Turing complete language
Foundation for tokens
All contracts can interact with all other
contracts
Source code distributed by 3rd parties

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ERC20

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Anatomy of one Aave deposit transaction

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DATA &
COMPUTATION
Content Addressed Storage systems
IPFS, Arweave, Sia Skynet
Globally distributed computation
iExec, DFINITY, Golem Network
Decentralized Oracles
Chainlink, Tellor
Ledger Analytics
Etherscan, Alchemy, The Graph
Decentralized Cloud Resources

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Content Addressable Storage Networks
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Do you know QmRJYzy24...?
ipfs add

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TOKENIZATION
Programmable money
ERC20 Fungible Tokens
Monetary values
Shares
Governance / Voting power
Utility tokens (pay per use)
Security tokens (real world assets)
ERC721 Non Fungible Tokens
Unique Assets
Transferable Identities
Owner rights
Combined representations
ERC1155 semifungible Tokens
Ingame items

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NFTs
Represent unique items
Real estate properties
Cars
Domain names
(Digital) Arts
transparent auctions
Fractional ownership
Realtime Royalties
Marketplaces
OpenSea, Rarible, Zora
Non fungible tokens

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STABLE COINS
on the real world
ERC20 tokens pegged to another (fiat) currency
Custodial: capital backed (not decentralized)
Non-custodial: using interest bearing vaults,
automatically mint / burn tokens towards
pegged value
CBDCs & institutional investments
Central Bank Digital Currencies
Higher requirements on
KYC & AML
scalability
privacy

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MakerDAO contract infrastructure

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@stadolf
DeFI
Financial token instruments
Automated market makers
Math based “order books”
Pooled liquidity
Decentralized Exchanges (DEX)
Collateralized borrowing
Interest bearing tokens
(Flash) loans
Compound protocols / Derivatives
Yield farming
Fund / pool investments
Leverage / Margin trading
No-loss Lotteries
automated asset management

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BANKS ?
where we’re going
we don’t need banks

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@stadolf
TOKEN
ECONOMIES
Real life goods on chain: Digital Twins
Supply Chain usecases
M2M micro payments
Staking / Governance
Enable trust by incentivizing players to
play right.
Total market transparency
Data marketplaces
Once tokenized, compatible to all DeFI
protocols!
Everything becomes a tradable
commodity

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DAOs
Community owned enterprises, controlled
by smart contracts
Driven by governance tokens / member
stakes
Decentralized funding / grants
Formerly known as “crowdfunding”
Earn tokens by voting for the “right”
outcome
Can hold and distribute deposits
Foster community participation
Decentralized Autonomous
Organizations

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COMPANIES ?
where we’re going
we don’t need companies

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@stadolf
SELF
SOVEREIGN
IDENTITY
Users are in full control of all secrets
local creation of key material & DIDs
W3C Verifiable Credentials allow issuing /
proving claims about a subject
Blockchain based
credential registries
DID changesets
VC revocations
Selectively disclosable (JSON-LD/BBS+)
Highly interoperable
DIDs, Agents & Credentials

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PUBLIC
ADOPTION
DK, Estonia are running administrative tasks on
blockchains
E-estonia
DK anti corruption chain
Germany’s administration agrees on blockchain
strategy
Financial, innovation, Digital Identity
Liechtenstein blockchain act
Token Container model for rights
and assets
El Salvador adopts bitcoin as legal tender
EU lays technical foundations and regulations
EBSI eSSIF
CBDCs / Digital Euro

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GOVERNMENTS ?
where we’re going
we don’t need governments

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LAYER 2
Sidechain networks
Polygon, Binance Smart Chain
Mostly driven by BFT/PoS consensus
Bridge anchor chain assets
Much lower gas fees / faster execution
Rollup networks
Collect local transaction headers
Local contract execution
Proofs written as CALLDATA on chain
Optimistic or zk secured
Local transactions, anchored on
global consensus

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OPPORTUNITIES
Blockchain analytics
L2 / Oracle node operation
Fiat bridging / onboarding
Marketplaces / UX
Consensus participation
Maximum Extractable Value
FlashBots
Ethereum 2 Staking (2022)
Participate on the network

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