AMA with AdEx’s CEO | Part 3 — The Ethereum Ecosystem

In this AMA session, AdEx's CEO, Ivo Georgiev, discusses the Ethereum ecosystem, its challenges, and its implications for the AdEx platform. He addresses community questions about Ethereum's development, DeFi, and the future of staking.

AdEx Editorial Team

Jan 12, 2021 • 5 min read

Our CEO Ivo Georgiev is chatting with the Chainnode community about Ethereum in an AMA.

In November our CEO Ivo Georgiev was invited by Chainnode, a respeced cryptocurrency media, to participate in an AMA session with their Chinese community. People were very excited and Mr. Georgiev got tons of questions — in fact, they were so good that we decided to share some of them with you on our blog. Over the whole session Ivo received more than 50 questions — we selected the most interesting ones and grouped them into three topics — The AdEx advertising platform, The AdEx Staking and Farming Portal and the Ethereum ecosystem.

In the first blog post we shared with you the most interesting questions regarding the development of the AdEx Platform and in our second blogpost we shared Ivo’s thoughts on AdEx Staking and Farming. Today we selected the most interesting questions about the Ethereum ecosystem.

❓ It is well known that there are three main phases in ETH 2.0. What will be the main changes brought by Phase 0? What benefits can it bring to the project based on ETH?

👨🏻‍💻 ETH 2.0 is a long term project — phase 0 is only a beacon chain, meaning it only implements basic blockchain consensus but without transactions. This means it doesn’t affect ETH based projects at all for now, but it paves the way to more scalable ETH later down the road with phase 1 and 2

❓ Not long ago, Uniswap just finished the first round of UNI liquidity mining, and the proposal to move on to the next round was not approved by the community. What do you think of the liquidity problem caused by staking tokens?

👨🏻‍💻 This is exactly why in AdEx we balance incentives so that they continue for a longer period — for example, it is already decided that staking rewards will continue in 2021, and the governance decision is about deciding the exact amount. We think that it’s better to plan for long-term goals rather than short term.

❓ More and more altcoins are disguised to con users to stake for high annual returns. When users bring the earnings from the staking to the exchange, they usually find out that they are scammed, which cost the life savings of those folks. Does this kind of situation go against the intention of staking in its creation? How can staking prevent this? What should be the future of staking? How will TRON4.0 ‘s tokenless concept change the game of staking? How to adjust the dynamics of User-Staking- Project?

👨🏻‍💻 Users have to always do their research and evaluate their possible outcomes when making a decision about investing or managing crypto assets. In general, users should probably be cautious about staking or farming for tokens that aren’t already present on exchanges or don’t have traction. Getting scammed is much easier in this situation.

❓ The boom in the DeFi market this year can be attributed to the base infrastructure and the improvement of AMM. In your opinion, has the DeFi boom come to an end?

👨🏻‍💻 DeFi as a concept is in a really early stage of its development. We’ve yet seen very little — AMMs, stablecoins, prediction markets — there’s still a lot of financial instruments in centralized finance that will be reimagined in DeFi. Take for example options and futures. This space surely has a lot more coming.

❓ For DeFi market projects such as Uniswap and yearn.finance, what will be the next golden opportunity?

👨🏻‍💻 Nobody can tell unfortunately — but there’s a lot of exciting stuff coming for sure!

❓ It seems that DeFi has become hackers’ cash machine — they can withdraw as much money as they want. In this round of DeFi hype, I reckon the hackers have made hundreds of millions of dollars. Will this problem be solved after the launch of ETH2.0?

👨🏻‍💻 ETH 2.0 alone surely can’t solve problems with hackers, since they are mostly human problems and not problems of the Ethereum network itself — hacks come from mistakes in software (bugs) — and those can never be removed no matter how good the platform is.

❓ The DeFi vs CeFi debate never seems to stop. Some people think that according to the “decentralized purpose” of DeFi, when a hacker invades, it is the DeFi user, not the developer, who should file a claim or take legal action against the hacker. However, the DeFi user are too disparate to do so, and at the end of the day it is the developers who take the lead to claim the rights, which makes no different to CeFi. What do you think of that?

👨🏻‍💻 The idea of filing a claim or taking legal actions is not something that goes well with DeFi simply because DeFi is permissionless and decentralized — the whole idea of DeFi is to strip financial products of the legal burden. This comes with the risk of getting hacked and not being able to file a complaint. In CeFi, you have a better chance of getting your money back if there is a hack, but you will have to do KYC and you will have less opportunities than in DeFi. In short, DeFi is riskier but more powerful.

❓ Christensen, founder of MakerDAO, believes that DeFi needs the help of CeFi to develop further, and that the two will eventually merge. Do you agree with this idea.

👨🏻‍💻 Yes! Centralized finance is a great gateway to DeFi because it’s easier and more user friendly right now.

❓ At present, the composability between DeFi protocols makes it too complex compared with its current maturity. Vitalik Buterin said on Twitter that DeFi products are becoming more and more complex. How do you think? And how to strike a balance between the two (the complexity vs maturity)?

👨🏻‍💻 DeFi is all about experiments — so it’s normal that it will become very complex. But as ideas get more refined and clear, we will see more projects that are very simple from a technical perspective but provide great value — for example, Uniswap is very simple but it provides trading, and the AdEx staking is also very simple but it’s able to provide good APY/ROI for stakers.

❓ In the current DeFi lending market, most of the collateral is still encrypted digital currency. When the extreme market position such as the plunge on March 12, 2020 appears again, will DeFi lending trigger a crisis similar to the subprime mortgage crisis? What are the emergency plans for ADEX?

👨🏻‍💻 Unlike the subprime mortgage crisis, most DeFi products like DAI stablecoin are overcollateralized, meaning they can cushion a potential plunge and recover.

❓ AdEx is based on ETH. Congestion in ETHand high Gas fees have become bottlenecks in its development and ETH2.0 has along way to go to solve congestion by sharding. Will AdEx consider integrate with existing mature Layer2 solutions?

👨🏻‍💻 AdEx is blockchain-agnostic, meaning that we wrote the protocol to not rely on a particular blockchain. If there is a better solution and or a blockchain that solves all of Ethereum’s problems, we might switch. However, for now we stick to Ethereum.