Bankless DAO Weekly Rollup #10 | July 9, 2021

New NFT Showcase, Guild Funding Requests, Bankless BED Logo Contest, and a rundown on EIP 1559

Another great week for Bankless DAO.

We’re kicking off Season 1 with Guild Funding and working towards a public announcement and marketing campaign around the Season—keep any eye out for that next week.

Find all the other DAO updates below.

Authors: Bankless DAO Writers Guild (ffstrauf, siddhearta, frogmonkee, Frank America, 0xLucas)

This is the official newsletter of the Bankless DAO. If you were a Premium Member of the Bankless Newsletter as of May 1, 2021 you have been subscribed to this newsletter at launch.

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Bankless DAO Weekly NFT Showcase 🔥

🧑‍🎨 Artist: Bayu Marlin
🏦 Auction Type: 48 Open Edition
💰 Price: 0.01 ETH

#1: Deus Ex-Machina

Deus ex machina is a plot device whereby a seemingly unsolvable problem in a story is suddenly and abruptly resolved by an unexpected and unlikely occurrence. Its function is generally to resolve an otherwise irresolvable plot situation, to surprise the audience, and to bring the tale to a happy ending

#2: Bankless Mempo

A Mempo is known as a samurai mask, used both to protect warriors’ faces and to give fearful impressions to enemies. Equip this Bankless Mempo in your wallet and use it as your online persona to shield your identity and show support towards the battle against the corrupt financial system.

Community Highlights

  • 💰 Guild BANK Funding Request Form: The Guild Funding Request Form is now live for all to request up to 385K BANK to fund internal guild operations. Once the guild’s multisig has been created, guild signers can fill it out here. First round of distributions set to go live early next week!

  • ✍️ $WRITE Race Finalist: The BanklessDAO was a finalist in the $WRITE Race 🏁 this week, qualifying the DAO to become a member of the community and publish on Mirror. Mirror is a decentralized, user-owned publishing platform that revolutionizes the way we can express, share and monetize our content. Stay tuned for what’s next :)

  • 🤖 DEGEN Bot Launch Party: DEGEN Bot is a Dev Guild product meant to help automate DAO processes—current plan is deploy V1 this weekend! Stay tuned for the launch party 🎉

What’s New

  • 🛌 BED Index Logo Design Contest: The BED Index is expected to launch July 20th. BanklessDAO and the Index Coop are opening up a competition to design the BED token logo. The contest is open to all and must be submitted by midnight PDT on Sunday, July 11. The prize is 35,000 BANK and 45 INDEX. 🤑

  • 🎙 Tuesday Talks with Tracheopteryx: This week the Crypto Sapiens podcast, hosted by Humpty Calderon, features Tracheopteryx, a contributor to Yearn and Coordinape. Join us in the Amphitheater on Tuesday, July 13 at 1pm EDT, where we will discuss governance, social graphs and more!

  • 🚧 Project Repo: Boots are on the ground for Season 1 projects and we have a new Project Repo to highlight current initiatives. All important documents, files and resources for each initiative can be found on the Projects Kanban board along with project champions responsible for executing the project. Is there a project that catches your eye? 👀 Raise your hand to contribute to the project or to claim a bounty. 🙋🏽‍♀️

  • 📈 Twitter Analytics: @paulapivat has been crunching numbers and crushing the Twitter data from June. His interpretation of the data suggests that to boost engagement, we might sustain efforts around media views, media engagement and detail expands (threads), while finding ways to encourage more likes, retweets and replies. URL clicks as it turns out, are not that engaging.

🙏 Sponsor: UMA — Diversifying DAO Treasuries. DAO Better.

EIP-1559; Watch it Burn.

Ethereum's upcoming London Hard Fork includes a bundle of improvements. Among them, EIP-1559 has garnered most of the attention. It’s slated to go live on mainnet on August 4th. The gist of 1559 is to move from miner determined fees to protocol determined fees.

The whole year so far has given us wildly volatile transaction fees and this is precisely what the proposal is aiming to improve. EIP-1559 will stabilize transaction fees so they don’t go too high during times of congestion. There is a common misconception that this change will generally decrease transaction fees. This is not the case. High fees are a scalability issue, addressed in Ethereum 2.0, when the network shifts to Proof of Stake (PoS), sharding and rollups.

The team from BanklessCZ has created an informative video explaining this topic in very simple terms.

Reducing Volatility

Summarised by the Ethereum core contributors, here is what EIP-1559 does:

“A transaction pricing mechanism that includes a fixed-per-block network fee that is burned and dynamically expands/contracts block sizes to deal with transient congestion.”

Pre EIP-1559, transactions are auctioned. This means users bid high fees to have their transactions processed quickly. Miners were incentivized to pick the highest fees that extracted the biggest return for them. Users bidding lower fees were forced to wait or increase their bid. This was good for miners, but bad for users, and inefficient for the system overall.

With EIP-1559, transactions will split the fee into a fixed base fee and a small priority fee. The base fee will be adjusted dynamically, but not vary more than 12.5% to the previous block, effectively putting a lid on volatility. The priority fee still allows users to buy priority by tipping miners, but it is limited due to the total gas limit of the block.

It’s all about functioning properly in times of very high trade volume. Trade volume is not always high though and that’s why a variable block size helps. When many transactions want to be added to a block, the size is increased to fit more in. The network increases throughput and prevents high-fee traffic jams. Ultimately this reduces delays for users, gives clarity on fees, and stabilizes price volatility across the entire blockchain.

Burning fees

EIP-1559 not only optimizes transaction fees but it also burns that same base fee, removing it from circulation forever.

This is where it gets interesting. If there continues to be a high amount of transactions on Ethereum (which seems…likely), it is possible that the burn rate will exceed the issuance rate, potentially making ETH deflationary (supply goes down).

Here is how burning ETH will impact tokenomics:

Miners are rewarded 2 ETH per block and 1.75 ETH per uncle block. The daily block reward of ~13,500 amounts to about 4.9 million annual new supply (~4-4.5% inflation). Through burning of fees, the supply of ETH will be tied to the intensity of network usage. This means that the more transactions are taking place, the more fees will be burned, literally removing existing ETH out of circulation. Supply goes down, demand stays fixed….wonder what this does for price.

The base fee is adjusted dynamically based on network usage, so it is hard to predict the actual amount of burned ETH. There are some attempts to calculate it, but we’ll have to wait and see until it’s live to get the full picture.

Until then, let’s assume 70% of transaction fees are burned, which could lead to ~2.6 million ETH burned per year. At ~4.9 million new ETH annually, this would cut supply in half. With greater adoption, as mentioned, we might even see Ethereum turn deflationary.

Justin Drake joined the Bankless show earlier this year to discuss his Ultra Sound Money theory.

So, is there anything else to be aware of? Not really. Your Ethereum will work the same way as it did before.

Just sit back and watch the burn 🔥

Live Proposals

  • No live governance proposals on Snapshot!

Proposals in Discussion

  • 🤝 BanklessDAO partnership with Linus: This proposal would establish a referral program with Linus, a high yield, low-tech financial app that connects your funds to borrowers in digital asset credit markets. This partnership targets non-crypto natives looking for higher yield savings and would pay out referral fees to the DAO to support on-chain revenue.

  • 🧑‍🤝‍🧑 Bankless Sponsored IRL Events: There’s continued discussion around launching IRL events for the Bankless community.

Action Items

🙏Thanks to our sponsor


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Meme of the Week