Ready to peek into the mind of one of the geniuses behind the Ethereum Merge? In our newest Cryptonatives session with Mario Havel, we’ll do just that!
Tune in as Mario fills us in on his experience serving as a protocol supporter and researcher at the Ethereum Foundation and thoughts on what makes the Ethereum community unique. Also, get ready to take a behind-the-scenes look at the Merge itself.
PWN: What do you think defines a cryptonative?
MH: I think cryptonatives are those who have submerged into the parallel economy so much that it's easier (or potentially the only possibility) for them to use the crypto tools than traditional ones. This brings to mind people who have either voluntarily opted out, but it could also encompass dissidents who are basically forced to become cryptonatives of sorts.
PWN: What are some of the main issues facing cryptonatives in today's financial ecosystem? What issues have you faced (especially regarding living with crypto only) and how are you mitigating these? Furthermore, as a cryptonative, what are some of the DeFi tools and strategies that you find yourself using?
MH: Right. So let’s first consider the parallel economy. Here is the cryptonative world, where everything is smooth, free, and beautiful. I think the issues arise at the point of connection between this world and the “traditional” one. There are multiple issues that I can think of related to this connection. It affects anything from basic needs – like getting food – to successfully navigating payment systems.
As it stands today, cryptocurrencies as the means of exchange are still not that popular. There are places which accept crypto, but in the larger scheme of things, they remain very limited. This, in turn, puts limits on how an individual can spend their money. Fortunately, there are certain solutions available – for example, what I was doing for years was helping people to accept Bitcoin in their business and to save some money in crypto by accepting it for their services.
It’s a pretty slow process, but there are many pros. For example, there are tools like Bitrefill, which makes it possible to buy almost anything with crypto using a gift card-like system. So I can get a card for Uber, another for Uber Eats and restaurants, and here in Barcelona, I can use it to buy groceries. Bitrefill is one resource which makes it easier to live within the cryptonative system.
There’s also the issue of spending crypto that I should mention. Many people are reluctant to spend their crypto, which influences the slower speed of adoption in the mainstream systems. When it comes to living only with crypto, I received my salary in crypto and avoided using bank accounts (thus minimizing my exposure to fiat), which essentially forced me to spend crypto – otherwise, I wouldn't be able to eat, right? The problem there was with the price conversions (at one point last year, the average lunch I had was costing around 200 EUR, which is far from ideal!).
This is where DeFi comes in. When creating my own DeFi strategy, this is what I’ve found to be incredibly useful: The ability to get a collateralized loan. This makes it possible for me to collateralize a crypto asset and get a loan or a stablecoin, which I can then use for spending. For real-life scenarios like the ones that we’re discussing here, it’s very useful – not only for personal finance, but also for business.
When we were starting up Paralelna Polis in Slovakia (more on that here!), there were some big expenses involved. We were able to crowdfund money and get a bunch of donors, so then it was a question of how to spend the money wisely. We used Maker DAO to pay for many things, and at the time (this was early 2018), it was a bear market. When we used a collateralized loan, it really saved us.
PWN: What are some borrowing strategies that stand out to you as a user? Any advice you’d give to those looking to get started in asset borrowing/lending?
MH: PWN takes what I’ve mentioned above to the next level, right? Among the many things about PWN that fascinate me are its peer-to-peer nature. This stands out, as actual peer-to-peer interaction is something that I miss in many other DeFi or Ethereum projects. While Ethereum allows people to build peer-to-peer marketplaces on Ethereum itself, there’s still not many projects other than PWN that are doing it right.
Because of this, I'm really excited that PWN works in the way that it does, since it enables me to do a number of things. I’ve used ERC-20s as collateral, which I find to be incredibly useful. This is especially because there are many communities that use some sort of loyalty tokens that aren’t registered on Aave or other protocols. And although I’m all for loyalty points and serving as an active member of a given community, I still need cash!
To resolve this issue, I can use PWN to collateralize any of my assets or get a loan based on them. This includes the assets that I receive from various communities, all of which are embraced by PWN.
Another use case is with more niche tokens, like that of Rocket Pool. Its staking derivative is permissionless, which is great, but it also results in slower growth and isn’t listed on the major DeFi platforms. When I was looking to see where I could actually collateralize this token, the only place was PWN.
PWN: As you’ve been working on the TTD prediction of the Ethereum merge, can you tell us what was the main difficulty in this work for you? What are you most excited about now that the Merge is done?
MH: My line of work related to the TTD prediction was to actually set the TTD value when the Merge was supposed to happen.
This definitely wasn’t a simple task because of volatility. It was happening on test nets, which meant that there was volatility in the hash rate. This was related to the number of miners (in a nutshell, if you have more miners, the TTD value would happen much sooner). In general, the test nets are incredibly volatile because there is no real incentive in mining them – it's just a bunch of volunteers doing it.
So in the first days, my job was predicting the values for test nets. A number of complications came up, like a volunteer who came to mine the whole thing in about 12 hours, which caused some unpredictability. I still carried out the prediction, but in certain parts, I had to sort of mine it manually by myself.
For the mainnet, there was less volatility involved, but it was still significant considering that we saw a 20-25% change in the hash rate during the weeks leading up to the Merge – I still can’t believe that! In the end, the Merge happened just as I initially predicted when I first put the TTD value together in early August. Now, I'm really happy that we have these beautiful 12-second blocks and it's much more stable and more predictable.
Now that the Merge is done, I'm excited that many people are now opening their eyes to Ethereum. Prior to the Merge, I had talked to a number of people who were initially hesitant about using Ethereum (they were opting for Solana because of its ecology), but post-Merge, their attitudes have shifted and entrepreneurs from many different industries are warming up to Ethereum.
From a technical perspective, the work has just begun. There’s Shanghai coming up, which comes with its own set of exciting changes and challenges to overcome.
PWN: As a core member of Ethereum Foundation, what do you find to be unique about the Ethereum community?
MH: While the Ethereum Foundation certainly doesn’t represent the whole Ethereum community, it’s an interesting piece of it because it’s clear how motivated people are by their core values. This is something that holds true across the entire community, actually.
A friend of mine, Dr. Paul J. Ennis, said that cryptocurrencies are not technologies in the first place – instead, they’re a reflection of the community behind them.
This is definitely the case for Ethereum, as I believe the Ethereum community is the first that has a strong vision and principles that are reflected through technology. I love that people aren’t scared of growth and improvements. I understand that this unconstrained vision of what can be achieved can be met with skepticism – I myself was skeptical of it at first. But now, through achievements like the Merge, we can see that so many people from around the world really can come together to pull something huge off.
In addition to the 150 core devs that were behind the Merge, there were so many other direct and indirect contributors. Everyone believed in the same vision to go to the proof-of-stake. So, that's what fascinates me: Ethereum’s diverse community that’s able to pull together.
PWN’s Cryptonatives is a Q&A series with some of the brightest minds within the web3 and DeFi space who are building and making active use of the services that today’s crypto ecosystem has to offer. Through shedding light on their experiences and lessons learned throughout their careers, it’s our team’s goal to educate the masses and further spread our guests’ wealth of knowledge.
Read through our previous Cryptonatives interview with Juraj Bednar.