Payment Automation for web3 – Greylock’s Investment in OAK Network
Some key observations/thinking from that Greylock public investment Memo (I’m sure it’s way deeper than that for the internal memo):
“Committing to a future transaction at a future price”
This is arguably a form of options or at least future fixed transaction/in the SaaS model world, I’m sure how this data is written on-chain but mathematically, this means there will be exponentially more data on the system = more stress on these chains b/c also flip side of that is it theoretically minimize future state volatility in crypto price? b/c options chain provide a better hedging mechanism and some level of certainty of medium term market participant expectations…so no more 50% drop in crypto price in 50 days went from that being just a 2+ standard deviation type price move drop to, in future state with options chain, that 50% drop in 50 dayswill be a 6+ standard deviation type price move (insert Nassim Taleb’s quote on anti-fragility and entropy)
The “if this, then that” in blockchain oracle
Build extra logic into blockchain, crypto, transaction.
We saw a bit of this with Uniswap v3.0 protocol upgrade below with the “banding of price” for liquidity provider. If price of ETH moves outside of [2200 USD, 4000 USD] then pull my liquidity (as liquidity provider, LP) out of the liquidity pool.
As Uniswap v3.0 (which I believe was voted in Uniswaps DAO governance structure community) alluded to, this ‘banding price range” on LP. requires a substantial upgrade to the code, arguably a revamp of a big portion of their current system.
But probably provides a better strata on risk premium and risk curve in general across different crypto price(barring deep exogenous events like 2008 level GFC liquidity crisis).
There’s also the philosophical argument/questions:
1. Is price stability a function to adoption of blockchain and crypto? Depending on the use case, like Terra Money or other physical consumer transaction based product probable need some level of price stability.
AND/OR 2. Is price stability not important for the adoption of blockchain and crypto infrastructure
AND/OR 3. should we go through the economics theory of “creative destruction” (push the capital inflow so illogically high then flush out and take a large % of speculators with it) and not care about price stability that Austrian School of Economist has supported, which btw, has more or less governed the economic principles in the past century and a half ish, with the two most recent “world order” or shall we say empire (and the soft and hard power construct that comes with it – which btw, came across this recently which is worthy of a thinking here from a historian POV “How to Hide an Empire” https://youtu.be/ZaKOOqXDnqA) back to the thinking here is that b/c this space gives more participants to contribute their thoughts via DAO governance structure, early token incentive holders via airdrop/early crypto hedge fund token investment etc versus the alternative therefore more participants with stakes = more need for price stability, or at least cognizant of it before the relative peak of economic destruction (beyond just investing $ in crypto, which btw, can be argued that philosophically is a form of “proof of stake”)
“most transactions on blockchain are simple, one-time events. If you want to do anything more sophisticated — for example, commit to a future transaction at a future price — it is complicated, expensive, and often not secure. Use cases like recurring payments, buy/sell orders based on on-chain events or price movements, or swapping between chains have previously been mostly inaccessible due to cost or technical complexity.
The best way to think about OAK is an if this, then that system for blockchain transactions — specifically for long running smart transactions that require some maintenance of state. The team at OAK is addressing this missing feature to significantly expand the use cases of programmable money. OAK enables users and developers to schedule future and recurring payments, engage in trustless auto-trading, and place decentralized limit and stop-loss orders on AMM DEXs — all without smart contract middlemen or compromising the security of a user’s wallet.“
Intersection notepad 