GM, this is your Daily Bolt briefing.
In this edition, we've curated some of the most significant and valuable sections from our comprehensive project breakdown on Radiant, the innovative omnichain money market, which was recently published on our platform. Although the complete report of over 80 pages is exclusively available to our premium subscribers, below you will find a basic overview of the protocol and its recent V2, along with detailed information on the project's Risks & Security, economics, fee structure, and other essential aspects.
Once you have familiarized yourself with Radiant, you can delve deeper into the impact of cryptocurrencies on society as a whole, from the philosophical perspective of Tim Urban, a prominent Twitter poster, blogger, and author.⬇️
Stay alert.
Overview
Radiant is a decentralized omnichain money market that allows for cross-chain lending-borrowing activity. This enables operations such as lending on one chain and withdrawing custom amounts on different chains.
Why the Project was Created
Radiant was created to solve the liquidity fragmentation problem across multiple DeFi chains. There are multiple different money markets in DeFi, each with its own liquidity and interest rates.
To access capital, users must decide on what chain they want to use. For instance, if lenders on Arbitrum wanted to access their capital by withdrawing on Optimism, they could only do so by going through a series of cumbersome transactions.
This liquidity fragmentation creates a suboptimal user experience for borrowers and lenders.
As an omnichain money market, the primary goal behind Radiant is to facilitate seamless cross-hain borrowing and lending. The ultimate achievement would be the consolidation of more than $20 billion of fragmented liquidity across the top 10 alternative chains.
Economics
Radiant’s economic model revolves around becoming the DeFi protocol with the lowest price-to-fee ratio (similar to the PE ratio in stocks) in all of crypto.
From an economic standpoint, Radiant measures its profitability and degree of success relative to the price-to-fee ratio of its competitors.
This is achieved with a tokenomics model focused on the native RDNT token, such that protocol profitability is tightly coupled with the utility of the native token.
In Radiant V1, protocol fees generated from borrowers were equally distributed between RDNT lockers & lenders (50% to lockers of single-sided RDNT, and 50% to lenders).
Radiant v2 aims to provide a stronger value proposition for liquidity providers by improving the ratio of protocol fee splits while concurrently reducing the dilutionary impact of vesting RDNT.
This is achieved by splitting protocol revenue as follows:
60% of platform fees are distributed to Radiant Dynamic Liquidity Providers (dLP).
25% of platform fees are distributed to lenders as their base APY.
15% of platform fees are allocated to a wallet owned by the DAO for operational expenses.
Fee Breakdown
Borrowing fees are the main driver of economic activity in the ecosystem, but there is also a 15% liquidation penalty (half of which goes to the liquidator and half of which is accrued by the protocol) and flash loan fees (0.09%).
There is a penalty fee for early exits from vesting RDNT. This penalty fee is distributed as follows:
90% to the Radiant DAO reserve
10% to the Radiant Starfleet treasury
Risks and Security
Radiant’s core security focus revolves around oracle manipulation. The codebase inherits functionality forked from Aave and has also been audited by reputable security firms such as Zokyo, Peckshield, and Blocksec.
Because the code was forked from Geist, a fork of Aave, many of the contracts are upgradeable by the owner. To mitigate the concerns around upgradeability and increase transparency, all smart contracts are behind a timelock with a 2-day delay for any action.
Radiant has spent ~$2M in security audits conducted by Layer Zero and Stargate.
Radiant V1 has been fully audited by Peckshield and Solidity, while Radiant V2 was audited by Peckshield, Zokyo, and Blocksec.
V2 audit results are as follows:
Smart contract audit report – March 5 2023 – Peckshield
High: 2 (2 Resolved)
Medium: 4 (4 Resolved)
Low: 1 (1 Resolved)
Smart contract audit – March 6 2022 – Zokyo
Critical: 3 (3 Resolved)
High: 4 (4 Resolved)
Medium: 7 (7 Resolved)
Low: 4 (4 Resolved)
Info: 18 (17 Resolved, 1 Unresolved)
Security testing report for Radiant V2 – March 21 2023 – BlockSec
High: 2 (2 Fixed)
Medium: 8 (7 fixed, 1 Confirmed)
Low: 7 (4 Fixed, 3 Confirmed)
Recommendations: 3 (2 Fixed, 1 Confirmed)
Notes: 1 (1 Confirmed)
Click here to read the full Radiant Project Breakdown (80+ pages).
aiPX is the official sponsor of the Daily Bolt by Revelo Intel
In a post-FTX world, securely trading with leverage and earning real yield in a decentralized manner has never been more important.
aiPX offers cutting-edge risk management for liquidity providers, leverage trading, and a suite of products between perpetuals, binary options, and synthetics.
Earn passive yield and trade with leverage straight from your wallet.
Take the step, join the presale.
Bankless - Outlook of Cyrpto in 2022, Regulations, Future for Coinbase
In this episode, David and Ryan from Bankless invite Tim Urban to discuss liberalism, woke culture, their relationship with cryptocurrencies, AI, and the mindset of traders. Read our notes below to learn more.
Background
David Hoffman and Ryan Adams from Bankless (Host) - David and Ryan are the co-founders of Bankless and frequently share their market insights and interview project founders in the crypto space.
Tim Urban (Guest) - He writes articles on Wait But Why about a range of topics regarding social and political issues.
Understanding Liberalism
Urban explains that liberalism is a compromise between rules and individual rights. It creates rules that you can't violate. Within those rules, individuals are left free to do what they wish. In this sense, it creates a balance between rules and individual rights and it ensures freedom and security in that freedom.
He thinks that liberalism is about equality of opportunity instead of enforcing equality of outcome.
The Importance of Liberal Norms
Urban expresses that the First Amendment guarantees freedom of speech and prohibits the government from punishing individuals for expressing their opinions.
However, he believes that true freedom of speech requires more than just legal protection. It also requires a culture that values free speech and encourages open dialogue.
According to Urban, violating liberal norms by shouting down speakers or blocking events may be legal but it undermines the culture of free speech that is necessary for true freedom of expression.
Urban iterates that liberalism is in contrast with power games where violence is used to settle disputes.
He believes that liberalism is an artificial invention that puts a veneer over the state of nature.
The Emergence of Free Markets
Urban believes that free markets emerge from regulations that prevent fraud, theft, and monopolies. Basic rules are in place to ensure a free marketplace of ideas where individuals can guide their own path.
Urban states that broad rules are in place to prevent perjury, libel, and incitement of violence.
According to him, the government is there to serve individuals by keeping these broad rules in place.
Money as a Social Coordination Technology
Urban believes that money is a social coordination technology that almost no one thinks about.
According to Urban, it's a point system used to allocate labor and resources in society. In this sense, money is a shared myth that everyone believes in but rarely thinks about.
Battle of Persuasion vs Power Games
Urban believes that the battle over ideas should be fought through persuasion rather than power games.
According to him, persuasion involves presenting counterarguments and creating movements that expose flawed ideas.
He states that power games involve using brute force to silence opposing views rather than engaging in constructive debate.
Balancing Freedom with Responsibility
Urban explains that while liberal norms provide flexibility and tolerance, they also require individuals to act responsibly and respect others' rights to express their opinions.
According to him, balancing freedom with responsibility is essential for maintaining a healthy democracy where diverse perspectives can coexist peacefully.
The Law of Nature
Urban thinks that the law of nature is straightforward - whoever has the power to do what they want can do what they want.
According to him, there are no laws or fairness in nature. It's just whoever has the power to catch or get away with something.
Urban believes that human societies also follow this rule where those who have power usually use violence or religion to maintain their control.
Liberal Laws vs Totalitarian Dictatorship
Urban explains that liberal laws are a complex set of rules that govern society, but it requires people to follow them voluntarily.
He believes that a totalitarian dictatorship only needs an intense set of rules enforced by the military and police.
According to Urban, norms play an important role in liberal democracy as unwritten rules about how government functions. Violating these norms is legal cheating.
Urban believes that liberal democracy has a soft spot where people who break norms can get away with it if things aren't functioning well. Playing power games inside liberal democracy is possible if people let you get away with it.
The Role of Social Norms in Maintaining Free Speech
Urban argues that social norms are essential for maintaining free speech in a liberal democracy.
Urban notes that there will always be groups trying to use coercion and power games to get what they want, but a healthy liberal democracy has an immune system that prevents this behavior from becoming normalized.
Urban emphasizes that protection for the First Amendment is not just in the Constitution or laws, but also through social contract and norm enforcement.
Objective Truth in Science
Urban explains that modernity is a concept that is a few hundred years old that brought about the idea of objective truth through science and reason. Before modernity, there were different understandings with their own denominations of truth.
According to Urban, objective truth in science allowed people from all over the world to collaborate toward discovering an objective truth.
Liberal Movements
Urban explains that there are different movements within liberalism such as progressives on the left, conservatives on the right, and moderates in the center.
Urban thinks that progressives focus on exposing flaws in liberalism while conservatives stand up for traditional values.
He believes that all movements within liberalism share a common goal of upholding the Constitution and supporting liberal ideas.
According to Urban, social justice fundamentalism is a revolutionary movement outside of liberalism that differs from liberal social justice. Urban uses social justice fundamentalism to describe what others call "wokeness."
Social Justice Fundamentalism vs. Liberalism
Urban states that social justice fundamentalists believe that liberalism is a "rotten" system that entrenches the power of the powerful and fosters inequality.
He explains that social justice fundamentalists think that the entire “House of Liberalism” needs to be dismantled, including its tools like free speech and free markets.
He reiterates that social justice fundamentalists reject individuality in favor of group identity, treating groups as monolithic entities.
According to Urban, this ideology merges neo-Marxist ideas with post-modernism, rejecting objective truth in favor of lived experience.
Understanding Social Justice Fundamentalism
According to Urban, people who value liberalism should reject social justice fundamentalism because it seeks to empty the house instead of being pro-house.
Urban says that people who believe in social justice fundamentalism should agree that they're empty houses or else they're in the wrong place.
Dismantling the Liberalism
Urban explains that social justice fundamentalists believe that they cannot dismantle the master's house with the master's tools.
Urban states that social justice fundamentalists view opponents' speech as dangerous and seek to de-platform them rather than engage in persuasion.
Rejecting Objective Truth
Urban explains that social justice fundamentalists reject science and objective truth as meta-narratives through which oppression flows.
According to him, social justice fundamentalists emphasize lived experience over objective truth and often say things like "there is no such thing as an objective truth."
Levels of Civilization: Modernity, Liberalism, Norms, and Policies
Urban explains that there are four different levels of civilization: modernity, liberalism, norms, and policies.
He believes that liberalism sits on top of modernity and norms and policies sit on top of liberalism.
Urban notes that liberty is relatively new software on the human time scale.
The Pyramid of Wokeness
According to Urban, liberal Progressives are progressive about level three (norms) but conservative about level one (modernity) and two (liberalism).
He thinks that Marxists are progressive about level three (norm) and two but conservative about level one (modernity).
He explains that social justice fundamentalism is progressive about the first three levels (modernity, liberalism, and norms), making it the most radical form of progressivism.
Urban believes that the deeper a person's progressivism, the more radical they are.
Applying the Pyramid Model to Crypto
According to Urban, crypto sits above liberalism on level three as a social technology that seeks to shake up top-level institutions and laws.
Urban thinks that the cryptocurrency ecosystem has been criticized based on how central banks and banks are managed but seeks to have a better liberal digital property rights system.
Crypto as an Expression of Liberalism
Urban believes that the crypto movement is aligned with liberal values and provides a liberal alternative for digital rights and digital property.
According to him, the nation-state constitutional apparatus hasn't effectively instantiated analog types of rights in the digital world.
He believes that during the height of the 2021 bull market, there were moments when some people played power games that operated outside of the rules.
He also believes that some people would silence all forms of dissent to make sure anyone with a dissenting opinion didn't have a platform to stand on.
According to Urban, the people who are passionate about using crypto to enhance or preserve level two have more in common with passionate liberals than with those who want to use crypto to undermine level two.
Polarities in Crypto World
Urban thinks that there are different factions in the crypto world such as bitcoiners, ethereans, solanians, etc. Each faction has its own flavor and operates differently from others.
He believes that some communities cooperate with each other while some operate in conflict with each other.
Urban thinks that all communities have members that operate with both primitive minds and higher minds.
Understanding Different Factions in Crypto
Urban explains that there are different parties and factions within the crypto community that operate on the same code and play with similar strategies.
He thinks that these factions may appear very different, but their patterns are often similar to those found in mainstream political movements.
Understanding Anti-Liberal Arguments
According to Urban, some people view liberalism as just another entrenched power structure that perpetuates inequality.
He explains that millennials, for example, see capitalism and free markets as unequal power structures that exacerbate wealth inequality.
Urban believes that millennials also question concepts like individualism and free speech, seeing them as enabling hate propaganda.
Defending Liberalism
Urban believes that free speech is a cornerstone of liberalism, allowing all ideas to be expressed rather than being silenced by those with cultural or military power.
He thinks that without free speech, only those with power get to decide what's true or good.
According to Urban, anti-liberal arguments lack humility because they assume that some people already know which ideas should be silenced.
Free Speech
Urban argues that free speech is essential because it allows for dangerous ideas to be challenged.
Urban notes that if certain people were given the power to decide which ideas could be spoken, dangerous ideas like interracial marriage or gay rights would never have been allowed.
He acknowledges that some people believe free speech allows dangerous ideas to flourish but argues that without it, powerful people would censor everyone else.
Capitalism and Inequality
Urban acknowledges there are strong arguments against unrestricted capitalism, such as unchecked capitalism leading to AI arms races and vast inequality being a sign of a crumbling society.
However, he believes that rules against monopoly and other regulations are necessary for a continually evolving dance between freedom and regulation.
Urban notes that while inequality should be curbed, too much regulation can lead to a loss of productivity.
Criticisms of Liberalism
According to Urban, the current system is flawed and corrupt since democracy and voting systems are imperfect.
He believes that historically, marginalized groups such as black Americans and women have not been treated fairly. For this reason, he believes that it's important to distinguish between criticizing flaws in the system and arguing against it as a whole.
Urban believes that we should work towards fixing flaws and eliminating corruption rather than advocating for an end to free markets.
The Two Dimensions of Thinking
According to Urban, there are lots of realms of what you think, and there are different nuances to it.
He believes that crypto is not just a single axis; there are different camps within it.
He explains that there are two broad ways of thinking: the higher mind and the primitive mind. Higher mind is the ideal, grown-up way of thinking where you're looking for truth and are not attached to your ideas.
The Ideal Way Of Thinking
According to Urban, when using the higher mind, you're trying to get closer to the truth, be less wrong, have humility because people are often wrong, and be open to disagreement and challenges.
He believes that if someone challenges your argument or points out a flaw in your idea, instead of getting offended or angry, thank them for showing you something new. This openness leads to being very open-minded about changing your mind when presented with new information.
He thinks that when using a higher mind, there's no identity associated with ideas; only identity as a truth seeker exists.
The Primitive Mind, Tribalism, and Confirmation Bias
Urban explains that the brain has two parts: one that wants to find the truth and the other that wants to be right. He thinks that these two parts often fight for control, leading to a tug-of war-in our brains.
According to Urban, when someone challenges our sacred beliefs, the fight-or-flight parts of our brain start to work. He thinks that this led people to not just think that others are wrong but also to hate them, leading to tribalism.
He believes that people in a group collaborate through primitive thinking and dehumanize those who don't share their beliefs. In this sense, he thinks that it's important to identify which voices are willing to change their minds and attack ideas instead of people.
Crypto Bull Market and Tribalism
Urban believes that everyone in the market is ultimately fighting over scarce resources during the crypto bull market.
He believes that the sympathetic nervous system causes tribalism to exist.
Identifying a Primitive Mind State
According to Urban, when you're in a primitive mind, you're delusional and letting primitive emotions make your decisions.
He believes that the signs that you are in a primitive mind state include irrational anger when someone disagrees with you and hating people who disagree with you.
He also believes that a little bit of self-reflection can go a long way in identifying when you are in a primitive mind state.
Ascending to Higher Mind State
According to Urban, in order to ascend to a higher mind state a person should surround himself with other people that value higher mind thinking.
He thinks that people should join an idea lab where people attack ideas but not other people, disagreeing is cool, humility is valued, and changing one's mind is encouraged.
He also believes that people should try to stay aware and notice the signs that they're slipping into a primitive mindset.
Urban thinks that pursuing higher mind thinking is important for individuals who want to be less wrong in their decision-making process.
Primitive Thinking on Social Media
According to Urban, Web2 technologies such as Twitter, Facebook, and YouTube reward sensationalism rather than truth-seeking behavior.
He explains that the algorithms used by these platforms encourage primitive content creation and dunking on opponents rather than nuanced discussions or thought leadership.
He thinks that while there may be a net benefit for individuals to engage in primitive thinking on social media, it can lead to an erosion of liberalism and repel thoughtful and nuanced individuals from engaging with that content creator's work.
AI Alignment and Existential Threats
Urban explains that Web2 algorithms were our test for AI, but humans have failed it.
He also believes that algorithms have caused ripple effects and unintended consequences.
Urban discusses AI alignment as a problem that will affect society in both the short run and the long run.
He thinks that there is a tail risk of existential destruction ahead of us due to AI.
He plans on writing more about AI alignment in the future.
The Human Colossus and AI
Urban explains that the human colossus is a term used to describe the Tower of Knowledge and know-how that our species has created.
He thinks that it has made the quality of life better but does not have a conscience or moral compass.
He also believes that the human colossus has created AI, which poses an existential risk to society.
The Need for Caution
Urban thinks that AI can’t be treated as traditional software development is treated.
Confidently pessimistic or optimistic views about the future of AI are both suspects because this is an unprecedented situation.
We need some mechanism in place that ensures the ethical development of AI.
It's hard for people to believe something they've never seen before, so we need to spread enough fear so that people take ethical considerations that AI can pose a threat to the humanity seriously.
Hope for the Future
Urban believes that humanity has an instinct for survival and will likely prevail out of pure fear if necessary.
Emergent wisdom produced by liberal democracy can help us solve complex problems like developing safe and ethical AI.
The Importance of Liberal House Working
Urban thinks that primitive thinking and tribalism are dangerous trends that need to be eliminated.
The concept of a functioning liberal house gives us our best possibility of doing things right.
He also believes that training people to break down the house instead of upholding it is concerning.
Check Out These Important Links
Show Information
Medium: Podcast (YouTube)
Show: Bankless
Show Title: Tim Urban on Power Games in the 21st Century
Show Date: May 1, 2023