Protocol Research
Ethos Network: Bringing Accountability to Crypto
Your normie friend thinks crypto is full of scammers.
And guess what? He's probably right. Our industry is actually a massive attraction for low-integrity scammers.
Why? Since we have a culture of pseudonymity, there are no real consequences for bad actors (and some people simply weren't raised right)
Anyone can grift, rug-pull, exit scam, shill, front-run or insider trade in crypto. If they get caught, they can just start over with a new pseudonym (aka new online persona).
Even worse, the crypto community just forgets many of the scams. I've seen so many people scam, and people give them a free pass because they're "funny."
Enter Ethos Network. It adds accountability to crypto participants.
It creates a "credibility score" for any online persona. We can use this score as a proxy for trusting people in crypto.
Right now, the town hall of the crypto community is X. An Ethos browser extension can show this score on X account while you scroll through X.
Did you notice the circle and a number around Vitalik's profile picture? That's his Ethos credibility score. Here's a scale to interpret the scores:
- 0-799 - untrusted
- 800-1199 - questionable
- 1200 - 1599 - neutral
- 1600-1999 - reputable
- 2000- 2800 - exemplary
Users can now instantly know if a person is trustworthy.
Ethos Network is an infrastructure. Every User-facing app (like X, Wallets, Farcaster, Discord, etc) will be able to use it. If successful, it can make our space 10x better.
It could've fixed the memecoin meta. Imagine if you had a credibility score attached to everyone who launches a memecoin on Pump.fun? We could've identified and removed grifters and extractors much faster.
How is this credibility score calculated? Well... The exact algorithm used to create the score will change, but it'll be based on actions taken by the members of Ethos Network.
Ethos members can do the following to any X profile or wallet on Ethos. The credibility score will be based on the following:
#1 Review: You can rate and comment on any profile. They're fast and free. It's like leaving a Yelp review, but about a person.
#2 Vouch: You can vouch for someone by staking ETH on them. For example, you can stake some ETH on my Ethos profile.
Vouching for me will meaningfully increase my credibility score. You'll also get a credibility score for vouching for people over time. Mutual vouching is the best to get maximum scores.
There are nuances to getting a credibility score via vouches, learn more about it here.
But staking ETH (aka vouching) on another person is also risky. If the other person acts sus, you can get slashed.
#3 Slash: By producing a bond in ETH, any Ethos user can accuse another person of inaccurate claims or unethical behavior.
Human validators will check if the claims are valid. If the accusations are correct, then a % of ETH staked on the accused is distributed between the validators and the accusor (or whistleblower).
If the accusation is found to be wrong, then the bond put up by the accusor is divided between the validators and the accused.
Read this if you want more details on slashing.
So, there's a bounty to find dirt on people with high ETH staked on them. Aka, high ETH staked probably means that he's trustworthy. If he isn't, then you can make money by getting dirt on him and accusing him of unethical behavior.
#4 Invite: The people you invite to the platform will be bonded with you. Their actions will affect your credibility score as well. This is to prevent sibyls or bad actors.
#5 Attest: You can connect your other aspects like your wallets and digital identities to your Ethos profile.
If we collect the results of the above actions on a profile, it should give us a reliable picture of the profile.
Here's my profile. I have 9 positive reviews so far, and people have vouched $900 worth of ETH to me. But I still have some work to do before I'm considered credible according to their system.
As time goes on, Ethos will have a good profile on everyone in crypto. The crypto community will be able to judge the character of an account by just visiting his Ethos Profile.
Ethos profile and credibility score will become everyone's reputation in crypto.
But there's a problem: Ethos profile can be gamed in theory - a small cabal can use money and influence to create a fake reputation.
Ethos Markets solves it.
That's another product from Ethos Network.
Ideally, there'll be an Ethos market for all influential people. Traders can buy both trust and distrust in someone's reputation. It is supposed to express the reliability of his reputation in % terms.
This market starts at 50%/50% trust and distrust. As users buy trust, the price of trust goes up and the cost of distrust goes down. And vice versa.
For example, if SBF uses money to create a fake reputation in Ethos, it'll be an opportunity for you to make money. You can buy "distrust" tokens and make money.
This product is still early. There are only 11 reputation markets live right now. And I don't think there'll be enough liquidity to create markets for everyone in crypto.
While Ethos Network & Markets is a very interesting project, don't assume it's perfect. There are a couple of problems with it.
- It can be gamified. Ethos Network depends on people doing stuff like reviewing and vouching. Cabals can coordinate to create a good reputation for them. And there won't be an Ethos market for everyone who does that.
- Exposing grifters is risky. There's no anonymous way to highlight any scam done by people. Most people wouldn't expose someone and risk retaliation. For me, I don't want to deal with the drama.
- Reliance on financial incentives. The mechanisms used by Ethos Network depend a lot on Financial incentives. This might lead to wealthy people boosting each other's reputation rather than creating a genuine reputation system.
- Invite dependency. If you wanna join Ethos, you'll need an invite. This is understandable because the reliability of Ethos will depend on the quality of people in Ethos. But invites are super limited.
- KOL Circlejerk. I've seen this criticism around. Basically, it's just a bunch of famous KOLs scratching each other's backs. People don't want ot see a repeat of stuff like Friend.tech.
Ethos Network isn't a get-rich-quick scheme. It is trying to build a genuinely innovative product. There are a lot of unknowns, but it is interesting enough for me to monitor regularly.
I'm using it because I think it solves a genuine problem in the space. And in market conditions like this, it always pays to be curious. Some people are even speculating that there might be an airdrop.
So snag an invite if you can.
Wanna learn more? Start with their documentation and blog.
Sponsored By SummerFi
How Lazy Summer Balances DeFi Risk While Keeping Yields High.
What would be the ideal world for you to start investing in DeFi? Let me guess, great yield with minimal effort.
If that's the case, Lazy Summer is the solution.
They use AI-driven automation to adjust and rebalance your positions, with 2 focuses: diversification and yield optimization.
With +$58M TVL (40.8% weekly growth), it's quickly becoming a DeFi powerhouse.
Why go Lazy?
- Diversified Strategy. You reduce reliance on a single protocol, getting balanced, stable growth.
- Save hundreds in gas. AI automates everything, eliminating useless transactions.
- Mental Bandwidth. Imagine taking care of +10 DeFi pools 🤯. All the risk management involved and hours wasted. Lazy handles it all.
Earn over 6% APY + $SUMR rewards on USDT & USDC—fully automated.
Time to get Lazy.
Yield farming
How to farm yields on Sonic?
In any phase of the crypto market, there'll be pockets of opportunity.
You just have to find it. In the current choppy market, the opportunity is in Sonic. There are a ton of yield farms where you can consistently increase the portfolio without taking insane risks.
We've already talked about Sonic several times. TLDR; it's the new version of Fantom that's super fast and cheap. It has good incentives to attract devs and users as well.
One reason to farm on Sonic is the 200M $S airdrop coming in June 2025. You can get Sonic points by doing the following.
- Passive points: Earn points by simply holding whitelisted assets.
- Active Points (AP): Earn points by deploying your whitelisted assets.
- App Points (GEMS): Earn further airdrop allocation from participating apps.
(Whitelisted assets: scUSD, stkscUSD, USDC.e, S, wS, stS, ONE, WETH, SolvBTC, SolvBTC.BBN)
Staking $S.
If you're a beginner, just staking $S is a good strategy to earn yield. Here's a table that compares various options:
If you want a step-by-step video guide, you can get it in our playbook on farming Sonic.
Where to find good Sonic Farms?
#1. DefiLlama
This is my go-to tool for 90% of DeFi needs, including yields. You can find Sonic yields by filtering for them. Here are some step-by-step examples.
- Go to DeFiLlama → Select "Yields" → Choose "Pool" → Filter by Sonic Chain & whitelisted assets.
- For Delta Neutral Strategies: Select "Delta Neutral" & filter by Sonic Chain.
- For Long-Short Strategies: Choose "Long-Short Strats" & filter by Sonic Chain.
#2. Beans
This page aggregates the best yield opportunities from Silo, Equalizer, Beets, and Beefy. It also displays current APYs, pool metrics, and top-performing strategies.
This is great for avoiding low-efficiency farms and focusing on high-yield plays.
Some example farms
For beginners, the following two farms are great:
Below are some options for intermediate-level
There are more advanced options as well. But I can fit everything in this article.
We have more advanced farming strategies and step-by-step video guides for each of them in The DeFi Edge Pro. We have closed admission for now, but you can join the waitlist.
🚀 DeFi Catalysts
StarkNet is promoting its goal to become an L2 that settles to both Ethereum and Bitcoin. ETH maxis are still skeptical of the claim.
GMX has officially expanded to Solana. You can now trade 20+ major crypto and mint GLV with SOL or USDC on Solana.
Fluid Money Market went live on Polygon mainnet. Since Aave has decided to exit the Polygon PoS market, this is a great opportunity for Fluid.
Aave has added EURC, Circle's stablecoin pegged to the Euro, to the Base market. Users can borrow or use EURC as collateral.
Lido shared the vision for its Community Staking Module v2. One of the goals is to scale CSM to a double-digit percentage share of Lido's stake.
PancakeSwap metrics are looking really good. Last week, it burned around $15M in $CAKE. For the last week, even the token supply was deflationary.
Movement Network Foundation today launched its Movement Public Mainnet Beta. It's liquidity initiative has already accumulated $223M in TVL.
Jumper Exchange has added support for Ink Chain, the new OP Chain from the Kraken team. Easy onboarding from another L2 is great for any chain.
Curve Finance has added three new collaterals to mint crvUSD. They're weETH from EtherFi, cbBTC from Coinbase, and LBTC from Lombard Finance.
📰 Industry News
Soneum is integrating LINE mini-apps into the chain. LINE is a Japanese internet company.
Nillion Network, which described itself as the world's first blind computer, has released the $NIL Airdrop Allocation Checker.
Hyperliquid's HLP lost $4 million on Wednesday. It happened due to the liquidation mechanics of the HyperLiquid.
🚀 New Launches
RabbitX is now live on Sonic. It's a zero-fee crypto futures exchange.
Truemarkets, a prediction market that competes with Polymarket, launched on Base. It already has hundreds of markets across a variety of topics.
3Jane released its whitepaper. It should enable the first capital-efficient and scalable money market on Ethereum enabling users to borrow at 0% collateral.
Berachain Foundation launched Bepolia. It's their canonical testnet for testing new upgrades.
🐦⬛ X Hits
- Freysa thesis.
- Market map of the AI inference providers.
- A comprehensive introduction to HyperLiquid.
- RateX: opportunities on the Pendle of Solana
- Comparison of major yield-bearing stablecoins.
😂 Meme
Until next time,
Edgy
Today's email was written by Edgy and Yayya.
DISCLAIMER: I'm NOT a financial advisor. This content is for education and information purposes only. Crypto and DeFi are risky and speculative. Please do your research before investing.
Whenever you're ready, here's how we can help you:
- ⚙️ The DeFi Edge PRO - Designed for busy people who want to stay ahead of the curve. Leverage our research to save you hours each week, and to see what we're personally investing in. Join today.
- 🚀 The DeFi Edge Ventures - We identify, invest, and help amplify DeFi Protocols that positively impact the Crypto space.
You're receiving this email because you signed up for my newsletter. You can update your Preferences or Unsubscribe here.
113 Cherry St #92768, Seattle, WA 98104-2205
No comments:
Post a Comment