👩‍💻 HackMoney Recap — Issue No. 98

On June 2nd, 2020, a livestream was held to mark the end of the month-long HackMoney virtual hackathon. The hackathon was the first virtual event held by the folks at ETHGlobal, who typically organize popular in-person Ethereum-centric events throughout the year. The finale featured ten finalists giving project demos, followed by feedback from several high profile judges, including Vitalik Buterin and Andreas Antonopoulos. Prizes were given by more than a dozen companies in the ecosystem and were awarded specifically to submissions which integrated with their projects. Link.

I was lucky enough to participate in the hackathon, and was pleasantly surprised and honored when the project Matt Solomon and I submitted was selected for the finale. In this edition of Build Blockchain, I'll give you a recap of the event from my perspective as a participant. I'll tell you about some of the favorite project submissions I saw, and— if you'll spare me a bit of shameless self promotion— about the project to which I contributed. Finally, I'll reflect on what the hackathon demonstrates about the Ethereum ecosystem. Ok, let's dive in!

The Hackathon

While we're all disappointed that in-person events aren't possible right now, one silver lining is the experimentation going on in the virtual event space. What was great about HackMoney is that the organizers didn't simply recreate an in-person hackathon on a Zoom call. Instead, they changed things up, taking advantage of the flexibility a digital venue afforded.



The hackathon was focused on the Decentralized Finance ecosystem. Hackers had to apply and be accepted, then stake Dai via smart contract to join a team. This Dai was refunded to everyone who participated in checkins. These checkins were organized in the Discord chat app, where teams were grouped into cohorts with separate chat channels.

Instead of a single weekend, the hackathon was a full month. This allowed builders to create much more extensive and robust projects, and the results reflected that. The quality of projects well exceeded those you'd see at a typical two day event.

Throughout the month, there were a number of resources available for hackers, including mentoring, live workshops, and support from the sponsoring companies. I personally took advantage of a workshop for the Gas Station Network, where I learned enough to integrate that system into our project. The OpenGSN team was great about answering my support related questions, enabling me to come up to speed quickly. Link.

One more advantage a digital event has over an in-person one is access. There were 350 developers from 46 different countries who submitted a total of 120 unique projects. That's pretty impressive for such a burgeoning technology.

Umbra

For HackMoney, Matt Solomon and I teamed up to create Umbra, a protocol for privacy preserving stealth payments on the Ethereum blockchain. The inspiration for the project came from this Tweet by Vitalik Buterin, posted in late March.



Umbra enables privacy preserving transactions where the receiver's identity is only known to the sender and receiver. Unlike coin mixers, Umbra is not about concealing ownership of your own coins. Instead, it's about sending and receiving payments between entities without revealing a relationship. With a stealth address, a payer can send ETH or ERC20 tokens to an address controlled by the receiver, but no one except the two parties know who that receiver is. Link.



Longtime readers know I'm passionate about the need for better privacy in the crypto world, so this project was especially consequential for me. Umbra is not a panacea, but we believe it's a useful tool in the privacy toolbelt. In particular, we think it may be helpful in on-boarding businesses, who may not want financial ties between entities disclosed.

We were blown away when we were selected as finalists, and have been heartened by the way the project has been received so far. We're hoping to get the project to mainnet in the not-so-distant future, but for now, you can check the project out on the Ropsten testnet. Link.

Our code is available on GitHub. Link.

Other Hacks

The submissions to this hackathon were impressive. Here are some that jumped out at me during my judging cohort, the finale, and browsing the submissions showcase page. Link.

• DeFi Dollar – A clever attempt to create a more stable stablecoin. The DUSD token is backed by a basket of other stablecoins, which are kept equalized under price fluctuations by their presence in a Balancer liquidity pool. If the weighted price of all the underlying stablecoins falls below $1, the system attempts to backfill the missing value with fees the pool has accumulated. This project is a great example of the "money legos" meme— snapping together a few primitives to make something unique and useful. Link.
• liquiDeFi – A combination of smart contracts and liquidation bots that allows users to pool Dai and participate in MakerDAO CDP liquidations, sharing the profits proportionally. This is an example of how DeFi enables complex financial interactions to be automated and democratized. Link.
• DeFi Support For VS Code – Does what the name suggests. Integrates really impressive Ethereum/DeFi features into the popular VS Code text editor. As a developer actively building in the ecosystem, this got me way too excited. Link.
• CelebrityFutures – A way to bet on the future popularity of musicians based on their streams on Spotify. I think this sort of thing will be mainstream at some point. Think of it as fantasy football, but for everything. Link.
• MagicBet – A no-loss betting system, like PoolTogether but for wagering on specific events. Betters lock funds which earn interest. The winner gets the interest, but everyone gets their money back! Link.
• defido2 – Enables the use of commercial two-factor authentication hardware, like Yubikey, to act as a hardware wallet. Link.

This list really just scratches the surface of the hacks that were submitted. I hope you'll take some time browsing the showcase, because there's a ton of cool stuff on display. Link.

Feedback Loops

I'm not a crypto-partisan, but one of my presumptions is that Bitcoin and Ethereum are likely to remain the dominant decentralized networks well into the future. As complementary projects, there's room for them to coexist, but within their respective lanes, they now have powerful network effects that will be hard for other projects to overcome.

Ethereum is a developer friendly smart contract platform, and in that regard, the HackMoney hackathon demonstrates just how far ahead the network is compared to its competitors. In a single month, for a single event, Ethereum saw more high quality projects developed and deployed than most so-called "Ethereum killers" see in total for a year. This isn't about shilling Ethereum, it's just observing reality.

Still, shouldn't it be possible for a competitor to catch up? Yes, it still is, but it may not be as easy as you'd expect. Developer platforms accrue strong network effects that can be surprisingly durable. Just ask Microsoft, who dumped billions into Windows Phone trying to catch up to iOS and Android, but failed spectacularly.

The reason for this durability can be hard to appreciate; it's a self-reinforcing feedback loop. iOS attracted early users, which attracted early developers, who produced high quality apps to sell to them, which attracted more users, which attracted more developers, who produced even more great apps! And so on and so forth. Bootstrapping a system like this can be hard, but once it gets going, it's a force to be reckoned with.

We're still very early in the age of cryptonetworks, but it's clear that Ethereum has already accrued some measure of this compounding power. What's more, for Ethereum, the effect is even stronger because of interoperability. iOS apps are sandboxed, but on-chain Ethereum protocols compose together. So the network effect doesn't just compound between users and developers, it also compounds between the apps themselves.

HackMoney was a lot of fun, and its fruits are emblematic of the breakneck pace at which Ethereum is accelerating forward. I really enjoyed participating, and I'm looking forward to continuing to work on Umbra. Whether Ethereum "wins" as a smart contract platform in the long term may not be settled, but one thing is surely true: for now, it's by far home to the most interesting and vibrant developer community in the crypto ecosystem.