In this Deepen dive, we discuss three captivating themes that have captured the financial sector's attention: the evolution of DeFi through Uniswap V4, the environmental implications of Bitcoin mining, and a glance back at how banks functioned before the advent of computers.

Uniswap V4: An Uplift for DeFi

Hayden Adams, creator of the widely recognized DeFi protocol, Uniswap, has put forward a version that emphasizes modularity and customization: Uniswap V4. As an upgrade from its predecessor, Uniswap V4 introduces hooks that allow users to customize functionality throughout the lifecycle of a liquidity pool.

By pushing complexity to the edges, the core remains straightforward, simpler than V3, and consequently reduces transaction costs. Much like there's no 'best way' to scale Ethereum, there isn't a 'best way' to design a liquidity pool. With V4, anyone with a better concept for an AMM can build upon Uniswap's framework instead of starting from scratch, akin to developing a roll-up for Ethereum.

Bitcoin Mining: Part of the Solution?

As the narrative shifts, the carbon footprint of Bitcoin mining that dominated the previous market cycle's concerns is now seen in a different light. Daniel Batten, a climate activist, started gathering data directly from miners and discovered that despite the rising power consumption, Bitcoin's carbon emissions are declining. Some miners have become carbon negative, preventing methane from reaching the atmosphere and consequently reducing the greenhouse effect.

The question now is, can the Bitcoin network as a whole become carbon negative?

Banks Before Computers: A Look Back

How did banks function before the digital era? A fascinating discussion on the Odd Lots podcast with historian Professor Anne Murphy and writer John Handel provides intriguing insights into how the Bank of England and the London Stock Exchange operated in the 18th and 19th centuries.

Despite the absence of modern technology, banks ran round-the-clock with robust security measures, from fire prevention strategies to careful physical planning. After listening to the podcast, one can't help but marvel at how these institutions performed functions that computers execute today.

Computers haven't necessarily changed how banks operate, but they have significantly increased the speed of operations.

These themes, from the rise of Uniswap V4 and the environmental narrative of Bitcoin mining, to the peek into pre-digital banking, shape our understanding of finance's past, present, and future. As we delve deeper, we appreciate the progression, the challenges, and the limitless possibilities the financial sector holds.