Overview

Structure and topics | The curriculum is structured in three parts — presented over a three-week session. The goal is to step up students’ understanding of crypto, web3, and NFTs, while developing proficiency in associated jargon, using primary tools and apps, and verifying basic information and claims by themselves. The course will also provide cultural context when relevant: memes, famous anons, macro events, and other critical components of the nascent crypto culture will be covered.

Schedule | The courses will run 2 hours daily, each weekday over 3 weeks (30h total). Ideally, I’d like to run the session in the early afternoon, between 11 AM to 1 PM GMT+1. 

An additional one-hour working session can be scheduled with the teaching assistants if needed.

Requirements & “Homework” | Each participant will be provided with a starting crypto (stablecoin) balance and is expected to set up and secure their wallet (this is covered in section I.D). We will cover wallet security best practices in one of the first classes. Each class will come with recommended resources and practical exercises when relevant.

Recommended readings:

• The Infinite Machine: How an Army of Crypto-hackers Is Building the Next Internet with Ethereum (also available on Audible)

To understand the full story of Ethereum, from its inception to the rise, initial developments, and manic growth that led it to today’s state.

• The Bitcoin Standard: The Decentralized Alternative to Central Banking

The main reference for OG Bitcoiners, it is a great resource to understand the cypherpunk tendencies of the early adopters: Bitcoin and crypto are tools meant to provide shelter from Nation States' and corporate abuses before anything else.

Part I: Crypto 101

I.A / Bitcoin’s Inception & A Decentralization Crash Course

Although Bitcoin is now one of the least exciting things happening in crypto, it has the merit of simplicity. Looking at Bitcoin’s early days and explaining the basics of its model will help us better understand what comes next. We will also examine fundamental technical concepts necessary to evaluate any blockchain-based project.

1. Bitcoin Creation Context: Back in 2009, when tradfi was already retarded, but slightly less than currently, Satoshi Nakamoto created a new type of digital ledger.
2. The Byzantine Generals Problem: Reaching a consensus with an unlimited number of more or less trust-worthy actors (or without a central party– aka. decentralization.) ⇒ Nakamoto Consensus. Byzantine Fault Tolerance (BFT).
3. Why do we decentralize? It’s slow, hard, and painful. Yet there are unique QUALITATIVE benefits to decentralized systems. We’ll examine various decentralized structures to see how they benefit from their nature.
4. Explaining blockchains: The merits of generalizable and trustless three-party accountability (vs. the previous/current two-party accounting that always requires trust).
5. Consensus Methods (Proof-of-Work): Bitcoin’s PoW, what it entails for miners, and the risk it creates (51% attacks).
6. Double spending issue & UTXO model: How to achieve verifiable digital scarcity.
7. Early BTC Infrastructure: What to do with BTC, then? The first (shady) exchanges popped around ~2011 for most.

I.B / Ethereum: Turing completeness to extend the scope of possibilities

A decentralized ledger enabling third-party accountability is neat. Still, it only offers a way to exchange value from wallet A to B. What if we brought additional logic at the blockchain level to handle more complex use cases? Enter Ethereum and EVM Turing Completeness.

1. Motivation for Ethereum: Persistent, self-owned, truly scarce, generalizable, and interactive digital items; or how Vitalik got pissed about the nerf of WoW’s warlock Siphon Life spell.
2. Transaction model: Externally Owned Accounts (EOA), on-chain messages, and smart contracts.
3. EVM - The Infinite Machine: What Turing completeness enables, and Solidity the language of the EVM.
4. The ERC20 token standard: Why token standards are useful, how improvements are made on the Ethereum network (Social Consensus > EIP > Formalization > ERC implemented as network upgrade), and a look at native token-based composability.
5. Other upcoming standards: ERC721 (NFT Standard), ERC1155 (Multi Token Standard), ERC4626 (Tokenized Vault Standard), EIP5095 (Principal Token)

I.C / Ethereum Scaling Roadmap: Sidechains and L2

One of Ethereum’s main challenges is coping with increased demand. In terms of processing power, decentralized networks are costly to operate and come with additional limitations compared to their centralized counterparts: it is the price of resilience. How to alleviate it? Enter Layer 2 (and other solutions) meant to scale Ethereum while preserving its base resilience as much as possible.

1. Why is scalability a core challenge? Cf blocksize wars. It’s easy to scale a centralized blockchain, but the more decentralized, the harder scaling will be.
2. Sidechains: EVM-based, separate environment with a different consensus method, and no guarantees that funds will make it back to L1, ex: Polygon, Avalanche.
3. Layer 2: (not necessarily) EVM-based, separate environment securing transaction proofs on the main layer, ex: Arbitrum or Optimism.
4. Quick intro to Zero-Knowledge: basics on zk proofs and what they enable, usage of zk proofs to build a scalability rollup
5. X-Chain Tokenization: IOU vs canonical assets and the impact on bridges’ security
6. The Merge: The latest update that switched Ethereum consensus algorithm to Proof-of-Stake, helping reduce by >99% the network's energy consumption, amongst other things.
7. Layer 3? Application/use-case specific rollup within a rollup for even more efficiency

I.D / DeFi & web3 onboarding kit

Enough theory and history – it’s time for us to jump into some practice. Now that you have a decent understanding of the basics, you can start to set up your wallet, properly secure your seed phrase, and explore the DeFi ecosystem. I’ll give you a rundown of the main things to consider. We’ll review the main generalistic tools in this section to ensure you know how to operate across all base chains, layers, sidechains, or rollups.

1. What are the different types of wallets?: What are the main wallet solutions (EOA vs smart contract wallet) + wallet service providers (Metamask, Rabby, etc.) + hardware wallet solutions (Ledger) & interactions between the two, WalletConnect, and multisig wallet explainer (Gnosis Safe)
2. How to secure one’s wallet: basis on public/private key cryptography, seed = encryption of private key, best practices to secure the seed.
3. On/Off-ramping: How to deposit/withdraw real-world fiat to/from the blockchain, or There and Back Again.
4. Paying for transactions: Understanding what gas & GWEI are, why we need gas, how the gas markets operate, and differences across chains/layers
5. Why Cross-chain infrastructure: Why do we need other chains/sidechains/rollups? How to bridge from one to the other? Plus, we explore the main differences in layer infrastructure.
6. Overview of the main tools: Etherscan for transaction analysis, Zapper for wallet tracking and overview, ParaSwap/1inch to exchange tokens, Bungee to bridge across chains.

Part II: Beyond the basics

II. A / Main Events in Ethereum & Bitcoin History

Knowing about these key events is like a rite of passage. People who were already involved when the events happened to remember them vividly as they became defining moments for the crypto culture. This chapter is a survival toolkit of the main things to know to pass as a crypto native.

1. Early Bitcoin History: Satoshi Nakomoto, the genesis block, pizza day, and the Mt Gox hack
2. Bitcoin's first foray into the mainstream thanks to drugs: the rise and fall of the Silk Road
3. BTC network upgrades: the blocksize wars, the Segwit update, and the birth of bitcoin cash
4. Ethereum early days: the vision, the team & foundation, the ICO
5. The DAO Hack: understanding implied governance processes with the path toward the chain rollback, ETC hardfork
6. ICO mania, the arrival of NFTs, and the rise of DeFi: Ethereum finding its firsts use cases, the network getting clogged, and the birth of DeFi

II.B / DeFi’s early days

In its infancy, DeFi was mocked, considered irrelevant, and pictured as convoluted. All three statements are partly true, yet they did not prevent DeFi from innovating and scaling. Good news for you, though: back in 2018/19, DeFi was dead simple and made of just a handful of protocols: Uniswap, Maker, Bancor, and Kyber. Let’s focus on this primitive DeFi ecosystem for a chapter, as it will help us better understand its evolutions up to today.

1. Uniswap introduced the Automated Market Maker (AMM) & pool-based logic: the first decentralized exchange that scaled, even though other previous attempts existed.
2. Alternatives approaches at decentralized exchanges: EtherDelta, Bancor, Kyber.
3. The birth of DeFi Collateralized Debt Position (CDP) with MakerDAO: to leverage ETH in a decentralized fashion + gave birth to the first decentralized stablecoin, SAI (DAI “ancestor”).
4. Synthetix and the birth of Liquidity Mining: with the arrival of AMMs, came a need to attract liquidity into the pools: liquidity mining was the first solution to that challenge.
5. Stablecoins and the concept of Asset-Backed Tokens: DAI growing integrations in DeFi

II.C / DeFi Summer & the crazy growth phase

Past its relatively quiet days, DeFi entered a period of unbridled hype where every metric was exploding and new, promising protocols were launched every day. In a few days, you’d farm a reasonably-sized house worth of yields: the good old times of DeFi, also known as “The DeFi Summer” (summer of 2020). Despite the peak craze and recklessness, this epoch also delivered significant innovations and key concepts still being built on today.

1. Generalization of Liquidity Mining: SushiSwap’s Vampire Attack, LM on Aave, etc.
2. Emergence of meta-protocols (building on top of others): such as Yearn, the yield aggregator
3. Early Governance Wars: the launch of the CRV token, the year-long airdrop, and the instigation of the gauge-based emission allocation model
4. Liquidity Mining Party on the sidechains: Polygon 2021 LM craze with Aave & other protocols following
5. Liquidity Mining Fiesta on alt EVM chains: BSC, Fantom, Avalanche

II.D / DeFi, NFT broader crypto Culture

Before we deep dive into protocols to make a DeFi wizard out of you, there are some other cultural elements you’d need to master to be able to chat and understand a degen. These are the major hacks that shaped the public perception of crypto — and affected the behaviors of participants, major meme(coins) that came to prominence, famous NFT collections, etc. If you remember a few items from each of these seven categories, you will have the references to follow a discussion between DeFi natives.

1. Notable hacks, ponzis and scams: their classification (rugpull, protocol issue, ecosystem, infrastructure, smart contract) the sketchy DeFi - Cream Finance, Cover Protocol, bZx, Cronje’s Solidly spectacular explosion, Time/Wonderland and the Frog Nation, the UST/Terra crumble & so much more
2. Coin Maximalism: aka how flipping $1k into $1M can flip someone’s belief system and core values.
3. Communication Channels: the DeFian basic toolkit – where to get the news and discuss it: Crypto Twitter, governance forum, Discord, Telegram, Reddit & 4chan, and the crypto etiquette
4. ICOs, IDOs, IEOs, Launchpads: the creative ways to launch a token and fleece retails in the process. + the proper DeFi-native way to do it: LBP, IFO, capped strategic asset raise.
5. Crypto VCs & Notable People: famous investors, market makers & worshipped builders (Cronje, Sam@Frax, Stani@Aave, etc.)
6. Top-of-the-canon NFT collections: what is “the canon”? CryptoPunks, Bored Ape Yacht Club, Otherdeed, Azuki, ENS, Clone X, Chromie Squiggle, Moonbirds, Doodles, etc.
7. Meme coins: understanding the appeal for the DOGE and SHIBA of our world

Part III: Deep dives

III.A / Liquidity Structure: Pooling vs. Order-book-based logic

DeFi brought a revolution at the fundamental level: a new way to structure liquidity, the root of all markets. While regular finance relies on an “order book” (bid/ask), DeFi introduced and scaled a new liquidity structure with the Automated Market Makers: liquidity pools. There are fundamental structural differences critical to understand between the two approaches, even if they can be abstracted functionally to the end-users.

1. Pros/Cons of each model: pools offer constant availability and democratize access to liquidity providing, orderbooks are usually seen as more efficient (able to process bigger tx volumes) but they usually come with a centralized entity (exchange) maintaining the book…
2. The advent of AMMs and pooling: How x*y=k enabled AMMs and created the concept for liquidity pool with Uniswap/Bancor. Transparency and auditability benefits.
3. Understanding Impermanent Loss: definition = theoretical loss vs holding both assets, minimization but there is no solving it, context (ex: UNIv3 seller)
4. Fee collection & redistribution models: fees collection & 0 redistribution to LPs and/or token holders depending on the DEX: deep dive on Uniswap and Curve fee model.
5. Harnessing the pool model for lending: what Uniswap did for liquidity, Aave and Compound did to lending: a look at Aave’s inner workings with the aTokens vs cTokens, liquidations, and interest rate calculations – and how it harness the pool model to maximize the availability of liquidity for loans (vs its ancestor P2P-based Ethlend)
6. The Coincidence of Wants — an optimized order book with pool-based fallback. This logic is applied to DEX liquidity — CoWSwap, but also to the lending markets — Morpho.
7. Advanced pool-based liquidity structure:  UNIv3 brought liquidity concentration along a certain range of the price curve, Curve is doing liquidity concentration around the peg with stableswap, Impact of the Balancer 80/20 weighting on liquidity effectiveness and impermanent loss.

III.B / “No-loss” financial products

There are things that only DeFi can do because they harness all the fancy tools we’ve been building so far. The no-loss model is the prime example, as it knows no tradfi equivalent. Would you like to play a game with your yield?

1. The no-loss concept: a fun redistribution of yield while the principal is protected. The risk concentrates on the yield ⇒ no-loss, while the principal is as protected as possible.
2. Meta Protocols: how Pooltogether harnesses Aave and Compound – and it is also the main limit of its principal protection.
3. Other no-loss models: place long/short no-loss bets on DeFi yields with Entropy
4. No-loss endgame: crowd intelligence as an oracle?

III.C / Risk management tools in DeFi

You thought TardFi had it all figured out? Wait until you see how many layers of derivatives you can stack on top of another with DeFi. Finance could be described as a toolbox made to slice the yield pie in all possible different ways. TardFi started this with its meager means. DeFi brings it to the next level.

1. Insurances are in DeFi, too: even though they are mostly useless and doubtfully solvent + challenge the incident definition
2. Main Insurance models: Nexus Mutual, Unslashed. Liquidity providers for insurances
3. APY-fixation: another form of insurance, lifting uncertainty on yield, using for instance, a tranching approach
4. Future Yields Tokenization: selling 3 months of future yield today, using APWine
5. Dispute resolution for claims: looking at the main solution used, the decentralized arbitration service Kleros

III.D / Governance and DAOs: what do they do & why do we need them?

Some say governance is just a meme, others call it a “decentralization theatre,” while pragmatists just look at the money flows it engenders. All are right in their own way.

Let’s dive into a core component of NFT, DeFi, and crypto in general: how do we reach a consensus on impactful protocol-level decisions in a decentralized project? What are the processes and tools used by DAOs? How to follow their activities and decisions?

1. Why do DeFi protocols need governance? The base: deciding on parameters that cannot be algorithmically adjusted. & the fluff: the “valueless governance token” meme — using governance to add value to a valueless project. + Governance as a legal avoidance strategy.
2. The scope of governance: what parameters should token holders input on vs. what should be set up according to pre-defined rules? Understanding the scope allocation model: operational ⇒ algorithmic | strategic ⇒ governance.
3. Governance Support & Processes: where is the discussion happening? What is the process enabling going from a suggestion to a vote? The (Twitter)>Discord>Governance Forum>Snapshot>Onchain vote standard governance flow.
4. Governance Parameters: proposition threshold, quorum, vote duration, delegation model.
5. Governance Attack & Defense: the main attack vectors governance can create and how to hedge against them: timelock, community-driven forks, nested influence, etc.

III.E / The value of governance: veCRV model, bribes, and the liquefication of influence

Despite the meme, governance can have real value. How? Simple! By including within its scope control over tangible money flows, for instance, the emission allocation of one of DeFi’s major tokens: CRV. The veCRV tokenomics is essential to understand, as it explains the path from governance to yields. It’s the most built-upon tokenomics there is, also forked and adjusted by many other protocols.

1. Why veCRV? Aligning the long-term best interests of three-four potentially distinct populations of users: Curve users, liquidity providers, CRV holders, and other protocols looking to attract liquidity.
2. The four layers of veCRV:

1. Admin fees: share of the fees collected by Curve (stablecoin yield)
2. Governance power
3. LP boosting capabilities,
4. Gauge voting power (+bribes)

3. Gauge-voting bribes: why would protocol bribe for liquidity? How is it done? Which protocols are used to that end?
4. Governance-voting bribes: bribing on governance vote directly (not done in the open)
5. First abstraction layer on top of Curve/veCRV: the example Convex
6. Second abstraction layer on top of Curve/veCRV: the example of 0xConcentrator.
7. veCRV-inspired successors - GMX model: addressing the shortcomings of veCRV – the extensive locked-in period with an opt-in model enabling users to accrue bonuses as long as they don’t unstake.

III.F / Resilience and censorship resistance

DeFi means nothing if it cannot stand attacks from nation-states, corporations, high-net-worth individuals, and any other type of actors that could derive a benefit from its downfall. Yet, most DeFi protocols still have several centralization points that could be turned into attack vectors. Let’s take the time to understand what it takes to create a protocol as resilient as DeFi can build.

1. Governance is an inherent risk by itself: having a governance structure means the protocol can change – depending on the scope of governance, it can be more or less of a risk.
2. Execution of governance: governance can be either fully onchain (no trust in anyone/anything required for vote executions) to fully trusted (multisig-based vote execution). + Impact of governance parameters: proposition threshold, quorum, vote duration, delegation model, timelock.
3. Front-Ends / Access Point to the Protocol: websites used to interact with the protocol and the various solutions that can be harnessed to enhance their resilience
4. Oracles: a single source of all truth in DeFi, including the most important data point: token prices. How decentralized are “decentralized” oracles like ChainLink? Are there viable alternatives? How to improve oracles’ operational security?
5. Other third-party dependencies: understanding the composability chain, reliance on censorable collateral or protocols

III.G / Onboarding the NFT ecosystem

NFTs are a key technical innovation brought by crypto. Deep-diving NFTs force you to reconsider your mental models to evaluate goods & is full of learnings to better understand the crypto culture. Besides, NFTs enable crafting the most fun, engaging, and interactive experiences, which are increasingly harnessed by DeFi or governance-focused projects.

1. NFT Introduction: What are NFTs? What do they enable?
2. Non-fungibility: Engineering incremental & potentially generative digital item scarcity.
3. Generative Art: rarity tables, verifiable randomness generation (VRF)
4. Securing NFT media: how can an NFT truly be resilient? Understanding the pros and cons of the main methods: SVG-based art, IPFS, and Aarwave.
5. NFT Token Standards: the pioneer ERC-721, the modulable successor ERC-1155.
6. Trading and exchanging NFT: full & exhaustive provenance history, a look at the main NFT marketplace OpenSea
7. Utility NFT: Tying an NFT to a decentralized application with the example of Ethereum Name Service (ENS / ERC-721)

III.H / DeFinancialisation of NFTs: NFTfi

No too fast, not too simple, this is crypto! While in 2018/19, DeFi and NFTs were two separated universes, this is no longer the case, as both worlds are converging. DeFi-based approaches help resolve the main pain point of NFT projects, such as their sparse liquidity while enabling new use cases (lending, leveraging, renting, etc.).

Remember the “Creator Economy” back when Airbnb, Uber & co were popping up almost a decade ago? This was just a meme to shill tax-avoiding corporate structures into the mainstream. The actual means to sustain a genuine “Creator Economy” are the ones we will study in this section.

1. “Gen 2” NFT Marketplaces: improving on OpenSea’s base model with LooksRare
2. Tokenization of NFT: example of the NFTx vault to grow floor liquidity
3. Tokenization of NFT II: SudoSwap pooling model to grow arbitrary liquidity
4. NFT Leveraging: borrowing ETH/stablecoin from an NFT — JPEG69
5. NFT Utility: Play to Earn, Crafting, Token–Gated Access
6. NFT Renting: utility + time-based NFT rent, with a profit-sharing model (Play2Earn) or fixed cost
7. NFT in DeFi: the example of Liquity’s Chicken Bonds

*Once the course has completed, in the final “Practice” slot, have the student return to Part IA to the Proof-of-Work assignment.

Extras/Visual Aids

🎓️ Llama U Final Understanding Test

As you all know, veCRV has four utility layers:

1. Admin Fees: 50% of Curve trading fees redistributed as stablecoin (3pool)
2. Governance: proposal power (>2500 veCRV) and ability to vote on Curve DAO governance proposals
3. Gauge Voting: direct the weekly CRV emissions on chosen pool gauges
4. LP Boosting Capabilities: increase CRV output (up to x2.5) of Curve LP tokens staked into Curve Gauge contracts.

This led to veCRV seeing many projects building on top of it, the CRV wrappers:

• Yean Finance yCRV (previously yveCRV)
• Convex cvxCRV + Convex vlCVX
• StakeDAO sdCRV
• Concentrator aCRV (cvxCRV wrapper)
• Llama Airforce Union uCRV (cvxCRV wrapper)
• Badger bveCVX (vlCVX wrapper)

You’ll be expected to answer the following questions:

1. What do you think the project behind each wrapper is trying to achieve?
2. Can you explain for each wrapper what re-distribution is performed on veCRV’s four base utility layers? Highlight how it fits each protocol use case (⇒Question 1)
3. Say I sent you 10 000 CRV tokens with a dual mandate: you are not allowed to sell them  and you must output the best risk-adjusted yield over the next year. Which wrapper would you choose and why (=show me an exhaustive return/risk comparison)? 
           ℹ️ Tip: Don’t forget to account for raw veCRV too

The DeFiNinja Shortcut ProTip

As you learn about DeFi, you’ll find yourself checking often tokens, addresses, or protocols on various tools. To speed up the process, you can set up specific shortcuts so that for instance typing “zapper tokenbrice.eth” in your browser search bar instantly opens the zapper page of the tokenbrice.eth wallet overview.

It can be set up in Chrome/Firefox “Manage search engines and site search” tab. Here is my setup for instance:

Typing “tx +transactionID” instantly opens the related Etherscan. I can get an instant position overview of any wallet just by typing debank or zapper + wallet address, etc.

Setting up your first shortcut

Let’s try to build our own shortcut: one to check wallets super efficiently.

First, we go to your favorite wallet stalking service, let’s say Zapper.

And we explore a few wallets to look at the URL structure:

https://zapper.fi/account/0xAA7A9d80971E58641442774C373C94AaFee87d66

Where the address is just added at the end of the URL, making it easy to replicate with a basic regular expression:

To make it even easier for you to set up your ninja toolbox, harness the ready to use the shortcuts below:

Example Shortcuts You Can Use

Coincidence of Wants — Visual Explainer

Defi Maps/ Ethereum Ecosystem Maps