On a superficial look, there are 3 types of proposals in Nouns:

1. Proposals that directly benefit the Nouns community

2. Proposals to fund public goods or develop public protocols that may or may not be useful to the Nouns community

3. “Spread the meme” kind of proposals: spreading the Nouns brand in events

Proposal 216 aims to fund 3 research teams to implement private voting.

Currently, there’s no solution to vote privately, and this is certainly something that could be desirable for some DAO — not sure if desirable to all DAOs. It would fall in category 2 (or potentially 1 if Nouns decide to ever implement private voting)

Since I want to see if this solution is actually possible, I voted FOR (the majority also voted FOR).

Proposal 217 is super simple (full description below, with implementation). It’s staking 5k ETH from the treasury on Lido, something that passively grows Nouns treasury. I would put it in category (1). I also voted FOR (and the result is clearly going to be FOR)

The third proposal, Proposal 218, is the trickiest to me: “Bring Nouns to 2m+ People over 15 Months at Japan’s Best Ski Resort and Integrate Nouns into the Alpine Subculture”

That one clearly falls under point (3). I get the point that the these “spread the meme” proposals are supposed to create a flywheel where the treasury is spent spreading the meme, and then in turn the meme becomes more valuable, hence our NFTs become more valuable.

The difficulty I have is really assessing a cost/benefit here.

Using $200k to “spread the meme” to a completely un-targeted audience in a ski resort seems kind of pointless. If this was a crypto of NFT or Art event it could make more sense. But I see absolutely no evidence that the people who go ski in Hokkaido even care about crypto or NFTs.

I’m voting no on this one. Since I’m literally the first vote, no idea how that will go. It will be interesting to see.

Took me almost 1 month to read it (I tried to not skip any links). And I say "finished" because there are so many follow up readings that I'm still going to be in this rabbit hole for some time.

I really like the step by step progression that Balaji describes, from "Startup Society" to "Network Union" to "Network State" That's probably the most useful idea on the entire book. You can get a sense of what he means here.

That idea needs a lot of examples, and I think some of them are good and some didn't clicked to me. This is expected when we're talking about new concepts. It was hard to paint a picture of what the internet could do (remember Gates explaining it?)

The One Commandment

Another idea that generated some controversy is the "One Commandment" idea has generate a lot of criticism, most notably by Vitalik Buterin (below):

I actually think the concept has some validity, the problem lies in the examples given by Balaji ("keto-kosher society" or "anti-cancellation guild").

History

There is something to be said about History in this book. As a History nerd, I have difficulty finding books that combines so well tech and history and have practical use. The potential to use History as an applied science is powerful.

The historical arc of the Westphalian Nation States potentially dissolving into Network States is something that we're already seeing. Network States offer an optimist exit from both anarchy and autocracy.

Next Steps

Two points I am really focused on learning more

(1) Cloud first, land last: seems like an obvious strategy that is being ignored by everyone

(2) Purpose: almost all DAOs and online communities don't really have an overarching purpose like a true community. This is essential

I’m not sure if the vision established in the book will come to fruition, but the interesting thing is that it doesn't need to in order to make economic and social sense.

Intermediate states like a Network Union are already extremely valuable.

Think for example of a union of DAO workers that provides insurance, credit, training, job opportunities, signaling and an overall sense of ownership and collective purpose. Union could charge a % of the member income on-chain to provide the services.

Seems doable.

The book offered data on adoption, reasons why bitcoin had been adopted early, and reasons why regulators moved early on creating frameworks for exchanges and token listings — MtGox, the infamous exchange that dominated the market in 2014, was based in Japan.

However, Japan lost its prime position over the last cycle. It is notoriously hard to launch new projects in Japan compared to other jurisdictions, and more costly to operate exchanges — Coinbase recently announced that they’re withdrawing from Japan.

Stablecoins are still not allowed. Generative art NFT projects could fall under “gambling” because of the random nature of the drops, so Japanese generative artists that I’ve been in contact with have been really cautious of selling their work.

A new perspective

However, one flipside of the early regulatory move is that many of the discussions the western countries are starting to have now are already taking place at the highest levels of the government.

Yesterday’s piece on Coindesk details exactly this: Japan Embraces Web3 As Global Regulators Grow Wary of Crypto. With tight regulations already in place that helped insulate FTX Japan and its investors from heavy losses, Japan is working on policy and guidelines for stablecoins, NFTs and DAOs as it welcomes a crypto future.

I selected a few quotes from the article, but advise you to read to get a full perspective.

“There have been various stablecoin proposals circulating in Washington, D.C. The European Union is in the final stages of approving stablecoin rules in its Markets in Crypto Assets (MiCA) Regulation. Singapore has also proposed stablecoin rules. But for the most part, regulation has yet to take hold.

This means that Japan might end up in the lead once again.

On Stablecoins:

“Japan may be the first country to regulate permissionless stablecoins. America is still debating how to regulate stablecoins. Japan’s stablecoin law will take effect in June of 2023,” said Tetsuya Saito, product manager at the digital planning office of the Japanese bank MUFG. (…)

So while other jurisdictions are trying to rein in stablecoins, Japan is cautiously moving in the opposition direction. That’s because at present stablecoins are essentially not allowed in Japan at all.

“Tether, USDC are not listed on Japanese exchanges,” the FSA’s Ushida said. “In general because we ensure that a stablecoin is really stable, reserve assets are secure and redemption can be done on request.”

Now, thanks to the new rules, overseas stablecoins have a path forward. Starting in June, Japanese exchanges will be able to apply for a special license to trade stablecoins. This could make it possible for overseas stablecoins like tether (USDT) or USD coin (USDC) to enter the Japanese market. But that does not mean it will be easy. Saito says the dollars that would back the stablecoins circulating on Japanese exchanges will likely require a scheme in which the underlying assets are held in trust at a Japanese trust bank — an unusually strict requirement.

On NFTs and DAOs

Some LDP politicians are not only embracing the potential of DAOs and NFTs, they have gone to great lengths to provide policy guidelines for them. Last year the project team published a rather detailed NFT white paper.

“Japan has rich, high-quality intellectual property (IP) such as animation and games that are internationally competitive, and has great potential to lead the world in the NFT business and, by extension, the Web 3.0 economy,” the white paper says. The white paper includes policy recommendations on themes such as promoting NFT business development and protecting the rights of content IP holders.

A lot of Japanese content is seriously undervalued, explained Masaaki Taira from the LDP’s Web3 Project Team. Some of this has to do with deflation, but it is also because much of it is in the hands of the content holders and not available on the global market. NFTs provide a path to digitizing this content and bringing it to a wider audience, thus potentially increasing its value.

“Content holders and big companies are still very nervous about Web3 and blockchain. Because there is no clear regulation around it, they are afraid of breaking a law,” Taira said.

“These big companies have plenty of money and they have technology. But if the government does not give them a green light, they will be afraid to enter the NFT space.”​​

DAOs are another area where Japan is positioning itself to emerge as a leader. Japan’s digital ministry is creating its own DAO. The Web3 Project Team views DAOs as an innovation that has the potential to do everything from resolving social issues to revitalizing local communities and the Japanese economy.

"There is no nation-state that has formal DAO legislation,” said Akihisa Shiozaki, also a member of the House of Representatives and member of LDP's Web 3 Project Team.

“We are planning to introduce a DAO law to allow an option for those who want to do business in the form of a DAO, to be protected under LLC,' said Shiozaki.

The reason for this is basically to give people more peace of mind about entering this new world. "If you were running a DAO and the DAO made a mistake and caused people damage, you could be sued,” Shiozaki said. “You want a corporation-type shield that would limit your liability."

The Bottom Line

Japan is known for being an extremely conservative country, but an early adopter of new technologies (and one that crosses the chasm faster than other populations, due to the homogeneity of its society).

If crypto regulations end up being favorable and creating a safe environment for entrepreneurs and investors, this could mean Japan could rise again to #1 in web3. To be in the lead of the new paradigm for the internet would certainly be desirable for an economy that has been stagnant since the 90s.

Maybe “Satoshi Nakamoto” was not chosen randomly.

But that has been the case throughout history, from the Library of Alexandria to the Dark Ages, knowledge has been lost several times.

I’m in London this week and went to the British Museum, where an exhibition about Egyptian Hieroglyphs is taking place. The exhibition explains how humanity lost the knowledge of how to read hieroglyphs for centuries until, finally, after a lifetime of work, Champollion was able to crack the code.

The Rosetta Stone (below) is often cited as the key to crack the hieroglyphs code, but the exhibition made clear that there were additional decades of work to get a full understanding of how to read hieroglyphs and how they actually represent both words figuratively and sounds, depending on the context.

An under-appreciated use case for blockchains like Bitcoin and Ethereum is that of being permanent records.

By attaching an economic incentive to the record keeping, the idea is that there will be a permanent incentive for people to be validators (or miners) and to keep the record by making the chain run.

Of course, both technologies are so new in the grand scheme of History that currently it would be imprudent to only store important records onchain, but over time I expect this to become the norm. We’re seeing Cryptohistory in the making.

See you tomorrow.

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Apparently they’re raising $25M for a exchange focused on trading claims — some of them, quite curiously, created by their own downfall.

Crypto is known for being a Wild West, where many people deemed disgraced elsewhere come for redemption arcs. It was the case of Adam Neumann from WeWork, Mike Novogratz (who previously failed at the hedge fund Fortress) and many others.

If there’s no foul play — only incompetence, carelessness or plain bad luck — I think we, as a society, benefit from giving people second or third shots. After all, many of the greatest builders in history failed spectacularly at least once. Henry Ford, Walt Disney and many others.

The problem lies when we’re still in the middle of the process of finding out how much of the failure was bad faith, and how much poor management was happening.

The people who lost money on Gemini Earn (operated by Genesis, one of the main creditors of 3AC) may take offense at the fact that the founders are onto their next thing, for example.

See you tomorrow.

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I am planning a trip to Japan in April, something I’ve been looking forward doing since before the pandemic. So I’m particularly interested in Japanese culture and history.

I’ve been listening to Dan Carlin’s Hardcore History podcast series “Supernova In the East”. It’s comprised of six 4-hour episodes, so I’ll probably have enough to listen for the next two or three months.

The first episode is about the deep roots of the Asia-Pacific War of 1937-1945, going back in time to try to understand the Japanese society “one of the most distinct on Earth”. It’s a culture of intensity unlike no other, and we can see that in may aspects, from gardening to war to food.

I always wonder why the creator of Bitcoin decided to use the pseudonym “Satoshi Nakamoto”, even thought no serious candidate of being Satoshi has Japanese heritage (other than Dorian Nakamoto, who is probably the least likely of all).

How much the Japanese culture influenced them?

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I always thought of myself as a humanities person as a kid, but I liked electronics. then I read something that one of my heroes, Edwin Land of Polaroid, said about the importance of people who could stand at the intersection of humanities and sciences, and I decided that’s what I wanted to do

The quote from Edwin Land is “Industry at its best it the intersection of Science and Art”.

The Two Cultures

The idea of sciences and humanities being two separate cultures — and the realization that there’s value in putting them together — is not new.

Scientist and novelist C. P. Snow has a famous lecture from 1959 about it: “The Two Cultures and the Scientific Revolution”. His thesis was that science and humanities had become split into "two cultures" and that this division was a major handicap to both in solving the world's problems.

A good many times I have been present at gatherings of people who, by the standards of the traditional culture, are thought highly educated and who have with considerable gusto been expressing their incredulity at the illiteracy of scientists.

Once or twice I have been provoked and have asked the company how many of them could describe the Second Law of Thermodynamics. The response was cold: it was also negative. Yet I was asking something which is the scientific equivalent of: Have you read a wor3rk of Shakespeare's?

I now believe that if I had asked an even simpler question – such as, What do you mean by mass, or acceleration, which is the scientific equivalent of saying, Can you read? – not more than one in ten of the highly educated would have felt that I was speaking the same language. So the great edifice of modern physics goes up, and the majority of the cleverest people in the western world have about as much insight into it as their neolithic ancestors would have had.

Web3 and Network States

I’m a strong believer that, more than any other area in tech today, web3 rewards people who can stand at the intersection of these two cultures.

So much of what is currently happening in crypto requires the founders to have an understanding of the technological foundation (which will generally establish the limit of what is currently possible in terms of scalability) and the ethos and culture — aka “the vibe” — that will guarantee that you maximize the output given that set of technical constraints

If you have a strong narrative and memes but the technological foundation is flawed or incomplete, the project will fail.

Failure is also a certainty for projects with strong technological foundations that can’t capture the attention of users because of the dry language, unwelcoming community or simply for not being fun.

Crypto is both a scientific and humanities movement, from the very beginning. Bitcoin itself has a social motivation underpinned by a technical solution.

On the subject of Network States I think the same will apply, especially in the beginning.

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The physical and cultural constraints that gave rise to a normal income distribution are losing their power. The difference between highway and airline networks explains why

It takes an information from 2007 paper by Albert Lázló Barabási — highway connections are normally distributed while airlines are distributed in a power law — and expands the analysis to conclude that knowledge work will allow for the same power law distribution in income (vs. bell curve for industrial work).

You can read the full article for a more detailed explanation, but I would like to expand a bit more the analysis. Going back even further, imagine the transition from roads travelled primarily using animal workforce to highways.

Roads have historically developed in a decentralized way — culminating sometimes in large interconnected paths like the Silk Road (or more precisely, roads, because it was a network of roads rather than a single one).

Meanwhile, highways were generally planned by single centralized entities like governments. So in a sense airlines are more similar to ancient roads than highways.

That realization of the cyclicality of history is not uncommon. The Helix model of history is one of my favorites: history is both cyclical and progressive. We go in circles but we advance.

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In this page you can see 3 categories of mistakes:

1. Price: they failed to invest because the price seemed too high at the time: e.g. Aibnb at $40M in 2010, Apple at $60M pre-IPO

2. Didn’t get because they thought it was basically a toy or a super niche market: Coinbase, Ebay, Facebook, Google, Tesla

3. Miscellaneous mistakes including failing to realize the founders could pivot the customer or overestimating the competitive landscape or complexity

I think many verticals in crypto (and the market itself) falls into the category (2).

I for example said NFTs were “too niche” in an article I wrote in October 2020 (see below). Even though I recognized that being too niche was not an excuse for failure, I failed to move faster.

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It took me some time to realize that culture is a better way to onboard users into web3 than finance.

Coming from a financial background, I assumed financial applications would be the ones that would get us to broad adoption. Crypto allows for the financialization of culture, but alto for the “culturalization” of finance. Crypto has a bigger chance of spreading through culture because more people care about culture than care about finance. And NFTs and DAOs are both essentially cultural movements.

There were a few key moments in this journey down the crypto-cultural rabbit hole. Luckily most of them are documented in this journal, so we can always re-read and learn something about what I was thinking back then — mostly learning from the mistakes.

Buying my first Punk — and then selling it — provided me for the realization that a digital collectible could give you with the same feeling of ownership that you get with a physical collectible. I was hooked.

Buying my first Autoglyph made me realize that this could go beyond collectibles, into the realm of fine art. It also provided the basis of what turned out to be the most intense and crazy experience I had so far in this journey down the rabbit hole: that Autoglyph (and then 19 more Glyphs) became the foundation of Fingerprints DAO.

Yesterday I felt a similar sensation, when I purchased my first Noun. Noun 398, born August 5, 2022. (if you don’t know wtf is a Noun check this)

My preference would be to buy from the daily auction vs. secondary, but I liked the Volcano head of Noun 398 and I thought the price was right — 33.9 ETH. I saw some other sales happening yesterday and decided to pull the trigger. The current floor is ~39 ETH

(I bought it on Blur, a platform I’m proudly a seed investor)

Why Nouns

Differently from the Punk or the Glyph purchases, I’m not necessarily buying a Noun because of historical importance or potential price appreciation.

A Noun is an NFT that goes beyond the art or collectible aspect: it’s one of 574 votes (and growing every day) to allocate a treasury currently worth 28k ETH, or $38M (and growing every day).

My intention in buying a Noun then is not only have exposure to this NFT or add it to my collection. It’s to learn and understand more about this experiment, becoming part of the experiment and the community.

I have yet to see an experiment that captures so much the attention of the best builders in the space. Some of the projects I invested and admire like Tessera and PartyDAO built products that are pretty much optimized to be used in Nouns-like experiments.

The quality of the proposals being presented to the DAO is also increasing. Following the interest of the best builders tends to be a good predictor to be early on the next trends. And many of these trends start as toy-like products.

As our investor Chris Dixon says, “What the smartest people do on the weekend is what everyone else will do during the week in ten years”

Beyond Nouns

The stated vision of the Nouns DAO experiment is the following:

Nouns are an experimental attempt to improve the formation of on-chain avatar communities. While projects such as Cryptopunks have attempted to bootstrap digital community and identity, Nouns attempt to bootstrap identity, community, governance, and a treasury that can be used by the community.

CryptoPunks created Identity and community. Nouns took it a step further and developed governance over the very contract that creates the NFTs and controls its treasury. Nouns is the first meta-project.

We’re still in the fun and games part of the development of DAOs. What capture our attention is funny pictures and governance that feels more like a game than government. But that’s how we learn. After all, many new revolutionary organizations start out looking like ultra-niche toy projects. That was the case for eBay, Airbnb, Facebook, etc.

I have a hunch that if we couple these innovations with a clear purpose and a well constructed narrative, it can become a powerful tool for collaboration of capital and people in the network. Out of all experiments happening today, that’s the one that can claim to be testing building blocks that can get us in the direction a true network state. Cloud first, land last.

Conclusion

Instead of providing a conclusion, let me finalize with a short conversation.

So much of this space is born out of well-thought conversations between strangers. Nouns DAO itself was born out a Twitter thread by 4156, the pseudonymous founder. So I’ll conclude with a screenshot of my interaction 2 weeks ago with Farcaster user “@rabbit” — and appropriate name to given that I was going down another rabbit hole.

See you tomorrow!

It’s a private version of a planned city (like Brasilia).

This was the time of peak centralization in the West. A time where States were still seen as builders and innovators. A time where it was feasible to think of innovating fast, like this list of examples of people quickly accomplishing ambitious things, put together by Patrick Collison.

Now we live in a time where doing even the simplest innovation in our cities is unthinkable, especially in the West. Where a new bus lane takes 27 years to build in San Francisco.

But now we have the ability to leverage the network to fight back and build it fast, with a decentralized approach.

That brings me back to Disney. What’s so captivating about Walt is his ability to create narratives: not only stories for his movies but also narratives to create mini Worlds, like Disneyland and Disney World.

What would Walt do to capture the imagination of people in the Network to build together?

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A large group of protesters invaded the three main buildings of the Executive, the Legislative and the Judiciary in Brasilia: the Palácio do Planalto, the Congress and the Supreme Court.

The group supports the former president Bolsonaro, and claims that the election was stolen and calling for a military coup. We’re still learning the full extent and the implications of the attack. The Governor of Brasília had its powers suspended for 90 days and is under investigation for being potentially complicit or complacent.

It’s difficult not to remember the invasion of the Capitol on the US on January 6, 2021. More than an attack on a particular candidate, it’s an attack to the State.

Which brings me back to a book I’ve been reading: The Network State by Balaji Srinivasan.

Part of Balaji’s thesis is that the State substituted God as the ultimate power structure organizing the society. And the Network is rising as a potential to disrupt the State.

Before diving into this, let me make clear that I think these protesters are utterly stupid and represent some of the most despicable groups in the Brazilian society. However, I want to highlight the underlying conflict that is taking place.

When the State is attacked, the upstream powers that support the State (in the case of both Brazil and the US, the mainstream media) and its representatives come to defend it.

There are no reports of injuries, only vandalism. However, the media in Brazil started calling the protesters “terrorists” in unison.

We’ve seen many protests over the years, some of them ending with deaths. I can’t recall the media broadly calling protesters terrorists, even when a cameraman was killed.

What’s different this time?

This is a clear attack on the State as a whole. In a sense, those buildings are like cathedrals, the physical representation of the State power.

As it happened in the US, I expect a big backlash from the events that took place yesterday. The State won’t let any Network movement defy its power with impunity.

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If you don’t know what a Noun is, I recommend this video explainer:

Going through this journey to me is a great way to get a sense of the current state of web3. It’s a journey through Decentralized Finance, DAOs, NFTs, Open Source development and building in public.

But first things first: how do you buy a Noun?

There are two ways to buy a Noun: on the primary market through the daily auction and on secondary, in marketplaces like OpenSea and Blur.

Nouns are minted every day and sold in an auction. The minting process has been turned into a game with Proposal #8, aka FOMO Nouns. Anyone can go to the website and help to vote and choose which Noun is going to be minted next.

As I’m trying to keep my ETH exposure fixed and use USDC to buy this Noun, I did an extra step: used USDC as collateral to borrow ETH on the Aave protocol. That way I’m effectively short the ETH I’m using to buy this NFT.

I would prefer to buy directly from the daily auction, but my goal is to optimize for the lowest price possible. So I’ll leaving a collection offer to buy on secondary for a price lower that the current 14-day average for the auction.

I’ll also try to monitor the daily auction, but it’s currently settling at 3AM in my timezone, so it’s not exactly easy.

See you tomorrow!

As we wrap up the first week of 2023, I’ve been looking back at the last three years of my life.

I started a personal journal in 2020 before the pandemic, and what happened that year made it unforgettable to everyone in the planet. I’m grateful that I can look back at those personal notes and learn from them. There are so many mistakes I did in the past that I’m trying to avoid in the future. Recording your thoughts and feelings is something I highly recommend.

In the spirit of journaling in public, I started this blog in 2021 as a crypto trading journal. It evolved with me and the market. As I dug deeper into NFTs, DAOs and beyond, I was writing less often, but trying to always come back.

The irrational exuberance of the ‘21 market was followed by the deep depression and hangover in 2022, with the FTX fallout as the cherry on top of a already disastrous year for crypto.

Full recovery looks like it will still take years, but now I feel in a place where I can start observing which pockets of the market start to get more attention, which narratives start to gain momentum, which products start to get traction.

That’s why I want to repeat something I did last May: a 30-day challenge to write daily on this journal. Last time I managed to write ~60% of the days, so I’ll try to beat that.

My idea is to write about the future of Fingerprints, the broader VC market — last year I joined Canary as a venture partner — and random thoughts on projects and initiatives I’ve been following like Nouns, Farcaster, The Network State, OpenAI and Chat GPT etc.

Speaking of ChatGPT, I fed it this post up to here and asked it to write the closing paragraph. A bit too repetitive but it would get a passing grade, with a bit of work it could really be a great first draft. See below the result:

“As we embark on another year, it's important to reflect on the past and learn from our experiences. Journaling has been a helpful tool for me to do just that, and I hope to continue this practice in the future. Despite the ups and downs of the past few years, particularly in the world of cryptocurrency, I am excited to see what the future holds and to continue sharing my thoughts and insights on this blog. I hope you'll join me on this 30-day writing challenge as we explore the future of Fingerprints, the VC market, and other projects and initiatives that I am passionate about. Thank you for following along, and here's to a bright and prosperous 2023!”

See you tomorrow!

Both share “not your keys not your coins” mentality but their differences go deeper. I’ll try to suspend judgement while I analyze their behavior, like David Attenborough does when describing the mating rituals of birds in New Guinea.

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The Bitcoin Maxi PoV

All Bitcoin Maximalists have reservations about Ethereum as an asset and platform. And many have a distrust of any smart contract platform — even the ones building on bitcoin.

The main argument focuses on the inherent lack of security of these smart platforms, and how smart contract creation allows for corruption of the original monetary vision for Bitcoin. It allows for speculation, usury and grift.

Bitcoin maxi reaction has been based on the argument that if you agree with their view of the world, where Bitcoin and “crypto” are two separate things, there would be no reason for you to be using a “shitcoin casino” like FTX. And even if you use it to buy Bitcoin, you should withdraw and use self-custody.

The DeFi Maxi PoV

DeFi maxis are mostly pointing that the issue with FTX is the centralized and custodial nature of FTX.

DeFi maxis believe centralized services need to be extinct completely if possible or restricted to some very narrow activities.

The smart contract platforms are actually a way to get rid of these trusted intermediaries to substitute centralized products for decentralized products. So they’re highly desirable, despite the technological risk (hacks) and the initial trust/centralization risks

(In general, most DeFi protocols bear require some trusted setup before decentralizing and some of them have been pushing the goalpost on decentralization. Since decentralization is a spectrum, it’s hard to really draw a line in the sand to where DeFi becomes too centralized to be called DeFi)

The Moderates

In the DeFi camp, there’s also the moderate view. People who believe a world where we have increasing decentralization coupled with regulated centralized services. The field is exemplified by the positioning of the CEOs of Coinbase, Bitwise and most centralized services.

My own personal view

I believe I’ve seen enough useful innovation coming out of the smart contract platforms to believe they’re all worthless. However, I agree that most of the potential is in the future, and many benefits are theoretical. But the same argument could be applied to Bitcoin, 14 years in. Most of the original vision is still unrealized.

NFTs for the first time brought commerce to crypto at scale. Forget the speculative prices, I’m referring to people buying digital collectibles. Price can go up or down but this behavior won’t go away. It’s the first instance of crypto-native commerce at scale.

Decentralized exchanges like Uniswap, collateralized lending protocols like Aave and Compound are a reality and useful to some degree. Stablecoins, in different degrees of centralization, are also useful — as someone living in Latin America, I can attest to that. Decentralized storage, computing and other infrastructure is also working, today, and being used by people.

Most of these capabilities can’t (or won’t) be built on Bitcoin. So it’s very hard for me to subscribe to a Bitcoin-only view, when I see this much evidence in contrary. I really admire the simplicity of the BTC Maxi view, but I find it ineffective to push the boundaries of making use of the technology.

I’m a realist and most likely there will be a number of services that will still require centralization. So, as boring as it may be, my view is aligned with DeFi moderates. While suspicious of regulatory capture by the incumbent players, I believe sensible regulation is going to be required because some degree of centralization is going to be needed.

FTX is currently experiencing the equivalent of a bank run.

In theory, if they are operating as a exchange should, that should not be a problem. Exchanges are supposed to operating at a 1:1 reserve ratio. Maybe they experience some delay in their services due to illiquidity or difficulty to access some of their assets, but they should not be insolvent.

However, if they’re operating under fractional reserve — directly or indirectly through related parties — they’re behaving like a bank. In this case of enough people come for their money, they’ll run out of money.

Since there’s no accurate and public proof of reserves, we can only trust (or not) what FTX tells us.

In the absence of relevant costs for users, the smart thing is to withdrawal— to take a wait and see approach.

While I tend to trust the way FTX is managed, I don’t believe the CEO retweeting a rumor about “an airdrop for not moving your funds” inspires much confidence in times like this.

But in our microverse of DAOs, politics is always on the table.

Compared to companies, politics is even more important in DAOs, because of the (somewhat) decentralized nature of it.

I wouldn’t go as far as saying that companies don’t have a political aspect — the bigger the company, the more time you’ll spend on politics — but for DAOs this issue arises much earlier, in the “startup” phase — periods where most companies are still dictatorships.

Nouns DAO

For a brief explainer on Nouns check nouns.wtf

Nouns have increasingly seen some degradation of the quality of the projects they’re funding. Basically everything I’ve seen proposed could be done with a lower budget. I won’t link directly to specific projects, but a simple look into the initiatives approved you’ll notice they’re overpaying for most things.

This is not necessarily corruption or a big problem given that the treasury is still growing, but long term it’s certainly inefficient and creates a certain culture that is not aligned with the goals of the DAO.

Another aspect that could apply to other DAOs is the Discord.

Discord has many benefits but also many downsides. 4156 (one of the founders of Nouns DAO) has been vocal about deleting Discord and letting the forum (or other groups, with no official validation) be the place where people coordinate.

It will be interesting to see how that works out.

Fingerprints DAO

Over the last few months, we had politics and disagreements on a few issues: providing liquidity, transitioning to a NFT membership (vs. ERC-20 membership) among other quarrels and disagreements (you can check discussion here )

But probably the most costly politics in Fingerprints lies beneath the surface. Individual members who have a specific claim or complaint. The team generally listens and tries to address this claim somehow, working with individual members. This could be a specific complaint about the way the DAO is being managed, or about our failure to acquire something, or about some new implementation or project etc.

I believe we must push to address everything in the open instead of having multiple (I mean multiple) 1-on-1 interactions with members.

A great example was the Traces Project (discussion on forum/project channel on Discord). The idea of Traces is to let people stake PRINTS to use a mirrored version of our artwork in their virtual galleries/collections.

Despite being one of the founders of the DAO, Shira put up a rough proposal (he sent me beforehand but I made no comments) and let the community discuss. Not much 1-on-1 discussion, straight to action. There was minimal cost and I think the project is going well. Other proposals popped up, without any prior contact with the team.

I think this is more scalable and frankly much more enjoyable than multiple 1-on-1s.

RAW DAO

Here is probably the clearest case where broad participation without regard for the economic ownership of the DAO failed.

At first we started with a Committee to decide on acquisitions, like Fingerprints.

The Committee had multiple factions of photographers, and people with different and sometimes opposing interests. There was a lot of drama in those committee discussions, something I never experienced with Fingerprints.

Then we moved to Community Curation, a process by which every member (people with a minimum 500 $RAW, currently $300 worth of $RAW) could nominate and vote to acquire a certain collection and a piece of a certain collection.

Way less drama, but the quality of the decision making and the regard for the DAOs funds started to deteriorate even faster. Participation was low, out of 500+ members, only 20-40 were voting at any point in time, acquiring work that is now being sold at a fraction of the price paid (or not being sold at all).

People were forming small groups to vote on their friends’ acquisitions or bumping the most expensive acquisition of a certain collection. It became clear that financial responsibility was not really a concern for voting members.

The decision I and other larger token holders made — after all, we were the ones who contributed the most money and artwork to RAW — was to halt community curation and to review the acquisition process.

In the meantime, acquisitions still can happen, but they have to surpass a high bar: 10% of outstanding tokens as quorum, in a Snapshot vote.

I expect the factions who were there solely to lobby for acquisitions to leave. This is actually fine and healthy for the DAO.

Then we can have a broader discussion on the RAW experiment.

Less dopamine and less politics should be the motto to built something for the long term.

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Fortunes are made — and lost — almost overnight. Today’s hype is tomorrow’s FUD, we seem to be in an inescapable dopamine fueled rollercoaster.

This is detrimental to crypto/web3 achieving its true potential.

The potential of being an alternative, open financial system. Of banking the unbanked. Of giving the power over data back to users.

While most of us recognize that the ultimate aspirations of the space are only going to be realized in the long term, the early liquidity and the excessive focus on trading makes the whole space extremely short term oriented. Even more than the traditional tech startup space.

Of all the criticism the mainstream media and TradFi have to offer us, our short term vision is the one I agree most.

Would be nice to create a sense of long term. Maybe crypto art can help us.

We need collective therapy

From the Book “Art as Therapy”

There is widespread agreement that art is ‘very important’ – but it can be remarkably hard to say quite why. Yet if art is to enjoy its privileges, it has to be able to demonstrate its relevance in understandable ways to the widest possible audience.

The purpose of this book is to introduce a new method of interpreting art: art as a form of therapy. It’s the authors’ contention that certain art works provide powerful solutions to our problems, but that in order for this potential to be released, the audience’s attention has to be directed towards it in a new way (which they demonstrate), rather than towards the more normal historical or stylistic concerns with which art books and museum captions are traditionally associated.

In this book, the authors suggest that we seek to create “an agenda for art” — a way to prompt artist to create art that addresses the biggest concerns and needs of our society.

The Catholic Church used to create a certain agenda for art, by commissioning religious artwork depicting key moments of the Christian faith, moral lessons and imagery of a certain ideal or goal for their community.

The same happened to Communist states, so this is not something exclusive to religions.

Luckily we now live in a liberal, secular society, where the state or the religion are no longer imposing a vision onto individuals. But what we ended up missing in the way is the idea of a certain goal or “agenda” for art.

Our liberal, secular society can (and should) also commission and incentivize certain themes to be explored by artists, but themes that are our desirable societal goals, attending to the individual needs to reduce anxiety, seek love and, as I suggest here foster long term thinking.

The Big Here and the Long Now

The Foundation of the Long Now is building a clock that will last 10,000 years and is famously funded by Jeff Bezos. The idea is to foster long term thinking.

This is how the clock currently stands:

The essay “The Big Here and The Long Now” by Brian Eno, named the foundation and explains the concept. See an excerpt below.

It was 1978. I was new to New York. A rich acquaintance had invited me to a housewarming party, and, as my cabdriver wound his way down increasingly potholed and dingy streets, I began wondering whether he'd got the address right. Finally he stopped at the doorway of a gloomy, unwelcoming industrial building. Two winos were crumpled on the steps, oblivious. There was no other sign of life in the whole street.

"I think you may have made a mistake", I ventured.

But he hadn't. My friend's voice called "Top Floor!" when I rang the bell, and I thought - knowing her sense of humour - "Oh this is going to be some kind of joke!" I was all ready to laugh. The elevator creaked and clanked slowly upwards, and I stepped out - into a multi-million dollar palace. The contrast with the rest of the building and the street outside couldn't have been starker.

I just didn't understand. Why would anyone spend so much money building a place like that in a neighbourhood like this? Later I got into conversation with the hostess. "Do you like it here?" I asked. "It's the best place I've ever lived", she replied. "But I mean, you know, is it an interesting neighbourhood?" "Oh, the neighbourhood? Well that's outside!" she laughed.

The incident stuck in my mind. How could you live so blind to your surroundings? How could you not think of where I live as including at least some of the space outside your four walls, some of the bits you couldn't lock up behind you? I felt this was something particular to New York: I called it "The Small Here". I realised that, like most Europeans, I was used to living in a bigger Here.

I noticed that this very local attitude to space in New York paralleled a similarly limited attitude to time. Everything was exciting, fast, current, and temporary. Enormous buildings came and went, careers rose and crashed in weeks. You rarely got the feeling that anyone had the time to think two years ahead, let alone ten or a hundred. Everyone seemed to be passing through. It was undeniably lively, but the downside was that it seemed selfish, irresponsible and randomly dangerous. I came to think of this as "The Short Now", and this suggested the possibility of its opposite - "The Long Now".

One of the advantages of crypto is that we mostly live in the big here. No other space thinks globally so early.

While we have failed so far to be inclusive, to bank the unbanked and to create monetary technology that levels the playing field across the developing and the developed world, the goal is always there, one way or the other. What we need is to think about the long now.

A call to crypto artists

I’m proposing for Fingerprints DAO, other DAOs I’m involved and collectors to help make this mentality shift by commissioning, incentivizing or giving a platform for art that embodies this agenda.

This could be financial help, but my intuition is that most artists won’t necessarily need this financial incentive — and we’re not in a space that lacks on ways to monetize and finance projects, quite the contrary. What many artists need is a prompt.

What I’ve been feeling we’re lacking is the enthusiasm of a community promoting and getting excited about a collective north star.

This can take multiple forms, and is not really restricted to one particular genre of artwork. Whatever medium or genre the artist think it’s going to be more impactful in achieving the goal.

It’s an open ended request for proposals from artists. Can you make an artwork that either embodies long term thinking or creates a longer term perspective on the viewer, collector or both?

What would be our answer to the clock of the long now? What would be the digital, more artistic version of the clock of the long now?

Bitcoin has emissions programmed until 2140 (but inflation gets very close to zero in 2041) and embodies an idea of replacing a 5000-year metallic monetary technology, and eventually fiat money itself.

It chose to scale in a deliberately slow and cautious fashion to achieve this goal.

Ethereum chose to trade off some of the simplicity for a bit more speed in development, but still aims to create a platform that allows code to live forever (or at least forever-ish).

If we are able to build base layers with longer term thinking, I’m convinced that it’s possible to also create applications, markets and a crypto community that fosters long term thinking. This is the only way we’re truly going to fulfill the original vision.

Collective therapy is what our space needs. Crypto art can show its utility by changing our perspective. This is one of the powers Art has.

Let’s seize it.