📌 An opinionated recap of the most interesting news in crypto
Token Economy
📓 also published on Medium
🏔 Announcing Unplug's 2018 Winter Venture Retreat
As you know, last September we organized a small venture retreat in the Dolomites. We had people coming from most top EU venture funds as well as crypto funds like Placeholder (thanks Chris!) and crypto projects like Aragon.

Given people enjoyed the event, we are going full-steam with it.

Today, we are announcing Unplug. Unplug will organize a series of events, all in the spirit of the first venture retreat.
Small, in nature, and with the best people possible.

The next one is the 2018 Winter Venture Retreat, an EPIC event in the heart of the Dolomites where we'll gather 60 amazing people who'll have a chance to get to know each other by skiing together, going to the SPA, sledding and just enjoying a drink around a fire.

You should apply to attend at http://unplug.vc
🔐 Q&A with Ledger CEO, Eric Larchevêque
This week Ledger, the French maker of the most popular hardware wallet for securing crypto assets, have announced the closing of a $75 million Series B round led by Draper Esprit and with the participation of a very international syndicate. The round was unsurprisingly highly contested, despite the company not having relied on any broker.

If you want to dig deeper on Draper's investment thesis, read their post announcing the investment.

This is fantastic news for the ecosystem, which now has a well funded participant working on one of its most critical issues (security), and for Europe, that has demonstrated it's ability to generate category-leading tech companies.

We were lucky to grab Ledger CEO Eric's attention and ran a few questions by him, which he has kindly addressed "between pear and cheese", a french saying apparently ;) 🍐🧀

TE: Huge round of funding and significant milestone last week, congrats all around. Despite all that, it still feels early days when the largest security player in the industry is barely servicing a million people. Where do you think you are in the journey and where are you aiming to get to in the next 5-10 years?

EL: Ledger has defined a 5-year roadmap in three phases. The first step, almost completed, is about scaling our operations to achieve a global leader status with our hardware wallet product line and make sure we can fulfil the ever growing demand of the market. We will then focus on creating more value in our ecosystem by leveraging our millions of users through new application use cases (decentralized exchanges, account management through governance, etc). We are also launching this year the Ledger Vault, a SaaS solution catering to the needs of financial institutions. Finally, in the longer term (2-5 years), we plan to distribute our technology in all relevant IoT and industrial spaces.
Ultimately Ledger aims to become a large technology provider, designing infrastructure solutions for all cryptocurrency and blockchain application. The last decades have seen the golden age of the internet protocol, seeing the dominance of American based GAFA. A change of paradigm is coming forward, with the emergence of the blockchain protocol, powering a new generation of decentralized applications. It is in this context that Ledger is building itself as the next technological giant.

TE: When a European tech company makes the headlines, particularly if French, there are always naysayers casting gloom with the obvious cliches. Let's debunk them. What are the challenges of scaling a global tech company from Europe, and France specifically, and how are you tackling them? Also, if I may dare, what are the benefits?

EL: Ledger is building all its stack on top of a French technology: secure chips & smartcard. We therefore have a very strong legitimacy on addressing the crypto security market from France and Europe. All relevant engineering talents are in France, and it wouldn't make any sense for us to move to the USA (or elsewhere). Nevertheless, we have been positioning Ledger as a global company from day one and opened a San Francisco office in early 2015. Most of our customers and partners have really no idea that we are a French company. Finally, we also demonstrated that being European didn't prevent us from raising a large Series B round.

TE: Participating in the crypto economy still feels daunting and scary for most new comers. What are your plans from a product perspective to reduce frictions?

EL: One of the main mission of Ledger is to make cryptocurrencies accessible by comforting users through the best experience possible. We are seeing the enormous work ahead and we know it won't be easy. The first step on the road of improving our user experience will be the release of our new Ledger Wallet set of interfaces: only one application for all cryptos, with a massively improved UI and flow. We'll also eventually add in our interfaces the most the basic requirements for new users, such as buying/selling/swapping cryptos.

TE: From a strategic perspective, how do you see the demand for hardware-based security evolve as both retail/institutional investors and, ultimately, corporates enter the market demanding more user-friendly hosted solutions, and how are you positioning to service it?

EL: Our hardware wallet line of products is catering to the individual usage, personal or professional. One device equals one user. If you are an institution with a large amount of cryptos to secure, you could of course use a Nano S, but then the question arises regarding who has access to the PIN code, or to the device itself. It becomes a single point of failure, akin to securing physical gold in the company safe. How long until you get a hostage situation? The solution is governance: multi-signature, delayed opening, etc. Our new product Ledger Vault is bringing to the market this missing link, providing a turn key integrated solution for enterprises and financial institutions, onboarding all the necessary governance model. It is an enabler for professionals to invest into cryptocurrency markets.

TE: What's your perspective on open-source and will Ledger ever go fully open-source?

EL: Ledger's core technology is an operating system for secure chips. Most of it is open source, with the exception of the bare metal parts (drivers of the chip) which must stay closed source due to strong NDA enforced by chips manufacturers. Our ambition is to bridge open source and secure chips, by providing the most open possible operating system. We are working to reduce the closed source parts to the minimum, and certify them as deterministic black boxes doing exactly what they should be doing and nothing else.

TE: We've noted the news about the Radar Relay
integration with huge excitement. Should we expect more integrations with relayers coming soon? Is 2018 the year decentralized exchanges take over?

EL: Decentralized exchanges are providing frictionless and censorship resistant solutions to swap cryptos between each others. It is also moving the security responsibility from the centralized exchange to the end user. Ledger is therefore committed to provide a fully integrated and secure experience, allowing users to create swaps easily and without any hurdles. EtherDelta has been one of the first integrations, now followed by Radar Relay. Other relayers integrations are on the way, and different protocols such as Airswap or Kyber Networks are as well in development.

TE: Thanks Eric!
📌 Token Economy
This, with the Tether situation and one newborn each, is what is keeping us up at night these days.

Until the whole economy runs on crypto, we still have to pay taxes and buy groceries with fiat, so we are still heavily reliant on legacy banking rails to 'cash-out', like it or not. The fact that banks can overnight refuse to transact crypto-related wires is still scary, almost a decade into the development of censorship resistant money. 

Many crypto funds were banking with Metropolitan for instance and are being left high and dry with blocked wires from/to their international LPs, as well as Coinbase.

Capital One bank is another recent example of a bank that is closing the taps, not allowing its customers to buy cryptos from exchanges.

If anyone is building a decentralized fiat-to-crypto ramp, please get in touch.
Speaking of whole economies running on crypto, stablecoins will play a critical role in that direction. And given the uncertainty around Tether, it's about time for an undisputably legit alternative.

Myles from Multicoin deep dives on stablecoins, highlighting:

- the models currently being experimented (centralized IOU issuance, collateralized, seignorage shares)
- what is possible today (stability and decentralization) and the challenges ahead (scalability and privacy).

A must read, as is everything coming from Multicoin.
Crypto cold wars must look like this.

Sia, the decentralized cloud storage network, has been working on a dedicated ASIC mining hardware called SC1 (currently available on pre-order and supposedly shipping in June 2018). 
So, it came as a shock to the Sia community when Bitmain announced an ASIC miner for Sia, already pre-selling $20 million worth of it.

Worried about the greed-induced over-saturation of the mining market that Bitmain would cause, the Sia developers had developed an extra feature, actionable via a soft-fork, that would invalidate the Bitmain ASIC (until they develop a new one at least), but ultimately decided not to pull the trigger on it until they have evidence of malicious intent from Bitmain.

Only last week we featured Keep's great post Miners aren't your friends, so this is a timely reminder.
Great to see Vitalik pruning down his non-core commitments and focusing on Ethereum. His statement shows incredible maturity and leadership, way beyond his age:

"2017 really has been the year where hype in crypto, including financial hype and social hype in general has far exceeded the reality of what existing blockchain systems can offer. There is a lot of attention, and a lot of eager expectation, but as far as reality goes the practical usability of blockchains has in some cases even regressed due to rising transaction fees.

I expect 2018, at least within the Ethereum space that I’m best able to speak about, will be the year of action. It will be the year where all of the ideas around scalability, Plasma, proof-of-stake, and privacy that we have painstakingly worked on and refined over the last four years are finally going to turn into real, live working code that you can play around in a highly mature form in some cases on testnets, and in some key cases even on the public mainnet. Everyone in the Ethereum space recognizes that the world is watching, and we are ready to deliver."
Larry publishes his own principles to selecting crypto assets as investments, touching on decentralization, governance, market size, marketing, teams and competition.

Very accessible yet well articulated and bullshit free, just like we like it.
It's game over for Bitconnect.

After two cease and desist orders, the company is shutting down its lending and exchange services. This articles does a good job at putting the pieces together.

Many people have lost all their fortunes on this scam and we can only hope justice will do its course with the promoters and organizers of this scheme.
Compound outlines their investment theses, of which blockchains are a core part of.

Specifically they are interested in:

- developer tools
- protocols enabling self-sovereignty
- protocols enabling value exchange

Disclaimer: we are co-investors in Nucypher.
💡 Featured on Token Economy.

Rhys applies the lens of Ben Thompson's aggregation theory to discuss the disruptive potential of blockchain technologies: the ability of blockchains to codify early adopter incentives, in a completely open-source environment, removes the need for and ability of dominant aggregators to emerge.
Alex from Lowe's Ventures proposes an extension to the existing crypto assets valuation frameworks. 

We look forward to digging into it.
A new episode of the Tezos drama as it unfolds, and this one feels like bad news for the project.

First, Gevers rejected all the community proposals for the board member replacement (which included Olaf from Polychain), on the basis of him/her needing to be a Swiss national and unbiased.

Last, Gevers went on a Twitter spree (annoyingly not threaded) were he made a number of statements, mixed with Musk and Buffet's quotes, including announcing the Foundation's intention to recruit a new executive team to lead the project. Was he always like this, or perhaps half a billion dollars turned him into seemingly a psychopath?

Is it over for the Breitmans now? What is the core Tezos community planning now? Tune in next week for the next episode.
A team from Cornell examined the state of the Bitcoin and Ethereum networks over time.

Their key take aways are:
-  the mining on both chains is controlled by around 20 entities. That's a bit scary.
- Ethereum is more decentralized than Bitcoin
- The BTC block size could be upgraded without problems

This, as any article from Linda, is a good one to point n00bs to
Myles Snider of Multicoin dives deep on Stablecoins.

If you want to know more about the different types of models that people are trying out in order to get to the holy grail, you should read it.

In short: - Centralized IOUs, - Asset-backed, - Seignorage based
4 Bitcoin devs have released the first paper on the Schnorr multi-signature protocol, a protocol which allows a group of signers to produce a short, joint signature on a common message, instead of having to list every single signature.

This would save quite some space on the main blockchain.

Still a long ways off.
😎 Cool new projects
PSA: we now have a shiny collection on Product Hunt where we'll curate the cool projects we talk about on Token Economy. 

Feel free to follow it!
We never thought we would write about a recruitment company, but this approach is different and interesting.

Inevitably, as crypto projects are born and grow in totally different ways compared to traditional companies, traditional recruitment and talent management processes do not apply.
If you laughed at Cryptokitties, you'll probably ROFL at the idea that you'll soon be able to get a cash loan from a random person on the internet by collateralizing your digital feline.

Like it or not, this is the future. Dharma, the protocol for issuing, underwriting, and administering tokenized debt instruments that we first featured in issue 9, put out a cool coding game to learn how to build a kitty-collateralized, trustless debt agreement with smart contracts.
Disclaimer: we are investors in Picks & Shovel Co.

Matt Galligan and co-founders Dan and Clark are finally unveiling Picks' first product in the making, Interchange, an institutional-grade portfolio management solution for crytpo fund managers and professional traders.

Crypto is an unusual asset class in that retail investors have proceeded institutions, so most of the existing tools to date have been retail-grade at best. As we witnessed institutional investors starting to salivate at crypto for most of 2017, Picks vision of providing the right infrastructure and toolset for them to operate effectively in this asset class really resonated with us. As they say, in a gold rush you want to be selling picks and shovels.

They are currently hiring a Product Designer, so if you fit the bill apply here.
Ben Tossell and team finally unveil Token Daily, a crypto-focused online forum on steroids. 

We've yet to properly test it but the idea is good and ambitious. We started Token Economy for similar reasons, the quantity and spread of information in this space can be totally overwhelming, particularly for new entrants. While we have taken the approach, for now at least, of curating what we feel is the best content and adding an opinionated commentary layer on top, Token Daily aims at capturing and organizing new discussions. That will come with the challenge of diverting them away from where they are already happening. It will be interesting to see the extent to which their ideas about incentivizing contributions and engagement via TCRs will help in that direction.
We talked about the new ERC777 token standards a few weeks ago. 

This Reddit thread has a lot more details about it.
Continuing on new token standards, the team at Decentraland are advancing the community's standards for the development of non fungible tokens with ERC821, an improvement on ERC721 (the basis of CryptoKitties).
If you are a Trezor user and own an Android phone, you can use the Sentinel app to watch your Bitcoin accounts on the go, by importing your public key.
Blockstream is already going all-in on Lightning, and has released Charge, an implementation of c-lightning that enables people to easily start accepting Lightning payments on their stores (this is what powers their online swag store).
🤡 ICO madness
💡 Featured on Token Economy.

Charles from Pantera doesn't hold back on Telegram's plans for TON, calling it an opportunistic ploy and citing lack of substance in the papers produced, with no evidence of material contributions to any of the mentioned research streams.

As we mentioned last week, the risk/reward profile of this token sale makes absolutely no sense, regardless of how ambitious the project is. And yet, we keep hearing of investors desperately scrambling to find allocations...luckily for them Telegram have just upped their target raised to $2 billion ($850 million private, $1.15 billion private) to accommodate the demand. Two. Billion. 
That alone would account for more than 1/3 of all ICO capital raised in 2017. Yannick's recent Twitter poll on the topic ended up with a draw, but at this pace we should definitely be on for a gang-buster ICO year...our friends at Tokendata will no doubt be busy.
If you ever wondered how a pump and dump scheme actually works and who's involved, this post is for you. 

Be careful out there.
It's officially corporate coin season. Mitsubishi UFJ Financial Group is working on its own stable crypto currency to enable p2p transactions and low fee shopping, with a plan to release it as early as March this year. If we are still trying to digest the government-issued crypto currency plans (crypto-fiat), we are at total loss in placing a bank-issued one in the context of censorship-resistant money (corp-coins?)

"Horse carriage manufacturer makes an automobile-shaped horse carriage" in the words of an equally sceptical Reddit user.

However. With the heating debate and scepticism about the viability of existing stable coin projects, sadly this may be the only way to have a coin that can be both actually stable and actually legal. Not much to see from a technological perspective though, this is all going to be sitting on a centralized ledger.

Surprisingly, no silly share price jumps. The markets prefer the simple things, like appending 'blockchain' to a company's name.
So this is a weird one.

Omni, a service to store your physical stuff and then easily rent it out to other people, has raised funding from none other than Ripple Inc.

The deal is apparently as such:
- Ripple is not getting any equity
- Some Ripple executives are investing and joining the board.
- Highland is also investing
- Total is $25M

I really can't understand this one right now, but there's obviously something going to happen with Ripple here.
Venezuela really is moving forward with its Petro currency!

This is the stuff of movies.

They want to raise $1.3B in the pre-sale and have travelled all the way to Qatar shilling out discounts to lure institutional investors.

Unfortunately, it doesn't seem like there's any improvement to the design.

"While the petro would be backed by one barrel of Venezuelan crude, the coins can’t be exchanged for the actual oil."
👮 This week in regulation
More FUD from China, though we're kind of immune now. 

A leaked internal memo from a government meeting suggests the PBOC is working on banning centralized crypto exchanges, market-making activities and settlement services, including online wallet providers. As a reminder, the PBOC have already shut down ICOs, fiat-crypto order books and are working towards an orderly wind down of mining activities.

In the meantime, we are hearing that thousands of individuals involved in fraudulent ICOs and crypto exchanges are being prohibited from leaving the country. 
It will be interesting to see what comes out of the next G20 in March, when France and Germany will make a joint proposal to regulate bitcoin. Tax treatment, ICOs, exchanges AML/KYC, all of the above?

Some harmonization across the EU was inevitable given how much regulatory disparity there is between its constituents. The man tasked by the French Finance minister to report on this topic, Jean-Pierre Landau, is known as Monsieur Bitcoin and his stance has been sceptical since 2014 when he first called bitcoin the "the tulip of the 21st century". The simple fact that it is now subject to a regulatory proposal at a G20 summit clearly proved him wrong on that one.
ℹ️ About us
Token Economy is written and curated by Stefano Bernardi and Yannick Roux.

If you're building a new fundamental piece of technology for the future, please reach out 🤙
Feel free to send links to include in the next issue, or any comments you might have on this one!
Token Economy · The Dolomites · 38121 Trento TN · Italy
Unsubscribe | View in browser