📌 An opinionated recap of the most interesting news in crypto
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🎡 London Token Economy meetup - February 20th 5.30-7:30 PM
Token Economy comes to London! We'll be in town in a week or so and thought we would arrange an informal get-together in a cool venue. We'll be at Bar Elba in Waterloo with our friends from Decusis starting from 5:30 PM, would be great to catch-up with many of you.
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🎨 Looking for new logo for Token Economy
We're looking to deploy a small portion of the ETH some generous supporters staked on StakeTree into a brand new logo.
We've put up the job on Ethlance (a decentralized job marketplace powered by District0x) and so far got a couple of proposals through it. We'll wait to have a few more to decide.
If you know anyone interested in the job, please send them this way 👉 TE LOGO JOB
🎭The MEW Drama and the failure of the old-world corporation
As if Ethereum users had any need of more uncertainty, this week the big story was the drama going on at MyEtherWallet, the best known and most-used Ethereum wallet.
Taylor, the de-facto public leader of MyEtherWallet, and Kosala, the original founder of MEW, must have had a big fallout recently, of which we don't know much.
Fact is, on Friday Taylor announced that she was taking basically the whole team, forking the project, and moving all of their future efforts to a new company called MyCrypto.
This would have been all cool and all, but Taylor also took the liberty of moving all of the ~80k followers that MEW had on Twitter to its new account. And most worryingly, it also moved the verified badge.
Now I'm left following MyCrypto on Twitter, and not MyEtherWallet.
But most importantly, I'm not sure which one to use next time I need to move some funds..
The situation is quite tricky and it's hard to take sides, but it's clearly not been handled in the best way.
I think there are a few takeaways from this situation.
1) Security for Ethereum users
MEW had been plagued with phishing scams for a while, so this news is not going to help and will open up the door to many more attacks on users that don't really keep track.
While all previous attacks all tried to pass off as MyEtherWallet itself, I wouldn't be surprised if someone forked off MyCrypto or MEW again, with a new name, claiming to be an original developer, keeping the UI and just saying that have a new name but that they are legit.
We had absolutely no visibility in the MEW team, and always trusted the "public" brand of the website and their activity on twitter.
So now that the team has substantially changed, can we still trust that MEW will be safe? The site probably facilitates $M of movements on its site hourly, so ethics must be strong to not change a few LOC to take a peek at some private keys.
On the other hand, can we trust MyCrypto? If they took away one of the most valuable assets of MEW without any notice and clearly not in accordance, then can we be sure they won't "take" anything else?
Not great for the community.
2) Traditional corporate structures are absolutely medieval and it's embarrassing for humanity that we're still relying on them.
The situation between Taylor and Kosala is clearly pretty bad, and there have been multiple legal proceedings going on.
There is a lawsuit filed by Kosala in which we learn from a few emails sent by his law firm, that Kosala offered to buy out Taylor for $1M.
And on Reddit, /u/shanecorry uncovered some more info: MyEtherWallet LLC was dissolved (or requested dissolution?) on the 29th of December 2017 (signed off by Taylor).
A 2nd dissolution document states the dissolution is being requested by members (shareholders?) who own more than 50% of the company combined but that not all members (of which there is 3, see below) are in agreement to dissolve the company.
Aside from whoever is right and will win, which is not of particular interest to the writer, what is fascinating about reading the lawsuits and other documents is the realization of the state of our governance infrastructure. Which is basically NIL.
Kosala had to request a date and time to go somewhere to review books and other documents of the company. How medieval is this?
I am indirectly a shareholder in more than 100 companies all over the world, so I might be feeling the pain more than others, but the opacity and lack of recourse is really stunning.
Oftentimes small shareholders in companies don't really have a say, and whatever documents everyone signed are completely disregarded by the company which ends up doing whatever it wants knowing that no-one has the time money and energy for a legal battle.
This is what really made me the most excited about crypto-land. I got in love with Bitcoin early on, but when I discovered the possibilities for decentralized governance, I fell even more in love with Ethereum.
My guess is that in 20 years, we will not have to deal with this paper crap anymore. Won't been soon enough.
3) Front-end forks vs chain forks
We've obviously seen a lot of chains being forked, but this is one of the first examples of the front-end, final customer UI being forked.
I'm not even sure we can classify MEW as a proper dapp, but I imagine this happening more and more.
It's a fascinating albeit scary thing to think about for investors as it makes it even harder to answer the question: where does the value reside?
Superb post by 0x's Will on some mechanisms to prevents attacks in decentralized exchanges while maintaining networked liquidity.
"The 0x protocol is designed in a modular way such that we can create novel solutions that sit one layer above 0x’s system of smart contracts. This will ultimately require us to set the 0x order schema’s taker parameter to a smart contract address."
Colony announced that the source code for the Colony Network contracts has been open-sourced.
Unlike other projects who rush towards network launch, trading off some elements of initial centralization for speed to market, Colony is taking all the time in the world to ensure there will be no centralized legacy when the time comes to go live.
A couple of guys have devised a way to fulfill multiple payments on different Lightning channels at the same time.
They call it AMP Atomic Multi-Path Payments, and you can use them today on Lightning.
The existence of such a construct allows a sender to atomically split a payment flow amongst several individual payment flows. As a result, larger channels aren't as important as it's possible to utilize one total outbound payment bandwidth to send several channels. Additionally, in order to support the increased load, internal routing nodes are incensed have more active channels. The existence of AMP-like payments may also increase the longevity of channels as there'll be smaller, more numerous payment flows, making it unlikely that a single payment comes across unbalances a channel entirely. "
We were lucky to be able to get one of the Alpha eggs in the giveaway the past week, as they've run out in minutes with every new issuance.
Now you can earn eggs by referring users until the 16th here.
The game is fairly complex with different egg phases, qualities, stars alignments, breeding, re-incarnation and in-game currency. You need to keep your Ethergotchi alive obviously, and I am expecting I will get poor from gas fees.
We're very much looking forward to seeing this one live.
_____ Bonus I: even Baidu has launched a crypto-kitty style game, but for virtual doggies and built on the Achain blockchain.
Bonus II: Spankchain launched CryptoTitties. Expected no less.
Harbor is the first project incubated by David Sack's new fund Craft Ventures and it's awesome.
They are building a decentralized compliance protocol for the issuance and secondary trading of tokenized securities and the first project under their belt is a new open-source token standard called R-token (whitepaper here). It will be an additional layer built on top of ERC20 that bakes compliance into the token itself, meaning that custom business logic will be coded in to ensure specified requirements (e.g. KYC, AML, accreditation, caps, holding periods) are met before a trade is approved. R-tokens will be therefore natively compliant securities that can freely circulate between exchanges and wallets without enforcements from the gatekeepers.
Harbour also announced a $10 million Series A round led by Vy Capital, Fifth Wall Ventures and Valor Equity Partners.
David Sacks was interviewed about it on CNBC and the transcript is available here, it's worth a read as he also touches on Craft's investment thesis.
An interesting case of a city developing its own financial system outside of the US federal government. Threatened by Trump's tax reform, Berkeley is planning to tokenize and issue municipal bonds on the blockchain in an attempt to attract funding directly from residents who care about affordable housing.
The idea is that these tokens, backed by actual bonds, can become accepted as a medium of exchange in the local community.
The Aragon team have launched a R&D effort with a handful of other projects. The idea is to collaboratively explore governance use cases and implementation that ultimately will benefit all projects involved and beyond.
It is operated as a shared Github repository under the Aragon Github where anyone in the community can submit ideas and contribute code for working groups. The first two working groups are on Token Curated Registries and Liquid Democracy.
This will be a good place to get a sense for what's going to be hot tomorrow.
A take on the million-dollar homepage model, in Blocklord you can buy any block of the world on map for 0.01ETH.
You can then earn rewards if people buy a block next to yours, you can sell your block, but you could also get “bought out”, and in that case you’d get back your original price paid plus 80% of the rest.
His name is Christopher Giancarlo, the Chairman of the US CFTC who won the hearts of many in the industry at this week's Senate Banking Committee heard testimony.
“We owe it to this new generation to respect their enthusiasm for virtual currencies, with a thoughtful and balance response, and not a dismissive one”.
He went as far as describing the meaning of 'hodl' (his version goes “Hold On for Dear Life”, but we still love it), calling his niece a 'hodler'. Let's let that sink in for a minute.
As way of background, the US Congress called this testimony from Giancarlo and SEC Chairman Clayton to better understand how digital currencies can fit into the existing financial regulatory landscape.
The outcome of the hearing was undoubtedly bullish for the industry, with the known alarm bells (Clayton mentioned “ICO” 132 times): regulators have the situation firmly under control and they understand the “enormous potential” of distributed ledger technology, encouraging people to “pursue it vigorously”. Giancarlo even stated that, had blockchain public ledger technology existed in 2008, we may have have been in a stronger position to measure counter-party risk and respond to the financial crisis.
“As we saw with the development of the Internet, we cannot put the technology genie back in the bottle. Virtual currencies mark a paradigm shift in how we think about payments, traditional financial processes, and engaging in economic activity. Ignoring these developments will not make them go away, nor is it a responsible regulatory response.”
For a comprehensive tweet-sized summary of Clayton's testimony we suggest reading Peter Van Valkenburgh's thread, while here you find the transcript of Clayton's testimony and here Giarcarlo's.
No week goes by without another event in the Tezos drama.
The SEC has denied access to information pertaining to Tezos to an attonery who's representing plaintiffs in a class action lawsuit. This could indeed suggest that the SEC is working on enforcement activities related to Tezos.
European Central Bank president Mario Draghi opens up the possibility of European banks holding reserves of Bitcoin.
"...the credit institutions established in the European Union are showing a limited appetite for digital currencies like Bitcoin, notwithstanding the high level of public interest. However, recent developments, such as the listing of Bitcoin futures contracts by US exchanges, could lead European banks too to hold positions in Bitcoin, and therefore we will certainly look at that."
Crypto funds ain't cool anymore, crypto merchant banking is where it's at.
In the last stage of his come-back, Novogratz has apparently raised $250 million in a private placement to build what sounds like the Goldman Sachs of crypto, a mixture of prop trading, principal investing, managing third party capital and advisory work.
The process is structured in a rather complex way, including the acquisition of a Canadian startup and the reserve take-over of a listed shell company, involving investors like the CEO of China's Foxconn.
Coinbase is setting aside $2,500 a month to support open source projects, or approximately 0.000003% of their 2017 revenues.
While undoubtedly being a negligible sum for an insanely profitable company, this is a welcome first step from a centralized organization like Coinbase that relies on some open-source software. It also acts as a painful reminder of the open-source development funding issue: it's very arduous for the long tail of open source developers to continue developing in absence of more scalable funding mechanisms (that do not involve an ICO).
Projects like Gitcoin, Fundrequest, Oscoin and others have emerged to address this gap.
We continue to witness some of the most successful entrepreneurs, investors and developers gravitating towards decentralized technologies.
We're hearing rumours of Uber co-founder Travis Kalanick making moves into the space, as well as Linkedin co-founder, and now Reddit co-founder Alexis Ohanian announced that he will step down from the company to devote his attention to Initialized Capital, the early stage venture capital firm that he co-founded. He will focus on emerging technologies such as blockchain.