Time for some personal news this week, as Stefano announced he's joining Aragon as the new executive director for the Aragon Association.

More details in the post.
Regarding Token Economy, not to worry - we're still going to be writing in even if sometimes with some delay (like this issues, apologies).
Additionally, Stefano will try to keep the bias to a minimum - but it's best to keep in mind the potential for bias or conflict.

Sina and Robbie share the summary of their deep dive on security tokens in a very structured and logical dissection of opportunities and challenges in the real estate vertical.

The key takeaway is that the gating factors are typical of any two-sided marketplace, rather than technological. Unlocking liquidity on a global scale though could enable new kind of products in the long term.

Bonus: The Harbor platform went live this week with its first security token offering, a tokenized REIT from Convexity Properties representing $20M of private equity in The Hub at Columbia.

Another great part of a series on Bitcoin fundamentals by Hugo.

This one goes back in history and philosophy looking at the definition and main function of 'sovereign state' (to protect property rights), and how public-key cryptography’s application in digital hard money completely redefines the idea of private property making it *independent of jurisdiction or the law*. 10 years in, and it's still very hard to visualize the long term impact on society of this very powerful concept.

The post ends with a very thought-provoking question: "if securing property is the primary function of a state, then will its role — and power — be significantly reduced in a world run on digital hard money?"

Tony Sheng raises a fundamental question about how to grow networks beyond the early adopters "ethos users": growing the market of true believers or accepting some trade-offs to appeal to the mass market of "ethos-agnostic users", at the risk of alienating the former?

With a large number projects going live in the next 12 months, this debate will be top of mind for everyone in the industry.

Tari Labs University published an analysis of the criticisms the community has expressed on Grin design choices. Worth a read if you are following the project.

In the Grin newsletter it was stated that Tari's report contained a number of inaccuracies, however we have not been able to track the response (if you've seen it please send it across).

And while we are on the topic, Jordan from Scalar published an excellent introduction of MimbleWimble, the privacy-oriented protocol of which Grin is one of the two implementations (both supposedly launching in the next month or two).

This is shaping up to be one of the hottest things in 2019 crypto.

You may not learn anything new, but it's notable that the CFTC has just published a 32-page primer on smart contracts, outlining a series of potential benefits and risks for registered entities that may want to adopt them.

Note how slide 26 suggests that "facilities" (unclear whether that includes protocols or front ends?) trading or processing smart contract-based derivatives need to be registered.

Albert Wenger makes the case for Blockchains to move Turing complete computations off-chain while natively supporting on-chain verification of ZKP certificates for such off-chain computations.

(this is one of the use cases that got us excited about the work Starkware is doing in this space).

USV has clearly been spending a lot of time with regulators and policy makers talking about the dangers of centralization and what can be done about it.

In this post Fred shares some of the arguments they typically bring up in those conversations, picking up on a recent post by his colleague Albert on how Twitter should not be thought of and run as a traditional publisher. Instead it should 'decentralize power to the edges of the network', empowering the endusers:

"We need the decentralized tech stack to evolve more quickly and show the world how decentralized technology works in a mainstream way at scale before policy makers and regulators force the tech sector to go the wrong way."

Bonus: in this context it's also interesting to see Google employees taking a strong stance against their employer and project Dragonfly.

In case you've been sleeping under a rock, crypto markets have brutally tanked since mid-November.

Here Hash CIB does a great job at analyzing the drivers that sparked the violent downward move while debunking some popular narratives (eg ICO treasuries selling out).

Following naturally from the previous post, if you are asking yourselves 'when moon' again, Boris crunches the numbers and comes up with some estimates for the amount of fresh fiat and volumes needed to fuel a recovery to new highs for BTC. 

(spoiler: potentially a truckload of it, though the range is wide)

His point being, we've been down there before but every time it takes more $$ to get back up.

Crypto and decentralized governance is one of the most fascinating areas of new research, as it ties so many different areas: tech, politics, social sciences, psychology and more.

Here the team at Cleanapp tries to summarize the differences in thoughts by Gavin and Vlad. Worth a read if you're interested in the topic.

Extremely interesting proposal from Jieyi Long about Plasma SNARKs.

Essentially this is what he's suggesting: a system that uses SNARK for signature validation and the EVM for state transition. In this system the transactions would be private and the only visible change would be the final user balance of the specific token after each block.

Reading the post would make it more clear than my explanation though :D

Another dashboard for all DeFi activity, aiming to become the "Bloomberg Terminal for Ethereum". 

For now there's some data from the Compound money markets.

Cool visualization of ETH locked up in DeFi smart contracts over time. 

Nice looking chart, eh? Ok, now click on Maker...

Barriers to interacting with Dapps are rapidly coming down thanks to products like Gnosis Safe by the Gnosis team, who have released on Android the first mobile smart contract based wallet with multi-factor authentication, which works in tandem with a Chrome extension. 

A lot of the complex stuff is abstracted away, it looks slick and crucially losing or getting private keys stolen does not compromise funds, which is amazing. The on-boarding still requires quite a number of steps, having to switch from app to browser and back to app, set up passwords on both ends, write down seed phrases and ultimately to load up the safe with ETH from an external address, which an average user at her first go may still find slightly overwhelming despite the good UI. 

Bitski is finally doing something I've wanted for a while now.

It's essentially what Coinbase could have been (and should still be) and what could be called a Paypal for crypto.

I'm a fond believer we need a super easy fiat-to-crypto gateway that can be used in dapps around the web3, and I'd argue it would need to be even much simpler than Bitski.

In any case, congrats to the team and the investors. And if you're building something in this space, please please reach out. 

The Commonwealth Labs team are introducing Edgeware, a new blockchain that aims to be a testnet for on-chain governance with real incentives. Edgeware is built on top of Parity Substrate and through Polkadot will ultimately interoperate with the Ethereum blockchain.

They are also experimenting with a new distribution mechanism defined as a "lockdrop", whereby to get the native token one has to lock up some ETH for up to 3 years, after which they can get it back. Effectively an incentivized version of a traditional airdrop.

A fascinating vision from their paper:

"Edgeware can become an environment to deploy applications that need to be deployed in a lower-stakes manner, yet still have a greater incentive  to  attack  than  existing  testnets. Over  the  longer  term,  we  believe users will run Ethereum and Edgeware dapps alongside each other—perhaps using high-stakes financial applications on Ethereum, and user-experience-critical applications on Edgeware."

Get ready for NFTs to land on the PlayStation 4 in Q1 next year.

Plague Hunter’s in-game assets will be pegged to NFTs and tradable P2P with other players.

Not a new fund, but a refreshed one (and apparently bigger too) with a new lead, after Nic Carter and Matt Walsh left earlier this year.

Good to see a big name back in action at the early stages.

Big congrats to our friend Carlos and his team for closing a healthy Series A round for the digital security issuance platform Securitize.

The round was led by Blockchain Capital, whom Securitize helped 'securitize' their BCAP token, with participation from Japan’s Global Brain, Ripple’s Xpring fund and Coinbase Ventures.

And it sounds like they will be eating their own dog food next year.

This London-based team, emerged from Entrepreneur First earlier this year with Creditmint, have just closed a $2.1M round led by ConsenSys to bring to market Atzec Protocol, which enables confidential transactions on the Ethereum network. Notably, Joe Lubin himself is joining the board of the company.

The protocol uses ZK-SNARKs to hide transacting addresses and amounts, and they have a proof of concept that works with DAI, but they claim it can work on any Ethereum-based asset.

Having private transactions effectively as an add-on to Ethereum would be pretty amazing. More on their Github.

Fliside Crypto has closed $4.5M from Coinbase Ventures, DCG, Castle Island and True Ventures. They provide detailed fundamental analytics (like developer activity, trading and utility signals) and benchmark scoring for crypto assets. 

Hopefully no one is surprised by this one. Mayweather and DJ Khaled got charged by the SEC for "failing to disclose payments they received for promoting investments in Initial Coin Offerings (ICOs)".

Back in October the NYT covered Mayweather's crypto exploits with a wonderful article titled "How Floyd Mayweather Helped Two Young Guys From Miami Get Rich". How time flies...  

Our most avid readers may remember this back from issue #31:

"The whole thing is so weird that we don’t even know where to start, from their supposed acquisitions of a 100-year old bank and a 25-year old investment bank in one go, or from their announcement of a nonsensical “crypto treaty”, or perhaps from the fresh endorsement of non less than retired boxer Evander Holyfield."

As expected it didn't end well for its founder and CEO, who's been arrested by the FBI and charged with three counts of securities fraud and three counts of wire fraud. If convicted, he'll spend the rest of his life behind bars.

Interesting precedent in a federal court of California, where the judge denied the SEC's motion for preliminary injunction over a token issuer on the basis that the Agency could not prove the ICO satisfied the Howey test (link in the headline is to Marco Santori's tweetstorm, while here's the full order).

One takeaway from the decision seems to be that airdrops may be safe (the court made the point that there must be a “risk of financial loss”).

This to show that it's unlikely all ICOs will be thrown into the securities bucket by default.