📌 An opinionated recap of the most interesting news in crypto
Token Economy
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🏚 Downsizing season
Winter is here, and with it the cold chills are taking away the luxury of secure jobs and constant employee # growth in a number of projects.

The focus this week in the media has been Consensys and its round of layoffs. (Here's an AMA from one of the people let go).
It's always a bit scary how the media can pick a target it never had anything to say about, and then attack it like it. You can almost see the pleasure in the media's eyes of someone not being successful. I can understand it with Theranos, or Stox, but not with companies like Consensys.

Even if it does some things we might not appreciate, the role of Consensys in the ecosystem is undeniable. The boldness of it is stunning as well.

And course-correcting for a while is just absolutely fair. Who are we to say what they should have done during the bull market or how they should have run their firm?

But with this context, it is hard times for many projects like Consensys which have counted on a lot of funding, but whose commercial success is unlikely and in any case far off in the future.

Many are downsizing, some are even closing down dev efforts entirely. That being said, VCs deployed staggering amounts of capital, so I'm sure mostly everyone will be able to land on their feet thanks to some Silicon Valley cash, at least for the next few years (and then hopefully a new bull run can start!).

The team at Consensys responded to the critics with a piece detailing Ethereum by the numbers, in which you they try to spread optimism about the ecosystem.
As someone very involved in it, it does seem that the pace of innovation, development and talent inflow is inversely correlated with the price action. The stuff we have now, is just another level from what we had at ETH's ATH.
Every day we have something that's more usable, more innovative and more importantly that can be improved upon in an exponentially increasing pace of innovation.

Suffice to say, we're very long Ethereum (we're not that clear on ETH instead).
Muneeb and the team at Blockstack are not impressed with CBC (and Vlad is not particularly impressed with the post).

In a long post they explain why the paper just solves for correctness but doesn't consider liveliness at all.

Vlad says that this aspect is going to be addressed in future work, so there isn't really any constructive criticism in here.

You can read more to think about the shortcomings or potential of this specific ETH 2.0 proposal, but I think what Muneeb and team are doing here is very important, and something I've been proposing for a year and a half when I started proposing people share more public due diligence efforts for token sales. 

Obviously some reviews will be more helpful than others, but just engaging in the act is a net positive for everyone.

Doing so for technical whitepapers is even more important, as even less people can wrap their heads around the complicated cryptography and politics.

So thanks to Muneeb and team, and looking forward to seeing more of these.
0x is on an absolute roll, and in this post they share some ideas of cool things that could be built on top of their protocol.

The most interesting thing here is to note how horizontal of a protocol it is, and how versatile.

But really the most obvious thing is that we're just at the beginning of all of this. We now have new technical tools, like the 0x protocol, that enable so many new types of applications, and we can't wait to see some of these built.
Featured on Token Economy, by David Truong

Bonding curves continue to be a hotbed for experimentation or economic models. In this post David describes the design of "bonded donations" where early supporters have a financial incentive to evangelize the cause and bring in more donors. 

This is interesting as it expands the donor pool beyond the intrinsically motivated supporters to the financially motivated ones, ultimately to the benefit of the cause.
The concept of 'decentralization' has been debated over and over, and it's fair to say that it's been mostly abused and not fully understood in the last couple of years.

Ali from A16Z shares his framework to think about what decentralization actually means in the context of crypto networks and we think it's a helpful one.

His contention is that at the end of the day it's all about power structures and who of the "4 horsemen" he describes wields power:

"[Decentralization is t]he degree to which power and control over a network is distributed across a large and representative base of independent human actors."

Bonus: along the same lines, you might enjoy Epsilon Theory's Neville Crawley interviewing Alex Gladstein of the Human Rights Foundation about anti-authoritarian technologies.
We've mentioned in the past how cool Uniswap is.

This is a great post by Scalar detailing how it works and why it's probably one of the highlights of the year.
We'll bookmark this for a rainy day read, but wanted to surface it regardless as Livepeer has been object of several case studies recently. 

This one by Vision Hill is a very long, detailed and data heavy post dissecting the economics of staking the Livepeer token for an investment fund. 
A rather simple but very poignant post by Albert Wenger given current state of crypto prices.

They tl;dr is that while we had similar corrections in the history of crypto, this was by far the one that got most media attention and therefore any new entrant will need to accept "perception risk" (ie many have been burnt in the past) on top of "return risk". 

So don't expect institutional investors to start piling in causing a V-shaped recovery, it's more likely to be a long and slow one similar to the post-dotcom one.
If you have a spare 30 minutes for an overview of ZK-Proofs, here's a recording of fellow Italian and Berkeley Prof. Alessandro Chiesa (co-founder of Zcash and now of Starkware) on stage at the Scalar Capital Summit back in October.

(disclaimer: we are investors in Starkware Industries)

Bonus: a ZKP "starter pack" with links to the main learning materials.
💥Newsy stuff
- 51%. Vertcoin was 51% attacked in 4 different occasions. Here's the analysis that shows how it won't be the last coin to suffer from this.

- More crunch times. An ETC development group had to shut down due to the market crash and lack of funding options.

- Token (re)design. Numerai announced an overhaul of their NRM token (including a 50% reduction of supply), following the unveiling of Erasure. It's tempting to see an emerging narrative in this, but Numerai is a rather unique case (a token actually used AND a centralized entity that can implement the changes).

- ICOs. A mere $65M was raised via ICOs in November according to Token Data, two orders of magnitude below the heydays. Suffice it to say that this deserved its whole section in earlier issues of TE.

- ETHSingapore. List of finalists.

- Down under. Australia's House of Reps has passed the Anti-Encryption Bill, allowing law enforcement to force Google, Facebook, WhatsApp, Signal etc to help them access encrypted comms. File under "why crypto".
- Interesting comments from the Swedish central bank. Two stand out: “Sweden will probably become cashless in 3-5 years” and “If we don’t do anything we are looking at a future where money will be spontaneously privatized.”

- Ryan Zurrer is out at Polychain. We also learn that a LP is supposedly suing the fund. Fun times for everyone.

- BitcoinMagazine is going back to its roots and will only cover BTC going forward.
😎 Cool new projects
We've always been impressed with 0x, but the pace of product shipments is something out of this world. This week they release Instant, a quick and secure crypto purchasing flow powered by the 0x protocol.

As I've tweeted, I think something like this is a key to getting more people to use dapps. Hopefully we can add an instant fiat-to-ETH layer in front as to make it completely seamless.

(Also amazing to see that the GIF demo is for the Balance wallet of our Unplug-alumni Richard!)
If you've read last week's issue to the bottom section, you'd have picked up the news of the funding round and first glimpse at Aztec Protocol.

In this post CTO Zach sheds more light into what's happening under the hood in really accessible language, what's on the roadmap and why it's all very exciting.

Having confidential digital assets on top of Ethereum is indeed a potential game changer enabling a whole range of new use cases, and yet another major platform lock-in.

Bonus: Zach was also on our friend Jeff Tong's podcast discussing Aztec (and here's a tweetstorm summarising it if you can't make the time to listen to it).
The DAI ecosystem is structuring itself more and more every day. Now with the new dashboards for individual CDPs and more data, it's even easier to understand what is going on in this weird corner of the web3, which is showing us the future of DeFi.
The battle of the stablecoins continues, and this week Synthetic launches on mainnet with the ability to mint synthetic USD backeb by its own token.

Differently than MRK/DAI, the collateral is not in a third party currency, but in the utility token itself, which makes it all the more scary.

One really cool thing here tho is the shared collateral liquidity pool, meaning that minters can change one flavor of a synthetic coin into another (sUSD to sEUR) without having to exchange them with someone else.

Maybe a hint to what some FORdEXs could look like.
Last week was a big week for transparency, as Messari unveiled their open-source disclosure registry for token projects and its first 12 partners. Coindesk had a good coverage of the launch.

The hope is that this will become a major force towards transparency in 2019 and beyond, in an industry that to date has been plagued by bad actors and absence of disclosure standards.

(disclaimer: we are investors in Messari)
We've lost track a bit of what Team Just and the PoWH/FOMO3D gang have been up to lately. Our bad.

It turns out one of their community developers has just released a new token called P3X which is pegged to their existing token P3D, extending its functionalities and programmability. 

This continues to be one of the most intriguing communities in crypto, and we look forward to seeing what else they'll be experimenting with in 2019. 
Fascinating. One can now buy r/ethtrader's top banner with Donuts (the reward units of the sub-reddit) and set up any picture.

The pricing model is inspired by the Harberger Tax:
- The current owner sets the price for the banner
- They pay a daily tax rate of 1% by burning Donuts
- If the owner cannot pay the tax, the price goes to 0
- Anyone can buy the banner at its advertised price
- The owner cannot refuse to sell it at that price

It's interesting that this is an initiative by the Reddit admins. It feels like the future of internet advertising is somewhere in there.
Curated on a Product Hunt collection!
💰 New funds
Interestingly two ecosystem funds popped up this week, after not having seen one in a while.

The first one is sponsored by DCG (large holders of MANA and LAND) and it's focused on investing in companies building on and developing the Decentraland ecosystem further.

Its first two investments are Vegas City (the equivalent of a real estate developer but for a specific district in Genesis City) and Artie (a platform for intelligent avatars).

So out there, but such an incredibly fascinating experiment.
The second one is by Gnosis and will be grant based, with quarterly batches starting in the new year, focused on encouraging the community to "build modules and integrations for our diverse products, enhance the overall user experience, and develop market mechanisms and governance tools."

The goal is to ultimately enable the community to take part in decision-making of how grants are allocated, mostly likely through a DAO.
💸 Funding rounds
ErisX has closed a $27.5M Series B round to build a regulated crypto spot and futures market for institutional investors, and presumably to go head to head after Bakkt.

The round was participated by Bitmain, ConsenSys, Fidelity Investments, TD Ameritrade, Nasdaq Ventures,  Monex Group and existing investors CTC Group Investments, Digital Currency Group, DRW Venture Capital, Pantera Capital and Valor Equity Partners.
Sequoia China, Baidu Ventures, crypto mining firm F2Pool, exchange Huobi, Metastable and IMO Ventures have backed the Conflux Foundation to the tune of $35M.

The team behind the project counts scholars from the University of Toronto and China’s Tsinghua University, including a Turing Award winner.

The project itself seems to be focused on developing yet another scalable smart contract platform, based on DAG. 
ℹ️ About us
Token Economy is written and curated by Stefano Bernardi & Yannick Roux.

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