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Message from the Editor:
You are reading the 100th edition of the FF Newsletter. Over the last (almost) two years, our only goal was to be the best place to get updates and insights on everything related to DAOs, social tokens, and web3 communities.
The Forefront Newsletter will always be free. If you've enjoyed since you've subscribed, send out a tweet of appreciation with the hashtag "#FF100" or buy an edition (of 100) on Zora to show your support, available for the next 100 hours.
Thank you for taking this journey with us to the Forefront of Web3.
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Fresh off the press:
▹ Week's Top Signal
▹ cc0 "Summer" is here!
▹ Marc Boiron on Decentralization
▹ Luca Prosperi on Nouns Dilutive Governance
▹ Kevin Owocki on Sybil Resistance
▹ Uniswap Upcoming Fee Switch
▹ ... much more
Plus: Market Pill, What else is Poppin'
Let’s get into it.
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The new buzzword on crypto Twitter is cc0, and it is an indication that NFTs are beginning to truly reach their potential.
Flashrekt and Scott Kominers wrote a piece this week in a16z Future about why NFT creators are going cc0. This license basically allows the creators to reserve no rights over the work. Nobody has to pay royalties, attribute authorship, or even say where they got the work from. The benefit? “cc0 licensing lets creators more easily ‘seize the memes of production.’”
While not every project needs to go cc0, the benefit comes in allowing for true community unlock. Anyone can do anything with the work, and anyone can make money off of the work that they do. With no limitations, the “meme” can spread far and wide, and the community can guarantee that they won’t get rugged by a centralized entity later down the line.
But what if the opposite happens? This week, Kevin Rose announced that the Moonbirds project would now be cc0. Some holders were upset that they were not given a choice over the license – they could no longer exclusive monetize the rights over their specific Moonbird.
Projects like Nouns, however, have proven that monetization is still possible (maybe even moreso) in a world of cc0. When the creative power of the community is fully unlocked, who knows what can be accomplished.
TAKE NOTE
cc0 is open source media – anyone can take it, remix it, sell it, and compose it. In the true spirit of web3, we should be exploring more and more how we can build a world with open source technology and media at its core. CC0 Summer is upon us!
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Eating Through The Internet. Crate Digger is a series by Forefront editor Julia Pepper on how the blockchain is affecting and creating internet subcultures. In her genesis piece of the series, Julia explores the world of web3 and food. She begins by observing how our relationship with food has evolved since the onset of social media. Julia then highlights a few web3 communities that are active today, including Thirsty Thirsty and DinnerDAO, to learn more about how they are using crypto to change that relationship with food and with each other. All in all, this piece not only is an incredible introduction to the web3 food subculture, but also opens our eyes to the wide range of subcultures that have been and will be formed alongside the rise of web3.
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Sufficient Decentralization. Since 2018, when the SEC first coined the term, web3 builders have focused on building “sufficiently decentralized” networks and technology. Most of this effort, however, has focused on the technology itself – not necessarily the off-chain organization that lives to support or use the technology. This piece from Variant goes deep into investment contracts, securities, and what it means to be decentralized in the eyes of the law. For example, the piece highlights how the BD arm of an organization might be decentralized by providing grants to a wide range of community members and encouraging independent action. On the software side, open sourcing code and encouraging integrations is a step in the right direction. This piece is a must-read for absolutely anybody building in the space – regulation may not be 100% clear, but there is enough information available that can allow builders to make smart decisions.
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Go Fork Yourself. Historically, democratic governance could be boiled down to groups of people voting on decisions that were highlighted from the top-down. What if we viewed the goal of DAO governance as a way to force people to disagree on a whole host of decisions proposed from the bottom? With this question in mind, Packy, David, and Luca argue that the real promise of DAOs might be forking: getting people to disagree and discover subcommunities where they're aligned and create their own version of a project. This idea would turn governance into a social network, where our interactions would be agreements and disagreements over firm proposals. The design space here is endless, and projects like JokeDAO are turning these ideas into reality by building tools for bottoms-up governance.
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Upcoming Uniswap Fee Switch. A “consensus check” on a proposal to activate fees on a select few Uniswap pools (DAI-ETH-0.05%, ETH-USDT-0.3%, USDC-ETH-1%) has garnered overwhelming support. The voting began on August 4th and is set to run for 5 days, ending August 9th. While many concerns have been flagged, particularly from the perspective of liquidity providers on the protocol, the community seems eager to experiment with the pilot, which will last at least 120 days before it can be overturned by governance. The results of this experiment will play a huge role in understanding how best DeFi protocols should monetize and drive value to token holders. Additionally, there should be signs as to whether the Uniswap brand can counteract the negative effects of a fee, or if LPs (and thus traders) will shift over to other protocols. This is a very exciting development to keep an eye on.
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Nouns DAO: Organically Dilutive Governance in Motion. Yet another Nouns DAO post – but this one is a fantastic exploration of dillutive governance and value-accrual throughout the ecosystem. Specifically, Luca explores how the constant inflation of Nouns supply (plus the high cost) makes it extremely difficult for governance to be gamed or deemed useless by a 51% attack. We would expect the price of each new Noun to decrease over time, but this hasn’t been the case. The constant expansion of the Nouns supply has led to more stakeholders coming into the ecosystem to drive value, which in turn has increased the cost of consecutive Nouns over time. While there is no direct way to measure the impact of individual proposals, the system seems to be working given the positive economics of the ecosystem thus far. Nouns continues to be one of the most interesting projects in the space – happy birthday Nouns!
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The Current Scene in DAO Compensation. Mikey from Hedgey begins this piece with a simple argument: “A sustainable compensation model can be a make-or-break for DAOs trying to retain and onboard contributors, especially in a bear market.” DAOs across the ecosystem are struggling to maintain and grow their contributor bases as we continue to explore how to build sustainable, positive-sum economic models. Native token incentives are used widely, but many DAOs are moving to hybrid compensation to ensure that contributors can pay their bills and that there isn’t intense sell-pressure on the token. Hedgey is building tools to alleviate this problem by making it insanely easy to manage token lock-ups. As the space continues to evolve, it will be interesting to see what new trends emerge, and how many DAOs adopt tools like workstreams and vesting token distributions.
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Characterizing the Sybil Resistance Problem. This post is Kevin Owocki’s attempt to share all he has learned about Sybil Resistance. He dives into problem identification and explanation, before exploring through the lens of an iterative, evolutionary game. The Gitcoin DAO team has been working tirelessly on this problem to ensure that Grants cannot be gamed, especially given their use of quadratic funding and its emphasis on funding projects that the most people support. Sybil Resistance, however, is becoming increasingly important across DAOs as many more continue to flesh out their governance processes and put more on-chain. Interestingly enough, Kevin considers Sybil Resistance a side-quest for all protocol development: “But if you look at it from a certain angle, because Gitcoin Grants requires sybil resistance, every Gitcoin Grants round is actually a giant red team / blue team exercise for battle testing Digitally Native Sybil Resistance technologies.”
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On August 16th, we are hosting the first NFT Financialization hackathon to surface the next generation of protocols that enhance the productivity, utility, and financial use cases of NFTs. Sponsors include NFTfi, NFT Bank, Ronin, NFT Perp, and Sudoswap. $25k+ in prizes & up to $34k in bounties. Macro Hackathons is an initiative by 1kx and Macro DAO to drive experimentation in emerging web3 verticals. Read the full announcement and register here!
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Market data on the last 7 days. Last updated Aug 8, 2022
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Updates from the DAO
— Three new proposals passed this week: Everyone’s a Contributor, Ed’s renewal as Product Lead, and Tony’s renewal as Dev Lead.
— We published Eating Through the Internet, a piece on the web3 food scene by FF Editor Julia!
— This is the final week of the W3CR, so make sure you show out to any events you’re able to attend!
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Firelight
— The full synthesis of this week’s W3CR can be found here. This is the last week of the W3CR - join us!
— Kabuki, multi-disciplinary artist, musician and dj, continued building out his generative NFT project using the no-code tool Cables GL. Kabuki’s sessions show him dancing the fine line between structure and play. He also demonstrates the importance of allowing ourselves the space to make errors and enjoy the process of problem-solving.
— Solarpunk artist, designer and developer Nico took us on a thrilling, video-game development ride. As a self-taught game developer, Nico reminded us of the bounties of open-source education available via a simple Google search. Ultimately, one needs conviction to keep at it and, perhaps most importantly, communities and friends to help you along the way.
— 3D artist and musician D3MO crafted an intricate “inspo board” inside of Blender that traced the inspirations behind a recent addition to his “yh4” collection. The branching “map” of inspiration included Alan Watts’ thoughts on Zen and a convo on water’s archetypal movements with SpaceXponential. The “map” resembled fractal forms in Nature, particularly, the organic growth of trees. We are all conduits for a greater collective intelligence, says d3mo. Thus, there is no reason to be pessimistic about AI as a creator. If you remix your perspective, you can realize that creators are channels of creative energy, rather than “owners” of what is created.
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◎ Check out FF Signal for more headlines
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