Hey fam, welcome to the issue 86!

▹ Week's Top Signal
▹ Forefront Creator Residency
▹ The Elondrop by Balaji
▹ Variant Fund on Ownership Economy
▹ What's next for Crypto Gaming
▹ Optimism Collective & Airdrop
▹ ... much more
 
Plus: Market Pill, Member Spotlight, What else is Poppin'

Let’s get into it.

—

The Otherside, Yuga Labs’ land NFT project, brought in over $317M in sales, making it the largest ever NFT minty. But the scale wasn’t the only notable thing about this project.

First off, buyers had to pass a KYC verification and had their crypto wallets pre-approved on the project's website. This led to massive criticism leading up to the sale, but obviously didn’t stop a huge wave of investors from participating.

Second, on-chain data revealed the Otherdeed gas war led to the sale running up an additional $172 million in transaction fees that cost individual buyers between $4,000 and $10,000. Folks like Brian from Rabbithole and Andy from Fractional tweeted that this could be ammo (intentional or otherwise) to justify the creation of “ApeChain,” a separate blockchain built by the Yuga team.

The whole Otherside saga continues to demonstrate Yuga Labs’ absolute dominance within the NFT space and beyond. Yuga Labs is creating the playbook on building a web3-native powerhouse brand in real time: buying Punks, new NFT drops to expand the collection (MAYC), and bootstrapping an economy through ApeCoin. Given their massive VC fundraise, it’s only a matter of time before Yuga looks for a new frontier through which to grow their influence.

TAKE NOTE
Yuga Labs is not just building a brand – they’re building a microeconomy within their metaverse. ApeCoin has the potential to completely disrupt the way we view social tokens today, or come crashing down as the growth proves unsustainable for the web3 juggernaut. Soon we will find out.

The Elondrop by Balaji. This is one of those ideas that only Balaji can explain: “Elon should go over the heads of the establishment to offer all Twitter users a deal: every account worldwide gains full control over their username in a crypto wallet, plus a share of Twitter's new coin, if they can help him get the requisite legal clearance in their jurisdictions and the acquisition goes through.” Forefront is focused on supporting tokenized communities, and this is an ideal use case for creating one to decentralize and fight for Twitter’s user-ownership. Balaji argues for a model that puts ownership before activism, giving folks a reason to support Twitter in government vs. fighting the battle themselves.

The Ownership Economy 2022. In July of 2020, Jesse Walden from Variant Fund published “The Ownership Economy,” an essay that helped speak life to the web3 movement and highlighted the need for (and benefits of) user ownership. This week, the team is back with an updated essay, with new challenges and frontiers. Most interestingly, the team argues that user ownership can jumpstart growth, but isn’t a replacement for building a product that people want. Great stuff from Variant.

NFT Subscriptions Are Better Paywalls. Joon Ian Wong argues in CoinDesk that “NFTs are better subscriptions,” similar to this piece from Joey DeBruin on Forefront. Joon argues that NFT subscriptions allow for customers to own their “keys” to content, allowing for cross-platform portability and more composability between publications. Not only that, but NFT subscriptions are probably cheaper for publishers, since they don’t need to build their own infrastructure. As time goes on, we’ll continue to see more experiments in token-gated media.

Introducing the Optimism Collective. Optimism, the Ethereum L2, announced the Optimism Collective this week. OC is a “large-scale experiment in digital democratic governance, built to drive rapid and sustainable growth of a decentralized ecosystem.” The Collective is also an experiment in retroactive public goods funding, an idea in-part developed in collaboration between Optimism and Vitalik. There is a two “house” governance system meant to represent both tokenholders and key stakeholders. Additionally, the proposed airdrop is set to happen in phases, making room for users who enter the game later down the line to share upside and not concentrating ownership in the hands of early members. Very innovative model – we’re excited to see how it plays out!

Business-Governance Fit. Not every organization should be a DAO. Chris Ahn argues that “Business-Governance Fit” is arguably just as important as product-market fit. Choosing the right governance model is a critical decision for founders because the proper fit can act as a strategic advantage. An improper fit, however, can lead to major problems as stakeholders butt heads around misaligned expectations. As usual, great stuff from the folks at Station.

Crypto Gaming, a thought piece. Today, P2E gaming is just yield farming with extra steps. But what could it become? QuirkyQwerty argues that game developers will now have to play the role of economists, building a sustainable system around a truly enjoyable game. Builders will have to become more thoughtful about how they incorporate crypto into their games. Using crypto has inherent tradeoffs, they argue, such as transaction cost, poorer gameplay UX, and poorer onboarding experiences. Gaming is arguably the next frontier in NFT development, helping catalyze the “metaverses” that we’ll work and play in.

The Value of DAO Project Managers. “DAOs desperately need skilled project managers.” We couldn’t agree more. Decentralization, if anything, increases the need for project management at scale. A great piece of advice: “The project may suffer accusations of centralization [by implementing these systems]. It's the 14-letter c-word of Web3. My recommendation is to ensure projects are hyper-transparent in their workflows and burndowns and that they demonstrate completed work on a regular cadence.”

3 Frontiers of Web3 in 2022. “We’re so early” may be true, but where are the frontiers? This piece argues that they lay in three areas: NFT utility, crypto gaming, and scaling DAOs. Forefront can certainly speak on the DAO portion – we have a ways to go before we’re truly able to maximize contributions and ownership in a way that aligns incentives but is still a realistic experience. On the gaming side, check out the essay above for more thoughts!

Market data on the last 7 days. Updated May 2, 2022

Updates from the DAO

This week we announced Forefront’s Web3 Creator Residency. Creators will receive a $4k grant to support them in advancing a new project, or a new phase of an existing project, over a 4-week virtual residency. If you’re interested, apply at the link above or send it to a friend who is a great fit!

FF Labs launched its first “intervention,” Nicolaus Gauge – the most entertaining way to decide whether your governance proposal is up to par. Shout out to the FF Labs team and all of the contributors who helped out with this project!

Finally, we had Diana Chen from Rehash on Hangouts this week talking about the future of decentralized media and building a podcast DAO! Watch out for the recording soon!

▹ FF Library - Future of Search Is Boutique
▹ Read - Bringing More Humanity to Web3
▹ Deep Dives - Crypto <> Wealth Distribution
▹ Opinion - The Doom Loop
▹ Regulation - Panama Crypto Bill
▹ Updates - Coinbase on Asset Listing
▹ Mainstream - Why Elon Musk Bought Twitter
▹ Crypto - Solana Down
▹ Listen - FF Roundup - EP 28
▹ Watch - Waren buffet on bitcoin
▹ Web2 - Creator Report
▹ Finance - Deutsche Bank on Recession
▹ Techy - Flashside by Anish Agnihotri
▹ Tooling - Dework <> Coordinape

◎ Access FF Signal for daily Web3 headlines