|
Hey fam, welcome to the issue 87!
▹ Week's Top Signal
▹ The Economy of You by The Generalist
▹ PeterPan on VC <> ServiceDAOs
▹ Tokengated Commerce by Packy McComick
▹ DAO Landscape Report by Arca
▹ ManorDAO by Poolside
▹ ... much more
Plus: Market Pill, Member Spotlight, What else is Poppin'
Let’s get into it.
—
|
|
|
The NFT market is collapsing… or is it? According to the Wall Street Journal, NFT sales fell to a daily average of about 19,000 this week, a 92% decline from a peak of about 225,000 in September 2021. However, Tom Schmidt of Dragonfly Capital flagged that those numbers are actually entirely inaccurate. On-chain data indicates that while sales aren’t quite at all-time highs, the market is still chugging along, even when compared to late 2021 sales.
This isn’t surprising – mainstream media loves to capitalize on crypto’s perceived failures. And with both the crypto and traditional equities markets taking a beating over the last few weeks/months, bears will continue to cry wolf. However, as with any bear market, now is a time for reflection on what is actually valuable and how that value accrues.
Even with all of the negative market sentiment, both large traditional brands and new web3-native brands are making major headways throughout the ecosystem. For example, Starbucks recently announced their plans to launch NFT loyalty programs in conjunction with their existing app and rewards infrastructure. The company stated that they plan to create a “digital third space,” building on the success of physical Starbucks as local community spaces.
At the same time, web3-native brands from BAYC to Crypto Packaged Goods continue to innovate on what it means to build tokenized communities, regardless of market conditions, from “expansion packs” to collaborative product development.
TAKE NOTE
Regardless of market conditions, one thing is certain: the cream will rise to the top, and the junk will get crushed. Brands large and small, new and old, will continue to find new and creative ways to build tokenized communities. We’re excited to see what unfolds.
|
|
|
The Economy of You. Forefront is the home of social tokens, so this piece from Mario at The Generalist was music to our ears. Mario covers a lot of ground, first touching on some definitions (creator and community tokens are both social tokens) before exploring the whys and hows of “becoming an economy.” Near the end of the piece, Mario argues that we will soon see “creator ETFs” and other forms of investable web3 social assets. Forefront is actively working to bring this vision to life with $SOCIAL, our upcoming index product of the community token landscape.
|
|
|
Unbundling Venture Capital via DAOs. Since the dawn of DAOs, there’s been talk about the potential for these organizations to fundamentally disrupt venture capital. Pet3rpan of 1kx explores this future by first reflecting on investment and incubation DAOs, including NFT collector DAOs and play-to-earn games. The third generation of this trend, he says, is Service DAOs: “organizations that aggregate high-quality practitioners under one community to provide services to third parties in exchange for project ownership.” In some ways, this is a “work to invest” model that is uniquely enabled by tokenization of organizations. The trend towards Service DAOs will create more and novel ways of “investing” outside of traditional capital transfer that democratizes access to these investment opportunities.
|
|
|
To Start Building a Community, Master These Two Concepts. This essay from Amber Atherton for a16z Future first defines community not just as folks using your product or evangelizing your brand, but people who “spend time forming connections with other people based on a shared affinity for [your brand/product].” This important distinction then leads to another major takeaway: the community funnel. As a community builder, you want people to become invested (figuratively or literally) soon after their initial invitation. This is often a tough nut to crack, but the outcomes are extremely valuable, as Amber explains in this piece.
|
|
|
Tokengated Commerce. This piece is a collab between Alex Danco at Shopify and Packy of Not Boring to discuss “token-gated commerce.” The interview is well worth the read from top to bottom, as Alex’s experiences exploring crypto through the lens of Shopify are certainly interesting in and of themselves. Alex explains that NFT brands often follow a standard selling point: “It looks like a theme and variations: here’s what you fit into, and here’s how you stand out.” Token-gating commerce is a fantastic way to generate demand by leaning into what makes NFT communities special. Collaborations, then, become a means of exchanging exclusivity. This is an extremely thought-provoking piece.
|
|
|
DAOs: An Institutional Guide to Decentralized Governance. Arca, an institutional digital asset management firm, published an in-depth guide to decentralized governance (with a Forefront highlight!). The guide covers everything from the benefits of decentralization to types of DAOs and potential legal futures. Additionally, there is a chapter titled “Degrees of Decentralization” that proposes some interesting mental models for thinking about the ways in which some web3 organizations are centralized vs. decentralized.
|
|
|
Towards Better Token Distribution. Token distribution is hard. Since DeFi summer, we’ve seen lots of experiments (and a lot of thoughtless replications) on token distribution, but the problems of adequate liquidity, vesting schedules, and distribution rate are still hanging over the entire space. This piece explores Delphi’s LLBA (lockdrop + liquidity bootstrap auction) distribution model. The model is too complex to summarize here, but it is essentially made of three steps: distribution, auction, and public trading. Novel models like this one are critical to the maturation of the space and achieving truly fair and equitable ownership of organizations and protocols moving forward.
|
|
|
The Dominance of Uniswap v3 Liquidity. The title says it all. Research from Uniswap highlights that the AMM market structure can surpass order-book exchanges and transform traditional financial market structure to be more liquid, stable, and secure. Specifically, the paper finds that “for ETH/USD, Uniswap has ~2x more liquidity than both Binance and Coinbase” and “for ETH/BTC, Uniswap has ~3x more liquidity than Binance and ~4.5x more liquidity than Coinbase.” This is extremely impressive considering Uniswap’s relative youth. DeFi summer might be over, but the real disruption is just getting started.
|
|
|
Surviving Crypto Cycles. It’s tough to argue against the observation that the bear market is officially here. This letter from Paradigm to their portfolio founders in March of last year was meant to lay out strong advice on how to survive crypto cycles, and it is certainly as important now as ever. One of the best pieces of advice in this piece is on focus: “Since it feels like everything is working in boom times, it's tempting to want to do everything. Maintain a high bar for changing or expanding your scope.” As the market falls, it’s insanely important to maintain focus on your core mission and product. We now have a few crypto cycles to look back on – if we learn from the past, WAGMI heading into the next one.
|
|
|
|
|
Every week, Forefront publishes a weekly newsletter (this one!) curating insights and news across web3 social. Our ~10,000 readers are founders, contributors, builders, and explorers interested in the future of DAOs, social tokens, and crypto-powered social experiences.
Do you have a product or service to promote? Sponsor an issue by reaching out at hello@forefront.news.
|
|
|
Market data on the last 7 days. Last updated May 9, 2022
|
|
|
Updates from the DAO
Applications for the Web3 Creator Residency are officially CLOSED. Thank you for everyone who shared and applied! We’re excited to see all of the incredible work that’s being done throughout the space.
Join our next community sesh, hosted by Louis (@albiverse) of TwoPlus on Thursday, May 11 at 9AM PT. Louis will share about mental fitness and the contributor skills needed to thrive in the DAO ecosystem—especially as we navigate new ways of being (& being together).
|
|
|
|
|
Member Spotlight — Rachel | @chaka
This week’s Forefront Member Spotlight is FF DAO contributor Rachel
What got you into web3?
The shared energy of questioning, unlearning, and re-imagining new ways of communing & co-creating together.
What community are you keeping an eye on?
Verses. Their artifact Pluriverse is one that I come back to frequently whenever I need to be reminded of possible digital futures that feel safe, equitable, and regenerative.
Who’s one person you look up to?
Qrion is definitely one of my expanders who I see reflections of myself in. She's a DJ/producer that got me through the pandemic, and continues to inspire me to work towards my craft with intentionality.
What’s next for the space? What are you excited about?
I'm excited about all the cultural shifts that's now more possible!!
1. New genres of work — what will emerge as people have more freedom to explore different interests and projects, not bounded by their location;
2. More soulful explorations of creativity — especially with more examples of Metalabels;
3. Coordinating on social impact IRL — with more models for funding public goods, mutual aid, and impact DAOs.
Follow Rachel on Twitter
|
|
|
◎ Access FF Signal for daily Web3 headlines
|
|
|
|
