Hey fam, issue 90 highlights:

▹ Week's Top Signal
▹ FF Journal: EVM Network Effects
▹ Pool Together Legal Battle
▹ Not Boring on Token Economies
▹ Mirror Launches Writing NFTs
▹ Samantha Marin on Guilds
▹ Lisa Xu w/ "NFT Summer" Deep Dive
▹ ... much more
 
Plus: Market Pill, Member Spotlight, What else is Poppin'

Let’s get into it.

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Let's Pool Together... Earlier this year, PoolTogether faced a class action lawsuit in the state of New York on the basis that the company was essentially a lottery operating outside of government purview. The lawsuit was brought forward by a former Elizabeth Warren staffer. Fast forward to today, and the company launched an NFT collection called "Pooly" intended to raise funds and signal support for the company’s defense.

PoolTogether is a no-loss savings game where users can win prizes for depositing funds on the platform, using DeFi protocols on the back end. Joe Kent, the individual who brought the case forward, had only deposited $10 into the platform. As a result, the case is seen as a "test case" that has less to do with personal damage, and much more to do with a fundamental anti-crypto belief. The lawsuit names both Pool Together and its investors, implying that the damage was done by the ecosystem rather than PoolTogether as an individual actor.

As of today, 438 ETH (about $840k) has been raised by Pooly.

This case is yet another example of the lack of clarity around crypto regulation in the US, and the long road we have ahead of us to achieve that clarity. The outcome of the case could have serious and significant implications on DeFi, DAOs, and crypto investors broadly (both retail and institutional).

TAKE NOTE
Many people in the ecosystem believe that this lawsuit is just the first of many. Regardless of your opinions, a close eye on the developments here are certainly worth the time of anyone working in crypto.

EVM Network Effects. Ethereum (as most know it) is simply one implementation of the Ethereum blockchain. The Ethereum Virtual Machine, on the other hand, is open-source blockchain-based software that allows developers to create decentralized applications. In this piece on Forefront Journal, Nir Kabessa and Krishna Nandakumar argue that every user using any code on any EVM chain adds value to the entire network. EVM has a massive head start over other L1 competitors, but that doesn’t mean that ETH will capture all of that value. The essay is a thought-provoking and insightful exploration of L1s and the Ethereum ecosystem.

Designing Token Economies. We often talk about tokenomics and token economies, but rarely do we get practical insights on how to actually build a token economy. Tina from Station and Packy from Not Boring teamed up on this awesome piece exploring how token economies (specifically protocol token economies) are built, why the tokens are valuable, and how you can evaluate existing economies. The piece is long, and while there’s still plenty of nuance left to explore, this is a fantastic intro to the topic. Specifically, the idea of MVI (most valuable interaction) is critical to any community or protocol exploring how to better align incentives using a token.

Like → Share → Collect. With the launch of Writing NFTs from Mirror, a way to mint and collect Mirror essays on L2s, Graeme from Mirror wrote this piece exploring collecting and belonging. In web2, he says, we like and share media. In web3, we collect it, a more powerful action. He argues that “if web3 starts with collecting, it ends with belonging.” With the rise of this new feature from Mirror, we should see a wide range of new and creative ways of collecting, engaging, and building community through the things we publish.

Ultimate Guide to Metagovernance. Metagovernance is an extremely useful tool for DAOs to achieve their goals in a mutually beneficial way. Ben Giove of Bankless wrote this comprehensive piece on how metagovernance can be used for strategic gain (i.e. leveraged metagovernance) while also highlighting some key examples of this being done in the world of DeFi. He then uses an evaluation framework to break down $INDEX as a metagovernance token, a useful exercise in understanding the benefits and key factors in a metagovernance process. The future of DAOs is metagovernance, and this is a great introduction to the topic.

NFTs And The Risk Of Perpetual Colonialism. This piece explores the cultural implications of NFTs as an implicit means of perpetual colonialism. The author argues that many of the core features of NFTs – verifiable ownership, accountability, transparency, etc. – are also features of western democracy, which makes sense given that is where the technology was born. They then go on to question whether we can maintain the value of NFTs to creators while decoupling it from “crypto economics.” To be truly good and avoid these pitfalls, the author asks us to seek inspiration from ingenious teachings, and avoid one-size-fits-all approaches to NFTs, or any new technology, in order to respect the specific culture and community of folks the technology is interfacing with.

Summer 2022: NFT Winter? Are we in an NFT Winter? Lisa Xu first digs into the data indicating that active users are at or near all-time highs, and total USD flowing through NFT markets today is not far off from Q4 2021. Floor prices of “blue chip” NFT collections have certainly fallen in recent months, but they’re still well above their early 2021 levels. Additionally, creator sentiment is positive – folks are excited for a bear market to push out the low quality projects and people who were “in it for the wrong reasons.” However, Xu emphasizes the need for creators to further engage with their communities during a bear market to ensure consistent value and retention. This is definitely great advice for any web3 project given market conditions.

The Purpose of Guilds. Samantha Marin starts this piece with a core idea: Guilds serve people, Projects serve ideas. This distinction is critical to understanding how to best operate guilds: a focus on onboarding and individual experiences, education, and relationship building. We’ve learned a lot about DAOs and decentralized or self-managing orgs in web3 over the last couple of years, and guilds (or pods or squads or …) have certainly arisen as a key factor in the current and future success of these communities.

Illegible Enterprises: DAOs, Unwrapped. Oftentimes, DAOs are compared to LLCs. However, in the current legal landscape (at least in the US), this is an unreasonable comparison. DAOs are currently illegible to the law (arguably even in Wyoming, which has a DAO LLC). As a result, Mike Wawszczak argues that DAOs have three options: remain illegible to maintain the dream of full decentralization and autonomy, wrap the entire organization in a legal entity, or create a “legal ecosystem” where the DAO owns multiple entities for specific purposes. Different organizations have tried different routes over the last few years, and Mike highlights some of the pros, cons, and implications of each option. We still have much to learn in this area, and until we get clear regulation from governments, this will continue to be a very hot topic for all DAOs.

Market data on the last 7 days. Last updated May 30, 2022

Updates from the DAO

Forefront Social Token Alliance Swap proposal has PASSED. Keep an eye out to see how other participating communities vote! 

We are so close to choosing our official 𝒲𝟥𝒞𝑅 cohort. Starting this Tuesday at our Community Meet & Greets, you’ll learn more about each Creator & the incredible Projects they hope to workshop for the W3CR.

Follow us on Twitter & join our Discord to get the updates first

▹ FF Library - Equilibrium Auctions
▹ Crypto - The Hitchhiker's Guide to Ethereum
▹ Mainstream - Hotels Using NFTs
▹ Read - Everyone’s an Insider in Crypto
▹ Deep Dives - What really happened to $UST
▹ Opinion - On SoulBound NFTs
▹ Fresh Take - Stop Calling it a Wallet
▹ Listen - Market Design Masterclass
▹ Interesting - Otter Badges
▹ Interview - Latashá on HuffPost
▹ Governance - Lido Staking Proposal
▹ Report - Uniswap Governance
▹ Resources - DAO Entity & Selection
▹ Tooling - Zora Music NFT Edition
▹ World - Mona Lisa Incident
 

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