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gm fam, fresh off the press:
▹ Week's Top Signal
▹ Li Jin Creator Economy Curriculum
▹ Water & Music Musical Metaverse Report
▹ Cooper Turley on Web3 Labels
▹ Zee Prime Capital on Community Distribution
▹ Elon Must Wants Out of Twitter Deal
▹ ... much more
Plus: Market Pill, What else is Poppin'
Let’s get into it.
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In the wake of a deep economic downturn, the Other Internet squad explores a potent and important question: is crypto good?
Bryan Lehrer opens the piece by observing, “It’s clear that the collective themes that comprise what we call crypto are not going anywhere. The web is still largely centralized. Moving money online still requires third parties. The ownership of digital objects is still obfuscated. Problems like these will continue to be solved, and those building the solutions will continue to see financial upside.”
However, it’s clear that crypto has created tremendous wealth for a select group of individuals and organizations who got in early and were willing (or lucky enough) to wait out the volatile market. As a result, philanthropy from these parties has increased exponentially alongside their gains, with back-of-the-envelope estimates reaching billions of dollars of donated capital in recent years.
Crypto philanthropy isn’t limited to philanthropy using crypto tools – while impactful, the largest volumes of capital have come from money that has been made investing in crypto.
Essentially, the piece is a whirlwind tour of the history of philanthropy, why it is good, and how “crypto rich” folks can really push forward the idea of “funding public goods” in a meaningful way that is fairly rare despite the common rhetoric around doing so in crypto.
TAKE NOTE
The capital is there, but the “ambition [of crypto philanthropy] is still incubating.” Conversations around the what and why of philanthropy throughout the ecosystem is critical to ensuring that the field continues to gain legitimacy and develops a narrative that is a net positive on the world.
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Learn How to Build for the Creator Economy. Last year, Li Jin taught a 4-week long course about the creator economy. This past week, she open-sourced the entire curriculum. The course is specifically designed for founders & operators who are building for the creator economy. She’s experimenting with a funding model that will allow the materials to be free to the public while granting private office hours and a Telegram group to NFT holders. And it gets better – 100% of proceeds from the NFT sales supporting the course are being donated to two causes: supporting reproductive rights, and sponsoring Forefront’s Web3 Creator Residency awards! We’re extremely grateful for all of the work and support Li has given and will continue to give Forefront.
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9 Design Principles for a Musical Metaverse. Water & Music Season 2 is live, and they’ve kicked things off with an incredible deck outlining design principles for a “Musical Metaverse.” The best part about this analysis is how widely applicable it is to all of web3. For example, there is a section on “user-generated content” that explores how artists might not only publish to an audience, but collaborate on new remixes and live performances alongside their fans completely permissionlessly. This is true for any community. With web3 tools, there is no distinction between “creator” and “community” – everyone is a creator and a member of the community. Other ideas explored in the deck include time, persistence, and scale in the metaverse, and the different ways these things might play out today and in the future. Incredible work from the W&M team!
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Web3 Labels. In this essay, Coopahtroopa explores how web3 tools are fundamentally disrupting traditional record labels. He argues that labels today serve three main roles for artists – A&R, capital, and distribution – and explains what a traditional record deal might look like. For “priority artists,” these deals usually work out well as the label is incentivized to support you however possible to maximize their investment. The longtail of artists, even those who are signed, often aren’t as lucky. With web3 tools, artists can fulfill many of the roles of a record label without signing away ownership. Additionally, web3 record labels are coming to help artists outsource this work without falling into many of the traditional pitfalls. These “labels” often look much more like collectives or cooperatives than they do “signed rosters,” and artists benefit as a result.
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How a fake job offer took down the world’s most popular crypto game. Ronin, the Ethereum-linked sidechain that underpins Axie Infinity, lost $540 million in an exploit in March. While the exploit was quickly tied to North Korean hacking group Lazarus, full details of how it was carried out was only made known recently. A senior engineer working on Axie downloaded a job offer in PDF format — but the offer wasn’t real. Downloading the file allowed spyware to infiltrate Ronin’s systems. From there, hackers were able to attack and take over four out of nine validators on the Ronin network, leaving them just one validator short of total control. The story has been making rounds across the crypto ecosystem, reminding employees and founders the importance of security and diligence in using any systems with access to potential attack vectors.
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Blockchain-Backed Collectible Avatars Coming to Reddit via New Storefront. Reddit recently announced a new NFT-based avatar collection for users. Collectible Avatars are a set of limited-edition artwork created by community-sourced artists. The announcement stated the artwork is stored on Polygon. The company says their goal is to empower creators to sell their work to communities on the platform in a way that allows creators to maintain creative ownership. Additionally, users will be able to mix and match avatar gear on their avatars in a completely customizable fashion. It will be interesting to see how popular Collectible Avatars become and whether Reddit avatars will show face across the internet.
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Rethinking Digital Identity as a Defense Against Surveillance Capitalism. This paper aims to spark conversation amongst web3 builders and founders around the urgency of rethinking privacy and identity management. The author argues that “most of those harms [of blockchains] are rooted in ineffective privacy protections and poorly designed identity management, not extractive business models.” She argues that disrupting traditional web2 business models does not in and of itself serve to solve the problems of surveillance capitalism. Instead, business models are merely a symptom. The paper explores how the “systematic commercialization of attention” will continue to exist in a world of protocols vs. platforms unless we build tools that fundamentally change user’s relationship with their data and their ability to control how it is used and monetized across these protocols.
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Improving Community Distribution. This piece from Zee Prime Capital makes a simple yet provocative argument: airdrops are stupid, and they’re probably negatively impacting your protocol. Generally speaking, your goal should be to get tokens into the hands of the “right people,” and airdrops are almost never the best way to do that. In fact, the authors argue that if you are unable to continue to drive demand for your token while continuously increasing the supply (i.e. not just relying on speculation), then your business model is doomed. Instead, a “continuous rewards system” that constantly reevaluates user activity and allocates tokens accordingly is a better solution to solving the community distribution problem. To some extent, Optimism attempted to do this with their multiple waves of airdrops, but it remains to be seen whether doing multiple airdrops will solve the root problems of the token distribution method.
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Elon Musk aims to terminate $44 billion Twitter deal. Elon Musk has moved to end the $44 billion deal to acquire Twitter, according to regulatory filings. Twitter, for its part, indicated that it plans legal action to enforce the Musk deal. “Mr. Musk is terminating the Merger Agreement because Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect,” Musk’s lawyers wrote. However, it is likely that Musk wants to terminate the deal given tanking market conditions, making the agreed terms increasingly unfavorable for the Tesla founder. Twitter might have a change.
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For Season 2, we at Water & Music are tackling the metaverse — perhaps one of the buzziest, most polarizing concepts in modern technology. Our goal with this season is to build out an actionable roadmap for the music industry in the metaverse, highlighting where artists and their teams can start experimenting with cutting-edge tools and experiences today. You can follow along with our S2 research here, and learn more about our membership here.
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Market data on the last 7 days. Last updated July 11, 2022
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Updates from the DAO
— One more week of the first Web3 Creator Residency to go! Make sure to stay up to date in the W3CR Discord channels, on Twitter, and on the FF blog/newsletter.
— Terminal by Forefront saw some updates this week to add new communities and metrics! Check it out at terminal.co.
— Li Jin has open-sourced her creator economy course and is giving part of the proceeds of NFT sales to Forefront’s W3CR! Super exciting stuff. You can check out the announcement here.
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Firelight
— Our weekly synthesis of all things W3CR this week is published on the FF website.
— Check out the W3CR Open Studio episode this week for more updates on what the cohort is up to!
— This week, Allie explored the relationship between gifting and play.
— Allie ran a pop-up Play Date in a local park, where she talked with parents about Play Libraries and the Forefront W3CR.
— Alex ran a two-hour long session where she produced “The Lights,” a song off of her upcoming album.
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◎ Check out FF Signal for more headlines
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