Issue 49 đ” Web3 problems
It's not all WAGMI.
Disclaimer: This newsletter is not financial advice. We buy what we like, and you should buy what you like.
Itâs been a pretty tense weekend on Twitter, caused by some unearthed tweets from the director of operations for the Ethereum Name Service (ENS). Things got very quickly, so Iâd prefer to redirect you to reading a better summary about it from Coindesk.
And after all the discussions about inclusivity, it feels like Web3 got advertised too much for this thing that takes power away from companies and gives it to the people.
I want to pick at that, because despite the WAGMI (We're All Gonna Make It) slogan. Things suddenly donât just become an equal playing field in Web3.
For example, having an understanding of the space or how to manage money is a pretty big edge in a space where money is literally power. Not jokingâthis week, someone literally borrowed $13M of tokens to win a governance vote in a DeFi lending protocol.
Or for another example: letâs take the $ENS token, which famously got airdropped in November.
So one event over the weekend was that a lot of tokens $ENS tokens had been assigned to the problematic director. In response to the issue, people started delegating away from him.
Two things to point out:
Affording the gas fees to have been able to do this on-chain show of dislike definitely does imply having some spare income.
Letâs say you do care about governance. Thereâs an irony in that someone who sold their airdrop during the launch week, at $40-$80 per $ENS token, could have at least double the governance power right now than someone who just held it. Prices, after all, are currently about $20 per token.
And hereâs a cheat sheet for you: most tokens are probably going to be more useful for you as cash than as voting power. Especially if the project is created by a team in the USâif they do give too much to the token, they could actually get in trouble with the US government for violating laws about US securities.
So, yeah I admittedly sold my airdrop when ENS hit around $70, because the only thing I could do with it was to delegate it to someone else. I found that utility useless, so I cashed out to buy Christmas gifts for my family instead.
But wait, how did I come to learn all these securities things and tokenomics and etc.?
Well, I was able to afford to take some risk. When I got laid off in March 2020, I was able to just sit back for a few months and spend all my time looking at crypto (thanks, parents).
I think itâs fair to say that the people who can afford to take on risk can afford better opportunities in crypto, such as getting paid 100% in tokens. And the people who typically can afford that risk are probably going to be some combo of white, male, or American.
And this leads to my ultimate pointâcrypto does not erase existing conditions of power. Crypto probably exacerbates it.
On the flip side, though, crypto is a new frontier, so traditional degrees and credentials donât matter here. It doesnât even matter if you go around as an anime character, what matters is if you can do the work.
And there are still lots of cool new things to be built that can achieve the mission of a better distributed future. But to get there, I think itâs important to recognize that crypto isnât fair and equitable by default. After, Web3 is not some alternative universe thatâs separate from the society that we inhabit.
So, to enable fairness and equality, future structures have to be thoughtfully built. And to thoughtfully build, it probably helps to recognize the different powers at play in crypto for what they are. How else are you supposed to build around them, right?
Hope this made sense today. And as always, take care out there.
Other news
đ± An employee from fine-art NFT marketplace, SuperRare, was also removed from their position this week over past tweets.
đ± Nintendo has announced their interest in the Metaverse and NFTs. Nintendo has made some of our iconic games, so if they do pursue this, weâre pretty excited about it.
Reading List
Good read thinking about NFTs and how the images are stored.
Creative Corner
For this week, we are highlighting an artist known as Aswang. They specialize in creating 1/1 art based on Filipino folklore.
Aswang makes fantastically expressive characters, with beautifully textured and carefully drawn lineart. Theyâre also dropping a generative project soon, and itâs really cool to see culture being creatively adapted like this.*
*Both of us at Cup are from the Philippines, weâre absolutely biased đ
You can check out Aswang on Twitter, and check out their work on Opensea!
Try This
After this week: if did not make a fresh account to enter crypto, then considering reviewing your past tweets.
Hereâs the website.
If thereâs anything we can do to improve, let us know and hit us up on Twitter!