Institution Stiffness vs. Tech Innovation: Trends in Decentralized Social Graphs and Smoothing User Experience

Oliz / 2023-02-13

Read more on Substack

Panel 1: SEC and the Future of Crypto #

  • Kraken Shutdown: SEC shut down Kraken’s staking program.
  • Ethereum’s New Staking Model: Paradigm argues ETH staking does not classify as a security.
  • Commissioner Hester M. Peirce’s Comments:
    • Shutting down programs isn’t a solution; open dialogue with industry professionals is necessary.
    • A flexible regulatory framework should balance consumer protection and innovation.

Key Reflections: #

  • Information Asymmetry: There’s a gap between government regulators and the tech industry, leading to mistrust.
  • Proposed Solutions:
    • Hold roundtable discussions involving both regulators and industry professionals.
    • Develop frameworks to address crypto’s unique characteristics while ensuring safety and transparency.
  • The Ineluctable Modality of Securities Law: Why Fungible Crypto Assets Are Not Securities
  • Brian Armstrong’s response to SEC rumors about banning crypto staking.

Panel 2: Revisiting the Thesis of Fat Protocols #

The Original Theory: #

  • Joel Monegro’s “Fat Protocol Thesis” states that most value accrues at the protocol layer rather than the application layer.

Updates and Challenges: #

  • Cracks in the Theory: New trends show the application layer is capturing more value.
  • Rebuttal:
    • Combined protocol layers still outweigh application layers.
    • Modular blockchains and execution layers like MEV hold significant value.

Panel 3: Future of Scaling #

Institutional Challenges: #

  • KYC infrastructure vs. Web3 ethos.
  • Private key management to enhance onboarding.

Protocol Layer: #

  • ERC-4337 mempool for frictionless user experience.

Application Layer: #

  • Projects like dYdX and zk-knowledge solutions aim to rebuild consumer confidence.

Panel 4: Valuation in Web2 and Web3 #

  • Token Pre-launching: Governance models like Optimism.
  • Stablecoins and National Security:
    • Developing countries may shift from USD to crypto.
    • Regulatory challenges in the US could push innovation and talent abroad.

Panel 5: Why Crypto Needs Law #

Key Challenges: #

  • Regulatory Fragmentation: Agencies like SEC and CFTC create hurdles for innovation.
  • Global Trends:
    • Singapore and Japan adopt more open approaches.
    • Africa’s young demographic is poised for rapid adoption.

Government Perspective: #

  • Cost-benefit analysis of innovation vs. consumer protection.
  • Industry must demonstrate safety and innovation potential.

Panel 6: Web3 Adaptation #

Key Topics: #

  • Modular Blockchain: Simplify onboarding and enhance developer experience.
  • Developer Onboarding: Building tools and incentives for Web3 developers.

Panel 7: Real-World Assets Meet Tokens #

  • ReFi (Regenerative Finance): Tackling climate and public good challenges with trust and transparency.
  • Securitization: Pooling assets to reduce individual risks in developing countries.

Day 2: The Next Iteration of DeFi #

Key Focus Areas: #

  • Improving User Experience: Enhancing the volume of captured market share.
  • Governance Mechanics: Optimizing decentralized governance and delegation.

Unpacking Decentralized Science (DeSci) #

What is DeSci? #

  • Facilitating collaborative and non-linear academic research.
  • Use cases include social coordination and decentralized research funding.

Key Issues: #

  • Onboarding Senior Researchers: Building reputation systems for credibility.
  • Core Value: GDPR compliance, Proof of X, and data ownership.

Example Project: #

  • VitaDAO: Innovative approaches to decentralized drug research.

Key Developments: #

  • Distributed Data: Permissionless data collaboration.
  • Generative AI Applications:
    • Gaming and user-generated content.
    • Modularized identity and reputation systems.

Topics in Web3 Social #

Challenges: #

  • Ownership of Social Graphs: Transitioning ownership from centralized servers to users.
  • Switching Costs: Overcoming barriers to adoption in Web3 social platforms.

Opportunities: #

  • Empowering traditional franchises with interoperable data.
  • Gamifying participation to incentivize user contributions.

Key Takeaways: #

  1. Education and Awareness:

    • Correcting misconceptions through initiatives like EduDAO and FranklinDAO.

  2. Infrastructure Improvements:

    • Smoothing user experience via account abstraction and modular blockchain technologies.

  3. Policy Reflections:

    • Balancing financial innovation with regulatory stability.
    • Identifying breaking points in regulatory systems, such as diverging agency stances or emerging political movements.

  4. Decentralized Social Graphs:

    • Returning ownership of social graphs to individuals while fostering positive externalities through DID and IP protection.
#Web3 #Decentralized Governance #Innovation

Last modified on 2023-02-13