Newsletter: Towards a More Cooperative Web3 ⚡️

Welcome to issue 122: Cooperativism <> Web3 by Koodos Labs, Kevin Owocki on Coordination Mechanisms, Delphi Digital Year Ahead Crypto Report, Andrew Hong Guide to Web3 Data Tools, mainstream latest and more...

By Forefront - Jan 9, 2023


Welcome to issue 122:

▹ Week's Highlight
▹ Cooperativism <> Web3 by Koodos Labs
▹ Kevin Owocki on Coordination Mechanisms
▹ Delphi Digital Year Ahead Crypto Report
▹ Andrew Hong Guide to Web3 Data Tools
▹ Latest on Mainstream Crypto
▹ ... more

--- Let's get into it!

Year in Review…

Year in Review would be incomplete without a meaningful discussion of Nouns DAO. Launched in 2020, Nouns DAO asserts a simple, on-chain promise: one Noun a day, forever. The Nouns perpetual auction mechanism has proven to be one way for tokenized communities to unlock sustainable revenue that (theoretically) reflects the value of governance over the allocation of funds toward community projects.

Nouns is currently sitting on a $47m treasury, hundreds of voting members, and a rich ecosystem of builders and creators proliferating the Nouns meme.

Of course, many communities looked to Nouns as the model to replicate, with varying levels of success. Lil Nouns and Gnars, for example, built a strong reputation as Nouns "subDAOs," proliferating the Nouns meme while adopting a more specific community mandate. However, both have struggled to accrue even a fraction of the treasury that Nouns DAO has.

On the other hand, projects like SongADAO took existing creative endeavors -- in this case, Jonathan Mann's Song a Day -- and turned them into a tokenized community by adopting the Nounish perpetual auction mechanism.

The back half of 2022 saw the most significant unlock in the growth of the Nounish model: Nouns Builder. Stewarded by Zora and funded by Nouns DAO itself, Nouns Builder is a protocol to easily launch a Nounish DAO, from the perpetual auction to generative art to onchain proposal mechanics.

Purple, Public Assembly, BlvkHvnd, and other DAOs gained steam in Q4 thanks to Nouns Builder's protocol, and Builder DAO (the DAO governing the Builder ecosystem and protocol) has amassed the second largest treasury in the Nounish ecosystem.

What's Poppin'

Towards a More Cooperative Web3. Koodos Labs, featuring some friends of Forefront, gathered a diverse group of researchers and builders to discuss the potential intersections of cooperativism and web3. Cooperatives are autonomous associations of people united to meet common economic & social goals through joint-ownership & democratic control. Platform cooperatives specifically have become effective alternatives to centralized structures by ensuring stakeholders > shareholders. The team investigated how developers and emerging internet companies might learn from the shared history of cooperatives and how, in practice, they can construct systems that respect cooperative ideals. The shared values of cooperatives and DAOs has been discussed in-depth over the last few years, but this report is probably the best synthesis of many of those discussions we've seen.

Coordination is the Next Meta. In this post, Kevin Owocki, co-founder of Gitcoin, argues that "an important meta belongs to the ecosystems that are best at coordinating/funding their public goods." As such, it's important -- even necessary, according to Kevin -- for ecosystems to focus on building strong coordination mechanisms in order to solidify the support of public goods. In uncoordinated ecosystems, there is no incentive to work on public goods, so agentic actors only have a rational incentive to create things they can personally profit from. The thorny problem is that public goods do not have "customers" like private goods do, so there is not an effective + scalable mechanism for coordinating funding to the public goods that are good (but not the bad ones). Great write-up from Kevin to explain why public goods coordination is so important for strong ecosystem building.

Year Ahead for Crypto Report. The folks at Delphi published their Year Ahead for Crypto report, covering everything from DeFi to Gaming to markets and more. The report discusses topics like DEX tailwinds, NFT royalties, on-chain reputation and gaming, and a slew of other topics. Unlike many other year-end reports, this one is very much forward-looking, focusing on how momentum from 2022 will play out in the new year vs. simply summarizing the previous year. Unfortunately, there is a glaring lack of discussion around DAOs and other web3 communities, even within the context of the topics discussed. Overall, this report is definitely worth the read to get a birdseye view of where things are headed and what areas have momentum in crypto.

Web3 Data Tools. Data wizard Andrew Hong released his 2023 guide to web3 data tools. He begins with a landscape view of all of the best data-focused tools in web3 today. He divides these tools into various layers within the web3 data stack, and discusses each layer in depth along with how each tool fits. Everything from governance explorers like Messari Governor to OG tools like Dune Analytics are discussed. Data explorers, according to Andrew, are making massive strides, and will only continue to get better in 2023 and beyond. The piece is also minted on ZORA, so you can support Andrew's work by minting there!

Catalyzing a Movement with Gitcoin Grants. This post from Courtland Leer explores how Gitcoin Grants -- and other mechanisms for public goods funding -- have been used to catalyze the DeSci movement. Courtland interviewed Vincent Weisser, who helped facilitate the Gitcoin Grants DeSci round that raised over $500k for DeSci projects. They discussed the importance of having a strong squad from throughout your chosen ecosystem who will support funding initiatives. They also discussed the importance of reach and seed funding, arguing that a few early funders can make all the difference, "there needs to be a minimum threshold of ideally $50-100k which allows things to grow." Undoubtedly, as Gitcoin continues to grow and develop, there will be many more subcultures, scenes, and movements who are able to bootstrap public goods funding using this playbook.

Latest on Mainstream... Now on to the mainstream news. The president of US crypto exchange Gemini, Cameron Winklevoss, accused Barry Silbert, the CEO of crypto conglomerate DCG, of "unconscionable" behavior. Winklevoss says that DCG's crypto-lending subsidiary, Genesis, won't return $900M that belongs to his Gemini customers. He gave Silbert a January 8th deadline to commit to making his customers whole.

Next, Silvergate, a California-based bank that has bankrolled many crypto-focused institutions, announced that it's cutting 40% of its staff following an $8.1B bank run. That news, plus word that Silvergate's halting its digital-currency plans (down the drain: $196M spent on Facebook's Diem tech) led to a nearly 50% decline in Silvergate stock. Now its execs say the business could be a takeover target.

Finally, Aurelien Michel, a 24-year-old French citizen who lives in the United Arab Emirates, was taken into custody on Wednesday evening after landing at John F. Kennedy airport in New York. He is the developer of the Mutant Ape Planet NFT collection -- a knock-off of the popular Mutant Ape Yacht Club -- which prosecutors say perpetrated a $2.9 million rug pull.

Enjoyed this issue? Help us spread the word!

Signal Bites

▹ FF Library - Reviving Trust in Crypto
▹ Read - Limited Liability on the Internet
▹ Opinion - Oracle Evolution
▹ Interesting - "New New" Creator Playbook
▹ NFT - Rolling Stone x Pussy Riot
▹ Cool - Art Haus
▹ Thread - Punk 6529 on C00s
▹ Collab - Mastercard Incubator w/ Polygon
▹ Resources - 30 Coordination Mechanisms
▹ New - Web3 Manager Launchpad
▹ Techy - Decentralized Proof-of-Solvency Systems

Check out Signal  for daily top web3 social headlines

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The information in this newsletter is not intended to constitute legal, financial or investment advice and should not be construed or relied upon as such. Any opinions reflected are the opinion of the author(s) of the newsletter only and not necessarily of Forefront. Please DYOR.

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