Newsletter: Community-native Digital Spaces

Welcome to issue 127: This week we cover Friends with Benefits social app, JPG team on the intersection of curation and communities, Packy McCormick thesis on Startup Prophecy Markets, more...

Welcome to edition 127:

▹ FWB Social Software Launch
▹ JPG team on Curation <> Communities
▹ Packy McCormick w/ Startup Prophecies Market
▹ Bitcoin Ordinals (NFTs) Sudden Explosion
▹ Shopify Blockchain Suite for merchants
▹ Mainstream news and more...

--- Let's get into it, plus don't forget to collect this edition.

Week’s Highlight

Tokenized Communities Year in Review --- From individual to collective creation.

2022 was truly a hell of a year, and 2023 is already off to an even hotter start. We're excited to finally bring you...

Tokenized Communities Year in Review, 2022 Edition (Tweet)

This report, written and curated by the Forefront team, covers the journey the tokenized community ecosystem has taken from 2020 to today, highlighting the remarkable progress we made last year. You can find (and Mint) the full report here.

The report discusses Nouns DAO and the Builder ecosystem, PFP projects becoming DAOs, TC business models, metalabels, ERC20s vs. NFTs, and much more. The report also highlights some of the top essays from the year (including Toby Shorin, Yancey Strickler, and Jacob Horne) and some trends to watch for the rest of 2023.

There are a TON of communities and projects mentioned in this report, and even those are only scratching the surface. Feedback has been awesome, and we're excited to continue to pump out reports like this throughout the year.

Again, if you want to support the report and Forefront's continued work, consider minting here.

We’ll be publishing a thematic report every few months similar to this one, covering specific verticals of TC analysis. We’ll also be hosting a Twitter Space this week on this report, so keep an eye out!

What's Poppin'

FWB Social Software. At the intersection of web3 social and tokenized communities lies a simple question: what should community-native digital spaces look like? FWB seems to have found their answer. This week, FWB launched their own native app, giving members the opportunity to share, talk, and interact in more meaningful ways. FWB was already an organic social network in its own right, with a deep-rooted community and set of subcultures unique to the community. Building our own platform to serve our community and optimize for social depth was the logical next step for the DAO's evolution. There's no doubt that we will see many more experiments in community-native tooling and social platforms in the coming months. As usual, FWB is leading the way in the experience of tokenized communities.

Bitcoin Ordinals AKA "NFTs". Crypto derivatives firm BitMEX has identified over 13,000 Ordinals NFTs on the Bitcoin blockchain, evidence that buzz about a still-young flavor of non-fungible tokens is growing fast. Gamma.io, the company behind the NFTs, released a no-code creator tool for anyone with a Bitcoin address. In a few short weeks, the sudden influx of JPEGs and other media files onto Bitcoin has consumed 526 megabytes of block space and cost creators 6.77 bitcoin (roughly $155,000 at the time of publication), according to the post. The surging popularity of Ordinals has drawn the ire of prominent Bitcoiners such as Rene Pickhardt, who accused the Ordinals crowd of "spamming" the most dominant blockchain with oversized JPEGs. Ordinals' share of total Bitcoin transactions barely cracked the 3% mark on Wednesday, yet they consumed nearly 70% of the Bitcoin block space.

Startup Prophecy Market. This past October, Jacob Horne published Prophecy Markets, proposing a structure for positive sum prediction markets in which anyone can make a prediction, mint the prediction as an NFT, and let it trade freely. If a bold prediction paired with beautiful art comes true, might that NFT be worth more than it was when it was created? This piece from Packy explores another iteration of this idea: Startup Prophecy Markets. Startup Prophecy Markets would let anyone timestamp predictions about the startups they believe in most by creating art, videos, stories, analysis, and more about the companies' futures and minting them. Theoretically, if the predictions are bold enough, the content is good enough, and the startups they're attached to are ambitious enough, those NFTs might be worth more in the future than they are today. This is a fascinating idea with implications in crypto and beyond -- fun read!

Curation, Communities and Mechanisms. The team from JPG explored what the meaning of curation is, and what opportunity lies ahead. In short, JPG proposes networked co-curation under a governance structure bound by a custom designed reputation system, to facilitate mechanisms for the creation of on-chain lists to help order, contextualize and discover NFTs, while at the same time aiding in the archival and preservation of history. To achieve this, JPG proposes a protocol that's an evolution of Token Curated Registries (TCRs), crowdsourced and trusted lists of data - in our case NFTs - that can be contested, changed, or contributed by the stakeholders. The essay includes a fascinating history of curation and contextualizes the thinking behind the product and protocol design.

Collecting Culture. This piece from Coopahtroopa argues that the "new meta" is owning everything. Instead of focusing on a few select NFTs, why not collect everything you enjoy? How do you get 100,000 people to collect a song? How do you get 1,000 people to collect a blog post? In his opinion, the goal is to focus on NFTs being minted for $10 or less. He also explains why vertical specific platforms allow us to better understand why we would want to collect specific types of content. If you want to collect a specific type of media, you need a specialized product, not generalized marketplaces like OpenSea. All in all, this is a pretty straightforward perspective on where the market is headed and how you can capitalize as a collector.

The World's First DAO. Alex Stein of Charterless wrote about the lessons web3 organizations can learn from Wikipedia. Most importantly: to bootstrap a network, you need to either provide early adopters a massive financial stake (the VC model) or you need to offer them non-monetary value. You need to convert them into missionaries. Bitcoin, for example, did not start as a way to make bags of cash on Robinhood. It started as a libertarian, privacy-aware, computer science experiment.  It gained traction in this community of true-believers first. Then it attracted the speculators who helped scale the network by shilling their own holdings. Likewise, most DAOs need to start with a mission-aligned community, and spread to speculators later. This is the lesson of Wikipedia, which has managed to survive and thrive with strictly volunteer editors and contributors for decades.

UPI & Crypto: Super-App Product Ecosystems & Monetization Metas. This essay is an awesome analysis of the challenges that the Unified Payments Interface (UPI) in India faces, particularly around the ability for companies built on UPI to monetize on what are public rails, and how these might apply to crypto. The first part of the essay compares the monetization routes for businesses on UPI versus crypto, and the monetization meta that arises. The second part is on the product ecosystem philosophy that arises due to monetization issues. As founders building in crypto double down on finding product market fit, the author has strong belief that many traditional fintech lessons will return to the fold of crypto, and many lessons from other traditional fintech payment ecosystems around the world, and particularly in emerging markets, will be highly relevant to crypto moving forward.

Latest on Mainstream...

First off, Gary Gensler and the SEC moved to shut down Kraken's staking service, flagging it as a security. Coinbase responded to this news by explaining why their staking services are not provision of securities and why staking is an important technology to push forward.

Additionally, in the aftermath of the FTX collapse, Binance seems to be making the most of the situation. The crypto exchange saw its share of global crypto spot trading grow by 7 percentage points after the November collapse of its onetime rival. As of last month, Binance reportedly controlled 55% of all crypto spot trading. And at the end of last year, it oversaw a whopping 92% of all BTC spot trades. It's not just spot: last month Binance's share of on-exchange derivatives trading hit 61%. Speaking of Binance, the SEC also informed crypto firm Paxos that it plans to sue the company for violating investor protection laws, including use of the Bianance USD token.

Finally, the Central Bank of the United Arab Emirates newly launched a Financial Infrastructure Transformation [FIT] program that intends to enhance the pace of digital transformation of the financial services sector. Specifically, this initiative aims to promote digital transactions and encourage innovation in the space.

Signal Bites

▹ FF Library - The Rise Of UGC 2.0
▹ Read - CC0 <> Web3
▹ Opinion - DAO Leadership
▹ Deep Dive - Web3 Growth Tech Landscape
▹ Music NFTs - Rihanna Song Royalties as NFTs
▹ Listen - Jihad Esmail on UFO
▹ Interesting - Account Abstraction
▹ Cool - Super Bowl LVII Collectibles
▹ Data - NFT Finance Market
▹ Tooling - RabbitHole Quest Protocol
▹ Tweet Check - Austin Robey on Web3
▹ Techy - Shanghai Hard Fork

◎ Check out Signal  for daily top web3 social headlines

Looking for a way to support Forefront? We’re opening up the FF Newsletter to sponsors interested in sharing their company, project, or community with +10,000 of web3’s most curious minds. If you are interested in becoming a sponsor, check out our Sponsorship Page.

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.