Newsletter: Account Abstraction is here

Welcome to issue 130: This week we cover Account Abstraction Launch, Bobby Hundreds on NFT <> Creator Royalties, Boba Epicure piece on Nouns DAO governance, Gitcoin x Metalabel Drop mainstream news and more...

By Forefront - Mar 6, 2023

Welcome to edition 130:

▹ Account Abstraction Launch
▹ Bobby Hundreds on NFT Royalties
▹ Boba Epicure on Governance
▹ Gitcoin x Metalabel Release
▹ Uniswap Launches Mobile Wallet
▹ Mainstream news and more...

---This edition is brought to you by Otterspace

Week’s Highlight

Account Abstraction is here!

In case you missed it: an audited version of the Ethereum Foundation's ERC-4337 account abstraction standard is now available on Ethereum mainnet.

It was previously believed that account abstraction would need to be implemented at the Ethereum protocol level, but developers were able to implement almost all of the desired functionality through a smart contract deployment, accelerating the roadmap significantly.

What is account abstraction? Most of Ethereum's existing wallets are externally owned accounts (EOA). The list, which makes up a majority of wallets now in the Ethereum ecosystem, includes providers like MetaMask and Rainbow. With account abstraction, the idea would be to make the account flexible to match users needs.

Some examples? Adding two-factor authentication to spend more than $5,000 dollars, or having protocols pay gas on behalf of their users, or social wallet recovery if you can't find your private keys.

AA creates a massive unlock for dramatically improving crypto UX across applications and protocols. For example, Safe is one of the earliest and most battle-tested implementations of account abstraction (AA) securing $39 Billion. Their new AA SDK, alongside companies like Stripe, will offer developers direct access to a wide range of integrations, enabling web3 apps across use cases to offer web2-like UX.

Smart accounts also make subscriptions possible through transaction delegation. Smart accounts make "pull" payments, initiated by a biller, possible. So, for example, an electricity company could set up an auto payment smart contract on its website and list out its functions --- e.g., it will only initiate one transaction per month and set a maximum amount that it will charge. The user can then approve these conditional pull payments via their smart account, enabling automated bill payments after their bi-weekly pay comes in.

Take Note The possibilities are truly endless, and every crypto company and protocol should be exploring how AA can be implemented to make their users' lives significantly easier. This is extremely bullish for Ethereum, the EVM, and crypto adoption broadly.

What's Poppin'

Nouns DAO and the Philosophy of Governance. Boba Epicure wrote this piece for the Stanford Blockchain Review exploring Nouns DAO's potential to bring forth a new cyber civil society through the dual mandate of promoting both the principle of democratic governance and meaningful decentralization by leveraging the self-actualizing power of iconography. For the author, NFTs are a new digital primitive that allows for the easy bootstrapping of ideologically aligned social networks. The Nouns DAO is one such network. As such, the Nouns Project is a testament to the adage that beauty lies in simplicity. This is a great piece exploring a novel lens through which Nouns and other tokenized communities can be viewed, and the potential for digital civil society.

The Artist's Right. This bear market is where the foundations of "mainstream crypto" will be built, and Bobby Hundreds has some thoughts. To get there, he says, we will need to revisit the existing paradigm for NFT growth: resale economics. We will also need to reconsider why anyone would want to consume the product to begin with. Bobby dives into the creator royalty debate, and argues that regardless of whether royalties are good for artists in practice, there must be a renewed focus on the artist vs. the economic model. For NFTs to become "real," they must be fostered by a vibrant culture and narrate a consistent brand. Relatively few projects in Web3 have the means and wherewithal to do this, but it'll take a rising tide to lift all boats. But, to develop a brand, artists must be allowed to consistently introduce new work into the market and tell a thoughtful, cohesive story over time. Only then, can a healthy secondary market take hold.

Protocol GTM Strategies: Product vs Network-Driven GTM. Mason Nystrom of Variant lays out two different protocol GTM strategies: product-driven and network-driven. Product-led protocol GTM focuses on building a single application, tool, or product ‌ on top of a protocol in order to jumpstart demand. The product-led protocol development and GTMstrategy aims ‌to serve as the initial wedge and first driver of activity for a protocol. On the other hand, network-driven GTM focuses on building a protocol with broad distribution and permissionless access, and then evangelizes others to build on top of the network. Taking this approach allows a team to focus on the protocol and helps generate user activity that the initial team might not have anticipated. While much of this piece may seem obvious to some readers, it is a clean framework through which we can think about the various products and protocols we are building.

Crypto is a Religion---Are You a Believer? The first Folklore-funded essay is a great one. In this piece, Finn Lobsien reveals and examines the different elements that make crypto a religion. Crypto is a faith-based technology, he argues. Because it only works when others also use it, its usage requires not only technological, but also social construction: for crypto to be successful, we need a narrative that requires its success. The essay dives into the many factors of religion and applies a standard framework to the world of crypto. Like a religion, for example, there are "hierarchies" of believers based on how closely their actions align with the underlying beliefs of the faith. Not only is this an interesting piece in theory, but regardless of whether you align with the thesis, it is important to understand the dynamics of the crypto narrative when building and selling products to the masses. Great work by Finn and the Folklore community.

Blockchain Apps - Take Two. Polynya wrote a post in September about where blockchain apps make sense. A few months after that, Vitalik wrote a detailed post about a similar topic, which pushed them to realize their initial model was incomplete. This piece is another stab at that same topic. According to polynya, blockchain apps make sense where you need all three: P2P operation, strict global consensus, and objectivity. What applications require both peer-to-peer operation and strict global consensus? Money/value and identity, in their various forms, barring tiny niches. The piece explores why this specific intersection is where blockchain apps make the most sense, and why exceptions to this rule will continue to arise regardless.

Gitcoin x Metalabel: The Quadratic Funding Record. Metalabel showed their hand this week with a collaborative release with Gitcoin celebrating quadratic funding. This collection reissues "Liberal Radicalism," the 2018 whitepaper that introduced quadratic funding to the world. Additionally, the collection also makes use of Metalabel's own tools for releasing records, with almost all of the relevant information and context onchain, as well as funding splits between members of the metalabel responsible for this record. By collecting this record, you help support the creation of more public goods projects via the Gitcoin Matching Grant Pool and the Plurality Institute. Awesome stuff from both groups!

Latest on Mainstream...

Yuga Labs has released a new generative art project. The 300-piece NFT collection, entitled "TwelveFold," were minted on the Bitcoin blockchain as Ordinals Inscriptions. 288 of the 300 pieces will be up for auction, with Yuga holding back the remaining 12 for contributors, donations, and philanthropic efforts.

Silvergate, a California bank that's played a vital role in the crypto industry's growth, issued a stark warning on Wednesday: its days may be numbered. The company said it wouldn't be able to file its annual report with the SEC on time because its financial position has deteriorated significantly since last month. Now it's "evaluating" whether it can continue operating. This is a bad sign for all of the companies operating alongside the bank.

Finally, Kraken is moving ahead with plans to launch its own bank despite a challenging regulatory environment, Marco Santori, Kraken's chief legal officer, told The Block. This might be just the news we needed to hear in light of the above.

Signal Bites

▹ Read - Some Personal UX
▹ FF Library - Surviving Lower NFT Royalties
▹ Opinion - ETHDenver Takeaway
▹ Fresh Take - Internet Computers
▹ Deep Dive - Bitcoin Inscriptions & Ordinals
▹ NFTs - Fidenza $365k Sale
▹ Interesting - Prop Lot
▹ Drop - TwelveFold by Yuga
▹ Watch - Wen DAOs Win?
▹ Tooling - Uniswap Mobile Wallet
▹ New - POAP Checkout
▹ Mainstream - Brazil's Digital Real
▹ Techy - We Fixed Tornado

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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