Public Goods and Onchain Narratives

On Optimism, Base, Fintech's downfall, Music NFTs and the future of public goods funding

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Forefront
January 15, 2024

Happy Monday!

Welcome to the 175th edition of the Forefront Newsletter, now more dynamic than ever. If you’re new here, we give you a weekly roundup of the best news and insights at the intersection of crypto, culture, and community.

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This week we’re covering:

Let’s get into it…

Week’s Highlight

Through the third round of their RetroPGF program, Optimism just distributed over $100M worth of OP token to over 500 projects and individuals who have contributed in various ways to the Optimism ecosystem.

By far, this is the single biggest RetroPGF experiment ever conducted onchain. For reference, Gitcoin Grants has distributed just over $56M of funding through all of their rounds combined. 

There’s a couple of threads I want to pull on here.

The RetroPGF narrative is taking hold, which means more experiments with this model to come. Gitcoin and other organizations are building tools to enable RetroPGF rounds to be run by any organization or ecosystem around any idea or theme. This means more money going to more individuals doing more positive sum work on the internet – sounds like a great deal.

But it’s not a perfect model. Plenty of folks were frustrated by the seemingly loose guidelines around what constituted a “public good” that would be eligible for funding. Specifically, much of the criticism surrounded projects that had already received venture funding and had a viable business model.

Maybe the answer is more thematic rounds or specific feedback loops. Nouns, for example, can be seen as a version of a public goods funding organization. There was discussion on Farcaster concerning what would lessons Nouns can learn from Optimism, and Seneca’s answer was along the lines of staying true to the meme. Optimism is optimizing for increasing blockspace usage – not every ecosystem has the same goal.

All in all, this is a fantastic development for both the utility and narrative of the crypto ecosystem. We’re excited for more experiments in public goods funding to come.

What’s Poppin’

Dee from Zora answers the question we constantly ask ourselves: why mint? This essay is a useful guide for understanding the value of minting in the digital world. It highlights minting as a way to recognize and capitalize on the attention and worth of online media. These motives could include saving work that resonates, sharing it in a platformless capacity, and optionally monetizing or funding creative output. The key takeaway is that minting empowers creators to own and directly benefit from their content, challenging the traditional models where platforms and advertisers profit from user-generated content.

Music NFTs are losing their luster. Some are arguing that Music NFTs have become… lazy. Here’s an exclusive take for the FF Newsletter from Music NFT investor and connoisseur Cooper Turley: “The reason to collect is to directly support an artist. It's not that deep. Platforms have been focusing on accessibility and social features to ensure collecting is more about patronage and fandom rather than speculation. There's an active intention to make these products easier to use so they can truly reach a mainstream audience and that in and of itself is the reason why the space is worth paying attention to. Music NFTs have been a punching bag since the very beginning and it makes sense why. Traders are used to buying collections that can 100x and Music NFTs have never proven that to be the case.”

Spencer from Blockchain Capital argues that fintech innovation has been disappointingly slow and superficial over the past 15 years. He contrasts the rapid advancements in other technology sectors with the minimal foundational changes in finance, which mostly remain anchored to outdated systems and structures. The essay critiques the finance industry's reluctance to innovate deeply, pointing out that the few notable innovations, such as fractionalized shares and new payment methods, are relatively minor. Additionally, they are inherently solved – or aren’t issues at all – when using crypto. Spencer emphasizes that fintech has mostly provided cosmetic solutions without addressing underlying inefficiencies, concluding that crypto is a more fundamentally innovative approach, with its digitally native architecture offering more profound changes for the financial sector. This is a must-read.

This essay from Zee Prime Capital uses the concept of the seven deadly sins as a framework to explore the nature of speculation in human society. It suggests that each sin (like greed, envy, and pride) can be linked to different forms of speculative behavior, especially in the context of modern technology and the internet. The article delves into how these inherent human traits fuel our speculative impulses, driving both innovation and risk-taking in areas like digital and crypto markets. It argues that understanding these deep-rooted motivations is crucial for navigating and capitalizing on the opportunities presented in today's rapidly evolving technological landscape.

This essay from Amanda Young explores the development of cryptocurrency technologies, starting with Bitcoin's influence on wallets and exchanges. It highlights Ethereum's role in advancing decentralized applications, particularly in the realms of DeFi and DAOs. The rise of NFTs, with projects like CryptoPunks, marks a significant shift in digital asset ownership and trading. The piece delves into the development of new consumer app infrastructures, focusing on low-fee blockchains. User-friendly wallets and seamless on/off ramps are emphasized as crucial for wider crypto adoption. The essay also discusses the role of identity protocols in creating a more user-centric crypto experience. Emerging distribution channels are highlighted as key to simplifying access to decentralized apps. Overall, the essay presents a comprehensive view of the evolving landscape of cryptocurrency applications and infrastructure.

Across Farcaster network activity, Base is seeing the most transactions of any chain by far, including mainnet. EVM L2s seem to be doubling down on narrative, but that doesn’t mean that narratives can’s expand. Base has gone after the “consumer” narrative, Zora the creative, Arbritum with DeFi and gaming ($MAGIC). That said, it’s clear that Base has a real shot at the social layer, especially given its early usage with Farcaster and friend.tech. With backing from Coinbase, the Base team has an ambitious roadmap focused on dramatically increasing onboarding, improving the UX by 100x, and decreasing costs to below $0.01 per transaction.

Multichain Pill

  • Solana. The recent hype around Solana is well-captured in the "State of Solana: Q4 2023" report by Messari. This deep dive report outlines Solana's impressive growth in the last quarter of 2023, marked by a 423% increase in market cap and significant rises in metrics like daily fee payers and DeFi Total Value Locked (TVL). Key events driving this surge included the Solana Foundation's Breakpoint conference and notable listings and airdrops. This growth underscores Solana's expanding influence in the crypto space.

  • Ronin. The Ronin Network, central to Axie Infinity's innovative play-to-earn model, has been a major influence in the gaming industry, allowing players to earn real-world value from in-game activities. Despite facing a significant challenge with a substantial hack in March 2023, the network has shown resilience. It's latest development, the opening of the Mavis Store, represents a pivotal moment in its journey. This store enhances the gaming experience by offering a variety of in-game items, indicating the network's continued growth and commitment to its ecosystem after recovering from the hack.

  • Ordinals. Taproot Wizards, a Bitcoin Ordinals project, has announced the sale of their "Quantum Cats" collection. This initiative, following their $7.5 million fundraising, capitalizes on the Ordinals protocol's growing popularity on the Bitcoin network. The collection features 3,333 unique cat-themed digital assets, highlighting the expanding interest in Bitcoin-based digital assets.

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