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"The Space," Negativity, and Farcaster Arbitrage
Other Internet, PGN, crypto haters, 2024 dev report, and much more...
Forefront
January 22, 2024
Happy Monday!
Welcome to the 176th 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
Haters and skeptics often describe crypto as “lawless,” and it might be time for believers to describe it that way as well.
Other Internet’s newest essay – Crypto’s Three Body Problem – offers a simple explanation for crypto’s failure to achieve the goals that founders and builders have outlined: crypto lacks laws. In a world where “code is law,” the OI squad observes that a "three-body problem" arises, where social norms, markets, and code conflict. This leads to unique institutional behaviors and governance issues in crypto environments. In other words, there are no “collective notions of justice” which leads to “unstable interactions of norms, markets, and architecture [spawning] new and often surprising institutional behaviors.”
The essay then goes on to discuss Curve, NFT royalties, and ENS DAO norms as examples of times where this thesis was brought to light.
Most interestingly, the trio goes on to discuss how the root of these problems could be found in the oft-lauded principle of credible neutrality. “Invoking credible neutrality should not have the primary effect of degrading accountability and putting users at risk,” they say, and we couldn’t agree more.
Credible neutrality – and the lack of norms more broadly – is often used as a rebuttle to any request for self-regulation of the ecosystem. But “the space” has no shared moral framework. Credible neutrality attracted people of all perspectives, values, and beliefs, which has made it difficult for social institutions to gain legitimacy in a hostile environment.
All in all, this is a must-read essay for anyone working in or thinking about crypto, and has wide ranging implications for how we think about technology as a whole.
What’s Poppin’
The title is self-explanatory, but Cooper has been working at the intersection of crypto and music for years and has a deep perspective on what the rest of the world thinks of “the space.” The essay highlights how complexity, lack of understanding, overhype, and a disconnect from real-world applications hinder broader acceptance. Cooper suggests that the crypto industry needs to be more intentional about welcoming new users and integrating with their needs, rather than focusing solely on the existing crypto-savvy community. This approach, the essay argues, is essential for the growth and sustainability of the crypto industry. This isn’t a new perspective, but it’s definitely a debated one. Failure to accept that UX matters and that we cannot build for “crypto natives” is a failure to build stuff that matters.
This week, Public Goods Network – an L2 built using Optimism’s OP Stack – announced that it would be winding down the chain after months of experimentation. The appeal of the chain was its willingness to direct sequencer fees to fund public goods, making it a no-brainer for any application that wanted to have L2-level fees while “doing good.” That said, PGN failed to gain traction in a market dominated by OP mainnet, Arbitrum, and Base, with other more “niche” L2s like Zora gaining market share. It’s clear that L2s will not only need a strong narrative and lower fees to gain adoption, but also a rich developer ecosystem that is willing to start building from day one. Base was able to throw money at developers, Zora integrated their product into the chain from its inception, etc. Regardless, PGN was an incredible experiment and we’re excited to see what the team does next.
Electric Capital’s annual Crypto Developer Report is live, and it’s packed with insights. The team analyzed a record 485 million code commits across 818k repositories — 20x more code than their first report from 2019! Overall developers are down 24% but losses stem mostly from Newcomer developers. Long-term committed developers continue to steadily grow. Additionally, crypto developers have clearly shifted to multi-chain development. Meanwhile, the industry has become a global phenomenon: the US continues to lose developer share. Definitely spend some time giving the report a read if you’re selling to (or hiring) crypto developers.
Farcaster has been catching fire among crypto twitter-types over the last six months, but even before that, the “sufficiently decentralized” social media protocol had a small but loyal base of builder-users. This letter from YB argues that today’s users on Farcaster have the unique opportunity to shape the conversation, collaborate quickly, receive quality feedback, and directly engage with crypto accounts (i.e. Vitalik) that would otherwise not happen on saturated platforms. He believes that the Farcaster community right now parallels the early days of communities such as Ethereum, Twitter, etc. It's important to always be looking for the next scenius in tech and double down.
Jesse Walden of Variant defines a headless marketplace as “a market leveraging global (onchain) identity, money, and data while distributing locally, wherever a users wallet already is (e.g. inside a Telegram group chat or Farcaster feed).” The best known and most used headless marketplace is Uniswap. Users can tap global liquidity from any integrated interface they're already spending time in, like the Telegram bot in the group chat. Headless marketplaces are uniquely enabled by the composability of blockchains, where user identity is portable, data is open, and money is programmable. Fascinating idea!
Multichain Pill
The Solana Ecosystem. The Decentralised team wrote a massive state of the union on the Solana ecosystem here. For anyone looking for a deep dive on what’s happening in Solana, this is your opportunity.
Solana Phone 2.0. The newest Solana Phone is coming. Given the recent success of the first phone (despite the fact that, as a phone, it isn’t great), some folks believe this will be a successful strategy to bring Solana to the mainstream.
Blast Developer Incentive Competition. Dapps can compete to get in front of 100k users & $1.3B in TVL, connect with top investors, and earn the Blast Airdrop.
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