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The Origin and the Diffusion Curve of SBT

SBT: the Key to Unlock the Future of DeSoc

The term “DAO” (decentralized autonomous organization) gets used in the cryptocurrency ecosystem through a variety of contexts. Organizations claiming the title exhibit a broad range of variance when it comes to decentralization and autonomy.

<p>By James Duncan</p>
<p>As part of our new&nbsp;<a href="https://stateless.boardroom.info/" target="_blank" rel="noopener noreferrer">Stateless</a>&nbsp;initiative, we&rsquo;re excited to present a guest deep dive on DAOs by&nbsp;<a href="https://twitter.com/OKDunc" target="_blank" rel="noopener noreferrer">James Duncan</a>, in which he lays out a framework to analyze decentralization (technical and cultural) and autonomy (technical and political) in these novel entities.</p>
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<div class="css-ovd0pw"><img class="css-r0ukz2" src="https://cdn.substack.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb9440817-1a75-431f-87b0-a2ede34bf007_1322x726.png" alt="This is a scale used in a previously workshopped iteration of this idea presented at ETH Denver 2020. This article offers a more refined approach to defining autonomy within these systems." /></div>
<figcaption>This is a scale used in a previously workshopped iteration of this idea presented at ETH Denver 2020. This article offers a more refined approach to defining autonomy within these systems.</figcaption>
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<p>&ldquo;...it is safe to say that &ldquo;DAOism&rdquo; is well on its way to becoming a quasi-cyber-religion.&rdquo; - Vitalik Buterin 2014,&nbsp;<em><a href="https://blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-an-incomplete-terminology-guide/" target="_blank" rel="noopener noreferrer">DAOs, DACs, DAs, and More: An Incomplete Terminology Guide</a></em></p>
<p>The term &ldquo;DAO&rdquo; (decentralized autonomous organization) gets used in the cryptocurrency ecosystem through a variety of contexts. Organizations claiming the title exhibit a broad range of variance when it comes to decentralization and autonomy.&nbsp;</p>
<p>Many DAOs exhibit higher degrees of centralization than what the term theoretically indicates. While degrees of centralization are necessary for the evolution of such early networks there&rsquo;s no standard analysis for the variance between systems.</p>
<p>DAOs will slowly (or not so slowly) take the center stage of cryptocurrency network development and product entrepreneurship as every token project begins to implement strategies to move toward a self-propelled, community built, owned, and operated system. All DAOs aim to reach a state of&nbsp;<em>Sufficient Decentralization</em>&nbsp;in part to satisfy regulatory scrutiny. This concept loosely&nbsp;<a href="https://www.sec.gov/news/speech/speech-hinman-061418" target="_blank" rel="noopener noreferrer">coined by the SEC</a>&nbsp;in 2018 describes the state in which a token network has sufficient activity to no longer rely on a specific group or individual to &ldquo;carry out essential managerial or entrepreneurial efforts&rdquo;.&nbsp;</p>
<p>Today&nbsp;<a href="https://a16z.com/2020/01/09/progressive-decentralization-crypto-product-management/" target="_blank" rel="noopener noreferrer">progressive decentralization</a>&nbsp;stands as the defacto playbook to approach DAO development, but new frameworks for finding the path leading a project from idea to sufficiently decentralized network continue to emerge. This article offers a high level framework to analyze the range of autonomy and decentralization within these new global coordination mechanisms.</p>
<h2>Calculating Autonomy</h2>
<p>Autonomy holds multiple definitions in relation to DAO systems. In one form, autonomous indicates&nbsp;<strong>independent and self-executing</strong>. This type of autonomy refers to the way something is technically automated. On the other hand, autonomous also indicates&nbsp;<strong>political autonomy</strong>. This refers to the freedom of an organization to coordinate autonomously from outside influence.</p>
<p>The degree to which a DAO exhibits autonomy depends on the decentralization of the system&rsquo;s&nbsp;<strong>technical</strong>&nbsp;and&nbsp;<strong>cultural</strong>&nbsp;layers.&nbsp;</p>
<blockquote>
<p><em>autonomy(DAO) = decentralization(tech + culture)</em></p>
</blockquote>
<p>Increased decentralization results in an increase of censorship resistance and longevity, and every DAO fingerprint leverages a variety of technical and cultural tools during different stages of development in an effort to build a robust, self-propelled organization.&nbsp;</p>
<h2>Technical Decentralization</h2>
<p>The degree of technical decentralization is defined by the&nbsp;<strong>tools used to automate power distribution</strong>&nbsp;across participating agents within the system. In general, liquid token economies provide a stronger technical means of decentralization than a multisig because liquid economies allow for permissionless network ownership and participation.&nbsp;</p>
<p>Permissioned systems have less autonomy and decentralization, while permissionless systems generally have more autonomy and decentralization. With this in mind, consider the difference between a decentralized organization (digital, crypto-based permissioned coordination) and a decentralized autonomous organization (digital, crypto-based permissionless coordination).</p>
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<p>Characteristics differentiating the two types of structures on a technical level stem from the extent to which the management system automates decisions and distributes ownership. Below we organize examples of more technically permissionless systems with more technically permissioned systems.</p>
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<p><strong>On the left</strong>&nbsp;of this graph we see a variety of dao frameworks (Gnosis Multisig, Colony, DAOHaus, DAOstack, Aragon). These tools offer various degrees of decentralization based on their configuration (learn more from&nbsp;<a href="http://kronosapiens.github.io/blog/2019/06/16/aragon-daostack-colony-moloch.html" target="_blank" rel="noopener noreferrer">this article</a>).</p>
<p><strong>On the right</strong>&nbsp;we see the Bitcoin and Ethereum token economies, both of which can be considered DAOs. As far as technical decentralization goes, Bitcoin might be considered more technically decentralized due to the immutability of the code. Ethereum on the other hand, leverages some centralized coordination to update the underlying protocol.</p>
<p><strong>The middle</strong>&nbsp;symbol represents 1Hive, a community that has a liquidity token $HNY and organizes resources at the edges of their protocol via a variety of the frameworks presented on the left.&nbsp;</p>
<p>Tools continue evolving rapidly to create more sophisticated mechanisms for distribution of ownership and management within these new organizational structures. While the technical footprint might appear decentralized,&nbsp;<strong>the way in which these tools are used by their community</strong>&nbsp;defines the degree to which they actualize decentralization.</p>
<h2>Cultural Decentralization</h2>
<p>An organization's cultural decentralization comes from the way&nbsp;<strong>power is distributed across the humans</strong>&nbsp;interacting with the system. This layer carries more nuance than the technical layer, as it is not a technical assessment but an anthropological analysis of community development, information sharing, and decision making.</p>
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<p>Here is a first take at the cultural characteristics exhibited on both ends of the decentralized organizational spectrum. Again, the extent to which a DAO&rsquo;s culture is decentralized is defined by the manner in which the community building and interacting with the system exhibits properties of permissionless self-propagation vs permissioned and curated management.</p>
<p>To better understand cultural decentralization, let&rsquo;s dig into some examples of the differences between a few token networks (XRP, EOS, ETH, and BTC).</p>
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<p>Putting aside the technical differences between the consensus systems used in each network, let&rsquo;s take a broad strokes analysis of their strategy and path for decision-making.</p>
<p>On the left, EOS and XRP generally rely on coordinated marketing efforts and investment in developers to build applications on top of their blockchain architecture. These decisions come from a system that looks very similar to a corporate structure of management.</p>
<p>On the right, Bitcoin and Ethereum both rely heavily on open source development generated by communities of individuals who coordinate via forums and blog posts largely driven by research and intellectual curiosity (eg.&nbsp;<a href="https://ethresear.ch/" target="_blank" rel="noopener noreferrer">Ethresearch</a>).&nbsp;</p>
<p>This scale of decentralization can be further illuminated by looking at the activity of contributions to the network development. Albeit outdated,&nbsp;<a href="https://medium.com/electric-capital/electric-capital-developer-report-h1-2019-7d836d68fecb" target="_blank" rel="noopener noreferrer">an analysis by Electric Capital</a>&nbsp;from 2019 provides nice context to the differences in cultural decentralization.</p>
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<p>With this added information, it is relatively clear that Bitcoin and Ethereum stand as outliers in organically attracting human contributions to network development. Zooming in on the previous scale to analyze the difference between Ethereum and Bitcoin from a contribution standpoint advances the argument for Ethereum as a more decentralized and self-propagating system (<em>which is contradictory to the decentralization noted in the technical analysis section</em>).</p>
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<p>DAO systems that facilitate a high level of engagement from a large variety of people and initiatives naturally hold higher degrees of self-propagation in design and direction, as well as theoretically higher &ldquo;bus factors&rdquo; (ie. more decentralized points of failure).&nbsp;</p>
<p>Taking this back to the initial stated goal of networks reaching Sufficient Decentralization as defined by no specific entity carrying out &ldquo;managerial or entrepreneurial efforts&rdquo;, Ethereum might reasonably be more decentralized than Bitcoin as a DAO.</p>
<h2>Conclusion</h2>
<p>DAOs are gaining a lot of steam as groups begin launching their own governance tokens. A variety of&nbsp;<a href="https://thedefiant.io/what-is-a-dao-mapping-out-the-ecosystem/" target="_blank" rel="noopener noreferrer">offchain and onchain tooling</a>&nbsp;continue to advance the ability for these systems to elegantly distribute ownership and management. These systems offer the latest method of human coordination and a path for thousands of governance experiments to run concurrently.&nbsp;</p>
<p><em>More research needs to be done to further detail the extent to which specific DAOs are technically and politically decentralized and autonomous.</em>&nbsp;It will be particularly interesting to continue comparing and analyzing the difference in technical and cultural decentralization exhibited by projects of a specific category. All will demonstrate a mix of centralized and decentralized characteristics throughout their development lifecycles.</p>
<p>As the ecosystem continues to develop and harden core use cases, every project will implement some form of DAO structure to distribute network ownership. The most successful systems will define new design patterns for global coordination.</p>
<h2>Glossary</h2>
<p><strong>Autonomous</strong>&nbsp;- holds two definitions: 1. autonomous defines the degree to which a system or entity acts automatically on protocol changes, resource allocation, and membership systems. 2. autonomous used in reference to political autonomy.</p>
<p><strong>Cultural Layer</strong>&nbsp;- the layer of humans assisting in the productivity and coordination for the resources, membership, and protocol of a DAO.</p>
<p><strong>Decentralized</strong>&nbsp;- defines the degree to which the network of operating participants is resistant to a single point of failure.&nbsp;</p>
<p><strong>Decentralized Organization (DO)</strong>&nbsp;- a network of digital actors coordinating in a permissioned way.</p>
<p><strong>Decentralized Autonomous Organization (DAO)</strong>&nbsp;- a network of digital actors coordinating in a permissionless way.</p>
<p><strong>Operating Agent</strong>&nbsp;- humans, computers, or blockchain addresses that function as members or nodes of a DAO.</p>
<p><strong>Permissioned</strong>&nbsp;- defines an exclusive system that requires human input to curate the management of membership, resources, or protocol changes.</p>
<p><strong>Permissionless</strong>&nbsp;- defines an open system that leverages code, market activity, or knowledge to automate management of membership, resources, or protocol adjustments.</p>
<p><strong>Sufficient Decentralization</strong>&nbsp;- a term loosely&nbsp;<a href="https://www.sec.gov/news/speech/speech-hinman-061418" target="_blank" rel="noopener noreferrer">coined by the SEC</a>&nbsp;in 2018 describes the state in which a token network has sufficient activity to no longer rely on a specific group or individual to &ldquo;carry out essential managerial or entrepreneurial efforts&rdquo;.</p>
<p><strong>Technical Layer</strong>&nbsp;- the layer of code defining the way operating agents coordinate to manage the resources, membership, and protocol of a DAO.</p>

D(?)A(?)O - Decentralization and Autonomy in "DAOs"

November was rough. Are things up-only from here?

5 On-Chain Signals That We've Bottomed

The spectacular and scandalous collapse of FTX showed the colossal damage that a centrally organized, opaquely disclosed, and reckless managed ﬁnancial agent can do to the entire industry and society at large.

<h3>Crypto CeFi, the Original Sin</h3>
<p>The spectacular and scandalous collapse of FTX showed the colossal damage that a centrally organized, opaquely disclosed, and reckless managed ﬁnancial agent can do to the entire industry and society at large. That centralized organizations can dominate the assets originated from decentralized networks is a sad irony, a disease that has plagued crypto since the day when there was crypto trading.</p>
<p>The narrative of the "crypto natives" is that blockchain technology was supposed to replace centralized entities, the likes of the Federal Reserve or other monetary authorities. Whereas in reality, cryptocurrency has handed itself to the shady and sketchy organizations that primarily use them to loot and raid. The irony is so sharp that it hurts. It has never been clearer than NOW that decentralized, transparent, rigorous, and professional management of the Web3 ﬁnance must take the center stage. NOW isn&rsquo;t just a watershed-moment, it is an existential one.</p>
<p>The infrastructures needed to enable and sustain a crypto-powered Web3 go far beyond the DeFi in its current form, as facilities in this category are merely independent functional units - MUCH better units than their counterparts in centralized systems. What we regard as the absolute necessity is the operational and control layer on top of these functional units, capable of enforcing responsibility and accountability imposed upon the operators of these functional units, while demonstrating their competence and credibility. These operators should ideally be elected and monitored by the communities (organized as DAOs) they serve, and are regulatory compliant to perform their professional tasks, if necessary.</p>
<p>Throughout 2021 and the better part of 2022, prior to the fallout of FTX, the number of&nbsp;<a href="https://www.weforum.org/agenda/2022/06/are-dao-the-business-structures-of-the-future/" rel="noopener noreferrer nofollow">DAO participants</a>&nbsp;has already grown from 13,000 to a whopping 1.7 million people worldwide. The records speak for themselves; decentralization is the heart and soul of Web3. The damages done by the likes of FTX, 3AC, Celsius, etc. will only serve to show the advantage of Decentralized Autonomous Organizations (DAOs), as they are built on blockchains and promise transparent and democratic governance. Yet such lofty promises will disappoint if the operations of the DAOs are built on leaky or shaky foundations, particularly regarding their ﬁnance.</p>
<h3>Integrated Financial Management in a DAO</h3>
<p>Most DAOs today are built hastily with incoherent and fragmented management components that have resulted in plutocratic governance schemes, Sybil-infested incentive structures, and the proliferation of useless "utility tokens" (as fundraising vehicles). While these integrity and economic issues are already threatening the viability of DAO as an important augment to the traditional corporate framework, the lack of professional ﬁscal and ﬁnance tooling makes the matter even worse.</p>
<p>There have been numerous DAO treasury tools in the market, and more are coming. Most of them are multi-sign wallets in one form or another. Participants in the Web3 ﬁnancial management sector need to urgently understand that the robustness of individual parts of a machine is not the same as a well-designed and well-run machine itself. How these parts are put together is entirely a different thing of its own merit. A Multi-sig wallet can be regarded similarly to a DeFi lending protocol or a DEX as an independent functional part (we can&rsquo;t emphasize enough that they all are MUCH better than their counterparts in the centrally managed regime). Yet, what makes up a ﬁnancial management framework is the processes and procedures governing the usage of these parts, which must also be built on-chain to be veriﬁable and enforceable.</p>
<p>A quick review of the evolution of the Web1 economy to the Web2 economy may shed light on our vision of the DAO ﬁnancial management in the Web3 era. There were once numerous companies of various sizes who were all building their own online business systems. There were abundant independent solutions available to them (front end browser tools, back end server tools, middleware, payment, etc.), and yet what made Web2 an ultimate success isn&rsquo;t the abundance or individual qualities of these solutions; it is rather the emergence of cloud service and SaaS. Specialized, customizable, integrated, and off-the-shelf software suites that are capable of providing end-to-end solutions for a certain domain of business have won the day.</p>
<p>This is what&nbsp;<a href="https://tokeninsight.com/en/coins/ink-finance/overview" rel="noopener noreferrer nofollow">Ink Finance</a>&nbsp;is delivering to DAOs who treat their ﬁscal management and ﬁnancing seriously.</p>
<h3>What Financial DAOs Look Like in the Future</h3>
<p>While progress in recognizing DAOs as legal entities is underway in places such as&nbsp;<a href="https://www.coindesk.com/markets/2021/07/08/regulators-everywhere-should-follow-wyomings-dao-law/" rel="noopener noreferrer nofollow">Wyoming</a>&nbsp;and the&nbsp;<a href="https://cointelegraph.com/news/marshall-islands-officially-recognizes-daos-as-legal-entities" rel="noopener noreferrer nofollow">Marshal Islands</a>, or that the Colorado co-op scheme is being revised to embody DAOs, the underlying technical infrastructures that carry them must be built to address at least the following three critical aspects of on-chain ﬁnance:</p>
<ul>
<li>This is the easiest to understand: open source DeFi protocols that carry out ﬁnancial transactions such as spot trading, derivatives, lending, cross-chain asset swaps, and payment solutions. These facilities have never been short of innovation since DeFi took root in 2019, and will certainly attract more talents and investments after the fallout of FTX;</li>
<li>The operational and control layer on top of the above mentioned DeFi facilities. It is very much underappreciated why the aforementioned facilities are not enough to mitigate ﬁnancial risks by themselves alone.<br />Let&rsquo;s use Aave and Uniswap, the two prominent DeFi protocols, as examples. If an asset manager spends $1M to acquire token X from Uniswap and then pledges it on Aave to get a 700k loan, and then uses the proceeds to acquire more token X from Uniswap, and then pledges it again on Aave, and repeats the process indeﬁnitely, neither Aave nor Uniswap can stop his egregious leveraging. The guardrail curbing this asset manager&rsquo;s action is the key, which leads to the inevitable process of rulemaking and enforcement - the process of ﬁnancial governance, itself being a part of a more general governance framework.<br />What makes this process challenging is that the domain of ﬁnance is widespread, requiring profound ﬁnancial knowledge and the proper engineering that delivers rigor as well as ﬂexibility. This is the sector that Ink Finance is specialized in, one that we expect to see more competition in, as its critical importance becomes more and more clear to the institutions and large ecosystems. We regard this sector as the ﬁnancial SaaS of Web3.</li>
<li>Last but not least, the integration with global regulations. The FTX debacle has shown the harm of regulation arbitrage. If the advanced leading countries do not step up on the regulatory effort, the shady organizations will simply base themselves in jurisdictions with poor or no regulation, yet the nature of cryptocurrencies assures that the harm will be felt globally.<br />Encouragingly, various decentralized protocols have made major inroads in this domain, paving the way for on-chain organizations to be regulatory compliant if they choose to. Ink Finance has dedicated critical efforts to integrating these technologies to its own stack, partnered with industry leaders such as&nbsp;<a href="https://astraprotocol.com/" rel="noopener noreferrer nofollow">Astra</a>&nbsp;and&nbsp;<a href="https://humanode.io/" rel="noopener noreferrer nofollow">Humanode</a>.</li>
</ul>
<p>To sum up, the ﬁnancial DAOs of the future will need to use open source DeFi facilities as their transactional backbone, manage its ﬁscal and ﬁnancial process with a transparent and on-chain executable ﬁnancial control framework, and make themselves regulatory compliant when required.</p>
<h3>Conclusion</h3>
<p>The ingredients to the long-term legitimacy of on-chain ﬁnance are customizable, ﬂexible, and specialized products that can be picked off-shelf and ready for end-to-end deployment, that brings professionalism, security, transparency, and adaptivity to regulatory oversight.</p>
<p>Only when the crypto industry can deliver such sound ﬁnancial management solutions, will it then be able to persuade and incentivize traditional institutions to shake off the carnage brought by the centralized agents operating under the banner of crypto. Only then can institutions such as auction houses, VC &amp; angel investors, alternative asset managers, and web2 metaverse companies adopt DAO as an augment to their corporate structure in order to achieve high eﬃciency of their businesses, which is the promise of the Web3 world.</p>
<p>At Ink Finance, we will keep delivering the most comprehensive and professional solutions to ﬁnancially minded DAOs. We might be facing the longest and coldest crypto winter, but we are ready to chew glass and work with other determined builders to accelerate the adoption of TRUE decentralized ﬁnance.</p>
<h3>About the author</h3>
<p><a href="https://www.linkedin.com/in/tony-tang-5818595a/" rel="noopener noreferrer nofollow">Tony Tang</a>&nbsp;is the CEO of Ink Finance, a multi-chain financial governance toolset for on-chain organizations to manage all aspects of their fiscal and financing activities. Tony is a financial industry veteran with an engineering background who previously served as managing directors at several top financial institutions and fintech VC.</p>
<p>This content was provided by Ink Finance.</p>

The Post-FTX Future of Financial Governance

There’s no better time to build than a complete crash

The Web3 Ice Age

The L1 has fallen on hard times -- can it bounce back?

Is Solana Dead?

Earlier this month, FTX—the third-largest crypto exchange in the world—collapsed.

<h1><span style="font-size: 12pt;">BY Matt Hougan</span></h1>
<h1>Market Overview</h1>
<p>Dear Investors,</p>
<p>Earlier this month, FTX&mdash;the third-largest crypto exchange in the world&mdash;<a href="https://www.reuters.com/technology/exclusive-behind-ftxs-fall-battling-billionaires-failed-bid-save-crypto-2022-11-10/" target="_blank" rel="noopener"><u>collapsed</u></a>.</p>
<p>The firm&rsquo;s CEO, a media darling whom&nbsp;<a href="https://fortune.com/2022/08/01/ftx-crypto-sam-bankman-fried-interview/" target="_blank" rel="noopener"><u>Fortune</u></a>&nbsp;magazine dubbed the &ldquo;The Next Warren Buffett,&rdquo; appears to have engaged in a massive and perhaps criminal fraud, appropriating customer assets and funneling them to an affiliated hedge fund. The firm filed for Chapter 11 bankruptcy protection on November 10 and reportedly has&nbsp;<a href="https://www.cnbc.com/2022/11/15/ftx-says-could-have-over-1-million-creditors-in-new-bankruptcy-filing.html" target="_blank" rel="noopener"><u>more than one million creditors</u></a>.</p>
<p>The news has shaken the crypto industry and sent crypto prices down. Bitcoin, which had been trading around $20,000 before FTX&rsquo;s meltdown, is now trading around $16,000. Ethereum, which was trading near $1,600, is now below $1,300.</p>
<p>Critics have characterized FTX&rsquo;s downfall as proof that&nbsp;<a href="https://www.washingtonpost.com/business/2022/11/10/ftx-faq-crypto-turmoil/" target="_blank" rel="noopener"><u>crypto itself is flawed</u></a>, a failed idea built on sand. But that argument doesn&rsquo;t stand up to scrutiny. Fraud, unfortunately, has cast a long shadow throughout the history of finance. The potential existence of fraud at FTX does not invalidate crypto and blockchain any more than the existence of Bernie Madoff invalidated stocks and options.</p>
<p>But arguments that FTX &ldquo;doesn&rsquo;t matter&rdquo; are equally hollow. FTX was a high-profile firm. Its name was stamped on the uniforms of MLB umpires and on the stadium of the NBA&rsquo;s Miami Heat. Its CEO, Sam Bankman-Fried (SBF), was well known in Washington, both for his crypto lobbying efforts and for his status as one of the largest political donors in America.</p>
<p>As such, FTX&rsquo;s collapse&nbsp;<em>will&nbsp;</em>shape crypto for months and years to come, in ways both good and bad.</p>
<p>So in this month&rsquo;s Investor Letter, let&rsquo;s face up to FTX: what it means, what it doesn&rsquo;t mean, and how it will shape crypto in the years to come.</p>
<h6><em>Note: Bitwise has no affiliation with FTX. We did not trade or custody assets on FTX.</em></h6>
<h2>What FTX&nbsp;<em>Doesn&rsquo;t</em>&nbsp;Change About Crypto</h2>
<p>The place to start is what FTX&nbsp;<em>does not</em>&nbsp;change about crypto. It&rsquo;s a long list.</p>
<p>The collapse of FTX does not change anything about blockchain technology. It does not change crypto&rsquo;s ability to move money at the speed of the internet, program money like software, or create digital property rights. It does not change the advances of decentralized finance (DeFi), and it neither makes stablecoins less interesting nor truncates the long-term possibilities created by non-fungible tokens (NFTs). It does not reverse the incredible progress we have made in recent years on crypto infrastructure, from the rise of regulated custodians to the development of the regulated CME bitcoin futures market.</p>
<p>Similarly, it does not change the fact that there is a record number of developers working in crypto, or that Ethereum SDK installations&mdash;an indicator of how many applications are being built on Ethereum&mdash;have tripled in the past year alone. FTX&rsquo;s alleged fraud does not change that Ethereum&rsquo;s monthly revenue is up 32x over the past four years.</p>
<p>FTX does not alter the fact that crypto has received more venture capital in the past two years than it did in the preceding 10, nor does it detract from the incredible progress we&rsquo;ve made recently in blockchain technology itself: 2022 has seen the successful execution of Ethereum&rsquo;s Merge (which, among other impacts, cut that blockchain&rsquo;s carbon consumption by 99%) along with the rise of Layer 2 solutions that (in combination with other technological upgrades) are expected to increase blockchain bandwidth&nbsp;<a href="https://twitter.com/VitalikButerin/status/1277961594958471168?s=20&amp;t=tAfz1A_6y05yEqymm5iykA" target="_blank" rel="noopener"><u>more than 10,000-fold</u></a>&nbsp;in the coming years.</p>
<p>In other words, FTX doesn&rsquo;t change the fundamentals of crypto in any meaningful way. It does, however, alter the conditions we operate in.</p>
<h2>What FTX&nbsp;<em>Does</em>&nbsp;Change About Crypto</h2>
<p>In the short term, FTX&rsquo;s collapse has destroyed trust and introduced uncertainty into the market. The marginal crypto investor will now think twice before signing up for an account, and many institutional investors will sit on the sidelines waiting to see what other shoes will drop. It&rsquo;s a reasonable stance: We will likely see other firms pulled away by FTX&rsquo;s undertow, and we don&rsquo;t yet know the full extent of any contagion.</p>
<p>In the intermediate-to-long term, FTX&rsquo;s collapse will accelerate and intensify regulatory scrutiny in the space. While regulators bear some of the blame for FTX&rsquo;s unchecked rise&mdash;the lack of regulatory clarity in the U.S. pushed trading venues offshore&mdash;politicians and regulators alike will seize on the high-profile collapse to claim that we must tame the Wild West of crypto immediately.&nbsp;<a href="https://www.wsj.com/articles/ftx-collapse-sets-back-crypto-agenda-in-washington-11668434402" target="_blank" rel="noopener"><u>We are already seeing this in Congress</u></a>, which is likely to hold hearings on the FTX debacle, and from SEC Chairman Gary Gensler, who lays the blame for FTX&rsquo;s collapse on the lack of regulatory enforcement.</p>
<p>Long-term, increased regulatory clarity will be good for crypto. A murky regulatory environment keeps investors on the sidelines and stifles the creativity of crypto entrepreneurs. Ironically, the collapse of FTX may end up being a catalyst for the next bull market in crypto, which needs clear regulation to go mainstream.&nbsp;</p>
<p>But regulation made in haste brings risk, and FTX&rsquo;s collapse increases the likelihood we see rules adopted in a manner that doesn&rsquo;t give the industry time to adapt. (For a good review of what&rsquo;s at stake from a regulatory perspective,&nbsp;<a href="https://blog.chainalysis.com/reports/opportunity-congress-crypto-legislation/" target="_blank" rel="noopener"><u>read this insightful take from Chainalysis</u></a>.)</p>
<p>Beyond that, FTX&rsquo;s collapse will also likely pause and/or diminish the flow of venture capital funding into crypto. A huge number of VC firms had exposure to FTX&rsquo;s equity, and they will have to write that down to zero. Some, like Sequoia,&nbsp;<a href="https://www.sequoiacap.com/article/sam-bankman-fried-spotlight/" target="_blank" rel="noopener"><u>heavily promoted their investment in FTX</u></a>&nbsp;and now have egg on their faces. They will be unlikely to return to crypto quickly. Even funds that didn&rsquo;t have exposure will find it harder to raise new assets, as their institutional clientele will want to know how they are protected from the &ldquo;next FTX.&rdquo; The venture capital spigot will likely slow to a trickle for a year or more as firms adapt.</p>
<div class="c-fnBDkS">
<h4>VC Money Invested in Crypto/Blockchain by Stage</h4>
<img src="data:;base64,<svg xmlns='http://www.w3.org/2000/svg' version='1.1' width='1732' height='558'/>" alt="" aria-hidden="true" /><img src="https://bitwiseinvestments.com/_next/image?url=https%3A%2F%2Fwww.datocms-assets.com%2F62087%2F1668562961-vc-money-invested-in-crypto-blockchain-by-stage.png&amp;w=3840&amp;q=75" srcset="/_next/image?url=https%3A%2F%2Fwww.datocms-assets.com%2F62087%2F1668562961-vc-money-invested-in-crypto-blockchain-by-stage.png&amp;w=1920&amp;q=75 1x, /_next/image?url=https%3A%2F%2Fwww.datocms-assets.com%2F62087%2F1668562961-vc-money-invested-in-crypto-blockchain-by-stage.png&amp;w=3840&amp;q=75 2x" data-nimg="intrinsic" />
<div class="c-caIHrK">
<p>Source: Galaxy Digital Research, "2021: Crypto VC's Biggest Year Ever," January 6, 2022, with data from Pitchbook.</p>
<p>Note: New data on venture capital activity covering 2022 will not be made available on a standardized and comprehensive basis from Galaxy Research or other providers until early 2023. Other researchers have noted that venture capital activity has declined somewhat in 2022 vs. 2021. For instance, KPMG reported its "Pulse of Fintech" report that H1 2022 venture capital activity in crypto totaled $14.2 billion, the equivalent to $28.4 billion on an annualized basis (compared to their estimate of $32.1 billion in crypto venture activity in 2021).</p>
</div>
</div>
<h2>So, What Does This All Mean for the Next Crypto Cycle?</h2>
<p>In the past half year at Bitwise, we have been talking about the &ldquo;<a href="https://bitwiseinvestments.com/crypto-market-insights/the-bitwise-investor-letter-july-2022" target="_blank" rel="noopener"><u>next bull cycle in crypto</u></a>.&rdquo;</p>
<p>As we&rsquo;ve discussed, crypto has historically moved in four-year waves, with three big up years followed by a year of pullback. The table below shows the annual returns of bitcoin as a proxy for crypto as a whole, and is updated with data through November 13, meaning it incorporates the FTX-induced pullback.</p>
<div class="c-fnBDkS">
<h4>Crypto Has Historically Moved in a Four-Year Cycle</h4>
<img src="data:;base64,<svg xmlns='http://www.w3.org/2000/svg' version='1.1' width='1200' height='770'/>" alt="" aria-hidden="true" /><img src="https://bitwiseinvestments.com/_next/image?url=https%3A%2F%2Fwww.datocms-assets.com%2F62087%2F1668561314-2011-to-2022-btc-highlights.png&amp;w=3840&amp;q=75" srcset="/_next/image?url=https%3A%2F%2Fwww.datocms-assets.com%2F62087%2F1668561314-2011-to-2022-btc-highlights.png&amp;w=1200&amp;q=75 1x, /_next/image?url=https%3A%2F%2Fwww.datocms-assets.com%2F62087%2F1668561314-2011-to-2022-btc-highlights.png&amp;w=3840&amp;q=75 2x" data-nimg="intrinsic" />
<div class="c-caIHrK">
<p>Source: Bitwise Asset Management. Data from January 1, 2011, through November 13, 2022. Performance information is provided for informational purposes only. Returns reflect the return of bitcoin itself, and not of any fund or account, and do not include any fees. Backward-looking performance cannot predict how any investment strategy will perform in the future. Future crypto cycles may not be four years long; the four-year increment is based on historical data for illustrative purposes and is not a prediction of future results. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events, or a guarantee of future results.</p>
</div>
</div>
<p>The pattern is striking, but it's not a coincidence. These waves are driven by major technological upgrades and represent the market&rsquo;s response to those upgrades.</p>
<p>The first wave&mdash;from 2011 to 2014&mdash;was driven by Bitcoin itself. 2011 was the first year investors could buy bitcoin, with the launch of Coinbase, Mt. Gox, and other crypto on-ramps.&nbsp; These tools brought new investors into the space, pushed prices up, and inspired a wave of crypto engineers to think about what else blockchain technology could do.</p>
<p>The market pulled back when Mt. Gox collapsed; the exchange, built on rickety infrastructure and with no regulatory framework, couldn&rsquo;t hold up under the surge of demand.</p>
<p>The second wave&mdash;from 2015 to 2018&mdash;was driven by entrepreneurs who were pulled into crypto by the first wave. These entrepreneurs created Ethereum in 2015 as the first general-purpose blockchain, among other achievements. This technological breakthrough sparked massive new opportunities for investors and kicked off the initial coin offering (ICO) boom, sending prices higher.</p>
<p>The market reset in 2018 as regulators clamped down on the excesses of ICOs; once again, crypto got ahead of itself. But the excitement around the 2015-2018 boom laid the groundwork for the next wave of crypto, bringing significant venture capital activity into the space. And from 2019 to 2021, VC- and angel-backed entrepreneurs created multiple new blockchain-based breakthroughs&mdash;DeFi! Stablecoins! NFTs!&mdash;which together catalyzed the most recent bull market.</p>
<p>That wave has, of course, crested and withdrawn, pulled back by a tough macro environment and once again by crypto expanding too fast and taking on too much risk, as evidenced by the crypto credit crisis that took down Celsius and BlockFi, and now the FTX fraud. But just as 2015-2018 laid the groundwork for 2019-2022, so too has this last boom sown the seeds of what&rsquo;s to come.</p>
<p>From 2019 to H1 2022, investors have poured&nbsp;<a href="https://cointelegraph.com/news/vcs-pour-14-2b-into-crypto-in-h1-2022-but-investments-now-slowing" target="_blank" rel="noopener"><u>$57 billion of venture capital into crypto</u></a>, according to KPMG&mdash;many times the amount that entered the market from 2015-2018. This money is funding a record number of engineers and entrepreneurs building in the space. And with the rapid improvements in blockchain technology, I feel confident we&rsquo;ll see enormous new applications emerge in the coming years.</p>
<p>From my seat, the biggest impact FTX will have is that these entrepreneurs are likely to be building in a more carefully regulated, more sound, and more mainstream market. As one example, centralized exchanges are already adopting cryptographically native approaches to building investor trust through initiatives like &ldquo;Proof of Reserves,&rdquo; in which exchanges use the transparency of blockchains to prove that customer assets are held securely in stand-alone wallets.</p>
<p>Ingenuity often springs from adversity. As JPMorgan put it in a recent research note on FTX&rsquo;s collapse:</p>
<p>&nbsp;</p>
<p><em>[W]e see the news surrounding FTX as one step back, but one that could prove to be the catalyst to move the crypto economy two steps forward (further unlocking the utility value of blockchain). In fact, we see the establishment of a regulatory framework as the needed catalyst to massively ramp the institutional adoption of crypto.</em></p>

In This Issue: What FTX’s Collapse Means for Crypto

Where to find opportunities on the much-hyped zk-rollup

<div class="captioned-image-container">
<figure>
<div class="image2-inset"><a class="byline-profile-link" href="https://substack.com/profile/3972632-william-m-peaster">BY William M. Peaster</a></div>
<div class="image2-inset">&nbsp;</div>
<div class="image2-inset"><picture><img class="sizing-normal" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F324991e8-8ecf-4a8c-9891-0edbc458396f_2667x1500.jpeg" sizes="100vw" srcset="https://substackcdn.com/image/fetch/w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F324991e8-8ecf-4a8c-9891-0edbc458396f_2667x1500.jpeg 424w, https://substackcdn.com/image/fetch/w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F324991e8-8ecf-4a8c-9891-0edbc458396f_2667x1500.jpeg 848w, https://substackcdn.com/image/fetch/w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F324991e8-8ecf-4a8c-9891-0edbc458396f_2667x1500.jpeg 1272w, https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F324991e8-8ecf-4a8c-9891-0edbc458396f_2667x1500.jpeg 1456w" alt="" width="1456" height="819" loading="lazy" data-attrs="{&quot;src&quot;:&quot;https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/324991e8-8ecf-4a8c-9891-0edbc458396f_2667x1500.jpeg&quot;,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:819,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;internalRedirect&quot;:null}" /></picture></div>
<figcaption class="image-caption"></figcaption>
</figure>
</div>
<p>Rollups represent the foundation of Ethereum&rsquo;s scaling plans going forward.</p>
<p>StarkNet is a permissionless layer 2 (L2) scaling network that is one of the &ldquo;Big Four&rdquo; major early rollups. This Bankless tactic will show you how to navigate the StarkNet ecosystem as a novice!&nbsp;</p>
<ul>
<li>
<p><strong>Goal</strong>: Learn your way around StarkNet</p>
</li>
<li>
<p><strong>Skill</strong>: Intermediate</p>
</li>
<li>
<p><strong>Effort</strong>: A couple of hours for exploring</p>
</li>
<li>
<p><strong>ROI</strong>: Experience with one of the best L2s</p>
</li>
</ul>
<div><hr /></div>
<h1 class="header-with-anchor-widget"><strong>An introduction to the StarkNet L2</strong></h1>
<div id="&sect;an-introduction-to-the-starknet-l" class="header-anchor-widget">
<div class="header-anchor-widget-button-container">
<div class="header-anchor-widget-button">&nbsp;</div>
</div>
</div>
<div class="captioned-image-container">
<figure>
<div class="image2-inset"><picture><source srcset="https://substackcdn.com/image/fetch/w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8de172d0-87c5-4d07-bf87-c04f4dfc09a3_1280x853.jpeg 424w, https://substackcdn.com/image/fetch/w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8de172d0-87c5-4d07-bf87-c04f4dfc09a3_1280x853.jpeg 848w, https://substackcdn.com/image/fetch/w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8de172d0-87c5-4d07-bf87-c04f4dfc09a3_1280x853.jpeg 1272w, https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8de172d0-87c5-4d07-bf87-c04f4dfc09a3_1280x853.jpeg 1456w" type="image/webp" sizes="100vw" /><img class="sizing-normal" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8de172d0-87c5-4d07-bf87-c04f4dfc09a3_1280x853.jpeg" sizes="100vw" srcset="https://substackcdn.com/image/fetch/w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8de172d0-87c5-4d07-bf87-c04f4dfc09a3_1280x853.jpeg 424w, https://substackcdn.com/image/fetch/w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8de172d0-87c5-4d07-bf87-c04f4dfc09a3_1280x853.jpeg 848w, https://substackcdn.com/image/fetch/w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8de172d0-87c5-4d07-bf87-c04f4dfc09a3_1280x853.jpeg 1272w, https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8de172d0-87c5-4d07-bf87-c04f4dfc09a3_1280x853.jpeg 1456w" alt="" width="1280" height="853" loading="lazy" data-attrs="{&quot;src&quot;:&quot;https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/8de172d0-87c5-4d07-bf87-c04f4dfc09a3_1280x853.jpeg&quot;,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:853,&quot;width&quot;:1280,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;internalRedirect&quot;:null}" /></picture>
<div class="image-link-expand">&nbsp;</div>
</div>
<figcaption class="image-caption"><em>A &ldquo;StarkWare L2 chain&rdquo; output I created with Stable Diffusion</em></figcaption>
</figure>
</div>
<div><hr /></div>
<h2 class="header-with-anchor-widget"><strong>What is StarkNet?</strong></h2>
<p>Today, zero-knowledge (zk) and optimistic rollups are the two dominant Ethereum scaling styles.&nbsp;</p>
<p>Created by&nbsp;<a href="https://starkware.co/" rel="">StarkWare</a>, StarkNet is a zk-rollup L2 that uses zk proofs to create an off-chain execution layer for Ethereum.</p>
<p><img src="https://coinvoice-international.oss-cn-hongkong.aliyuncs.com/profital-prod/article/20221201/202212011235521922540.png" /></p>
<p>&nbsp;</p>
<p>This off-chain execution mechanism is a way to make Ethereum-based transactions extremely affordable and fast. Simply put, StarkNet batches many transactions together and then efficiently posts this data to Ethereum.</p>
<p>Since the Ethereum verification fee is spread out among all users, StarkNet is more affordable as it becomes more popular. Yes, the more transactions there are, the cheaper they become!&nbsp;</p>
<h2 class="header-with-anchor-widget"><strong>How to create a StarkNet wallet</strong></h2>
<p>You have two main options for a StarkNet wallet right now: Argent X and Braavos.</p>
<p><img src="https://coinvoice-international.oss-cn-hongkong.aliyuncs.com/profital-prod/article/20221201/2022120112365723945452.png" /></p>
<p>Argent X and Braavos are both smart contract-based wallets explicitly designed for the StarkNet ecosystem. Argent X is open-source and was the first StarkNet wallet, so if you want to try it out of the gate you&rsquo;d follow these steps:</p>
<ol>
<li>
<p><em>Download the Argent X extension from the&nbsp;<a href="https://chrome.google.com/webstore/detail/argent-x/dlcobpjiigpikoobohmabehhmhfoodbb" rel="">Chrome Web Store</a>&nbsp;or&nbsp;<a href="https://addons.mozilla.org/en-GB/firefox/addon/argent-x/" rel="">Firefox</a></em></p>
</li>
<li>
<p><em>Click on the new&nbsp;<strong>Argent X button</strong>&nbsp;in your browser</em></p>
</li>
<li>
<p><em>Select&nbsp;<strong>New Account</strong></em></p>
</li>
<li>
<p><em>Create a password</em></p>
</li>
<li>
<p><em>Wait for your account to deploy, and voila! You&rsquo;re now ready to receive funds on StarkNet</em></p>
</li>
</ol>
<p>Braavos is currently closed-source software, so keep that in mind. If you&rsquo;re interested in downloading this wallet service, you could follow these steps:</p>
<ol>
<li>
<p><em>Go to&nbsp;<a href="https://braavos.app/" rel="">braavos.app</a></em></p>
</li>
<li>
<p><em>Press&nbsp;<strong>Download</strong>&nbsp;and download the wallet software to your desktop or mobile device</em></p>
</li>
<li>
<p><em>Set up a new wallet and&nbsp;<strong>record your 12-word recovery phrase</strong>&nbsp;for posterity</em></p>
</li>
<li>
<p><em>Choose the&nbsp;<strong>Mainnet Alpha</strong>&nbsp;network to deploy on</em></p>
</li>
<li>
<p><em>That&rsquo;s it! You now have your own<strong>&nbsp;StarkNet wallet</strong>:</em></p>
</li>
<li>
<p><em>You can now&nbsp;<a href="https://twitter.com/myBraavos/status/1559155866661801984" rel="">transfer funds</a>&nbsp;into your StarkNet account using a credit-card service like&nbsp;<strong>Banxa&nbsp;</strong>or a bridge like&nbsp;<strong>Layerswap</strong></em></p>
</li>
</ol>
<h2 class="header-with-anchor-widget"><strong>Finding StarkNet apps with Dappland</strong></h2>
<div id="&sect;finding-starknet-apps-with-dappland" class="header-anchor-widget">
<div class="header-anchor-widget-button-container">
<div class="header-anchor-widget-button">&nbsp;</div>
</div>
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<p>The best way to find and explore apps on StarkNet today is through&nbsp;<a href="https://www.dappland.com/" rel="">Dappland,</a>&nbsp;a community resource hub that tracks notable app deployments on this Big Four L2.&nbsp;</p>
<div class="captioned-image-container">
<figure>
<div class="image2-inset"><picture><source srcset="https://substackcdn.com/image/fetch/w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4c598098-0351-4d4d-b500-dc3c2ab2b717_1600x794.png 424w, https://substackcdn.com/image/fetch/w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4c598098-0351-4d4d-b500-dc3c2ab2b717_1600x794.png 848w, https://substackcdn.com/image/fetch/w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4c598098-0351-4d4d-b500-dc3c2ab2b717_1600x794.png 1272w, https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4c598098-0351-4d4d-b500-dc3c2ab2b717_1600x794.png 1456w" type="image/webp" sizes="100vw" /><img class="sizing-normal" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4c598098-0351-4d4d-b500-dc3c2ab2b717_1600x794.png" sizes="100vw" srcset="https://substackcdn.com/image/fetch/w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4c598098-0351-4d4d-b500-dc3c2ab2b717_1600x794.png 424w, https://substackcdn.com/image/fetch/w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4c598098-0351-4d4d-b500-dc3c2ab2b717_1600x794.png 848w, https://substackcdn.com/image/fetch/w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4c598098-0351-4d4d-b500-dc3c2ab2b717_1600x794.png 1272w, https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4c598098-0351-4d4d-b500-dc3c2ab2b717_1600x794.png 1456w" alt="" width="1456" height="723" loading="lazy" data-attrs="{&quot;src&quot;:&quot;https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/4c598098-0351-4d4d-b500-dc3c2ab2b717_1600x794.png&quot;,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:723,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;internalRedirect&quot;:null}" /></picture>
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<figcaption class="image-caption"><em>The dappland front page</em></figcaption>
</figure>
</div>
<p>Dappland currently tracks projects across the Onramps, Bridges, DeFi, Games, NFTs, Social, Infrastructure, and DAOs categories. Some notable projects in these categories include the following efforts:</p>
<ul>
<li>
<p><strong><a href="https://www.dappland.com/ramp" rel="">Ramp</a></strong>&nbsp;&mdash;&nbsp;<em>A simple UI for getting funds onto StarkNet</em>&nbsp;</p>
</li>
<li>
<p><strong><a href="https://www.dappland.com/layerswap" rel="">Layerswap</a></strong>&nbsp;&mdash;&nbsp;<em>A CEX to L2 gateway</em></p>
</li>
<li>
<p><strong><a href="https://www.dappland.com/orbiterfinance" rel="">Orbiter.Finance</a></strong>&nbsp;&mdash;&nbsp;<em>A cross-rollup bridge</em></p>
</li>
<li>
<p><strong><a href="https://www.dappland.com/jediswap" rel="">JediSwap</a></strong>&nbsp;&mdash;&nbsp;<em>A community-led automated market maker (AMM) exchange</em></p>
</li>
<li>
<p><strong><a href="https://www.dappland.com/briq" rel="">briq</a></strong>&nbsp;&mdash;&nbsp;<em>An NFT building protocol, a la Minecraft</em></p>
</li>
<li>
<p><strong><a href="https://www.dappland.com/realms" rel="">Realms</a></strong>&nbsp;&mdash;&nbsp;<em>An onchain game situated in the Loot universe</em></p>
</li>
<li>
<p><strong><a href="https://www.dappland.com/mintsquare" rel="">Mint Square</a></strong>&nbsp;&mdash;&nbsp;<em>An NFT marketplace</em></p>
</li>
<li>
<p><strong><a href="https://www.dappland.com/starkboard" rel="">StarkBoard</a></strong>&nbsp;&mdash;&nbsp;<em>An analytics data hub</em></p>
</li>
<li>
<p><strong><a href="https://www.dappland.com/voyager" rel="">Voyager</a></strong>&nbsp;&mdash;&nbsp;<em>A StarkNet block explorer service</em></p>
</li>
<li>
<p><strong><a href="https://www.dappland.com/cartridge" rel="">Cartridge</a></strong>&nbsp;&mdash;&nbsp;<em>A StarkNet gaming console</em></p>
</li>
</ul>
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<h2 class="header-with-anchor-widget"><strong>The STRK token 101</strong></h2>
<div id="&sect;the-strk-token" class="header-anchor-widget">
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<div class="header-anchor-widget-button">&nbsp;</div>
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<blockquote>
<p>&ldquo;<em>If you are an end user, use StarkNet &mdash; but only as it serves your needs today. Use it for those transactions and applications that you value, not in expectation of any future reward of StarkNet Tokens. When Community Provisions are announced, they will refer only to snapshots that have occurred previous to the announcement date, and will filter and exclude usage that is deemed by it to be an abuse and gamification of the network, based on the information available at that point in time.</em>&rdquo; &mdash;&nbsp;<a href="https://medium.com/starkware/part-3-starknet-token-design-5cc17af066c6" rel="">StarkNet Token Design</a></p>
</blockquote>
<p>StarkNet isn&rsquo;t going to have a gameable airdrop.&nbsp;</p>
<p>If you used the L2 in the past, you may be in line. But if you&rsquo;re trying to cram in late, that&rsquo;s likely going to be counterproductive as the StarkWare team is looking to defend against people who are just trying to game the protocol in the &ldquo;final hours,&rdquo; so to speak.&nbsp;</p>
<p>That said, the STRK token is a real thing. While the token isn&rsquo;t transferable or purchasable yet, STRK has been&nbsp;<a href="https://medium.com/starkware/starknet-token-is-deployed-on-ethereum-f27f0000b00c" rel="">deployed on the Ethereum mainnet</a>&nbsp;ahead of an official token plan implementation. One&nbsp;<a href="https://medium.com/starkware/part-3-starknet-token-design-5cc17af066c6" rel="">tentative plan</a>&nbsp;seeks to distribute 9% of the STRK token supply to StarkNet community members.&nbsp;</p>
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<h2 class="header-with-anchor-widget"><strong>Key StarkNet resource</strong></h2>
<p>Want to keep up with all things StarkNet without having to spend a ton of time doing weekly research?</p>
<p>One must-have resource you need to work into your info diet is the Swagtimus.eth L2&rsquo;22 newsletter.</p>
<p><img src="https://coinvoice-international.oss-cn-hongkong.aliyuncs.com/profital-prod/article/20221201/2022120112383106721841.png" /></p>
<p>This newsletter is the premier destination for learning about all things new with StarkNet. Published every week, this column will help you maintain a firsthand view of the StarkNet ecosystem&rsquo;s evolutions as it progresses, so double down here if you want to stay current with everything StarkNet!</p>
<h2 class="header-with-anchor-widget"><strong>The future is bright for StarkNet</strong></h2>
<div id="&sect;the-future-is-bright-for-starknet" class="header-anchor-widget">
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<p>StarkNet is extremely promising and will likely be a dominant L2 for years to come.&nbsp;</p>
<p>The network is particularly well-positioned to scale. It&rsquo;s uniquely suited for a ubiquitous light client-centric future, where people manage all of their Ethereum affairs with nodes on smartphones.&nbsp;</p>
<p><img src="https://coinvoice-international.oss-cn-hongkong.aliyuncs.com/profital-prod/article/20221201/2022120112391262185175.png" /></p>
<p>For now, though, learning about how to use early StarkNet apps will position you to quickly become a veteran in an L2 space that stands to grow tremendously from here!</p>