Drawing from experience in helping develop various points systems over the past year, and now launching a platform dedicated to managing these systems, I've come to see onchain points as more than a trend. They are, in my perspective, a natural progression of blockchain technology as it becomes more scalable. I believe that onchain points will play a crucial role in consumer adoption, aligning seamlessly with the inherent strengths and use cases of blockchains.

Blockchains are for Games

At the Coinbase Ventures Summit a few months ago, I delved into the role of onchain points, contrasting blockchains with other major technology platforms like AI or search engines. Unlike these technologies, blockchains align naturally with game-like elements — players, rules, and points. Historically, points in blockchain have been synonymous with cryptoassets, driven largely by the need to offset transaction fees with speculative value.

This framework can be applied to evaluate blockchain protocols: their success often hinges on how engaging their “game” aspect is. This is true for both serious applications in DeFi, like leveraging without liquidation, and for activities like staking or trading. Ignoring the game-like nature has led many to develop ideas that fail to gain traction.

But the landscape shifts with more scalable blockchains. Will existing game-like applications simply become more accessible, or will we see the emergence of a fundamentally new primitive? I believe that as blockchains become more scalable, we're not just making existing applications more efficient; we're introducing a new kind of primitive that doesn't rely on financial properties. This is the era of 'points', distinct from financial-centric cryptoassets, paving the way for innovative applications in consumer crypto.

“Points” vs “Tokens”

Currently, tokens like ERC20s are closely tied to financial applications, which imposes certain limitations for their use in consumer point systems. Therefore, it's beneficial to distinctly separate “points” from “tokens”, ensuring they are not easily confused or conflated.

Consumer application developers often require the flexibility to allocate points in various ways; a need that doesn't align with the expectations of token holders who view their tokens as financial assets.

For instance, consider if Duolingo used crypto tokens instead of point rewards. While this would allow greater interoperability with blockchain mechanisms and encourage community-driven innovation, it also comes with significant challenges. These might include regulatory complexities, market volatility, and altered user perceptions, as these tokens are seen as financial assets rather than mere points for learning progress.

But implementing these points onchain would enable an innovative system, where for example an onchain network state issues visas based on language fluency. This concept, independent of the Duolingo team, offers potential benefits to their community by recognizing and rewarding language proficiency in a tangible, blockchain-verified manner.

Current Work

At Stack, we've engineered a robust platform and SDK that simplifies managing and scaling point systems, seamlessly integrating with onchain crypto mechanisms. Our platform, currently in beta, is ideally suited for consumer apps aiming to foster healthy user engagement.

If you’re developing a consumer application and are interested in leveraging points to enhance user engagement, we encourage you to explore the possibilities with Stack. For more information or to join our beta program, reach out to us at X (strangechanges or stackdotso) or email me at g@stack.so. We're excited to collaborate with forward-thinking developers and help bring your ideas to life.

Bountycaster leverages the Farcaster network for identity and content. Users sign in with their Farcaster account and post bounty descriptions to the Farcaster network. On the backend, Bountycaster monitors posts to Farcaster, and uses AI to parse the bounty content.

The service elegantly interweaves four powerful new technologies in a simple way:

1. Borderless payments – bounty payments are made in USDC or ETH, which can settle to any person in seconds at low fees, regardless of where they live.

2. Open content networks – Farcaster allows anyone to monitor and parse content on the network (unlike traditional social platforms), and integrate all relevant communication and engagement into their own service.

3. Decentralized social identity and reputation - bounties are tied to Farcaster identities, which are not controlled or censored by a centralized entity and therefore entail significantly less platform risk for users. Over time, this compounds the value of these identities through aggregated cross-platform reputation.

4. AI is used to simplify the user experience, replacing tedious forms with written prose – which presumably will work across languages as well.

A Personal Example

Today I wrote a bounty for $100 on Farcaster and tagged the Bountycaster bot account. The bot immediately parsed my prose and responded with a confirmation that the bounty had been posted.

Within seconds, the Bountycaster website reflected the bounty, and minutes later I was receiving responses from participants. I can read these responses on the Farcaster network, using the delightful Warpcast mobile app, or directly on the Bountycaster website.

In the screenshot above, we see that engagement on the bounty from the Farcaster network is reflected on Bountycaster interface – demonstrating the interweaving of social content across platforms that leverages the development of both teams.

A safer and more bountiful web

The interoperability between Farcaster and Bountycaster perfectly illustrates why decentralized social projects stand to gain network effects more quickly than traditional rivals.

Not only is the content interoperable, but so is the accrual of reputation tied to the identities who use these networks – online identities that, for once, are owned by communities and not corporations.

The core technologies that power these new networks are also open-source, giving us an unprecedented ability to scrutinize network power and adjudicate network security.

Conclusions

Bountycaster was co-founded by two exceptional builders: Linda Xie, an early PM at Coinbase and former co-founder of Scalar Capital, and Daniel Pyrathon, a former engineer from Phantom and 0x. They have demonstrated a beautiful understanding of how to weave together the best of multiple technologies into a simple and useful product, and have executed remarkably to bring that to market with a lean MVP that gets the job done.

Needless to say, I’m excited to use Bountycaster and watch the progress towards an improved web with more efficient economics as well as safer and more robust identity and social features.

I came across a transformative idea while learning about behavioral psychology: the power of "living gamefully" (see SuperBetter by game designer Jane McGonigal, Ph.D, 2015). I spent a summer researching habit formation, and became convinced that even superficial rewards were able to drive healthful behavior (like reading or exercising) that stuck around long after the initial reward period.

Continuing to explore a productized version of this idea, I joined as a founding engineer at a startup that helped distribute billions of dollars in scholarships from over 300 US colleges to high school students, based on their academic achievements in high school.

In discussions with the CEO at the time, I began thinking further about distributing rewards like universal basic income, based on prosocial behaviors, including education, and health. We could compute rewards based on user attributes – not just for college scholarships, but any kind of reward.

Around that time a friend of mine had founded a startup in the crypto industry, and I got to thinking about how we could distribute awards onchain. I saw that the trustless rails of crypto could serve to bridge funds from one source (like colleges) to end-users, without the need for a trusted intermediary like the one we had built. It would be safer and faster and more transparent. The key to this would be having onchain attestations that we could compute over, with safe bridges for rewards.

I have always had a strong inclination towards personal growth, starting with being a competitive athlete in my youth; I represented provincial teams in South Africa in two sports as a teenager. I found that having metrics could help me direct my behavior and feel like I'm making progress towards specific goals. I love having metrics about the progress I'm making on my goals.

With the invention of the iPhone and the app store, many of my behaviors were suddenly more quantifiable and online. When I run on Strava, I can track my times. When I learn a language on Duolingo, I have "experience points" for quantifying my progress. When I'm learning a subject deeply, I often use Coursera.

I'm not alone in this, as apps like Duolingo have successfully onboarded millions of people. But all of these metrics today are siloed without a way to aggregate them into a single identity – the intersection of the things I care about, and the progress I'm making towards those projects. The question has remained on my mind for years: how we do bridge this with blockchains?

Blockchains provide a way to make this kind of data more accessible and useful. But until recently, blockchains were not scalable enough to bring data onchain, and to distribute rewards accordingly as I had envisioned years ago. But we are now entering a time where it is not only viable but also potentially a central piece of the web3 social ecosystem.

After working in the crypto industry for the last 6 years, I am convinced that the time has come to build a product centered around this concept. With the ability to easily integrate data onto blockchains and bridge rewards, we are ready to create a unique product that distributes rewards based on individual progress in areas we care about.

That’s essentially what we’re trying to do with Stack – to help make a more engaging, connected, and healthful world that is aligned with positive outcomes for emerging technology.

Whenever I dive into Gray's writings, I am confronted with a wave of introspection, occasionally bordering on melancholy. His perspective serves as a stark counter to the buoyant techno-optimism that pervades our modern narrative. Yet, I am invariably drawn to his philosophical musings, always eager to delve into his intricate tapestry of thoughts. For those unfamiliar with his work, I often recommend starting with "Feline Philosophy," an approachable exploration on what we can learn about life from cats, by this esteemed English historian of Philosophy.

Now, as the pressing question looms - what makes Gray's new book so relevant today?

John Gray's Perspective

John Gray's voice, undeniably distinct amongst contemporary thought leaders, offers a nuanced critique of the Enlightenment values that have come to shape the intellectual fabric of modern societies. While he doesn't shy away from applauding the Enlightenment's remarkable feats, Gray sounds an alarm against its occasional overconfidence, its sweeping universalism, and most crucially, its unwavering belief in the linear progression of human society.

Diving into the heart of global politics, Gray posits a somber outlook: the declining stature of the US empire. He argues that this decline, far from being a mere power shuffle, might usher in a dramatic reversal of the present world order. Historically, the equilibrium of global safety and order was maintained by a Hobbesian "Leviathan."

For those less acquainted with Hobbes' philosophical landscape, the "Leviathan" stands as a central figure. In the anarchic state of nature, Hobbes believed humans, driven by unbridled self-interest, would inevitably descend into chaos and conflict. To circumvent this dystopia, individuals willingly cede some of their rights to a formidable central authority, the Leviathan. This entity, often visualized as a colossal sea monster, wields absolute power. Its dominion ensures that societal peace prevails and that contracts and agreements, the bedrock of civilized societies, are respected and upheld.

But as we navigate the tumultuous currents of global geopolitics, Gray draws attention to the unsettling reality. The stability once guaranteed by the Leviathan is wavering. Potent indicators of this shift, Gray suggests, are the overtly aggressive geopolitical moves on the world stage. The audacious invasion of Ukraine and the escalating conflicts between Israel and Palestine serve as harbingers of this changing world order.

And while I sit oceans away in LA, without the tangible presence of Gray's book, its essence resonates more profoundly this week.

The Tech Perspective: A New Hope?

As the geopolitical stage oscillates between old orders and emerging powers, another force, often less explicit perhaps but equally formidable, is shaping the course of our future: technology. The tech industry, particularly in America and more specific in the AI sector, seems to be undergoing a renaissance, reinvigorating Enlightenment values and channeling them into innovations that even a few years ago would border on science fiction.

Notably, the epicenter of this technological surge isn't just confined to Silicon Valley startups or cutting-edge labs. Established giants, once considered dormant, are awakening with newfound vigor. A prime example is Microsoft. A company that, until a short while ago, was perceived as a relic of the tech past, is now at the forefront of transformative projects. Their audacious investment in nuclear energy, not merely for traditional applications but to supercharge their pursuits in Artificial General Intelligence (AGI), underscores the seismic shifts underway.

OpenAI, with its pioneering advancements, has not only set benchmarks in the realm of AGI but has also instigated a competitive surge. Tech behemoths, in a race reminiscent of the space race of the 20th century, are vying to achieve milestones in AGI, often shattering expectations in their wake.

I am reminded at this time of Professor Hans Moravec, a visionary who, in the previous century, had dreamt of a world teeming with robots, each feeding vast troves of data into evolving AI systems. While his predictions seemed slightly off-mark—robots didn't quite become the ubiquitous entities he envisioned—the crux of his hypothesis was astonishingly prescient. Moravec did not foreseen the meteoric rise of the internet and its role as a mammoth data source for AGI. Yet, in a twist of fate, entities like Tesla cars have emerged, in many ways filling the void of the robots Moravec had imagined. The strides in computer vision, powered by data from these machines, are testimony to the unfolding of Moravec's world.

This technological era, anchored firmly in Enlightenment values, challenges not just our understanding of progress but also long-held philosophical beliefs. What was once viewed through the lens of anti-Christian or anti-existential philosophy now seems not just plausible but increasingly probable.

However, Gray, with his characteristic sagacity, doesn't dismiss this wave of technological optimism. He acknowledges the tantalizing possibilities on the horizon—be it curing aging or crafting immersive metaverses. But Gray's contention lies elsewhere. As we stand on the cusp of these technological marvels, he urges us to introspect: What will "humanity" truly do with these unprecedented gifts of progress? Can technology, in all its glory, truly usher in an era of unequivocal progress? Or are we, as a species, mistaking technological advancement for genuine, holistic betterment?

Gray vs. Tech Optimism

In the grand tapestry of human evolution, technological advancements have always been seen as a beacon of progress. Yet, Gray, ever the discerning philosopher, prompts us to question our very definition of "progress." In a world teetering on the edge of unprecedented technological marvels, what does it truly mean to progress?

Gray acknowledges the transformative power of technology, from potential remedies for age-old human ailments to the creation of intricate, almost lifelike metaverses. But he also implores us to reflect deeper. With every leap in technological prowess, are we also advancing in our understanding and betterment of human nature? Or are we merely building advanced tools with the same old flawed hands?

Two seemingly divergent groups, the Accelerationists and those who champion Wokeness, both lay claim to the title of "progressive." Yet, their visions of progress differ starkly. Accelerationists, with a quasi-religious fervor, place unwavering faith in the power of rapid technological growth. Their belief is that accelerating tech advancements will inevitably usher in societal betterment. On the other hand, advocates of Wokeness emphasize societal and cultural evolution, seeking progress in the realms of equity, identity, and justice.

Amidst these evolving definitions of progress, Gray spotlights a central challenge of the 21st century: How do we reconcile the promises of technology with the urgent global issues at hand? Climate change, environmental degradation, and socio-economic disparities loom large. Each path of progress brings its set of promises and perils. As we hurtle forward, the challenge is not just to choose a path, but to discern the risks each road might harbor.

One of Gray's most poignant contentions revolves around human nature. His writings resonate with a somber truth: while technology can evolve at breakneck speeds, human nature, with its complexities and contradictions, remains much the same. The question then becomes: As our tools and tech grow smarter, do we?

Yet, my personal journey with Gray's philosophy is not one of complete alignment. While I share his measured pessimism about the unchanging facets of human nature, I find myself diverging when it comes to technology. There's an inherent optimism I harbor for the transformative potential of tech.

But herein lies the conundrum. As our tech-powered optimism scales new heights, we find ourselves in a world where the stabilizing Leviathan, as posited by Hobbes, seems to be receding. This leaves us grappling with a quintessential question: In this brave new world, can emerging technologies like AI and blockchain serve as the anchors, the new Leviathans, that keep our ship steady?

Personal Reflection

Embarking on this intellectual journey, delving into Gray's profound insights and juxtaposing them against the backdrop of our technologically advancing world, has been enlightening, to say the least. Each page I turned and every perspective I encountered served as a mirror, reflecting back not just the world's realities, but my own beliefs and biases.

One of Gray's most resonant points, to me, lies in his understanding of human nature. Time and again, history has shown us the cyclical nature of human actions, decisions, and even follies. We oscillate between moments of great altruism and periods of deep division, between collective progress and individual regress. While our tools, languages, and civilizations have evolved, the core instincts, desires, and fears that drive humanity seem relatively unchanged. In this, I find myself nodding in agreement with Gray.

However, as I gaze upon the horizon of technological advancements, I can't help but harbor a glimmer of hope. Yes, technology, in and of itself, is not a panacea for all of humanity's ills. But it holds the potential to be a catalyst, a tool that, if wielded wisely, can usher in not just advancements, but genuine progress. Gray's cautionary tales serve as a reminder that technology should be an enabler, not a replacement, for human empathy, wisdom, and judgment.

As we stand at this unique juncture in history, the challenge ahead is monumental. With the traditional Leviathan fading, the onus is on us to envision and shape new paradigms of governance, order, and progress. Here, I find myself contemplating the roles of AI and blockchain. These technologies, with their promise of decentralization, transparency, and accountability, might just offer glimpses of the new Leviathans we seek. They have the potential to reshape societal structures, ensuring not just efficiency, but equity and justice.

Yet, with every stride we take into this brave new world, we must tread with caution. We must remember that technology is a double-edged sword, and its impact is determined not just by its design, but by our intentions. As I reflect on Gray's teachings and the world around me, I'm left with a profound realization: The future is not just about building smarter machines, but about nurturing wiser humans.

Conclusion

In this ever-evolving dance of history, philosophy, and technology, we find ourselves at an inflection point, poised between past lessons and future possibilities. Professor John Gray's insights, deeply rooted in an understanding of historical patterns and human nature, serve as both a guide and a cautionary tale. They implore us to look beyond the glittering facade of progress and question the very essence of our journey.

While the allure of technology and its transformative potential cannot be denied, it is paramount that we do not lose sight of our human core. As we stand on the precipice of the Fourth Industrial Revolution, with AI, blockchain, and other advancements redefining the realms of possibility, the true measure of our progress will be determined by the balance we strike—between innovation and introspection, between creation and compassion.

The fading Leviathan, a symbol of the old world order, challenges us to envision new paradigms of governance and societal structure. Can AI and blockchain step into these colossal shoes? Perhaps. But more importantly, can we, as a collective humanity, rise to the occasion, ensuring that our technological strides are matched by ethical, moral, and philosophical growth?

As we move forward, may we do so with a harmonious blend of optimism and caution, ensuring that the future we build is not just technologically advanced, but holistically enriched.

The debut featured an animated trailer, unabashedly laden with provocative imagery and bold catchphrases. A memorable line is, “The world is a fucked up place, but it’s a beautiful day to buy an NFT.” The audacity resonates with the increasingly bizarre spirit of the times.

For a 24-hour window, enthusiasts could mint specific frames from the video at $1 per frame, with the added cost of the mainnet gas fee. An impressive 50,000 frames found takers, culminating in an on-chain revenue of $57,800. The total amount was then transferred to a single NFT holder randomly selected via a smart contract function aptly called mrBeastMode.

On OpenSea, TWL aligned itself with “Virtual Worlds”—a segment typically earmarked for metaverse-centric endeavors. Following the announcement, the project's Twitter followership saw an massive uptick to 10,000 accounts, signifying the trailer's ability to pique curiosity.

While the trailer's content was likely divisive, the overall public sentiment seemed to lean favorably. Could it be that the project infused a new dose of excitement into web3, especially during an otherwise somber bear market phase?

What's next for TWL?

My perspective on this is unbiased. I've collaborated with Patrick at two startups—Dharma and Mirror—and had a hand in coding and rolling out the contracts for the TWL trailer mint. While admittedly the audacious tone of the trailer treads beyond my comfort, my curiosity is piqued—and that's its genius. The question now is: What narrative trajectory will this universe adopt, and how will onchain community engagement augment the experience?

To me, the allure of on-chain community building is its power to assemble like-minded individuals. Leveraging crypto offers these communities a structured foundation, empowering them to crowdfund initiatives they're passionate about. The question is what does TWL stand for, and how will it harness the attention it garnered this week?

Going forward, I envision TWL delving deeper into the confluence of virtual worlds, gaming, and the myriad possibilities offered by smart contracts. The project's inherent creativity could potentially push the boundaries of what we’ve seen with the tech, marking its niche as a fascinating art endeavor.

The project has taken Twitter by storm and the protocol has accumulated 3,632 ETH ($5,811,200) in fees at the time of writing. But as with any crypto initiative, there's more to the story than meets the eye.

At its core, the game is a reflection of the inherent value we place on social connections, quantified and made tradable. The premise of the game is simple and has certainly been alluring: as more people invest in your shares, their value rises, turning popularity and influence into a tradable commodity. Through its integration with Twitter, FriendTech allows users to link their digital shares to their real-world identities, which anchors the game in reality and encodes a personal touch.

FriendTech's swift integration into the DeFi universe through ERC20 wrapper contracts also opens the doors to the double-edged dystopian quirks the crypto world has been fairly critiqued for. It's no surprise, then, that opinions on FriendTech vary widely.

Detractors question its ultimate purpose and sustainability, seeing it as merely another venue for speculative trading rather than a genuinely transformative tool – such as a new identity primitive. Is FriendTech merely another way that that crypto will compel ordinary people, through the promise of financial upside, to spend time and money on something that serves no real compounding benefit to the web3 ecosystem? The sentiment can be summed up in a pressing question: "Is this emblematic of the best the crypto industry can offer?”

Jon Hillis (🏕️,🏘️,🌆)

@JonathanHillis

friend tech is a sketchy side loaded buggy app with dark UX patterns that demonstrates how broken crypto onboarding still is, has no purpose besides degen speculation, and is driving short-term engagement from airdrop farming

is this really the best we can do as an industry?

210

7:53 AM • Aug 19, 2023

Others embrace FriendTech's innovative spirit. They celebrate the entertainment value it brings to blockchain transactions, especially with the smooth transition to Base, the new Layer-2 from Coinbase. To these enthusiasts, the platform is less about its speculative potential and more about the sheer joy of on-chain interaction.

sassal.eth/acc 🦇🔊

@sassal0x

Bullish on people having fun onchain

353

12:40 AM • Aug 20, 2023

By enabling purchasing shares of new profiles, FriendTech has created a gold rush of sorts, where users are incentivized to invest early in potentially high-value shares. As one would expect, this has quickly led to the proliferation of bots designed to “frontrun the opportunity” and quickly accumulate profits based on technical advantage.

The owner of the contract retains the power to set fees and configurations. The fee is currently set to take 5% of all trades, and the contract has accumulated 3,632 ETH ($5,811,200) at the time of writing. Interestingly, the protocol's upgradability, or seeming lack thereof, poses questions about its future adaptability.

In an environment that's rapidly evolving, the inability to upgrade might be a limitation. But the other end of the spectrum, the trading component is decentralized as serves as a lego for new extensions that rest in the hands of ecosystem building around it. The game will run as long as the Base chain is maintained, and will always be open to such extensions.

In essence, FriendTech is a reflection of the broader crypto industry: brimming with potential, yet not without its challenges and controversy. As it weaves social media and DeFi together, only time will tell if it becomes a beacon of innovation or a cautionary tale.

This morning, during an early NYC-NFT coffee meetup, the topic of Ceramic Network arose that illustrated this interplay. To provide some context, Ceramic Network is a distributed file storage system similar to Arweave, with some other clever structures involved. These systems play a crucial role in the world of NFTs and decentralized technologies.

In my previous role as CTO of Mirror, a decentralized publishing platform, I was often encouraged to experiment with Ceramic over Arweave. It was touted as the better approach. Despite my best efforts, I struggled to understand Ceramic's advantages. I even printed their entire documentation and spent a day reading it in a San Francisco hotel lounge.

Ceramic's main issue, in my opinion, is that they didn't prioritize distribution and ecosystem cultivation early on. They developed disproportionately to their distribution ability and ecosystem. It's akin to a person who focuses solely on building muscle, but neglects flexibility and stamina. The result is impressive, but ultimately impractical.

In contrast, Arweave had working examples from the outset. Sam, the founder, interviewed me on a podcast before I had even written a line of Mirror code, just on the potential for building NFTs that stored content on Arweave. While some of the examples were rudimentary, like WeaveMail, an email solution built on Arweave, they provided developers with an entry point and gave the core developers valuable feedback.

As a member of Ceramic's target audience, I believe the responsibility for my lack of understanding and enthusiasm lies with the protocol's author, not with outsiders for not "getting it". I harbor no ill will towards anyone involved. Rather, I see this as an opportunity to learn: successful products must balance development velocity with distribution capabilities. This equilibrium is essential for their survival.

The machine theater phenomenon reflects the fascination with technology and innovation during the Renaissance and Early Modern periods. But it also portrays the strong human desire to speculate and imagine the future together, even if it is not grounded in reality.

In the crypto industry, we see a similar paradox at play. On the one hand, there is a fascination with the potential of blockchain technology and its ability to revolutionize various sectors and industries. On the other hand, there is a tendency for the industry to over-invest in presenting the potential of a technology or idea, rather than its actual substance or usefulness.

One example of this is the emphasis on design and branding in the crypto space. Many projects start out with no users and invest heavily in design, particularly brand identity. In some cases, hundreds of thousands of dollars are spent on design elements, creating the appearance of legitimacy where there is little substance. This emphasis on design often serves more as a form of entertainment than a means of solving real problems.

In this way, the last bull cycle of the industry resembled the machine theater phenomenon, where the focus was on the speculative value and appearance of technology, in order to attract an audience, rather than its substance and usefulness. I think its useful to label such cases, at least mentally, as machine theater.

The market volatility of cryptocurrency prices is often based on machine theater and feeds into this phenomenon, producing boom and bust cycles that are not representative of technological progress.

As an industry, it is important for us to break free from the machine theater paradox and prioritize substance over entertainment value and design. This means focusing on compounding on existing technologies and building upon proven primitives, rather than constantly introducing new and competing technologies.

Our professional capital allocators, in particular, play a key role in this process as stewards of the resources that keep the industry going. By supporting projects grounded in substance that have the potential to build upon existing technologies, investors can help create a stronger foundation for the industry.

Here are some specific takeaways:

• The crypto industry resembles the machine theater phenomenon, where the focus is on the entertainment value and appearance of the technology rather than its substance and usefulness.

• It is important for the crypto industry to break free from the machine theater paradox and prioritize substance over entertainment value and design.

• Projects and their investors should look critically at spending on brand identity, especially where there aren’t users. Other industries have not needed such investment in design to gain adoption.

• We should compound on existing technologies and build upon proven primitives, rather than constantly introducing new and competing technologies.

• Investors, as stewards of capital, have a key role to play in this process by carefully evaluating the substance and potential of a technology or project.

• By focusing on substance over theater and compounding on existing technologies, the crypto industry can create a stronger and more sustainable future.

Sam Richards used the term “rugged”, conveying the sense of being the victim of theft and betrayal. Messari and others trusted Mailchimp to host their subscription lists and provide a service, and when the platform unexpectedly turned on them it resulted in the loss of significant value.

A co-founder of Substack took the opportunity to welcome crypto writers to his platform. But it’s important to realize that there is no fundamental difference between Substack and Mailchimp in this regard. At the hint of issues with their partners (for example, Stripe payments) there is no guarantee that Substack would take your side over their partners. This lesson has been learned in crypto many times; when regulation is involved, only trustless decentralized protocols can keep their promises.

A trustless publishing platform is one that already mirrors your content on a decentralized file-storage system like Arweave. You shouldn’t have to hope that the platform stays favorable to your content. You should have the option to exit at any time because the data is simply not gated and owned by the platform.

Existing platforms – from Mailchimp to Discord – were not built for web3 and they have existing web2 users and partners that create an innovator’s dilemma. It’s not worth it for them to build web3 features like trustless publishing.

That’s why we built this as the foundation of Mirror.

Emails are still useful for notifications today, but we no longer want to center online experiences around usernames, emails, or mobile numbers; we want to build the internet around the web3 wallet.

Usernames were mostly used before email addresses. People would pick a username to identify themselves and reuse it across forums – often using the same username/password combination for authentication. But email addresses proved to be a more powerful primitive than the username because they served two important functions:

1. Websites could send alerts and announcements via email.

2. Emails could be used as an account recovery mechanism; we rely on the email account's security as the basis for many other platform logins.

But web3 wallets offer even more power:

1. Wallets can provide strong verification guarantees on authorship because users can digitally sign content with their private key.

2. Wallets can encrypt information, enabling cross-platform end-to-end privacy.

3. Wallets enable purchasing ability natively in the web experience without needing to connect a credit card or rely on a third-party payments service like Stripe or Amazon.

4. Wallets can enable universal login without giving power to a specific company like Facebook, or to a nation-state.

Try out web3 wallet subscriptions using the link below:

subscribe://

When I was growing up, I had a Korean roommate in my boarding school in South Africa. We became best friends in high school, and I watched him and his two brothers learn English and become one of the top students in my year. Every day for five years, as we worked and played together, we learned from each other. Korean culture wasn’t an explicit theme in our friendship, but hearing the language very often, seeing the writing, and the occasional k-pop exposure left a deep impression on me.

When we graduated high, both of us were accepted to colleges in the United States – we had collaborated together to get through taking the tests and completing our college applications. Because our South African high school ended in December, and American universities started in September, my friend invited me to spend a few months with him in Seoul.

[note: Koreans work extremely hard to get into American universities in pursuit of the world’s best education; far less than one percent of the world’s people are South Korean, but in 2007 a full 10.7% of foreign students at American universities came from there. ]

In my admissions essay, I wrote about my fascination with Korea’s miraculous socio-economic achievements. From the 1960s to the 1970s, Korea dug itself out of extreme poverty following the Korean War (when a third of its population was homeless) through strategic state planning; GDP per capita rose from $120 to $1040. The state focused on empowering privileged families called chaebol to scale companies like Hyundai, Samsung, LG, and Lotte and urbanize Korea – raising the population of Seoul from 2.4 million in 1960 to almost half of the country’s population today, and employing hundreds of thousands of people globally.

Economic liberation followed in the 1980s, and the Asian economic crisis in 1997 bankrupted some chaebol **companies like Kia and became a turning point for cracking down on corruption between politicians and the chaebol. However, chaebol still exists today and they have dominance and a head start over others in Korea, which makes it difficult for startups to thrive. I’m extremely interested to see a new generation of entrepreneurs rise up, and have often considered angel investing in some startups there.

Around the time I visited, back in 2009, k-pop was getting into full swing. Boybands like BigBang, girls groups like Girls Generation, and solo artists like G-Dragon were larger than life. I learned the songs, I learned some Korean language (I have spent a few hundred hours learning Korean but can only say about 50 phrases!), and generally grew to love the culture and people. I’ve kept up with some of the k-wave, and during the pandemic, I got to watch two great k-dramas: Crash Landing on You, and My Mister.

During my time exploring Korea, there were many cultural elements I became extremely attracted to – like education, protest, caring (Jeong), work ethic, and the cherishing and expression of emotion and melancholy in the arts.

Korean governments prioritized education as the key to national development and have pursued educational egalitarianism – which can be seen in the increasing number of schools throughout the country. Korean society prizes literacy and the democratization of education has a long history.

In the 1400s, King Sejong the Great mandated the creation of Hangul, the Korean alphabet that, unlike Chinese characters (hanja), is phonetic and easy to learn. Almost any Korean, Chinese, or English word can be written and read surprisingly easily in Hangul. It’s so simple that takes just a few days for anyone to learn! Once you know Hangul, you can read and write any word – although you might not know what the word means yet. This enabled ordinary people in Korean society to become literate, and today the illiteracy rate in Korea is almost zero.

This was evident to me already, having seen my friend and his family of three brothers fight to learn English from scratch and become top-performing academics at my high school. His mother had moved with them to South Africa so that they could have an excellent education at an English-speaking school. But I had to be there and see some teenage students walking home from private tutoring every night at 11 pm to understand the pervasiveness of this commitment to education!

Korea’s open educational system provides them with knowledge of fundamental civics and political theory, history, and public administration. This arms the society with a political agency that is expressed in a vibrant tradition of protest. There is a beautiful Korean film called A Taxi Driver that centers on an uprising in 1980 that demonstrated Korea’s mainstream, progressive and modern politics against a more conservative state. Although Koreans have less to complain about today, I believe that this tradition is still as strong as ever.

I learned that one of Korea’s defining cultural qualities is Jeong, which loosely means a “feeling of fondness, caring, bonding, and attachment that develop within interpersonal relationships.” Jeong demands loyalty, sacrifice, and forgiveness between those who share it. It doesn’t necessarily require liking someone – there is an expression mium jeong (hateful jeong) to describe bitter interdependency. To me, this had a similarity to the South African term Ubuntu, which means “you are who you are through other people” – emphasizing interdependence within communities as a fundamental part of the human condition. Jeong is more pervasive in Korean culture and influences business and economics. On a darker note, it likely also justifies corruption in chaebol discussed earlier; the Korean word for favoritism Jeongshil is derived from Jeong.

To have Jeong, there must also be cultural boundaries that create the interdependent in-group. The Korean term for this is woori – the sense of “we”. The outsider is known as nam. In one context family is woori and a person living down the street is nam; in another context, the people of the country are woori and foreigners are nam. The strong feeling of pride in one’s in-group can also lead to shame when a citizen does something that’s embarrassing internationally. That’s why the scandals, like with crypto founder Do Kwan, are dealt with very harshly.

Korea is characterized by frightfully intense competition. Students fight to win a place in the best universities, jobs, and marriage partners. The pressure to compete begins in early childhood and never seems to diminish. As noted, Korea pulled itself out of economic poverty in the 1950s, which it did by drilling it into students’ heads that they were on a historic mission to revive the nation. Each generation has been eager to pass on their hard-won advantages and continue the continuous education and improvement. This manifests in an extreme focus on schooling – moving kids overseas, as with my friends, and paying for expensive private lessons to get ahead; the elite maintain their position through their ability to outspend on private tuition. About 70% of elementary students and 50% of middle and high school students receive some form of private tutoring. However much the value of education resonates with me, it’s also arguable that Koreans are overeducated relative to productivity, and that this competitiveness has had a negative impact on their emotional well-being.

It’s well known that fashion, luxury, and cosmetic beauty are dominant themes in Korean society, which is part of a (sometimes literal) concept of an “investment in face” – whereby increasing social status is equated with moral value. It’s a combination of physical appearance and background – in career, education, or family – that puts women ahead of their peers in the search for the best jobs and eligible partners, and the BBC reported that by conservative estimates, 50 percent of Korean women in their twenties have had some form of cosmetic surgery. Balaji commented that he believes some of these characteristics should be exported – for example, that we should be more willing to experiment with cosmetic surgeries in the west, and not place so much emphasis on natural beauty over intentional improvements. I worry that competitiveness in beauty standards is a zero-sum game that doesn’t make people happier, but I do like the fact that cosmetic surgery can fix problems that would otherwise worry people.

And what about Korea and web3? I think that’s a post for another time. But I do believe that Korea has massive cultural capital and NFTs have a way of transmuting cultural capital to financial capital. This could be very good for artists there who otherwise leak profits to companies like Netflix. I loved watching k-dramas like Crash Landing on You, or My Mister, and I’m aware that watching them on Netflix probably detracts from Korea’s revenue. I’m excited to see the creative applications that will come from Korea.

That’s all I’ll say for now on my excitement and thoughts on Korea. I’m at the airport at JKF ready to board my flight. If anyone wants to meet up, talk, or invite me to participate in any events near Seoul, please let me know!

1. Products need to move onto L2 networks

2. Exchanges need to provide cheap on-ramps directly to L2

3. Products and specifically wallets need to abstract L2 networks.

I’ve written this out here and also experimented with sharing in video format. Let me know if the video format is helpful.

Products and projects need to move or start on L2 networks

The thing that killed each cycle was that Ethereum L1 didn’t scale and became expensive to use. This was very clear in the “DeFi summer” of 2020, and the NFT explosion in 2021. Transaction fees became too expensive and it priced people out. Eventually, only whales could afford to make profitable trades in DeFi, and only large speculators would mint Yuga Labs NFTs in 2021.

Exchanges need to provide cheap on-ramps directly to L2 (for a few cents)

We shouldn’t expect users to buy ETH and bridge to L2. Users need to purchase L2 tokens directly from exchanges with fiat, and then send them cheaply into the L2 networks so that they can use those products. We should look at apps like Coinbase to help onboard users to L2.

Products and specifically wallets need to abstract L2 networks

It doesn’t matter whether someone uses MasterCard or Visa these days. All of the payment processors can handle either and they abstract the differences. The same thing needs to happen with L2 networks, and it’s likely the wallets the need to take on this task.

Different products will launch on different L2s. It’ll be messy if we expect users to navigate all of the different L2s, and so wallets (Coinbase Wallet, Rainbow, Argent, etc) need to abstract the L2s and provide ways to bridge between them seamlessly. The user shouldn’t need to care that they have Arbitrum ETH tokens but want to use Mirror, which is on Optimism.

Writing is a form of thinking – it's “thinking on paper” and anybody who thinks clearly should be able to start writing clearly about any subject.

But many people are afraid of writing – of communicating private thoughts publicly – because we're not sure our private thoughts are valid. But if we’re able to embrace the vulnerability, then we can find a way to wrestle with any topic and gain more confidence and mastery.

Explaining and exploring concepts, from the scientific to the social, can be an exciting way to learn more and crystallize our understanding into a lasting artifact. At any time, we can pick a topic that we don't know much about – like cryptocurrency or the tort law system – and write about it until we have a clearer picture. We can even take different sides of a debate and explore new perspectives (maybe from an anonymous account if we want it to be public).

Writing isn't the hard part of this. The hard part is the vulnerable voyage into the self, as we clarify and challenge our thinking as we express it with real words. Our goal should just be to say things that are true, as simply as we can. We should start by figuring out what a novice should know about a topic, and then communicate that before moving on to the next thing. Word by word, this can compound into a book or a larger article that can even prove an advanced grasp of a topic, and be genuinely educational to others.

In a world where written content production seems so cheap (even computers can generate it now), we shouldn’t give ourselves more reasons not to write. The activity of writing is fundamental to civilization and it’s how we make intellectual progress together.

Here are some tips to start writing to learn:

1. Above everything, try to be simple and clear.

2. Try to pick a topic you enjoy learning and writing about because the reader will feel our zest. How we feel about a topic oozes through our writing.

3. Try to be brief. Brevity is a sign of organized thinking.

4. Avoid technical terms that can hide meaning or vague language (like “etc”) that replaces concrete examples.

5. Be consistent by blocking out time as often as you can to write. Maybe as much as an hour a day.

6. Embrace imitating others. One of the best ways to improve writing is to model our writing on others, and then deviate when it’s authentic to do so. We can start by mimicking others and later make the subject our own. This molds both our writing and our thinking processes.

7. Write and edit for yourself. Every reader is different, and you can't write for everybody. But you can assume that if something is interesting to you, and you enjoy writing about it, that other people find it interesting and will want to hear about it as well.

8. Don’t be afraid to move on once finished. Writing is a means of growth, and our perspectives change over time. Publish and move onto the next piece without getting stuck.

Conclusion

Since Mirror launched Writing NFTs, we could think of Mirror as a place to “write-to-earn”. But I really love seeing people in the community writing to learn. We can all become better thinkers and communicators by improving our thinking through writing.

When we write to learn, we find out what we think and want to say, and how our views are different from others. This even makes us better conversationalists! I can’t imagine a more worthwhile thing in life than to improve thinking, knowledge, and conversation. It improves every interaction, and it lasts our entire lives.

The vast and wonderful knowledge of this marvelous universe is locked in the bosoms of its individual souls. To tap this mighty reservoir of experience, knowledge, beauty, love, and deed we must appeal not to the few, not to some souls, but to all.

– W.E.B Du Bois, “Of the Ruling of Men” (1999: 84)

A healthy democratic society entails a just and rigorous definition of the person and the empowerment of the person with political agency via voice and exit.

The success of progressive politics throughout the 20th century was in broadening the definition of citizenship and enfranchising every citizen. But in the online social spaces that have become crucial to public discourse in the 21st century, there is a noticeable absence of an enforceable definition of personhood or citizenship.

I see basically three philosophical approaches underlying a project of personhood on the internet: psychological, physiological, and sociological.

A Physiological Approach to Identity

One approach to identity, which can be termed animism, defines a person as a human animal that survives across successive physical stages. The verification approach includes trying and match a person to a physical body.

This approach gives us an intuitive “numerical” identity for a person that enables a pragmatic approach to verification – for example, by scanning an eyeball or a fingerprint.

Philosophically, the animist approach to identity is deeply unpopular. Olson (2002) reminds us that the Western philosophers Plato, Augustine, Descartes, Spinoza, Leibniz, Locke, Berkeley, Hume, Kant, and Hegel all denied it.

Conceptually, as it is a materialistic view, it is vulnerable to Hobbes’s Ship-of-Theseus style attacks. I have an operation that transfers cells from my body to another, at what point does my “self” transfer?

I think this has all sorts of other problems, like literally purchasing eyeballs. But most importantly, I don’t think it survives in our inevitable posthuman future.

A Psychological Approach

Another way is to tie a person’s identity to psychological characteristics, like memories. If someone remembers all the critical things in the right sequence, that makes them the same person.

The psychological approach has more philosophical support (from Locke to Nagel), and at a basic level allows us to verify identity with passwords.

In this “psychological continuity” approach to identity, it’s the succession of memories and their connecting narrative that defines who I am. But defining identity by the causal relationship between psychological states is challenging in terms of practical verifiability, and has its own conceptual critiques. Conceptually, a psychological basis for identity isn’t actually well-supported by modern neuroscience. In experiments with “split-brain” patients, for example, subjects can demonstrate two streams of consciousness. These patients’ left and right hemispheres interpret the world differently and each hemisphere tries to influence the body in its own way. Each stream of consciousness might have its own succession of psychological states, but we don’t think of them as constituting two different people (Parfit, 1987).

Both the psychological and physiological approaches to identity might exclude digital-only entities like an AI, which may have neither physical bodies nor a humanlike subjective narrative. Perhaps animism would grant identity to “synthetic organisms” or “living machines”, as described by Deplazes and Huppenbauer (2009), but since we cannot scan the eyeballs of an AI that does not have a body, this will be problematic for both the posthumanists and transhumanists discussed further below.

A Sociological Approach

A third approach is sociological. The sociological approach focuses on the relationship between self and society. The self is viewed as always acting in a social context with others and it’s the patterns of interactions that can be used to construct identity.

The self in this context is reflexive because we create society and in turn society “creates us”. The mind develops through social interaction.

Social interaction happens when we use symbols to communicate, so this can be called a “symbolic interactionist” view of self – pioneered by American sociologist Sheldon Stryker.

When we communicate with others we point out who we are, and we appraise others; through mutual appraisal, we refine our view of ourselves.

When we interact, we don’t usually interact as a “whole person”, but as an aspect of a person – with a role like that of a mother or colleague. We play out our roles in society, and these roles are compossible, subjective and we move in and out of them fluidly.

So the self is differentiated by the groups, institutions, and individuals we interact with (our social structure) and the contents of those interactions.

I think this is the right type of personhood for the internet.

We can at least rule out the other approaches. The physiological approach does not allow for AIs to be considered people. I think this is a problem because soon AIs will be capable of social and political engagement.

So we should make internet personhood compatible with Posthumanism (though we aren’t forced to accept everything about this movement). I should point out that Posthumanism is different from Transhumanism, which is about the advancement of human capacities. Posthumanism rejects the hierarchical boundaries that exclude non-humans from political life whenever those non-humans demonstrate political agency.

This indicates that we want some kind of “capabilities” approach to identity – perhaps even drawing from Martha Nussbaum's Capabilities Approach, which has been used to argue for moral rights for animals. The basic capabilities would have to do with social interaction – for example, for a person to express common sense in a social context and influence others. Hannah Arendt is another relevant thinker because she warned that common sense, thinking and judgment are all necessary for politics.

In light of this, the psychological approach mentioned earlier (e.g. via memories) also doesn’t seem like it could be a necessary or sufficient condition for internet personhood. A posthuman person might be able to think and express political agency, but also control their memories – removing some memories completely and manufacturing others in a way that disrupts continuity. This person might even have multiple streams of conscious input while still expressing a single character identity outwardly.

So it really comes down to the patterns of social interactions. Blockchains are well suited to recording many of these patterns formally – our group affiliations, roles, language, and so on. So I think a subjective interpretation of on-chain interactions is a philosophically sound approach to online identity, and likely to be the one that succeeds our current messy approaches.

The following essay is a homage to collecting enabled by web3. It is a living document, minted as a collectible Writing NFT. By collecting it, you encourage me to keep refining and elaborating these views, which will be updated here.

Introduction: The Social Web Progresses into the Art of Collecting

The technology underpinning web3 enables ownership of digital media – including images, music, and writing. Some have said that this brings property rights to the internet. A common framing is that the web has evolved from read-only (web 1), to read + write (web 2.0), to read + write + own (web3).

Another way to think of the progression is to compare the verbs used on web2 platforms to those in web3. In web2, we like and share media; on web3, we collect. By introducing property rights to the internet, web3 moves beyond the like and share primitives of social to include a third and more powerful gesture: collect.

The social structure of collecting resembles contemporary art collecting – involving creators, collectors, and curators. But a key difference is that web3 empowers creators to engage instantly and directly with global collection markets. The disintermediation of the creator-collector relationship is reflected in the absence of the role of a dealer or central platform. This focuses web3 on creators and collectors.

“A Simple Trick” – Selling Ancient Ethiopia to Strangers on the Blockchain

In October of 2021, as Covid rates declined and the world became hopeful of reopening, an Ethiopian family of artists operating as a photography collective called Yatreda minted their first NFT collection on Foundation.

The series, titled Kingdoms of Ethiopia, included twelve motion portraits depicting historical heroes and heroines from Ethiopian history. The first NFT auction settled at 10 ETH ($30,562.80 at the time), and total sales topped 109.11 ETH ($388,741.47).

Yatreda is independent – an African family working from home, using local tools. After their blockbuster sale, the founder of Yatreda, Kiya Tadele, gave Vogue Italia context about the shoot:

…we photograph and film everything in our front yard. Neighbors and the construction workers building houses around us wanted to know what we were doing, wanting to know who these people in historical costumes were walking around our house.

During the editing process, Kiya applies “a simple trick” using Adobe software to create video clips that loop smoothly. This is an example of a creative competency in technique. But artists also develop competencies in conceptual understandings. For Yatreda, the decision to mint Ethiopian history as immutable NFTs is inseparable from the art itself:

Imagine how far back Ethiopian history goes, and how many different unique things we can capture and preserve? Which heroes will we decide to mint and spread all over the world, decentralized and almost impossible to destroy? Books can disappear forever. NFT not so easy. That’s the work I’m trying to do.

It was early evening in Ethiopia when the family uploaded the forever-looping clips of ancient heroes to Foundation, and tokenized them on Ethereum. They finalized their timed auction, and two hours received their first bid.

It’s web3 that uniquely enabled a family of artists in Ethiopia to sell a quarter of a million dollars in art overnight to collectors in Canada, England, and the United States. They didn’t need to find a dealer, connect their bank, or create an account on a centralized platform – they just needed an internet connection. The program that ran their auction will continue servicing any artists like them, without intervention or maintenance, at all hours of the day, for every day of the year.

But it’s unclear whether the creative process can run sustainably without intermediaries. Intermediaries in the creative process are not just economic – roles like dealers can function as cultural intermediaries.

Dealer Not Required? Challenging the Proposition of Artist-Collector Disintermediation

In Bound by Creativity, an ethnographic fieldwork exploring the contemporary art scene in New York City, Professor Wolh examines the social processes underlying artistic production and evaluation. She reveals the interrelating roles of the artist, dealer, and collector:

Artists must decide how to produce their work, dealers and curators must select which works to exhibit, critics must choose how to interpret exhibitions, and collectors must purchase certain works for their collections.

Both practical and supportive, the dealer serves as an important cultural and economic intermediary between the often eccentric artist and their prospective collectors.

Dealers must maintain their role as true supporters of artists’ creative visions, while also keeping the lights on. In their interactions with artists, they delicately negotiate three kinds of creative decisions: what kinds of work artists make, how to arrange these works in the exhibition space, and the exhibition timeline.

Bound to the creative visions of both creator and collector, the dealer must nurture and guide the artist’s talent.

Collectors do not think about collecting discrete works. Instead, they view themselves as collecting artists’ creative visions, while also expressing their own creative visions through their collections. This perspective shapes which artists’ bodies of work they select, which works they purchase within these bodies of work, and how they claim status as collectors.

In the conclusion of Bound by Creativity, Wolh underscores that artists must “negotiate others’ interpretations of their creative visions as their work circulates through the art world”. Amidst web3’s absence of cultural intermediaries, artists are assumed to take full responsibility for this role, and the longevity of this approach is not proven. To become a home for serious cultural creation and evaluation, web3 might need to facilitate more than just efficient economic relationships.

From Collection to Collective: Token-Based Memberships

It was during the pandemic, while many were forced to search online for connection and community, that the web3 narrative took hold. Entrepreneur Trevor McFedries, the creator of virtual pop star Lil Miquela, had just launched an online club called Friends with Benefits – equating membership in the club with ownership of the “$FWB” token. Anyone who had the token could send some to their friends – expanding the group to others who shared the same cultural values and wanted access to events and chat rooms. The more people who wanted to join the group, the premise went, the more valuable the token would become.

By the time the New York Times reported on it, the group had expanded to over 6,000 members and FWB’s mission had evolved to “becoming the ultimate cultural membership in web3”. Investors had noticed; famed crypto fund a16z Crypto had valued it at $100m, banking on the group’s potential to take web3 mainstream:

Because of FWB, it’s now possible to envision a world where the first time you interact with crypto is when you walk into a bar or attend your friend’s concert.

During this time, the most compelling application of tokens seemed to transition from financial speculation to community membership. I realized that if web3 starts with collecting, it ends with belonging.

Choosing a specific Optimistic Rollup is not a difficult decision, because users will be able to bridge across all L2s cheaply and securely, and these L2s are likely to converge on similar code. The difference between L2s will be like the difference between Mastercard and Visa – as far as most consumers are concerned, there is no real difference.

L2 networks are starting to incentivize adoption with governance token airdrops, and supporting applications and infrastructure are compounding strongly. This post explains why devs should start building on an Optimistic Rollup today.

The Death of L1 Drops

Over $100 million was spent on gas for the YugaLab’s Otherdeed mint yesterday, with only 27,500 users participating. The $APE community assumed that members would wait for gas prices to stabilize during minting, but the fact that they did not highlights the problem with L1 – that although there are efficiency improvements that can be made to support more transactions (like different auction types, or code optimizations), what makes L1 untenable is the fundamental limit of concurrent users. Many users want to participate in drops at the same time, each applying independent balance changes – so the only way out of this concurrency conundrum is to batch transactions, which is what L2s do.

The Emergence of L2 Apps

Two L2 protocols have proven to be production-ready, with high-quality applications in use: Arbitrum and Optimism. NFT marketplaces such as Quixotic on Optimism and Treasure.lol on Arbitrum show these systems are working.

On Mirror, we recently let anyone mint an NFT of the Optimism governance token announcement – but only to mint on Optimism itself. 520k tokens were minted in one day. The take-away was that Optimism handled a half-million token drop easily, and it was the “web2” parts of applications like Mirror, Quixotic, and Dune that struggled to keep up with the volume. These applications are now working to improve their infrastructure from this feedback, and will become more resilient for the next drop. We will likely see flawless, million-token NFT mints on Optimism in the near future.

Arbitrum is also starting to have robust applications built on that network.

Choosing Between Arbitrum and Optimism

The big decision is to move from L1 to L2. Once this decision has been made, picking an L2 isn’t difficult.

Firstly, L2s can be abstracted, because they theoretically share the security of the L1, and it will be extremely cheap for users to bridge across different L2s. End users will care less about their L2 network for minting than they can about whether they’re using Mastercard or Visa to shop on Amazon. Only bridging from L1 to L2 will be expensive, but in the future users will typically never do this – they will be able to buy L2 tokens directly on exchanges. So bridging from L1 is a short-term problem to solve, and we shouldn’t blow it out of proportion when considering moving to L2s.

Secondly, and more technically, what makes any Optimistic Rollup a good block-producer is very similar to what makes the base-layer good. So Optimism, Arbitrum, Polygon, and other L2s might simply converge to the same code over time – a tight adaptation of the L1 code. This is exactly what Optimism did by forking the most popular Ethereum client, Geth. This approach makes sense to me, and I think it is a good pattern for new Optimistic Rollups. So there probably won’t be a substantial technical difference between L2s; assuming the code is bug-free, it’s fine to choose either. I like that Optimism is very similar to Geth.

Why Not Alt-L1s?

The main reasons to stick with Ethereum is that it will continue to be a robust and stable network to build on, it already has a wide distribution of usage, and bridging to L2 for cheaper transactions will prove to be more secure than bridging to other L1s. I expect the majority of quality web3 development to continue to be in Solidity, and for many existing Ethereum users to to bridge to the L2s. The more this happens without a major incident, the more the network effect will grow and development and investment will favor L2.

In the long-term, L1→L1 bridges might become perfectly secure, but today they are not proven. The recent Wormhole Solana-Ethereum bridge exploit for $250 million is a hint of the scale and consequence of insecure bridging.

What about ZK-Rollups?

Like many others, I am obsessed with the promise of zero-knowledge across all domains of technology this century. I believe ZK-proofs are the key to scalability and privacy in the long-term. But I still think that the Optimistic Rollups are the best choice today for development.

Firstly, ORs are fully production-ready, while ZK-rollups are in an earlier stage of development. Programing in Cairo is difficult, and only an acceptable burden for some stellar technical teams (like dYdX), but it is not approachable for most other product-focused teams that want to move quickly. To make this concrete: consider that Cairo doesn’t support for-loops, and so the contract developer must use recursion.

Secondly, (to say it again) bridging across different L2s will be cheap and easily abstracted in the user-experience. The bridging and migration path across L2s (even OR to ZK) will not be not as burdensome as the migration off of L1 in the first place.

Conclusion

Ethereum is becoming a base layer for L2 solutions – serving as a common root of trust to move assets between different rollups safely and cheaply.

This was reflected in a new roadmap, introduced in October 2020 – a week after Optimism announced their testnet launch and proved that rollup ecosystems were developing.

Cross-L2 transfers will be cheap and seamless for the consumer, and prototypes are developing that integrate existing L1 state with new L2 data, such as ENS names. This will support a user-friendly experience when interoperating across L2s, to the point where users will not care about the specific L2 network for a given application. This removes the stakes when deciding on an L2 network. Since Optimistic Rollups are production ready and easy to develop on, and Optimism’s code is very close to the base layer’s code, it’s viable to choose Optimism to build on today.

L2s are also going to launch their own tokens, which will incentivize adoption and funding. Altogether, this makes L2s very attractive for development.

Over the next thousand years or so, the biological substrates of suffering will be eradicated completely.

– David Pearce (founder of the World Transhumanist Association)

In Transhumanism, “physical” and “mental” pain are viewed as biomedical afflictions to be overcome and relegated to “evolutionary history.” This includes pain such as that of love (“soul-destroying cruelties of traditional modes of love”).

But an immortality free of pain would not be a life worth sustaining. A life that turns away from pain withers into a comfortable survival.

Although I am bitter about the fact that I suffer such unbearable physical pain...I am attached to them, my sufferings, and I hate the thought they might leave me.

– Marcel Proust

Pain is usually resolved through experiences of transformation, that create narrative and meaning. Pain can be healed through art that connects us, or a loving caress that soothes us. Pain and healing are social processes vital for a deeply meaningful life.

Hegel argued that our minds are characterized and enlivened by painful contradictions. These contradictions trigger reflection that challenges our habitual understanding of the world. Great philosophical insight is usually birthed by painful experience.

And as far as my long infirmity is concerned, isn’t it the case that I am more indebted to it than I am to my health? ... I own my philosophy to it as well.

– Nietzsche

The Transhumanist promise of an anesthetized intelligence (even a blissful one) is not likely to produce the most meaningful experience for us. Its positivity will become mundane. Our most meaningful experiences, especially social ones, often risk or entail suffering. The human life worth preserving is the one that can receive a vulnerable other, in a play of intimacy and distance, that must necessarily be as sad as it is joyful.

Human profundity is in the wager of life in the face of pain and death, in which the mind is stirred through pain to imagine beauty. Removing pain and death from society, through biomedical control, precludes depth and beauty.

But today, when Hamlet ponders, ”To be or not to be?” we might say, "Oh, come on! Give him Prozac." The near future will have narrowly targeted psychological drugs that could change the behavior of most of Shakespeare' characters.

– James Martin, The Meaning of the 21st Century

But tragic Hamlet recognizes that our alternative, to end “the slings and arrows of outrageous fortune”, is “to die: to sleep”. The transhumanists only promise a blissful eternal slumber.

It is called a "fair mint" project, because the contract does not sell the NFTs - they are free to mint. Only 8,000 tokens can be minted in total, and the creator has reserved 222 of them for themselves as a reward (these tokens have the same scarcity distribution as everyone else's). All tokens have already been claimed.

At the time of writing, over 9k ETH (~$30 million) of Loot volume has traded on OpenSea's secondary market, with a floor price of 5.5 ETH each - making it one of the highest market cap collectibles of all time.

Included with each token are 8 types of gear items:

• Weapons

• Chest Armor

• Head Armor

• Waist Armor

• Foot Armor

• Hand Armor

• Necklaces

• Rings

To produce randomized scarcity, each item may be augmented by a prefix or suffix based on a hash of your token ID. There is a 42% chance of a suffix, and an 8.7% chance of a prefix.

One prefix might be "Spirit Song", and a suffix might be "of Protection" - combining with a "Titanium Ring" item to form: “‘Spirit Song’ Titanium Ring of Protection” (which would be very rare). Here's what a full set might look like:

The names of the items are simply output as SVG in an image - as seen in the example above.

Claiming Tokens

There is no user interface for Loot, and there is no price to mint. People claim Loot by calling a function directly on the contract - usually through Etherscan.

Because the claim functionality does not have sybil resistance, it is easy to mint many tokens via a script. Anish Agnihotri wrote a script to do this (and likely has used it to claim many loot tokens), which is something to be aware of when considering the ownership distribution of this project.

Random Trait Attribution

Minting the NFT assigns the owner a token ID, and trait attribution happens deterministically whenever NFT's tokenURI method is called.

Trait randomization is random but deterministic. It uses a hashing function applied to the concatenation of the token's ID and the type of the item (e.g. "CHEST"), and converts this to an integer (uint256 in Solidity). Each type of item has an array of options, and this integer is used to pluck a random item from those arrays.

Once an item is found, a new random integer is produced, bounded between 0 and 21, by taking the modulus of the random number and 21. If the new number is greater than 14 (about 42% chance), then the item gets a special suffix. If it is greater or equal to 19 (about a 8.7% chance), then it gets a prefix. This creates special scarcity properties for each of the items!

Closing Thoughts

Some of the top creators in our industry have started creating interoperable games using Loot as a foundation. This is likely the start of a phenomenon in the NFT space.

It would be preferable to prevent sybil attacks when claiming - by only allowing one person to claim one token - since the distribution of ownership is certain to be extremely weighted towards a few technical or ETH-wealthy individuals.

This project has created life-changing wealth for many people who simply took the time to submit a simple Ethereum transaction. This points to the massive opportunity for everyone in space right now.

The protocol follows these steps:

1. An account tells the protocol to exchange their NFT for ERC20 tokens. They specify a name and symbol for the ERC20, the number of ERC20 tokens to mint, and a reserve price for the NFT.

2. The owner is now referred to as a curator, and should distribute the ERC20 tokens (usually by putting it on a DEX like Uniswap)

3. ERC20 token holders vote to update auction's reserve price

4. After sufficient voting to negotiate price, bidding starts in an auction to purchase the NFT

5. After the auction ends, ERC20 holders can cash out by exchanging their tokens for ETH from the sale

6. The original owner gets a curation fee through an innovative inflation model

Quick notes:

• ERC20 holders should cash out as soon as the auction closes, to prevent dilution from curator-fee inflation.

• The protocol is currently governed by a 3-5 Gnosis Safe multisig and is not taking any governance fee, but this is subject to change.

The rest of this essay breaks down the Fractional's technical components: how NFTs become ERC20 tokens, how voting, auctioning, and cashing out works, and how governance is structured.

Exchange an NFT for ERC20 Tokens

The game starts when the NFT owner creates a TokenVault, which is both an auction and an ERC20 token. This happens through a special factory contract that transfers the NFT into the TokenVault.

The original NFT owner becomes the curator of the auction, and can specify the initial reserve price and the number of ERC20 tokens that will exist. The curator receives all of these ERC20 tokens, and will need to distribute them manually (e.g. on Uniswap).

The Fractional UI integrates with Uniswap (yay integration!), which will allow end users to purchase the ERC20s directly from their website.

The auction runs for 7 days by default, but can be set by the curator to a minimum of 3 days and a maximum of 2 weeks.

With each block, the total supply will inflate by a small percentage set by the curator, and the curator can claim these tokens. The token supply can also inflate by a percentage set by the protocol's governance, and these tokens go to an address controlled by governance (this address will receive ERC20 tokens for all NFTs that are fractionalized) - but the governance fee is currently set to 0%. Anyone can call the function that mints and distributes these tokens to the curator and governance address.

Auctioning the NFT

Once the ERC20 tokens are distributed, participants vote on the reserve price of the auction, with 1 vote per token. When 50% of more of the tokens have voted on the price, then bidding can start on the auction.

When the auction is won, the NFT is transferred to the auction winner, and the ETH sits in the vault. ERC20 tokens can then be exchanged for this ETH.

Cashing Out

Once the auction is complete, the token holders can cash out by burning their ERC20 tokens in exchange for the ETH from the auction sale. There is an incentive to cash out as early as possible, otherwise the curator fee will inflate the ERC20 supply over time and dilute the value of the other holders.

Governance

The Fractional protocol gives a 3-of-5 multisig authority all parameters of the protocol. In the early days of the protocol, this is a good way to structure governance, because it allows a small group to take quick action to improve operation. In the long run, governance and ownership should decentralized to a group of users (via airdrop to early users?), which will slow modifications to the protocol’s functionality.

Most of the accounts on the multisig are anonymized via Tornado cash, except for @john_c_palmer who is using an account linked to his other web3 accounts. This creates a small target for him if Fractional continues to grow quickly - but hopefully they can decentralize governance before that becomes a problem.

Social forums like Mirror can use ownership verification to legitimize an account's voice within these communities, producing social capital for a pseudonymous avatar - without revealing the identity of the owner. This allows anonymous individuals to reliably coordinate, transact, and advance group values - an innovation in global collective action.

Who is Noun 17?

Buying a collectible NFT signals investment in a community. On August 24, an account invested 140 ETH (~$450,000) in an NFT project called NounsDAO, purchasing the 17th Noun via auction. The signal is reinforced over time if the account holds the NFT as the resale value increases. We can verify this signal by viewing their transaction history.

After the purchase, the buyer did something else worth noting: They created a Twitter account called Noun 17 - as if to speak on behalf of the Noun. The Twitter account only has 95 followers at the time of writing, and unfortunately we cannot verify NFT ownership on Twitter. But on Mirror we can verify ownership.

Reflections of a Noun

Mirror is a crypto-native publishing platform that links accounts to Ethereum addresses, so we can verify that a writer owns an NFT like a Noun.

Verifying ownership legitimates the writer as a member of the community. As more crypto-native social networks come online, owners of collectible NFTs will have more spaces and forms in which to express themselves - enabling a multifaceted identity project for the avatar. A Noun can produce identity through narrative on forums like Mirror.

Noun Leaders

Mirror also has a crowdfunding tool, where DAOs are raising funds for various causes. A publication called BLVKHVND just used it to raised 337.75 ETH (~$1 million), establishing their online gaming organization.

Although NounsDAO can collaboratively govern a large treasury already, these tools give each Noun the autonomy to enact leadership using their own social capital.

When we generalize from Nouns to every NFT community, we see the inevitable power of social networks that can verify Ethereum accounts.

Further Reading

• NounsDAO

• How Identity Emerges in Crypto Networks