• DAO governance is starting to look less like community participation and more like product capital allocation.

• ZKsync is a direct example: tokenholders are being asked to fund Matter Labs’ Prividium roadmap and institutional network development.

• SafeNet is a token-utility example: SAFE is moving from governance token toward a role in network security.

• Meta Pool is a liquid staking example: governance decisions affect validator distribution, token incentives, protocol rewards, and how value moves through the system.

• If these are the kinds of decisions DAOs are making, then voting power matters. Analysis is useful, but delegation is what turns analysis into leverage.

The job description of a DAO delegate

A few months ago, I wrote that DAOs should increasingly be understood not just as internet communities, but as onchain businesses.

The more governance proposals I review, the more convinced I am that this framing is becoming unavoidable.

Tokenholders are no longer just voting on process, participation, or abstract decentralization. They are being asked to fund product roadmaps, allocate recurring protocol revenue, support validator infrastructure, approve incentive programs, and decide which products a network should become known for.

In other words, DAO governance is becoming product capital allocation. This changes the job description of a delegate.

If governance is mostly about participation, then showing up, commenting thoughtfully, and voting consistently may be enough. But if governance is where product strategy gets funded, then delegates are being asked to evaluate proposals more like board members or investment committee participants.

And this creates the reality that in DAOs, the people with the most voting power are the people with the most meaningful say over product direction.

Good analysis matters. But voting power determines whether that analysis has a seat at the table.

ZKsync and the clearest version of the trend

ZKsync is one of the clearest recent examples of DAO governance becoming product capital allocation.

The latest ZKSync governance proposal, the 2026 ZKsync Protocol & Network Development Allocation, proposes allocating 67 million ZK per month for 12 months to Matter Labs. At the proposal’s reference price of $0.015 per ZK, that works out to roughly $1 million per month.

The stated goal is to fund the 2026 Prividium roadmap and convert the institutional pipeline into deployed chains and a growing institutional network. The proposal also references continued work on Prividium engineering, business development, forward-deployed work, ZK Stack, and Airbender.

This is not a small ecosystem grant.

It is tokenholder-funded product development.

That does not mean it is bad. It may be exactly the kind of strategic bet ZKsync needs to make if it wants to compete for institutional adoption. But it does mean delegates have to evaluate it with the seriousness of a product funding decision.

A few questions matter:

• Is Prividium central to ZKsync’s long-term advantage?

• Does institutional adoption create durable usage for the network?

• Are the milestones specific enough?

• Are the revocation rights meaningful in practice?

• Is this funding ecosystem growth, core-team runway, or both?

• How should tokenholders evaluate return on this allocation?

This is where the old governance framing starts to feel inadequate.

If delegates treat proposals like this as ordinary community governance, they will miss the point. The DAO is being asked to fund a roadmap. That means governance is acting less like a comment section and more like a capital allocation process.

SafeNet and token utility as product infrastructure

SafeNet shows a different version of the same pattern.

The Safe Foundation announced Safenet Beta as a way for SAFE token holders to play a role in network security. SAFE holders can delegate to genesis validators. Validators evaluate Safe transactions, and valid transactions receive cryptographic attestations that are verified onchain before execution.

The beta launched with six genesis validators, each with a minimum stake of 3.5 million SAFE tokens.

This is not a treasury allocation in the same way as the ZKsync proposal. SafeNet is more about making the token part of the product itself.

A governance token by itself is often hard to value. It gives holders some decision-making power, but the connection between voting rights, protocol usage, and economic value can be weak. SafeNet tries to make that connection more concrete by giving SAFE a role in transaction security.

If Safe’s core product is securing onchain accounts and transactions, then SafeNet gives SAFE holders a way to participate in that security layer.

That is a cleaner form of token utility than many governance-token designs because it is native to the product.

The question for delegates is still not automatic support. The questions become:

• Does the validator model actually improve transaction security?

• Are rewards, slashing, and future fees designed in a way that creates real accountability?

• Does delegation concentrate power among a small group of validators?

• Does the mechanism strengthen the product, or mainly strengthen the token narrative?

Those are product-governance questions.

SafeNet is useful as a case study because it shows what it looks like when token utility is designed into protocol infrastructure rather than added later as a marketing layer.

Meta Pool as the liquid staking example

Meta Pool is the less clean, but maybe more realistic, example.

I recently wrote about liquid staking and the importance of looking past the token wrapper. A liquid staking token is not just “the asset plus yield.” It sits on top of validator allocation, governance decisions, liquidity conditions, smart contracts, and exit paths.

Meta Pool is useful because it makes those layers visible.

On NEAR, Meta Pool’s stNEAR is not only a convenience product for staking. It also routes stake across validators and participates in validator distribution. That means governance decisions around Meta Pool are not just about a token. They affect how protocol-generated value, validator incentives, voter rewards, buybacks, and operations fit together.

This is where DAO governance starts to look less like a clean product roadmap and more like operating discipline under constraint.

The questions are practical:

• Should protocol rewards fund buybacks?

• Should they support operations?

• Should active voters continue receiving rewards?

• Should validator delegation remain a major part of the token’s utility?

• How much value should be retained by the treasury?

• Which incentives create durable participation, and which ones simply create sell pressure?

There are also more experimental community ideas, including a proposal to create new forms of utility for mpDAO. I would not treat those as Meta Pool’s official direction, especially when core contributors have raised concerns. But I do think they reveal something important: when token utility feels fragile, communities start searching for new economic loops.

That search can be productive. It can also become distracting.

Meta Pool’s real lesson is not that every DAO needs a new product narrative. It is that token utility has to be funded, maintained, and governed through changing market conditions.

That is harder than announcing a new mechanism.

The delegate role is changing

Across these examples, the pattern is becoming clearer.

ZKsync is asking tokenholders to fund product development.

SafeNet is making token delegation part of transaction security.

Meta Pool is using governance to decide how protocol-generated value should be allocated across operations, validators, tokenholders, and future utility.

These are different situations, but they all point in the same direction: governance is becoming the place where product and economic strategy get decided.

That changes what good delegation requires.

Delegates need to understand more than voting process. They need to understand:

• product strategy,

• treasury allocation,

• protocol revenue,

• token incentives,

• validator economics,

• user adoption,

• accountability structures,

• and tradeoffs between short-term growth and long-term sustainability.

This is also why delegation matters.

If DAO governance were only about discussion, thoughtful commentary might be enough. But governance is increasingly where product roadmaps are funded, protocol revenue is allocated, and economic priorities are set.

In that environment, voting power is not just influence.

It is the seat at the table.

The hard part

This is the part I have been thinking about most directly.

My company, Axia Network, spends a lot of time reading proposals, evaluating governance systems, and thinking through the economic consequences of DAO decisions. But in most DAOs, we do not yet have much voting power.

That creates a real limitation.

We can publish analysis.
We can comment in forums.
We can participate in calls.
We can explain tradeoffs.
We can try to improve the quality of the conversation.

But without delegation, we are still mostly advising from the sidelines.

If the largest tokenholders and delegates are the ones deciding which product roadmaps get funded, which incentive systems survive, and which teams receive protocol resources, then smaller governance firms need delegated voting power to participate meaningfully.

Not because voting power is the point.

Because voting power is how analysis becomes actionable.

Delegation as accountability

There is a cynical version of this argument that says governance is just a power game.

I do not think that is the whole story.

Delegation can be extractive, but it can also be a way to create accountability. Tokenholders who do not have the time, context, or interest to evaluate every proposal can delegate to teams that do.

The question is what those teams do with that responsibility.

For Axia, the goal is not to accumulate voting power for its own sake. The goal is to help DAOs make better capital allocation decisions.

That means evaluating whether proposals are tied to real product outcomes. It means asking whether incentives are sustainable. It means looking at who benefits, who is accountable, and what happens if the assumptions are wrong.

It also means being willing to support ambitious proposals when they are well-designed.

Not every large allocation is wasteful. Not every core-team proposal is suspicious. Not every incentive program is mercenary. Some protocols genuinely need to fund product development, subsidize growth, support infrastructure, or experiment with new economic models.

The job of a delegate is not to say no to everything.

The job is to understand what the DAO is actually buying.

The next phase of DAO governance

The next phase of DAO governance will probably be less about whether communities can produce discussion and more about whether they can make disciplined economic decisions.

That does not mean DAOs should become traditional companies. It does not mean they should abandon openness, community ownership, or credible neutrality.

But it does mean we should be honest about the work governance is already doing.

DAOs are funding product roadmaps.
DAOs are allocating revenue.
DAOs are approving incentive systems.
DAOs are deciding which infrastructure gets supported.
DAOs are shaping what protocols become.

If that is true, then delegates are not just voters.

They are product capital allocators.

And if delegates are capital allocators, then voting power matters. It determines who can move beyond commentary and into actual decision-making.

That is why delegation is not a side issue. It is the mechanism that decides who gets to sit at the table while protocols decide what they are going to build next.

Note: rsETH, issued by Kelp DAO, is a liquid restaking token (LRT), that allows users to deposit their Ethereum staking assets (like stETH or ETHx) into EigenLayer and earn compounded yields.

The exploit destabilized the DeFi industry, specifically impacting users of borrowing and lending protocols Aave and Compound, and Layer 2 chains such as Arbitrum, Base, Mantle, and Linea, where the rsETH was used.

Personally, it changed how I looked at my stETH position (for readers who may not know, stETH is a liquid staking token on the Lido protocols that represents your staked ETH plus accumulated rewards) by making something obvious that is easy to ignore when markets are calm: liquid staking and restaking tokens are not isolated yield products. They are wrappers around validator systems, protocol contracts, governance decisions, liquidity venues, bridges, collateral markets, and exit paths.

The system underneath the token is what matters when something breaks.

Liquid staking makes staking feel simpler than it is

Before this, I mostly thought of stETH in the obvious way: ETH, but staked. ETH, but earning yield. ETH, but liquid enough to use elsewhere.

That framing is incomplete.

A liquid staking token makes staking easier to enter, hold, transfer, and use across DeFi. That is the whole point. But it can also make the underlying structure less visible. You are not only holding “ETH plus yield.” You are holding exposure to a staking architecture, a validator/operator set, a governance process, and a liquidity environment.

The rsETH incident did not make me think liquid staking is broken. It made me think liquid staking requires better diligence.

The exit path is where the abstraction breaks

The lesson became clearer when I exited my stETH position.

There are two broad ways out of stETH. You can sell it in the market, or you can redeem it through Lido’s withdrawal process. Those are not the same thing.

Selling is a market exit. It depends on liquidity, pricing, slippage, and whether someone else is willing to take the other side.

Redeeming is a protocol exit. It pushes you closer to the underlying staking mechanics: Ethereum validators, queues, timing, and settlement constraints.

You learn what the token really abstracts when you try to leave.

The validator layer is not just plumbing

A liquid staking token is easy to think of as a receipt for yield: deposit the asset, get the token, earn the return. But that framing skips the part that actually secures the network.

Underneath the token, someone is deciding where the stake goes.

That raises a different set of questions:

• Which validators receive the stake?
• Who decides that allocation?
• Is stake being spread across the network, or routed through a dominant protocol?
• What happens when the token becomes widely used as collateral?
• Does the system still work cleanly when markets are stressed?

These questions make Meta Pool became a useful comparison point for me.

Meta Pool has a liquid staking protocol, stNEAR, for networks like NEAR. On NEAR, users can stake directly with validator pools, but Meta Pool adds a liquid staking layer on top: users deposit NEAR, receive stNEAR, and continue holding a liquid token while the underlying NEAR is delegated across validators.

That makes it useful for this discussion because Meta Pool is not just creating a yield-bearing token. It is also making allocation decisions inside NEAR’s validator set.

The relevant question becomes:

If liquid staking abstracts the validator layer from the user, can it still help distribute stake across the network?

That question is especially important because Meta Pool distributes NEAR deposits across 80+ validator nodes and automatically rebalances based on validator concentration and performance. In other words, stNEAR is not only a convenience wrapper. It is also a window into how liquid staking can be designed as a stake-distribution mechanism.

Protocol Concentration

Lido, like Metapool, routes stake across many node operators, and it has been actively working to broaden participation. Its Community Staking Module, for example, helped increase the number of node operators to 566 and active validators to 21,377, at the time of writing.

So the concern is not validator concentration but rather protocol concentration risk.

A large share of Ethereum staking demand flows through one dominant liquid staking protocol, one governance layer, one staking architecture, and one very important token wrapper: stETH. Even if the underlying operators are distributed, the coordination layer itself can become systemically important.

The real lesson is to look past the wrapper

The deeper lesson from rsETH is that staking wrappers can carry risks beyond the base asset. Smart contract risk, bridge risk, oracle risk, collateral market risk, governance risk, liquidity risk, and validator allocation risk can all become part of the user’s actual exposure.

Most of that is invisible on the way in.

It becomes visible on the way out, or when something nearby breaks.

So the next time when evaluating a liquid staking token ask yourself:

• Where does the stake go?

• Who controls allocation?

• How concentrated is the protocol layer?

• How distributed is the validator set?

• Where does liquidity actually come from?

• Can I exit through the market, the protocol, or both?

The rsETH hack is a good lesson in looking past the wrapper and asking deeper questions. Because staking products are easiest to understand when you enter them.. You find out what they really are when you try to leave.

Takeaways:

• DAOs are increasingly making business-critical decisions, not just governance-process decisions.

• The next phase of DAO maturity is better operating discipline around revenue, value accrual, treasury management, and accountability.

• Governance quality will increasingly depend on whether protocols can connect legitimacy with economic execution.

Why this shift matters

Across multiple ecosystems, the direction is becoming clearer. Protocols are increasingly being judged on business fundamentals: how they generate revenue, how value accrues to tokenholders, how treasury assets are managed, and whether governance can support economically coherent decision-making.

That is one reason I think DAOs should increasingly be understood not just as internet communities, but as onchain businesses.

This is not to say that every DAO should behave like a traditional company or abandon the principles that make crypto governance distinct. But it does mean that many DAOs are now responsible for decisions that look much closer to business governance than community moderation.

DAOs are already making business decisions

If a DAO is governing treasury deployment, emissions, incentives, contributor budgets, buybacks, tokenholder alignment, strategic priorities, or growth initiatives, then it is already making business-critical decisions. The question becomes whether it is willing to treat those decisions with the operating discipline they require.

In practice, the protocols that appear strongest today are getting clearer about economic logic. Hyperliquid is being rewarded for a tighter and more automated value accrual model. Uniswap continues to face pressure around how governance and token value capture should connect more concretely. Optimism is moving toward using a meaningful portion of incoming Superchain revenue for OP buybacks. And tools like Valueverse are emerging around the idea that raw onchain data is not enough on its own; what increasingly matters is how revenue flows, value drivers, and economic tradeoffs are interpreted.

These are not peripheral governance questions. They are core operating questions.

Where current governance framing falls short

A surprising amount of DAO discourse still frames governance primarily as a participation layer. The focus remains on discussion, signaling, voting, and community process. Those things are part of governance, but they are not the whole of it.

The problem is that many DAOs still behave as if governance is mostly about participation, commentary, and visible activity, when in reality they are governing economic systems. They are making decisions about capital allocation, contributor incentives, sustainability, and value distribution. That is closer to running a business than hosting a forum.

This does not mean DAOs should become more bureaucratic for its own sake. It means governance needs to become more rigorous about diagnosis, prioritization, and accountability.

What stronger DAO operating discipline looks like

DAOs need to get stronger at:

• defining real problems

• connecting governance to revenue and value accrual

• making treasury and capital allocation decisions with business logic

• evaluating tradeoffs clearly

• holding contributors and decision-makers accountable

• translating raw onchain data into interpretable strategic decisions

The hard part is rarely deciding whether a DAO is “community-led” or “business-like.” That framing is usually too simple. The real challenge is building governance systems that preserve legitimacy while also supporting economically coherent execution.

The next phase of DAO maturity

In that sense, the next phase of DAO maturity is probably not more participation for its own sake. It is better operating discipline.

The protocols that figure this out will likely be the ones that can sustain value, allocate resources more intelligently, and make governance feel less like theater and more like stewardship.

A more useful question for DAO teams now may be this: are you governing a community, or are you governing an economic system that needs sharper discipline than your current processes can support?

I don't usually write prediction posts, but this year feels different.

AI is here. ChatGPT is used by, what feels like, virtually...everyone. Claude is too, and the exciting updates keep coming. We even have robots now—Waymo self-driving cars are already on the road.

If you’ve watched Stranger Things, you might remember from one of the earlier seasons where the residents of Hawkins, Indiana first discover the Demogorgon —a monster wreaking havoc and threatening to destroy the world. Once the resident heroes realize what’s truly happening, they know they can’t just tell people the full truth. No one would believe them. They’d sound absolutely insane! So instead, they create a palatable explanation that fits into people's existing mental models: there’s a chemical leak in the water.

I think about that analogy a lot when it comes to crypto predictions.

If I said outright that crypto and AI will aggressively eat jobs across every industry—from law to healthcare to e-commerce, manufacturing, and logistics—that software developers will be replaced and that Uber and truck drivers may disappear in a few years, that robots will become commonplace… I’d sound crazy! Even if it’s already happening.

So instead, I will make the shift to AI palatable.

What excites me about AI isn’t the moonshot, science-fiction version of the future (though that’s coming too). It’s the incremental change—the "slow at first, then everything all at once" way that AI will transform the products, apps, and tools I already use every day.

Since this is a crypto newsletter, this post will focus on crypto predictions—and, importantly, the growing interplay between crypto and AI.

But before going further, it’s worth addressing two questions upfront: first, what gives me any credibility to make predictions like these; and second, the obvious one—isn’t crypto mostly speculation?

On the first point, I recently wrote a post trying to explain, in simple terms, what I actually do working in governance and DAOs—a question I’m often asked by family and friends. I don’t take for granted that I get to work at the ground level of crypto innovation. That proximity is what informs these predictions. I’m not claiming to know exactly how things will unfold, but I do have a strong intuition shaped by working directly with teams building the next wave of finance and AI.

Speculation Was the Beginning, Not the End

Before getting into where crypto is headed, it’s worth acknowledging where it’s been. Most people associate crypto with speculation—trading, gambling, prediction markets, and volatile assets that feel closer to casinos than infrastructure. And honestly, that perception isn’t wrong.

Speculation was crypto’s first mass-adopted use case.

When Bitcoin launched, its intended purpose was peer-to-peer electronic cash and censorship-resistant money. But the first thing people could actually do with Bitcoin at scale was trade it. Payments require merchants, norms, and trust. Speculation only requires buyers. Volatility attracted attention, capital, and builders, and markets formed long before UX, regulation, or social understanding caught up.

With Ethereum, the narrative expanded—toward smart contracts, programmable money, and the idea of a “world computer.” Yet the pattern largely repeated. The applications that achieved mass adoption were not productivity tools or everyday consumer apps, but speculative primitives: ICOs, DeFi yield farming, and NFTs primarily treated as financial assets.

This pattern isn’t unique to crypto.

Railroads, oil, telecom, and even the internet itself all began with speculative excess. Capital rushed in before demand stabilized. Many projects failed. But the infrastructure survived.

We wouldn’t have Google, Amazon, or Facebook without the experimentation and capital flows of the dot-com era. Speculation paid for the rails of the internet, as the graphic below shows.

Crypto’s speculative era has served the same function. And now crypto has reached its post-speculation moment.

Prediction #1: Natural Language Interfaces for Crypto Wallets

Crypto wallets today are still too technical (I wrote a comparison of top Ethereum wallets in my post here). Users manually choose chains, select tokens, approve permissions, and sign transactions. Wallets expose protocol complexity, which for new crypto users, can feel intimidating overwhelming.

If you’ve used crypto before, the below screenshot of an Ethereum wallet looks familiar. If you haven’t, it probably looks intimidating.

With natural language interfaces built into crypto wallets, you will be able to simply write, "send $500 to Rika for dinner." The wallet will pick the cheapest rail (stablecoin, chain, and route), handle gas abstraction, settle instantly, and show you a beautiful receipt.

Prediction #2: Decentralized Finance (DeFi) Gets Abstracted

This shift to natural language interfaces has already emerged in the NEAR ecosystem with NEAR Intents. So this isn’t a prediction—it’s already here. The real prediction is that NEAR Intents will continue to integrate with more partners and evolve into a self-custodial, decentralized alternative to Web2 incumbents like Stripe and PayPal, which are layering stablecoins onto existing Web2 payment flows.

Rather than simply plugging crypto into legacy rails, NEAR Intents re-architects the rail itself—treating payments as outcome-driven intents, analogous to natural language interfaces for AI, and drawing on the liquidity, vibrancy, and composability of the entire crypto ecosystem as its backend.

A similar abstraction is emerging in the Optimism ecosystem with Actions, which simplify how users interact with onchain apps by bundling multi-step DeFi workflows—like lending, swapping, or payments—into single, human-readable operations. Actions abstract application complexity, making Ethereum-native finance feel more like using a modern app than navigating protocols and transactions.

Prediction #3: Crypto for Private AI

As people increasingly mistrust large companies like Google and Meta with their data, private AI conversations will become a must. Using trusted execution environments (TEEs) and similar privacy-preserving infrastructure, we’ll begin to see private AI contexts where user data is processed and stored locally, rather than harvested for centralized model training.

Once again, this shift has already started and NEAR is at the forefront.

In a recent announcement post, the Brave browser outlined how it is using Confidential LLM Computing on NEAR AI TEE-enabled Nvidia GPU's, to enable browser-based AI that can process sensitive data without exposing it to the platform itself.

My broader prediction is that privacy-native AI will reshape industries built on confidentiality—healthcare, therapy, and law—where trust, discretion, and data sovereignty are foundational.

That said, this shift will come with an important caveat.

Sam Altman, CEO of OpenAI, has publicly warned about the confidentiality risks of using AI in sensitive contexts. These concerns are acute in the therapy or legal realm, where therapist-client privilege, and attorney–client privilege, is paramount. Centralized AI platforms, by design, can be subpoenaed or otherwise compelled to disclose user conversations—an inherent risk of custodial data architectures.

That said, just as crypto regulation has gradually matured, AI regulation will likely follow a similar path. Over time, clearer legal frameworks and technical safeguards will likely emerge to better align AI systems with the privacy expectations of the industries that they serve.

Takeaways

It’s easy to look at crypto’s history and dismiss it as a story of speculation. And for a long time, that criticism was fair. But speculation was a phase, not the destination. Crypto speculation funded experimentation, attracted builders, and laid the groundwork for what’s coming next—just as it did during the early days of the Internet, oil and gas, and railroads.

What feels different now is that technical abstractions are finally catching up. AI and natural language interfaces will make wallets usable for the average person. NEAR Intents and Optimism Actions are turning complex DeFi transactions into simple interactions that will be as easy to use as ChatGPT. And privacy-native AI is beginning to emerge, not as a promise, but as an architectural choice—one that reflects growing discomfort with centralized data custody.

Taken together, these shifts point toward a future where crypto fades into the background and becomes infrastructure: quietly powering payments, coordination, and AI-driven systems without asking users to understand blockchains or protocols. The real breakthrough won’t be when people adopt crypto, but when they stop noticing it altogether.

In this post, I’ve focused on the financial use cases of crypto—many of which are already gaining real traction. But it’s important to remember that crypto’s impact extends far beyond finance. From scientific research to physical infrastructure networks, these broader applications are still early and will require more time to mature. How successfully crypto evolves in this next phase—as financial rails and payment infrastructure—will meaningfully shape the trajectory of these other use cases.

As always, stay curious, and feel free to message me with any questions or feedback.

You wouldn’t show your bank account to anyone who asks. You wouldn’t hand over your entire financial history just to participate in everyday life.

This intuition is almost universal.

At the same time, we also accept that privacy isn’t absolute. Government employee salaries are public. Nonprofit tax returns are public.

Certain kinds of transparency are healthy, even necessary.

So privacy isn’t a binary. It’s contextual.

The real question isn’t whether privacy should exist — it’s when, for whom, and under what conditions.

Privacy should be an option. Not always required, but always available.

When institutions enter the picture

Things get more complicated once institutions are involved.

Institutions need transparency for accountability, compliance, and trust. They also need privacy — to protect users, internal operations, trade secrets, and sensitive coordination.

This is where advanced cryptography begins to matter for privacy in practical, non-theoretical ways.

That’s why Ethereum Layer 2 scaling solutions (L2s) like ZKSync and Arbitrum already have a seat at the table when it comes to institutional adoption. Their tech stacks are privacy-ready, designed around institutional-grade requirements.. NEAR may be headed in a similar direction — though it’s still an open question how explicitly institutional that path will be.

This raises a deeper product and philosophical questions.

Do we build for institutions — or let them come later?

There’s a common saying in tech: build it and they will come.

In practice, that’s rarely true. Good product management is about building features your users actually want and need — not hypothetical users you hope will arrive someday.

Crypto complicates this because it forces us to ask: who is the user?

Is it individuals seeking sovereignty and freedom? Is it institutions seeking efficiency and compliance?

Can a system serve both without compromising one for the other?

Crypto manifestos

In The Trustless Manifesto, Vitalik Buterin, the co-founder of Ethereum, writes that Ethereum was not created to make finance more efficient or apps more convenient.

It was created to empower people — to allow coordination without permission, and without blindly trusting intermediaries.

zkSync’s own cypherpunk-inspired writing echoes this ethos. Their ZK Credo is explicit about decentralization, individual sovereignty, and the dangers of power concentration.

And yet, zkSync is also pushing hard into institutional adoption — most notably with their Prividium product, a ZK based blockchain that keeps data private.

This is revealing.

The contradiction isn’t technical — it’s political

The question isn’t whether institutions will use crypto. They already are.

The real question is whether DeFi can remain true to the values it writes about once serious entrenched powers enter the system.

zkSync’s ZK Credo contains one of the most important warnings in the space:

If a network possesses all the right technical attributes but its governance falls into the hands of a privileged few, it is destined to fail.

This isn’t theoretical. It already happened once.

The early Internet promised decentralization, openness, and user empowerment. It delivered global connectivity — and then quietly centralized power, data, and influence into the hands of a few massive corporations.

The missing ingredient wasn’t technology.

It was governance.

Decentralized, permissionless governance is crypto’s invention**

Blockchains didn’t just introduce new cryptography. They introduced on-chain governance — imperfect, messy, slow, and political.

DAOs are not elegant. They’re not efficient. They’re often frustrating.

But they are new.

They represent an attempt — maybe the first serious one — to embed power-sharing directly into the infrastructure itself.

Without governance, privacy technology is fragile.

Institutions don’t need to destroy decentralization to win. They just need governance systems weak enough to capture.

A cultural lens: geeks, mops, and sociopaths

This dynamic reminds me of David Chapman's essay Geeks, Mops, and Sociopaths.

Crypto is a subculture, and you can see all three archetypes clearly:

• Geeks who care deeply about the tech and its ideals.

• Mops who do the bare minimum and generate noise.

• Sociopaths who understand power and know how to play the game.

Institutions structurally incentivize winner-take-all games and power accumulation.

If governance is centralized, institutions will win by default.

The question that matters now

So the question going into this year isn’t necessarily whether DeFi will “sell out.” Institutions are already here, and DeFi has embraced them.

It’s whether its governance systems are strong enough to absorb institutional participation without losing the values that made the space worth building in the first place.

Privacy without decentralized governance won’t survive.

Decentralization without checks and balances won’t last.

Institutions will use whatever systems allow them to operate and win.

The real test for DeFi isn’t technical maturity — it’s whether sovereignty and freedom remains a feature, or quietly becomes a casualty.

As always, I’d love to hear your thoughts. Feel free to reach out directly or message me on Twitter — my DMs are open.

Happy New Year!

When I try to answer, I usually reach for an imperfect analogy: governance work in crypto is closest to a board of directors — except it’s decentralized, transparent, and governing an open-source, permissionless protocol rather than a single company.

That difference matters a lot.

In most crypto ecosystems, there are three distinct stakeholder groups that coexist in tension:

• The Corporation or Labs entity that originally built the protocol

• A Foundation that stewards governance and ecosystem health

• The DAO — the community of token holders who have decision making power over the protocol's treasury

Delegates in a DAO of a decentralized finance protocol function a bit like a board. They’re the ones proposing, debating, and voting on how shared resources are used. Sometimes that’s treasury allocation. Sometimes it’s economic parameters like inflation or lending and borrowing rates. Sometimes it’s the governance process itself.

Unlike a traditional board, though, this power exists in a permissionless environment. Anyone can build on top of the protocol. Anyone can form a company. Anyone can ship a public good. There’s no approval step.

That’s rare.

The closest Web2 analogy I think about is Android developers — but even that falls short. Building a successful Android app is hard, expensive, and mostly disconnected from any sense of shared ownership. Crypto protocols, at their best, offer something different: a community that developers are building with, not just building for.

And when that community disappears, something important breaks.

As Dennison Bertram, the co-founder of Tally, a core governance infrastructure platform for DAOs, says in this video, when there’s no community, the “magic” is gone.

Sounds neat in theory — in practice, it's messy.

All of this sounds neat in theory. In practice, it’s messy — and often fails.

I’ve been spending a lot of my time as an endorsed delegate in NEAR, an ecosystem with a genuinely vibrant community, impressive tech, and a governance history that includes failure. NEAR’s first attempt at a DAO — the NEAR Digital Collective — didn’t hold. Incentives broke. Participation skewed. Power concentrated in ways that weren’t intended.

But failure isn’t unique to NEAR. It’s a common part of building any ambitious system, in crypto and in tech more broadly. What matters isn’t that you fail — it’s how you respond, and whether you’re willing to try again with the lessons you’ve learned.

Learning from governance failures

NEAR’s second attempt at a DAO looks very different. It’s called House of Stake.

House of Stake uses a stake-weighted, time-locked mechanism through a vote-escrowed token called veNEAR (vote-escrowed NEAR). Users obtain veNEAR by locking their NEAR or supported liquid staking tokens, stNEAR, or liNEAR, in a smart contract. Rewards accrue gradually over time, increasing with longer lockups to incentivize long-term alignment.

To encourage early participation, veNEAR holders receive additional rewards on top of standard staking yields. These incentives aren’t meant to be permanent subsidies, but a way to bootstrap participation while the system is still in its infancy.

House of Stake itself is the governance framework that empowers token holders by facilitating this transparent and stake-weighted decision-making. One of the first proposals passed under this framework established the veNEAR holder rewards program described above.

This design is a direct response to what broke in NEAR’s first DAO iteration. Specifically inefficient execution, misaligned incentives, low engagement, and opaque decisions.

When governance gets tested

What’s kept me engaged in NEAR House of Stake isn’t the belief that governance has been solved — it hasn’t. It’s that, after failure, protocol stakeholders got back up and chose to keep listening and bringing the community into the process of shaping the next iteration of governance.

The community doesn’t always agree. Friction is constant. But that friction is part of the magic. Centralization would have smoothed the edges — and flattened everything else along with it.

As we head into 2026, many DAOs are reaching an inflection point. Regulations are becoming clearer, organizational structures are evolving, and institutional participation is increasing. The next phase of governance will test which systems can adapt without losing the communities that make them worth governing in the first place.

As always, feel free to reach out to me directly with questions, suggestions, or feedback. You can also drop me a message on Twitter. My DMs are open.

ΞTH Market Capitalization = $516,173,975,400 (approximately $516B)

ΞTH Price = $4,272

As always, feel free to reach out to me with questions, suggestions, or feedback, by replying directly to this email (if you are a subscriber), commenting on this post, or sending me a message on Twitter. My DMs are open.

-Rika

DeFi is More than Speculation

DeFi has plenty of tropes: crypto bros timing the market, chasing jackpots, flexing wins (and downplaying losses). But trading to make a quick buck is hollow.

To be fair, some of these tropes are true.

Most people’s first touchpoint with crypto is speculation — buying a token on an exchange like Coinbase, driven by FOMO and the hope of making quick money. Personally, I think that’s problematic. Trading is short-term and risky; investing is long-term and purposeful.

My own experience with DeFi looks different. I work in Decentralized Autonomous Organizations (DAOs), a new type of organization.

Quick refresher on DAOs:

Working in a DAO is akin to being both a shareholder in a company and an active participant in its decisions, from treasury management to strategy to protocol upgrades.

I am paid on-chain in a combination of stablecoins (e.g, USDC) and protocol native tokens (e.g, UNI, ARB), also known as governance tokens. From there, I move assets between wallets the way others move dollars between checking and savings. My DeFi experience is grounded in real-life financial flows, not speculation.

DeFi isn’t just a casino. It’s the rails of a new financial economy — open to traders, investors, builders, business folks, and really anyone curious enough to explore.

Useful Definitions

What is Decentralized Finance (DeFi)?

• DeFi is a new type of finance that removes the intermediaries we rely on in traditional, centralized systems. Transactions are peer-to-peer, fast, and markets are open 24/7.

What is Traditional Finance (TradFi)?

• TradFi refers to the legacy financial system built around banks, brokers, and other intermediaries. In TradFi, access to money and markets depends on these middlemen — whether it’s opening a checking account, applying for a loan, or trading stocks.

What is Trading?

• Trading is the buying and selling of assets with a short-term focus, aiming to profit from price swings. In crypto, this often means moving quickly between tokens — trying to “time the market” or capture volatility.

What is Investing?

• Investing is the act of allocating money or assets with the expectation of long-term growth or income. In crypto, this usually means holding tokens, participating in governance, or providing liquidity with the belief that the protocol or ecosystem will increase in value over time.

What is Permissionlessness?

• Permissionlessness means anyone can access and use a system without needing approval from a central authority. In DeFi, this is one of the defining features: you don’t need a bank, broker, or government agency to grant you access. All you need is an internet connection and a crypto wallet.

What is a Governance Token?

• A governance token gives its holders the right to participate in the decision-making of a protocol. Instead of control resting with a company or board of directors, governance tokens distribute voting power to the community.

What is a Pump-and-Dump?

• A pump-and-dump is a market manipulation scheme where the price of a token is artificially inflated (“pumped”) through hype, misinformation, or coordinated buying. Once the price spikes, early movers sell off their holdings (“dump”), leaving latecomers holding the bag as the price crashes.

The Origins of DeFi

At the core of DeFi is permissionlessness, which means that anyone anywhere has access to the system There is no need to ask for permission from an authority.

One of the first breakthrough DeFi protocols started with MakerDAO (now known as Sky) in 2017, when it launched the stablecoin DAI.  Instead of relying on a central issuer like a bank, DAI was backed by collateral locked in Ethereum smart contracts. It showed that a community could mint a stable, dollar-pegged asset without a centralized authority in control.

Then in 2018 came Uniswap, which introduced the automated market market (AMM) to swap one token for another. Rather than order books and market makers, used by centralized exchanges, anyone could deposit tokens into a liquidity pool, with an algorithm setting the price.

Around the same time emerged Compound, a protocol for decentralized borrowing and lending. Instead of a bank deciding who qualifies for a loan, Compound allows anyone with collateral to borrow from a shared liquidity pool, with interest rates determined algorithmically.

DeFi Summer

The summer of 2020 marked an explosion of DeFi experimentation on Ethereum.

At the center of it was a new mechanic: yield farming. Protocols began distributing their governance tokens to users who supplied liquidity. Suddenly, providing capital to DeFi platforms didn’t just earn interest — it came with bonus tokens that could increase in value.

Compound kicked it off by distributing COMP tokens to its lenders and borrowers. Soon after, protocols like Curve, Yearn, and the infamous SushiSwap piled in, each offering outsized rewards to attract liquidity. Billions of dollars in assets flooded into DeFi protocols within weeks.

The gold rush however had downsides. Many token incentives were unsustainable, leading to “pump-and-dump” cycles. Meme-inspired projects went from launch to collapse in days. Hacks and rug pulls became common as unaudited contracts rushed to market.

Despite the chaos, DeFi Summer cemented that DeFi was not just a passing fad. Core protocols like Uniswap, Compound, MakerDAO (now known as Sky), and Aave, emerged stronger, battle-tested by the flood of users and capital.

Core DeFi Protocols

I’ve already mentioned some of the core DeFi protocols: Uniswap, Compound, MakerDAO, and Aave. But they’re far from the only ones. In the five years since DeFi Summer, the ecosystem has expanded dramatically, with new protocols tackling everything from derivatives to perpetuals to cross-chain liquidity.

With that experimentation comes added risk. For beginners, only a handful of protocols are reliable starting points. That said, I don’t want to suppress curiosity —as I noted in the introduction, DeFi ultimately rewards the curious.

Beginner Friendly DeFi Building Blocks

For those just getting started, here are a few DeFi protocols that are widely used, battle-tested, and relatively beginner-friendly:

• Uniswap: The go-to decentralized exchange for swapping tokens.

• Aave: A leading platform for earning interest or borrowing against crypto.

• Sky (formerly MakerDAO): Creator of DAI, a leading decentralized stablecoin.

• Compound: A foundational protocol for earning interest or borrowing against crypto, with a strong track record.

• USDC: A centralized but highly liquid dollar-backed stablecoin, often the on-ramp into DeFi.

• Arbitrum: A scaling network for Ethereum that makes transactions faster and cheaper, making DeFi more accessible to everyday users.

Even with these battle-tested protocols, risks remain — from smart contract bugs to market volatility. Start small, do your research, and never invest more than you can afford to lose.

Evaluation Framework

As in my previous posts, I’ve put together a simple framework to help you think about how to evaluate DeFi protocols and applications.

1. Security & Audits

   • Has the protocol undergone third-party audits?

   • How long has it been live without major exploits?

   • Is the code open-source and battle-tested?

2. Decentralization

   • Who controls upgrades and governance?

   • Is voting distributed among many token holders, or concentrated in a few wallets?

   • Does the team have a track record of respecting community decisions?

3. Transparency

   • Are reserves, collateral, or liquidity visible onchain?

   • Can you easily verify where yield is coming from?

4. Composability

   • Does the protocol integrate with others (e.g., can you use assets from one platform on another)?

   • Is it part of the broader DeFi “money Lego” stack, or isolated?

5. Sustainability of Incentives

   • Are yields coming from actual economic activity (fees, borrowing demand), or just inflationary token rewards?

   • Will the model work without constant subsidies?

6. User Experience

   • Is the app intuitive?

   • Are transaction costs reasonable?

   • Is there good documentation and community support?

Conclusion

Some of DeFi's tropes — crypto bros chasing huge returns, flexing wins, and quietly downplaying losses — will probably always be true. Surprising as it sounds, speculation can play an important role in keeping financial markets healthy.

They key however for most normal folks who don't want to take on excessive risk is that you don't need to be a risk chasing crypto bro to build wealth in this new financial economy. You just need to have an appetite for curiosity, thoughtfulness, and patience. Prioritize education and prudence above all else.

Practically, this might mean starting small with a swap on Uniswap, experimenting with a stablecoin like USDC or DAI, or lending on Aave. For others, it might mean contributing to a DAO or exploring new protocols.

Wherever you begin, the key is curiosity and a willingness to learn.

Feel free to reach out to me directly with questions, suggestions, or feedback. You can also drop me a message on Twitter. My DMs are open.

-Rika

ΞTH Market Capitalization = $276,031,157,221 (approximately $276B)

ΞTH Price = $2,286.75

Greetings, readers! (or Gm, as we say in crypto). This newsletter provides digestible breakdowns of complex protocols and products in the Ethereum ecosystem. You can expect quality substantive content (no hype pieces, shilling, or paywall) written for crypto-curious readers who are either newer to crypto or seasoned users who value refreshers on the fundamentals. You can learn more about this newsletter in the introductory post.

The potential of cryptocurrency is transformative: many of the online services we rely on today—such as banking, ride-sharing, and music streaming—are poised to shift to the blockchain, or “onchain.” Unlike traditional databases, blockchain operates on a decentralized network, eliminating control by any single entity. While blockchains don’t store files, they maintain an immutable record of transactions, offering unprecedented levels of transparency, authentication, and ownership.

The widespread adoption of crypto hinges on several factors, including market dynamics, regulatory considerations, and technological advancements. The good news? Early indicators suggest we’re on the cusp of a major shift.

2025 could very well be the year we see the first mainstream crypto consumer application and the breakout app may be a social media application.

In this post, I’ll explore the rise of onchain social media, tracing the evolution of social networks from early centralized platforms like Myspace and Friendster to today’s decentralized, non-crypto networks like Mastodon, to onchain networks like Farcaster and Lens, which represent the latest shift toward user control, data sovereignty, and creator monetization.

This is a lay of the land, breaking down how social platforms have innovated, scaled, and, in many cases, failed. By analyzing their strategies—what worked, what didn’t, and why—we can better understand the challenges and opportunities facing the next generation of social networks.

To wrap up, I’ve included a framework to help you evaluate decentralized social media platforms.

Before diving in to the meat of the post, let's align on three important definitions. You may find some of these rudimentary, so feel free to skip to the next section if you're already comfortable with these concepts.

*Note: These definitions are not absolute and are an amalgamation of my research. References and further reading are provided at the end of this post.

1. What is a Social Network?

   A social network is a system for exchanging messages and information between users. Traditionally, this exchange has been facilitated by centralized servers. However, with the rise of decentralized social media, social networks now operate across distributed networks of servers.

2. What is Social Media?

   While often used interchangeably with “social network,” social media has a broader meaning. It refers to platforms that enable users to create, share, and distribute content—whether for entertainment, personal expression, or building a brand.

3. What is Onchain Social Media?

   Onchain social media refers to protocols, applications, and platforms that use blockchain as their backend for storing and verifying data. This approach grants users greater control and ownership over their digital identity, content, and followers. Developers also benefit from the freedom to build applications on top of existing protocols without the risk of centralized platforms altering the rules.

Friendster and Myspace were the first social networks to set the standard for online communication, connection, and self expression — ultimately paving the way for the future of social networking.

Launched in 2002 by Jonathan Abrams, Friendster gained widespread popularity, capturing the attention of both developers and users, with its structured approach to online connections and relationships.

Friendster pioneered early social media features that have since become the gold standard:

1. Profiles & Connections – Users could create personal profiles, connect with friends, and explore extended networks through mutual connections.

2. Social Graph – A visual map of connections, where users are “nodes” and relationships are “edges.” This concept enabled features like friend recommendations and optimized content delivery.

Between 2003 and 2004, Friendster’s user base exploded to millions. However, this rapid growth came with challenges. The platform’s infrastructure struggled to scale, leading to slow performance and user frustration. Meanwhile, competitors emerged with faster, more reliable experiences, enhanced functionality, and stronger cultural appeal.

One such competitor was Myspace.

Launched in 2003, Myspace was developed by Chris DeWolfe and Tom Anderson, along with a team of developers, at eUniverse, a digital marketing and entertainment company.

By 2005, leveraging eUniverse’s marketing expertise and existing user base to accelerate its growth, Myspace became a household name and earned a reputation as a hub for musicians with bands like Arctic Monkeys using the platform to gain exposure and build fan bases.

Myspace innovated with the following features:

1. Profile Customization – Users could personalize their profiles with custom backgrounds, graphics, and music using HTML/CSS.

2. Top 8 Friends – A unique feature allowing users to showcase their closest friends on their profile.

At the height of its success, Myspace was acquired by News Corporation for $580 million—a massive deal at the time. However, mismanagement under News Corp, slow load times caused by cluttered profiles, and the rise of Facebook ultimately led to Myspace’s decline.

As social networks evolved, staying culturally relevant and providing monetization opportunities for creators has become increasingly more important. Today’s social networks prioritize not just connection but also status, recognition, and influence.

Launched in 2004 by Mark Zuckerberg, Facebook initially catered exclusively to Harvard students but opened to the public in 2006. By 2008, it had surpassed Myspace in monthly active users, marking the beginning of its dominance in social media.

Facebook innovated with the following features:

1. Exclusivity – Originally limited to Harvard students, Facebook created a sense of desirability before expanding to the public in 2006.

2. News Feed – A real-time, scrolling feed that aggregated updates from friends. This shift from profile-based browsing to a centralized stream of content fundamentally changed how users interacted with social networks.

3. Like Button – Revolutionized social engagement, becoming the primary metric for measuring content popularity.

4. Tagging – Users could tag friends in photos, posts, and comments, increasing engagement and encouraging users to return to the platform.

Facebook outcompeted Myspace for several key reasons:

1. Better User Design – Facebook’s clean, unified design offered a smoother user experience compared to Myspace’s cluttered interface.

2. Targeted Advertising – Initially offering fewer, less intrusive ads, Facebook perfected targeted advertising, capitalizing on its vast user data.

3. Real-Name Culture – Encouraging users to adopt real-name identities created a platform that appealed to a more mature audience, in contrast to Myspace, which remained largely associated with teen culture and music. As users grew older, they outgrew Myspace, while Facebook evolved to cater to their shifting needs.

One year after Facebook’s launch, Twitter was introduced in 2006 by Jack Dorsey, Biz Stone, and Evan Williams. It revolutionized social media by becoming an online public town square—the go-to platform for news, trends, and public discourse.

Twitter innovated with the following features:

1. Character Limit – Originally set at 140 characters, this limitation was later expanded to 280 characters, encouraging concise and impactful communication.

2. Hashtags – Initially a user-driven concept, hashtags were later embraced by Twitter, turning the platform into a powerful tool for activism (#MeToo, #BlackLivesMatter) and viral trends.

3. Real-Time News – The news feed provided live updates on breaking news, sports, and cultural events, making Twitter the go-to place for immediate information.

4. Retweet Feature – Amplified content virality and allowed users—ranging from public officials and journalists to brands—to engage massive audiences.

Twitter reshaped how we consume news, entertainment, politics, and digital marketing, influencing how the modern world interacts in the digital age.

So far, we’ve focused on centralized social media companies, but there’s also a growing presence of decentralized platforms, primarily within the Fediverse. The Fediverse is a federated network of independent servers that communicate with each other, running on the ActivityPub protocol—a decentralized framework that allows different platforms to interact.

One prominent application within the Fediverse is Mastodon, which gained significant traction after Elon Musk’s acquisition of Twitter. Following the acquisition, many journalists, political figures, and brands migrated to Mastodon, attracted by its decentralized nature, which frees users from the control of any single individual or corporation.

Seeing this shift, Meta also seized the opportunity and launched Threads, which directly competes with X (formerly Twitter).

Mastodon was created in 2016 by Eugene Rochko, a German developer who, disillusioned with Twitter, sought to build a decentralized, open-source alternative. His vision was to create a platform that prioritized user freedom, privacy, and community governance, positioning Mastodon as a space free from corporate control.

Initially launched as a non-profit, open-source project, Mastodon gained early traction among tech-savvy and privacy-conscious users.

Mastodon innovated with the following features:

1. Decentralization – No single company controls the platform. Users can choose from different instances, each with its own content and moderation rules. If one instance shuts down, the network remains functional, and users can migrate to another instance, taking their followers with them.

2. No Algorithms, Ads, or Tracking – Posts appear chronologically, with no algorithmic feeds, ads, or data tracking.

3. Open-Source Community – Anyone can create their own instance, fostering transparency and trust, unlike corporate-owned social media platforms.

4. Unified Feeds – Users can see feeds from all Mastodon instances, creating a larger interconnected network.

In 2022, when Elon Musk took over Twitter, many users migrated to Mastodon. However, the platform faced growing pains. The decentralized structure, with its multiple “instances” (independent servers running their own websites), proved challenging for new users. Each instance operates with its own domain, rules, administrators, and community, meaning users must create a separate account for each instance they join. While users can migrate instances and take their followers with them, old posts do not transfer, and profile details must be updated for each new instance.

Meta saw an opportunity after Elon Musk’s acquisition of X, and Threads has since positioned itself as a more approachable, less contentious competitor to X. Unlike X, Threads lacks a real-time trending section or hashtags, which reduces the focus on political debates, viral content, and news-driven engagement.

Officially launched on July 5, 2023, just days after Twitter implemented rate limits and restricted access for non-logged-in users, Threads quickly gained traction. Within just five days, the platform reached 100 million users, making it the fastest-growing app in history at the time.

While Threads shares many features with X/Twitter, it also introduces several unique elements:

1. Instagram Integration – Threads is built on top of Instagram, allowing users to log in with their Instagram account. This creates an instant social graph, leveraging existing followers, profile pictures, and usernames. This approach helps avoid the “empty network” problem faced by new social platforms.

2. No Ads (For Now) – Threads offers a cleaner, ad-free experience compared to X and Facebook, which enhances user experience.

3. 500 Character Limit – Threads allows up to 500 characters per post, surpassing Twitter’s 280-character limit for free users. Currently, there are no premium plans or subscriptions, so all users have the same features.

Threads, like Mastodon, is powered by ActivityPub, a decentralized protocol that allows data sharing across platforms built on the same protocol. This raises an intriguing question: why would a centralized company like Meta embrace decentralization?

The answer lies in strategy. By adopting ActivityPub, Meta can present Threads as a more open platform, distancing itself from the “walled garden” model of its other platforms (e.g., Facebook and Instagram). This move helps alleviate antitrust concerns and makes Threads more appealing to users who are drawn to decentralized networks.

Additionally, embracing decentralization allows Meta to tap into an existing ecosystem of applications, the "Fediverse", positioning itself as a supporter of open social networking. However, despite this decentralized front, Meta still controls key elements like discovery, account linking, and notifications. While ActivityPub allows posts to be visible across platforms, Meta is likely to impose restrictions—for example, only allowing interoperability with select Mastodon instances and prioritizing Threads posts over Mastodon posts.

Farcaster was founded by former Coinbase executives Dan Romero and Varun Srinivasan with the vision of creating an open social network on Ethereum, free from control by any single entity.

The platform prioritizes user sovereignty, enabling individuals to own their identities and content while maintaining a familiar social experience. It shares similarities with Reddit by allowing users to join interest-based channels. Unlike ActivityPub, which is not built on a blockchain, Farcaster operates on Ethereum, leveraging its decentralized infrastructure.

Farcaster innovated with the following features:

1. Sovereign Identity – User identities are tied to Ethereum Name Service (ENS) names, granting full ownership and control, similar to a website domain but entirely user-owned.

2. Permissionless Social Graph – An open social graph allows developers to build diverse applications on top of Farcaster without restrictions.

3. Hybrid Architecture – Combines on-chain and off-chain elements: identity and authentication are on-chain, while posts, likes, and interactions remain off-chain for efficiency.

4. Built-in Monetization – Encourages new monetization models, providing opportunities beyond traditional ad-driven revenue.

5. Developer-Driven Evolution – A strong developer community contributes to protocol changes through Farcaster Improvement Proposals (FIPs).

While Farcaster focuses on sovereign identities, an open social graph, and sufficient decentralization, another notable player in the decentralized social space, Lens Protocol, takes a different approach to redefining online interactions.

Lens Protocol, developed by Avara—the company behind Aave, Lens, and Family—was launched in 2022 under the leadership of founder Stani Kulechov.

Kulechov describes Lens as a decentralized social network that flips the traditional model, empowering users over platforms. This shift opens the door for transparent revenue-sharing models and better rewards for creators.

Lens innovated with the following features:

1. Built-in Monetization – Provides multiple ways for creators to earn, fostering a more sustainable ecosystem.

2. Collect, Mirror, Subscription & Tipping – Users can collect posts as NFTs, mirror (akin to sharing), and engage in direct monetization through subscriptions and tipping.

3. Fully On-Chain – Unlike hybrid models, Lens ensures all social interactions—including posts, comments, follows, and likes—are recorded on-chain for full transparency and ownership.

With its strong focus on decentralization, monetization, and user empowerment, Lens offers an alternative vision for social networking, further expanding the possibilities of Web3-powered online communities.

In this final section, I want to provide you with a social media evaluation framework that can help you make informed decisions that align with your values, needs, and goals.

Important factors to consider include whether the application is open source, on-chain, has built-in monetization, data sovereignty (e.g., identity), is interoperable with other applications, and has on-chain governance.

As we stand on the brink of cryptocurrency's mainstream adoption, the rise of onchain social media presents an opportunity to reshape how we connect, communicate, and create online. The evolution from centralized platforms like Myspace and Facebook to decentralized alternatives such as Mastodon, Farcaster, and Lens highlights a growing demand for user sovereignty, transparency, and new monetization models.

While challenges remain—ranging from adoption hurdles to regulatory uncertainty—the potential for on-chain social media to redefine digital interactions is immense. By understanding past successes and failures, we can better navigate this transition and make informed decisions about which social media platforms we use.

Love vs. fame: A framework for social applications

While "social" is often generalized as a single monolithic category, there's actually a ton of variance in today's landscape of social apps.

https://www.lisnewsletter.com

Farcaster Docs

A protocol for building sufficiently decentralized social networks.

https://docs.farcaster.xyz

Sufficient Decentralization for Social Networks

A design pattern to reduce centralized control and change incentives in social networks.

https://www.varunsrinivasan.com

Status as a Service (StaaS) - Remains of the Day

Editor's Note 1 : I have no editor. Editor's Note 2 : I would like to assure new subscribers to this blog that most my posts are not as long as this one. Or as long as my previous one .

https://www.eugenewei.com

About Fediverse - Fediverse.Party - explore federated networks

Let's make social media free, federated and fun! Fediverse.Party is your guide into the world of decentralized, autonomous networks running on free open software on a myriad of servers across the world. No ads and no algorithms. Join Fediverse and become part of the new interconnected Web!

https://fediverse.party

Threads is officially starting to test ActivityPub integration

Mark Zuckerberg said Threads is testing ActivityPub support that will make its posts available on Mastodon and other interoperable services.

https://www.theverge.com

First post: A history of online public messaging

From BBS to Facebook, here's how messaging platforms have changed over the years.

https://arstechnica.com

Feel free to reach out to me directly with questions, suggestions, or feedback. You can also drop me a message on Twitter. My DMs are open.

-Rika

ΞTH Market Capitalization = $412,733,583,128 (approximately $413B)

ΞTH Price = $3,436

A non-custodial Ethereum wallet is a portal to the Ethereum blockchain. It gives you a window to access your digital assets and sign in to decentralized applications.

Although the focus of this post is on non-custodial wallets, it's important to understand that some wallets are custodial, such as an exchange's wallet. Custodial wallets have their purpose, such as providing an off-ramp to local currency, but they lack in many features of non-custodial wallets.

In contrast to custodial wallets, non-custodial wallets allow you to meaningfully engage with crypto and use decentralized applications (dApps) for activities such as staking (see the last post), borrowing, lending, gaming, social networks, and more.

Very importantly: non-custodial wallets give you full control over your digital assets. Custodial wallets do not.

In this post, I will explain the basic mechanics of non-custodial wallets before sharing a handful of reputable wallet providers, along with a simple wallet evaluation framework to help you make informed decisions when selecting a wallet.

Hopefully you will come back to this guide throughout the bull market to help you get grounded when the energy may start to feel frenetic.

As always, let's start with a few useful definitions before diving into the meat of the post.

Let's align on six important definitions. You may find some of these rudimentary, so feel free to skip to the next section if you're already comfortable with these concepts.

*Note: all of these definitions are from Ethereum.org, a leading educational resource.

1. What is Ethereum

   Ethereum is a public network, a blockchain, and an open-source protocol — operated, governed, managed, and owned by a global community of tens of thousands of developers, node operators, ETH holders, and users.

2. What is Ether (a.k.a. ETH)?

   Ether (also known by its ticker symbol ETH) is the native currency transacted on Ethereum. ETH is needed to pay for usage of the Ethereum network (in the form of transaction fees). ETH is also used to secure the network with staking.

3. What is an Ethereum Account?

   An Ethereum account is an entity with an ether (ETH) balance that can send transactions on Ethereum. Accounts can be user-controlled or deployed as smart contracts.

4. What is an Externally-owned account (EOA)?

   One of the two types of accounts on Ethereum. An externally-owned account is controlled by anyone with the private keys.

5. What is a Contract Account?

   One of the two types of accounts on Ethereum. A smart contract account is deployed to the Ethereum network, controlled by code.

6. What is a Non-custodial Wallet?

   A non-custodial wallet gives you full control over your accounts. This means that the wallet provider does not have access to the private keys.

An Ethereum wallet is software that allows you to interact with your Ethereum account. Wallets use public key cryptography, a method of encrypting or signing data with two different keys: a public and a private key so you can sign in to Ethereum applications, read balances, send transactions, and verify your identity. Public key cryptography is an important technology to Internet security broadly, not only to crypto.

When you download a wallet (usually a browser extension) from the Google Play or App Store, the wallet software creates an account first by creating a private key. This is a 64-character string (e.g., 233EE78O5...) that should be kept secret. Then, a public key is generated from the private key. Finally, a hash of the private and the public key creates an address.

Note: Ethereum has two types of accounts: (1) externally owned accounts (EOA) and (2) contract accounts. For purposes of this post, you just need to know that wallets create an EOA. An EOA is controlled by anyone with the private keys.

Many wallet providers allow you to create and manage multiple addresses. Creating a new account is simple, as long as you have your private key.

Taking a step back, before generating a private key, the wallet software creates a seed phrase, a string of 12 or 24 words. A private key is also called a mnemonic.

The string of words in a seed phrase consists of common terms, e.g., tree, table, chair. The wallet software converts this string of words into binary numbers (ones and zeros) and uses it to produce a private key. When you change wallet providers, all you have to do is enter your seed phrase into the new wallet to pull up your accounts and have control of them.

You must keep your private key/mnemonic safe. If you lose your private key/mnemonic, or if a bad actor gets access to your private key, you will lose access to your funds.

Below is an example of a 12-word mnemonic phrase.

BIP39 (Bitcoin Improvement Proposal 39) is the standard for seed phrases. It has become popular across many cryptocurrencies, including Bitcoin and Ethereum.

Working in conjunction with BIP39, are two other standards: BIP32 and BIP44. BIP32 allows one seed phrase to control multiple accounts in Bitcoin, and BIP44 does the same for Ethereum (and other cryptocurrencies).

BIP32 and BIP44 specify a tree structure for organizing addresses. A tree structure is important because it adds a layer of privacy and security protection by enabling different addresses to be used for every transaction.

If you've ever researched wallets, then you've encountered a wide array of options.

The next section will introduce you to four reputable wallet providers, each with unique characteristics while sharing a common core of features. Additionally, you'll find a simple evaluation framework that highlights key features of wallets and will help you to make well-informed decisions when selecting a new wallet.

Founded by Dan Finley and Aaron Davis, who first met online while contributing to the project VoxelJS, a Minecraft clone, Metamask was incubated in ConsenSys. ConsenSys is a software technology company founded by Joseph Lubin, the co-founder of Ethereum. Similar to many crypto founders, Finley and Davis have a unique origin story, the details of which are outside of the scope of this post, but if you're curious I suggest reading their origin story here.

Metamask is one of the earliest players in the Ethereum wallet space, preceded only by Mist Wallet which went live in 2015 and was the first desktop crypto wallet with a GUI (user interface). Mist was taken out of circulation in 2019, with Metamask overtaking Mist, capitalizing on its second-mover advantage, and growing to lead the Ethereum wallet space with 30 million monthly active users.

Despite Metamask's market leadership, its biggest flaw, that many users, including myself, complain about is that it's "buggy." For example, transactions randomly fail, which can be frustrating and annoying.

Metamask's Key Differentiator: In my opinion, not much at this point, but it continues to be the market leader because of its wide distribution and appeal to crypto natives who face high switching costs if they were to use another wallet.

A few months ago, when I became increasingly frustrated by Metamask's random transaction errors, I discovered Rabby by happenstance while reading this essay by Vitalik Buterin about crypto and AI.

When I started to research Rabby, I was surprised that unlike other wallets it doesn't have much marketing or hype around it. After spending some time digging into the wallet, the reason why started to unfold.

In the wallet space, distribution reigns supreme. Wallets with extensive distribution, i.e., a large network of followers and users, tend to succeed, while those lacking distribution, tend to flail. One effective strategy to attain distribution when launching a new product like a wallet is to leverage an already widely distributed product.

Rabby's parent company, DeBank used this strategy in 2021 when it rolled out Rabby Wallet. DeBank, a renowned provider of on-chain activity data, leveraged its existing brand and user base to give Rabby a seat at the wallet table without overt marketing tactics.

Rabby Wallet's Key Differentiators

1. Ease of multi-chain experience — This is a must in the decentralized finance (DeFi) era where users constantly switch between Ethereum chains (e.g., Arbitrum, Optimism, Base, etc.) The Rabby Wallet can automatically detect which chain users are on and switch to that chain so that users don't need to take any manual actions.

2. Pre-transaction risk scanning — human-readable information for users about the transaction they are signing and alerting them to potentially malicious contracts (previously, astute users would use tools like Scope Scan to detect malicious contracts).

If you have ever bought any cryptocurrency, you may have used Coinbase. Coinbase is the largest cryptocurrency exchange in the United States and was founded by Brian Armstrong in 2012.

Coinbase is a custodial exchange and wallet, which means that the company controls your private keys, however in 2021, the same year that Coinbase went public with an IPO, they released a new product: a non-custodial wallet. Similar to Metamask and Rabby, Coinbase Wallet gives users full control over their private keys as they explore decentralized applications (dApps).

The Coinbase Wallet was an interesting strategic move by Coinbase. Similar to Rabby's story, Coinbase was able to leverage its wide distribution and trusted brand to secure a leading position in the wallet space.

Key Differentiator: Trusted brand and reputation, particularly with mainstream crypto users.

Brume is a new grassroots wallet. In October of 2023, it raised 1.46 ETH on Juicebox, a fundraising platform for Ethereum. Founded by two co-founders, HazAE41 and Bryce Gabari, Juicebox is a privacy-centric wallet built with Tor, a free and open source software for anonymous communication.

I'm not expecting that most readers will try Brume, but if you are a crypto nerd, like me, then you may enjoy digging into Brume, or at least keeping it on your radar. It will be interesting to keep tabs on the trajectory of this wallet.

Key Differentiator: Built-in Tor so users' IP address is not tracked (Traditional wallets send users' IP addresses to 3rd parties e.g., Coingecko and Etherscan).

In this final section, I want to provide you with a wallet evaluation framework that can help you make informed decisions when choosing a wallet provider.

Important factors to consider include whether the wallet is open-source, non-custodial, and permissionless (i.e., no account creation is required), as well as its security track record and public availability of audits or bug bounties. For instance, MetaMask and Rabby are both open-source, non-custodial, and permissionless wallets with publicly available audits and a proven track record, making them reliable choices.

Coinbase Wallet, while also non-custodial, isn't open-source and doesn't have a publicly available audit. Lastly, Brume, though a promising newcomer with privacy-centric features, hasn't been battle-tested yet. Always remember, do your homework before using any new crypto product.

As we enter the next bull market cycle, many new crypto products, wallets included, will start to captivate people's attention on the Internet. It will become increasingly more important to be an informed user and understand the basics inner workings of the products that you use.

A wallet is table stakes for accessing the Ethereum ecosystem of decentralized applications. Wallets have come a long way in user experience and design, but as with any nascent industry, there is still a long way to go to make the experience of using crypto as seamless as it is to say use Venmo or Apple Pay.

Being an early adopter will reap benefits down the road, so as I tell my friends and family, it's definitely not too late to start using Ethereum and building your skillset.

Lastly, stay tuned for the topic of the next newsletter: Ethereum social networks.

Feel free to reach out to me directly with questions, suggestions, or feedback. You can also drop me a message on Twitter. My DMs are open.

-Rika

Happy Friday. It's the end of the week, which means it's time for the end-of-week roll, where you'll find curated pieces of content. This week's role is on the topic of morals and ethics. It includes three thoughtful articles that I read this week.

Enjoy.

Being Nice vs. Being Kind by Kelly Shi

Article Summary: "Nice" and "kind" are commonly used interchangeably, but they carry distinct meanings. Unlike "nice," which lacks ethical significance and can describe inanimate objects (e.g., a nice dress), "kind" specifically conveys benevolence. The key difference between a "kind" and a "nice" person lies in their motivation. While a nice person seeks to please others, often with expectations of reciprocity, a kind person may act in ways that are not necessarily pleasing but align with benevolence, such as delivering difficult news.

About the Author: Kelly Shi is the Hackworth Fellow at the Markkula Center for Applied Ethics.

Read the article here.

College Presidents Debate When to Speak Out — and When to Keep Quiet by Charlotte Matherly

Article Summary: The article explores the challenges faced by college presidents in responding to global events, particularly the Israel-Hamas conflict, where leaders have been criticized for either taking a stance or not taking a stance. College presidents, including Jonathan R. Alger, President of James Madison University, and Lori S. White, President of DePauw University, discussed the delicate balance of making public statements. They often exercise caution and institutional neutrality, aiming in part to preserve the influence of their voice. The University of Chicago's Kalven Report, promoting institutional neutrality, is referenced, and a distinction is drawn between large public colleges and small private colleges in navigating these challenges.

About the Author: Charlotte Matherly is a reporting intern at The Chronicle.

Read the article here.

Gaza Israel’s ‘Open-Air Prison’ at 15 by Human Rights Watch

Article Summary: Between February 2021 and March 2022, Human Rights Watch interviewed 20 Palestinians who sought to travel out of Gaza via either the Israeli-run Erez crossing or the Egyptian-administered Rafah crossing. Human Rights Watch wrote to Israeli and Egyptian authorities to solicit their perspectives on its findings, and separately to seek information about an Egyptian travel company that operates at the Rafah crossing but had received no responses at this writing.

About the Author: Human Rights Watch is an international non-governmental organization headquartered in New York City that conducts research and advocacy on human rights.

Read the article here.

As always, feel free to reach out to me with questions, suggestions, or feedback, by replying directly to this email (if you are a subscriber), commenting on this post, or sending me a message on Twitter. My DMs are open.

ΞTH Market Capitalization = $226,848,377,160 (approximately $227B)

ΞTH Price = $1,886 (approximately $2k)

Introduction

Most likely because staking ETH is a cornerstone, and potentially lucrative, component of the Ethereum network, you can find a Godzilla amount of information about it online.

One problem however with information overload is misinformation. The crypto space is plagued with self-serving marketing campaigns that embellish or distort the truth, making it challenging for people to suss out what's real and what's not.

I wrote this post for two reasons:

1. As a (gentle and fun) forcing mechanism for me to think more clearly and deeply about Ethereum staking.

2. To share what I learned with my newsletter readers.

The post is structured as follows:

• the first part will get us aligned on important definitions

• then I'll introduce some theory and a background on staking.

• then we'll dive into practical ways for how to stake ETH, including risks and considerations.

• finally, the recap and conclusion.

I hope you have fun reading this post. As always, feel free to reach out to me by replying directly to this email (if you are a subscriber), commenting on this post, or sending me a message on Twitter. My DMs are open.

Useful definitions

Let's align on six important definitions. You may find some of these rudimentary, so feel free to skip to the next section if you're already comfortable with these concepts.

*Note: all of these definitions are from Ethereum.org, a leading educational resource.

1. What is Ethereum?

   • Ethereum is a public network, a blockchain, and an open-source protocol -- operated, governed, managed, and owned by a global community of tens of thousands of developers, node operators, ETH holders, and users.

2. What is Ether (a.k.a. ETH)?

   • Ether (also known by its ticker symbol ETH) is the native currency transacted on Ethereum. ETH is needed to pay for usage of the Ethereum network (in the form of transaction fees). ETH is also used to secure the network with staking.

3. What is a consensus mechanism?

   • The term consensus mechanism refers to the entire stack of protocols, incentives, and ideas that allow a network of nodes to agree on the state of a blockchain.

4. What is proof-of-stake?

   • A type of consensus mechanism that derives its crypto-economic security from a set of rewards and penalties applied to capital locked by stakers. This incentive structure encourages individual stakers to operate honest validators, punishes those who don't, and creates an extremely high cost to attack the network.

5. What is a validator?

   • Node operators can add a validator to their consensus clients by depositing 32 ETH in the deposit contract. The validator client comes bundled with the consensus client and can be added to a node at any time. The validator handles attestations and block proposals. They enable a node to accrue rewards or lose ETH via penalties or slashing. Running the validator software also makes a node eligible to be selected to propose a new block.

6. What is proof-of-work?

   • Proof-of-work is a type of consensus mechanism that derives its crypto-economic security from "mining", the act of nodes running GPUs or ASICs hardware to solve cryptographic puzzles, validating transactions, and adding blocks to the chain. Ethereum has deprecated proof-of-work and now uses proof-of-stake consensus instead.

Theory and background on staking ΞTH

Staking is a native feature of the Ethereum blockchain, and it is one of the most important contributions that an Ethereum user can make to the network. Because Ethereum is a decentralized and community-driven network, owned and managed by its users, anyone who owns ETH can actively contribute to the network's security.

The Merge

The ability to stake ETH was added as a native feature to the Ethereum blockchain on September 15, 2022, during a technical upgrade known as The Merge. It was a momentous event that celebrated one of Ethereum's most profound technical advancements, the merging of Ethereum's original execution layer (Mainnet) with its new proof-of-stake consensus layer, the Beacon Chain.

Proof-of-stake's predecessor, proof-of-work, was used since Ethereum's genesis in 2015. For years, however, Ethereum developers were developing and testing proof-of-stake, to ensure the highest level of security and efficiency before it was finally integrated into the Ethereum network in The Merge upgrade.

Proof-of-stake is a superior consensus mechanism to proof-of-stake, for the following reasons:

• Proof-of-work burns an insanely large amount of electricity.

• Proof-of-work is much cheaper for a malicious actor to attack than proof-of-stake.

  • In a proof-of-work system, the primary financial hurdle for individuals is the acquisition of hardware for mining. Most miners on Ethereum use GPUs, which are significantly less expensive than ASICs and can be rented cheaply.

  • On the other hand, the primary cost to participate as a validator in a proof-of-stake system is capital. Validators must deposit 32 ETH.

    • Vitalik (the founder of Ethereum) explains this in greater detail with a small theoretical calculation. If you're interested, you can see how he crunches the numbers, along with the full rationale, in his essay Why Proof-of-Stake.

• Attacks on a proof-of-work network are very difficult to recover from. Attacks on a proof-of-stake network are much easier to recover from.

  • In a proof-of-work network, a 51% miner cartel can keep attacking the chain, with a type of attack called spawn camping, making the chain permanently useless, and causing honest miners to drop out. To recover, the community can choose to implement a hard fork, but miners on the attacked chain will be "bricked", rendering them useless.

  • On the other hand, a proof-of-stake system has a built-in slashing mechanism where only the bad actor, and no one else on the network, has their stake destroyed. And for harder-to-detect attacks such as a 51% coalition censoring nodes on the network, the community can coordinate a minority user-activated soft that destroys the attacker's stake.

The different ways to stake ΞTH

There are four ways to stake ETH. Each method requires a different level of technical expertise and carries its own set of risks.

These four methods are:

• 1) Solo staking, where you deposit a minimum of 32 ETH and run a validator node on a home computer

• 2) Staking-as-a-service, where you deposit a minimum of 32 ETH and a 3rd party runs a validator node for you

• 3) Pooled staking, where you deposit any amount of ETH, a 3rd party runs a validator node for you, and you receive a receipt token

• 4) Liquid staking, where you deposit any amount of ETH, a 3rd party runs a validator node for you, and you receive a receipt token, which can be used across DeFi (decentralized finance) protocols.

1. Solo staking

Solo staking is the gold standard because it yields maximal decentralization for the Ethereum network. And decentralization is a core pillar of Ethereum, not just a nice-to-have feature.

In an ideal world, every node on the Ethereum network would be a solo staker, but the reality is that only approxf nodes on Ethereum are solo stakers (the green section in the visual below represents the share of solo stakers compared to other types of staking).

Only ~1% of stakers solo stake because compared to the other methods, it is the most technically challenging, requiring a user to set up and manage a validator node.

Solo staking requirements:

• Basic hardware setup and an understanding of minimal specs

• Basic software setup: run a node on Ethereum 1, another node on Ethereum 2, validator software, and key manager software

• Node maintenance: network upgrades or other critical client upgrades

• Reliable uptime: >10 mb/s upload and download time. (Rewards are proportional to the time your validator node is online and properly attesting)

• 32 ETH deposit

Solo staking risks:

• Your ETH is at stake

• There are financial penalties for your node going offline

• Behavior that is deemed harmful to the network, even if not intentionally malicious, results in financial penalties

Solo stakers are prone to making common mistakes that will get their validator node slashed, resulting in financial penalties.

2. Staking-as-a-service

It is possible, and indeed is part of Ethereum 2's design, to ensure that validators can run on low-end hardware and anyone can run a validator at home. That said, being possible does not mean it is desirable: there are significant costs involved with running a validator and, as such, many people will look to a third party to operate some or all of the validator functions.

• Jim McDonald, co-founder of Attestant, a staking-as-a-service provider

Staking-as-a-Service exists to alleviate the hassle of setting up and maintaining a validator node. In exchange for a fee, individuals or organizations can rely on a third party to handle the complexities of being a validator.

Although using a Staking-as-a-Service provider is convenient, there are inevitable trust assumptions, therefore it's crucial to choose a reputable service provider. In addition to reputation, other important considerations need to be thought through, as outlined below.

Staking-as-a-service considerations:

• Is essential code 100% open source?

• Was essential code audited and the results made available to the public?

• Was a public bug bounty performed on essential code?

• Has the code been available and used by the public for >1 year?

• Is the service permissionless for users to sign up?

• Is there diversity in execution clients used?

• Is there diversity in consensus clients used?

• Do users have self-custody of validator credentials, signing, and withdrawal keys?

A sample of Staking-as-a-service Providers: Kiln, Attestant, Stakefish. More can be found on Ethereum.org's website here.

Staking-as-a-service risks:

• Counterparty risk of using a service provider

• Use of your signing keys is entrusted to someone else who could behave maliciously

3. Pooled staking

Unlike solo staking and staking-as-a-service, pooled staking doesn't require a user to have a minimum of 32 ETH to stake. Rather, pooled staking uses a collaborative approach where users' funds are combined in the pool to meet the 32 ETH minimum deposit.

The pool operator manages the validator node infrastructure. They are responsible for activating and deactivating validators according to deposit and withdrawal activity in the relevant pool.

Users benefit by using a staking pool because they earn staking rewards without having to own or operate a validator node. Individuals effectively own a percentage of the pool based on their contributions, which, again, can be any amount of ETH, not necessarily a minimum of 32 ETH.

Pooled staking considerations:

• Is essential code 100% open source?

• Was essential code audited and the results made available to the public?

• Was a public bug bounty performed on essential code?

• Has the code been available and used by the public for >1 year?

• Is the service trustless in that no one holds custody of users' keys or reward distributions?

• Is the service permissionless for anyone to sign up as a node operator?

• Is there diversity in execution clients used?

• Is there diversity in consensus clients used?

A sample of Staking pool pperators: Rocket Pool, Stakewise, Bedrock. More can be found on Ethereum.org's website here.

Pooled Staking is not natively supported by Ethereum, which adds a new layer of risk, as outlined below.

Pooled staking Risks:

• Counterparty risk of using a pool operator

• Smart contract risk of pool contract

• Execution risk of using a pool operator

4. Liquid staking

Liquid staking is staking with a DeFi (decentralized finance) twist.

The purpose of liquid staking is to unlock liquidity in staked ETH by creating a financial product: a derivative. Similar to any other type of derivative traded on traditional financial exchanges, a liquid staking derivative represents some value of the underlying staked ETH.

Many staking pool operators offer liquid staking derivatives. This means when a user deposits some amount of ETH into the pool, they receive a transferable receipt token (i.e., liquid staking token) that represents their share in the pool. This token allows withdrawal rights and, unlike other types of staking, it can be transferred to other wallets.

Furthermore, a liquid staking token can be used across DeFi protocols and applications, for swapping, borrowing, and lending. It can act as collateral, generating further income, while earning staking rewards.

However, as with all DeFi products, liquid staking tokens carry significant risks.

Liquid staking is considered the riskiest type of staking, compared to solo staking, staking-as-a-service, and pooled staking, because it introduces further counterparty risk as the liquid staking tokens are transferable.

Liquid staking tokens tend to create cartel-like behaviors where a large amount of staked ETH ends up in the control of a few centralized organizations, creating conditions for censorship or value extraction.

A sample of liquid staking providers: Rocket Pool, Stakewise, Lido. More can be found on Ethereum.org's website here.

Vitalik wrote a post titled The Risks of LSD, heeding capital allocators about the significant risks associated with pooled capital when it exceeds critical consensus thresholds. He notes that these risks are inherent, therefore the community needs to keep a close eye on the numbers. He writes that capital allocators should not allocate to LSD protocols exceeding 25% of total staked Ether due to the inherent and extreme risks associated.

A worrying statistic, and one that the Ethereum community is rightfully enraged about, is liquid-staking-provider, LIDO, whose current market share is at ~31%, as seen in this Dune dashboard.

Recap and conclusion

To recap, there are four methods to stake ETH:

1. Solo staking, where you set up and maintain a validator node. Requires a deposit of 32 ETH. Although this is the most technically challenging method, it is the gold standard because it is maximally decentralized for the Ethereum network. If you find it fun to tinker and be technical, then learning how to solo stake may be the best method for you. Plus, there are no middlemen so you keep 100% of the rewards that your node earns.

2. Staking-as-a-service, where you use a third party to set up and maintain a validator node. Requires a deposit of 32 ETH. In exchange for alleviating the hassle of running infrastructure, you pay the service provider a fee, and sometimes a portion of the rewards your node earns. This method, although convenient, introduces trust assumptions and is potentially detrimental to network decentralization.

3. Pooled staking, where you use a pool operator and participate with multiple stakers to pool funds. A deposit of 32 ETH is not required. You can deposit any amount of ETH. Rewards are proportional to your ownership share in the pool. The operator is responsible for activating and deactivating validators in line with deposit and withdrawal activity, and managing the validator infrastructure supporting the pool. Pooled staking, although convenient, is not natively supported by the Ethereum protocol, and it introduces counterparty risk.

4. Liquid staking, where, similar to pooled staking, you receive a transferable receipt token that represents your share in the pool, acts as proof of ownership, and allows withdrawal rights. The additional functionality of this token, which differs from pooled staking, is that you can use this token across DeFi protocols as collateral for borrowing and lending. Liquid staking, although convenient, and potentially lucrative, introduces counterparty risk, and is considered the riskiest type of staking. It is also the biggest threat to Ethereum's decentralization.

Ideally, every node on Ethereum's network is a solo staker, running on a home computer. However, the reality is much different, likely due to market forces, human psychology, and behavioral economics. Only approximately 1% of nodes on the Ethereum network are solo stakers, with most individuals and organizations choosing to participate in staking through liquid staking, the riskiest type of staking, and also the biggest threat to Ethereum's decentralization.

If you are curious about solo staking, Ethereum.org built a great comprehensive portal to help you get your hands dirty in a safe way. Remember to always practice on Testnet, with fake ETH, before depositing real money into Mainnet.

As always, feel free to reach out to me with questions, suggestions, or feedback, by replying directly to this email (if you are a subscriber), commenting on this post, or sending me a message on Twitter. My DMs are open.

-Rika

Happy Wednesday. It's the middle of the week, which means it's time for the Midweek Roll. In this post, you'll find three curated pieces of content. These are articles that I've read during the week about culture and geopolitics. They are exceptionally thoughtful and I can't stop thinking about them.

Enjoy.

Would you sell them out?

About the Author:

Timothy Snyder is a Professor of History at Yale University, specializing in the history of Central and Eastern Europe, the Soviet Union, and the Holocaust.

Article Summary:

The article underscores Ukraine's pivotal role in deterring Russian aggression, ensuring global stability, and protecting American interests. It emphasizes Ukraine's value as a democratic ally and its contributions to broader global war prevention. The piece rejects "fatigue" as a reason to abandon Ukraine's calls for help, and urges American lawmakers to maintain their support for Ukraine.

Read the article here.

The Extremist's Gambit Helps Explain Why Hamas Attacked Now

About the Author:

Tanner Greer is an essayist, journalist, and independent researcher. He is also the director of the Center for Strategic Translation.

Article Summary:

The article discusses the concept of the "extremist's gambit," a strategy employed by radical groups or individuals when they believe time is not on their side and they want to force a fearful or apathetic majority to see things their way. The strategy involves taking actions to provoke a crisis, making it a binary choice for people to pick a side, effectively eliminating middle ground in a political dispute. While not specific to any one group, the article suggests that this strategy may explain the actions of organizations like Hamas in certain circumstances.

Read the article here. Special thanks to Anna Gat's post for helping me with discovery.

Britney Spears’ American horror story

About the Author:

Anna Leszkiewicz is the editor and writer for the New Statesman, the New York Times, and the Guardian.

Article Summary:

The article discusses Britney Spears's memoir, "The Woman in Me," which recounts her life as a child star and her subsequent loss of autonomy under a conservatorship. It highlights how Spears was preyed upon by the entertainment industry, with her fame spiraling out of her control. It discusses the abuse she endured by her family during her conservatorship, where her every move was controlled, and she was subjected to overbearing surveillance.

Read the article here. Special thanks to Anna Gat's post for helping me with discovery.

As always, feel free to reach out to me with questions, suggestions, or feedback, by replying directly to this email (if you are a subscriber), commenting on this post, or sending me a message on [Twitter](https://twitter.com/RikaGoldberg). My DMs are open.

-Rika

Welcome to my new newsletter! I know it has been a while since I last posted. Thanks so much for sticking around. Seriously, I mean it, I am very grateful to all 164 of you!

In this newsletter, I will do my best to demystify Ethereum protocols and products in a digestible format, much like how Gizmodo breaks down tech gadgets and Consumer Reports evaluates consumer products.

Before diving into the post, there are a few housekeeping items to get through (thanks for bearing with me!)

First things first, I have migrated the newsletter from the Substack platform to Paragraph. If you subscribed to my Substack, you now automatically subscribe to my Paragraph. You will not experience any disruption to your reading experience. New posts will continue to come to your inbox, and all you need to do is continue to read and enjoy!

Why did I leave Substack? It's nothing personal. The Paragraph platform is very similar to Substack's, but it also has additional features that make it more attractive for crypto newsletter writers, like myself. A few of these features:

(1) posts are stored in Arweave, a decentralized storage system

(2) posts can be minted and collected as NFTs

(3) readers can earn referral rewards by sharing my posts

Essentially, Paragraph offers more flexibility and customization than Substack in creating, distributing, and monetizing content, but the icing on the cake for me was that I really like and admire the Paragraph team. Their support on Discord is top-notch and the founders go out of their way to make writers feel like owners, not just users.

Lastly, you may have noticed that I kept the same newsletter name, Sharing is Caring. This is for brand continuity purposes. You can still find and read all original posts on Substack.

The "why" for this newsletter

The original Sharing is Caring newsletter was born out of the COVID pandemic, in January 2021. At the time, I was taking a break from crypto and spending my time exploring and making friends in online communities such as Ness Labs and Interintellect.

Many of my current subscribers discovered me through these non-crypto communities and have stuck around (thank you!!) as I have published both crypto and non-crypto content. No one has left, yet, so there must be some curiosity in my crypto writing.

With that said, writing a newsletter for two years has taught me many lessons - one is adaptability.

The time has now come for Sharing is Caring to adapt.

As far as I know, a newsletter that breaks down Ethereum protocols and products in a digestible format, does not exist. This newsletter will not be news-driven, there will be no paid product placements, and it will not be pay-walled.

What you can expect from this newsletter

The Ethereum ecosystem is chock-full of FOMO, where a sense of missing out on rewards --social or financial -- makes people lose sight of critical thinking, falling for overhyped projects, sometimes with deceptive marketing, without understanding the true risks involved.

In my experience, most Ethereum products, particularly financial products, are intended for professionals. For highly trained experts, who have both traditional finance and software experience, and who also have the time and bandwidth to do proper diligence and assess risk.

This newsletter is not for the experts. It is for the crypto-curious. P.S. You can be an advanced Ethereum user AND be crypto-curious. I put myself in this category -- there is always more that I can learn, and more foundational elements that I could refresh on.

My goal for this newsletter is to provide practical insights into using Ethereum protocols and products safely. You will surely fail, as one does when learning anything new, but you will, most importantly, fail safely.

Newsletter Topics

My intention with this newsletter is to write about areas that I don't already cover for my day job. That means I will write very little about Decentralized Autonomous Organizations (DAOs) and Decentralized Finance (DeFi).

You can expect to read breakdowns of:

• Staking (including liquid staking)

• Wallets

• Social networks

• Zero-knowledge proofs

Conclusion

My vision for this newsletter is to write digestible breakdowns of complex protocols and products in the Ethereum ecosystem. There will be no hype pieces, no shilling, and no paywall. Just quality substantive content for the crypto-curious -- people who are either newer to crypto or advanced users who value learning and refreshers on foundational elements.

Migrating from Substack to Paragraph allows me to explore new avenues for distribution and monetization. I do have a day job so this newsletter will serve as a passion project, at least for now. I'm hoping that if I take the right steps, follow a process, and with a little luck on my side, I can grow this newsletter to become a sustainable income stream.

Feel free to reach out to me with any questions, comments, or suggestions about the content; your feedback is invaluable in refining this newsletter and making it a valuable resource for everyone. You can reply directly to this email (if you received this post in your email inbox) or you can send me a message on Twitter.

You should expect the first newsletter, where I cover Ethereum staking, in the next few weeks. Until then, take good care!

-Rika

This is the third short story in an anthology of short stories about DAOs. You can collect the inaugural short story about MetaCartel DAO on Mirror. 

Preface

With a heavy heart, I bear the news that Meta Gamma Delta (MGD) will be winding down its operations. After three years of supporting women building in Web3, and disbursing approximately $100k+ in grants, MGD will be bidding adieu.

In the spirit of being a public goods and grants-giving DAO, MGD’s main priority today is  to allocate the remaining $20k+ in the DAO treasury to grants.

If you are a female founder building in Web3, MGD welcomes you to apply for a grant here! The deadline is August 21, 2023.

There is an official DAOHaus proposal to end operations, so please vote if you are a member. And for those who are members, feel free to pop into the Discord and say hi! The Discord will remain available to members indefinitely to stay connected for years to come.

As the DAO comes to a close, I am excited to share with you this story: a final piece of content to commemorate the trailblazing women of MGD, the impact they made, and the legacy they leave behind.

Introduction

With the growth of blockchain and cryptocurrency, many "women-in-crypto" groups have emerged to address the industry’s significant under-representation of women. The majority of these groups, however, function solely as social clubs for women to connect and promote industry events.

Meta Gamma Delta (MGD) was created to fill this gaping gap.

With a primary focus on grants-giving, MGD was able to differentiate itself from other female social clubs at the time. MGD’s founders planned from inception to progressively evolve the social club into a Decentralized Autonomous Organization (DAO).

Note: A DAO is a nimble group of people who act together in a joint enterprise for a common mission that coordinates through a shared set of rules enforced on a blockchain.

In 2020 –when Internet meme culture was at its peak– the founders of MGD branded themselves as a parody online sorority and took to Twitter to proliferate this meme in hopes of gaining followers and “rushing” new members.

Early on in the history of MGD, there was a lot of cross-pollination between founding MGD members and MetaCartel DAO members. This meant that the women of MGD were already red-pilled on how DAOs were an important component of an internet-native global organization.

With the help of friends at MetaCartel, MGD members were able to successfully transform a social club that started on Twitter and Telegram into a legitimate organization that supports women-led projects building with blockchain technology.

Origin Story

The online parody sorority

Meta Gamma Delta emerged in February 2020, at EthDenver, a popular Ethereum conference, when a group of women decided to start a Telegram chat to connect with other women also attending the conference.

A dedicated Telegram group would help women at ETHDenver “find the others” and give them exclusive access to women-organized side events. This had the potential to fuel social connections with cool, like-minded ladies and open doors for future careers, similar to how professional business sororities function at universities.

Every sorority needs a cheerleader, someone capable of amplifying the group’s message and attracting new members. For Meta Gamma Delta, this individual was Mahoney Turnbull. A tall, blonde hailing from New Zealand, she was gregarious and had an extensive, far-reaching network in the Ethereum ecosystem.

With unwavering determination, Mahoney wasted no time recruiting women and encouraging them to become part of the vibrant Telegram group. Her infectious energy radiated through exchanges within the group, a phenomenon evident in the screenshots below:

Supercharging the social club

Several weeks after the conference, a looming pandemic was creating chaos around the globe.

But the world seemed to be in perfect order for MGD. With stay-at-home orders going into effect, ETHDenver conference attendees had a lot more time on their hands. Many turned to Twitter and chat platforms for a sense of human connection and stability.

An increasing number of women joined the Telegram group, including the likes of Samantha Stein, the founder of Hacktivision and former Director for Special Projects at TechCrunch; Hsin-Ju, a Venture Partner at HackVC and co-founder of Dystopia Labs; Ariana Fowler, a researcher and former Blockchain Strategist at UNICEF; and Meltem Demirors, Chief Strategy Officer at Coinshares.

Men and allies were equally embraced and encouraged to join, a move that attracted prominent members from MetaCartel such as James Waugh, Ven Gist, Pet3r Pan, Alex Masmej, Yalor Moon, and 0xJoshua. These men would later play pivotal roles in the early stages of MGD, offering invaluable mentorship, unwavering support, and helpful resources.

Harnessing this momentum, the group of women wrote a manifesto that breathed life into the essence of MGD- skillfully balancing a serious mission with playfulness.

Creating an early structure

An early structure took shape through grassroots efforts by several women who emerged as the group’s torchbearers. These women orchestrated community calls and created rules and procedures for being part of the organization.

Juliana Passos took the initiative of spreading the word about MGD’s Genesis Community Call, which took place virtually on February 21, 2020. She urged members to whitelist their names on a Google form to preemptively safeguard the event from the disruptive presence of trolls, an unfortunate yet rampant phenomenon during those early pandemic days.

Sydney Lai then jumped in to craft the call’s agenda. Her objectives were to align members on the group’s purpose and establish clear expectations that allowed each individual to make unique, meaningful contributions to MGD.

Launching a DAO

Launching a DAO requires creating smart contracts that enable members to participate in democratic decision-making by creating and voting on proposals. Among the pioneering options available on the Ethereum network was (and still is) DAOHaus, a platform that provides a user-friendly interface and suite of tools to help DAOs manage funds, allocate grants, and conduct voting processes using a framework called Moloch.

Launching the Meta Gamma Delta DAO on DAOHaus was, in hindsight, almost predetermined. Since DAOHaus originated in the MetaCartel universe, a foundation of shared values already existed. Consequently, members of DAOHaus became ardent supporters of MGD and graciously donated their time and energy to assist launching the DAO.

Juliana captured the essence of DAOHaus members support in a blog post:

DAOHaus was of immense help to us. From late Sunday evening calls to quick Telegram channel responses. If it weren’t for Dekan, Ven, James Waughn, Alex Masmej, Pet3r Pan, Yalor, James Dunkan, Burrata, to name a few…we wouldn’t have been where we are today.

In the midst of MGD’s launch as an official DAO on DAOHaus, Sydney was spearheading another crucial endeavor. Recognizing the need to secure sustainable operational capital, she diligently embarked on raising a modest amount of funds by composing a compelling grant proposal on MetaCartel DAO's forum.

MGD Today

Let’s now fast forward three and a half years to 2023 and take a look into how Meta Gamma Delta DAO has evolved.

Since inception, MGD has seen its earliest members, the OGs, soar to new heights in their crypto careers. A prime example is Kseniya Lifanova, who founded Upstate Interactive while contributing to MGD. She is now the VP of Decentralized Strategy & Engineering at Foundry.

Many of these OGs have gracefully transitioned into advisory roles within the DAO. While they are available for support and guidance, they do not participate in day-to-day operational activities. A few exceptions exist, such as Nich Kesonpat, who is now a Researcher at 1kx but continues to contribute her technical skills to MGD.

What remains unchanged within MGD is its unwavering mission and the foundational structure that the OG members established. Every day, diligent MGD members dedicate themselves to empowering and supporting women-led projects building on the Ethereum network. They rely on structures the founding team put in place, which encompass everything from DAOHaus-facilitated on-chain onboarding and governance mechanisms to crafted templates within Google Sheets and channel structures within Discord.

Active members strive to evolve and enhance these structures as the crypto landscape changes. Embodying nimbleness, MGD members consistently seek innovative approaches to advance the DAO’s mission.

In the following quote, Kseniya astutely highlights the inherent flexibility of a DAO:

The beauty of a DAO is that the structure can be evolved or changed at any time as long as the members agree.

The next section will build on this idea of flexibility through consensus, and dive into the new structures that have evolved within MGD.

Note: A structure for dissolving operations is also important for a DAO. At a time of uncertainty and risk, like the one MGD faces today, it becomes wiser to wind down a DAO than to continue operating indefinitely.

Committees and Seasons

At first, MGD operated with a stagnant committee structure. The four committees: grants, fundraising, onboarding, and treasury – were static and had the same Lead who served in the position for an indefinite amount of time.

This led to member burnout.

In the Fall of 2022, MGD started an initiative called MGD Revival to tackle the challenge of burnout, amongst other DAO challenges. Members hoped that the initiative would enable the initial core contributors to take a step back from day-to-day operations, while empowering the next generation of DAO leaders.

As part of MGD Revival, the DAO implemented a dynamic committee structure with cohorts and seasons. Committees ran for one quarter (season), with a Lead who rotated out every three months. Each cohort had a defined scope of work, with clear timelines, and KPIs (key performance indicators).

Several OG contributors, including Nich, heyitsDB, and Zayi, joined the early cohorts to provide support. And new members, including Into the Woods and Quantum Alpha stepped up to the plate.

Fellowship Program

Meta Gamma Delta strives to empower and enable women from diverse industries to reap economic, financial, and social benefits from Web3 - while contributing their invaluable skills to the DAO.

Despite being highly skilled in their professions, talented women shared during community calls that they needed more guidance to transition to and navigate this new Web3 career path.

In response to members' needs, a group of exceptional core contributors including Ann Willmott, Tess Willmott, Zayi Reyes, Dr. Kelly Page, and LeRae Bigelow, collaborated to address this challenge – a pressing onboarding issue where new members lacked the Web3 knowledge and skills necessary to contribute to the DAO.

Recognizing the urgency and importance of this matter, this exceptional group of women realized that an evolution of the DAO's onboarding structure was critical. The existing structure failed to account for the skill and knowledge gap that new members faced.

As a solution, MGD made the strategic decision to collaborate with ConsenSys, a prominent incubator for Ethereum projects and an early pioneer in the cryptocurrency industry. Together, they embarked on co-creating a Fellowship program specifically designed to equip new members with essential skills before they actively participated in the DAO within a cohort and Season.

The Fellowship Program, which started in September 2022 and spanned three months, offered MGD members the opportunity to undertake one of two educational tracks provided by ConsenSys entirely free of charge. The first track, ConsenSys Blockchain Essentials, emphasized practical applications over technical intricacies for individuals seeking a more foundational understanding. The second track, ConsenSys Developer Bootcamp, offered a more advanced curriculum, which delved into the technical aspects of blockchain development.

Through this partnership with ConsenSys , MGD helped new members prepare to make meaningful contributions to the DAO and to the wider cryptocurrency industry.

Grants

[My favorite memory of MGD] has been knowing that they took a chance on the company I work for, and me, by proxy, to help us progress the company’s mission and further me along in my professional journey with a much appreciated financial gift.

-Kori Riddick, 2023 grant recipient

By 2022, Meta Gamma Delta had issued $76k+ of DAI in grants. The following are a few examples of the types of trailblazing projects that were funded:

• LYNX Technology — Founders: Alexandra McCarroll & Sarah Hamburg — 14,520 DAI

  • A backend data management system for real-time biometric user data collected through wearables and interfaces (including brain-computer interfaces [BCIs], fitness trackers and eye-tracking technologies)

• ARTVX — Founders: Ava & Tara — 10K DAI

  • ARTXV started out as the first NFT collective for neurodivergent artists and consequently the first Web3 community for the disabled. It has since become the #1 agency and community, providing neurodivergent artists with everything needed to sell their work on the blockchain.

• SHYRO — Founder: Kat Kuzmeskas — 10K DAI

  • Fitness tracker where anyone in the world can connect and earn for their health and wellness data. Shyro is a web3 application at its core. Shyro memberships, point structure, and profit sharing is managed on-chain automatically via an NFT and smart contract structure.

These women-led projects exemplify the pioneering spirit that MGD wholeheartedly supports. The impact of these grants resonates throughout the ecosystem, helping amplify the voices and achievements of these ladies and inspiring others to forge their own paths of success.

Conclusion

MGD has left its mark on the Web3 ecosystem. Although DAO members have chosen to wind down operations, the community that the DAO created will continue to create ripple effects within the industry.

As this story concludes, let's celebrate the pioneering women of MGD and reminisce about the unforgettable moments and achievements throughout their journey.

I hope you enjoy the below quotes, photos, and, of course, memes!

Quotes

For me, MGD has always been about giving women funds to go and build our decentralized future.

- Kseniya Lifanova, MGD “OG” member, currently VP of Decentralized Strategy and Engineering at Foundry

I love the irony of calling ourselves a sorority– the juxtaposition between this group of highly educated, motivated, leaders in their fields with a bikini-clad-car-wash crew or whatever you think of when you think of a college sorority.

-Tess Willmott, Operations at MGD

Memes and Photos

Additional Resources

MGD Twitter

MGD Medium

Acknowledgments

Thank you to Kseniya Lifanova, Kori Riddick, and Tess Willmott for shaping this story with your insightful interview responses.

Thank you to Zayi for providing guidance and direction throughout my writing process. And for the final copy edits and polishing.

Thank you to Gabriel Tumlos and Sam Houghton for your thoughtful feedback and line edits.

And, of course, thank you to Meta Gamma Delta for your generous grant to write this story.

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