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Global conflicts in a Web3 world + All the Web3 news you missed this week
This week, President Biden’s executive order is creating a lot of conversation around the regulation of crypto/blockchain and related concepts. Regulatory uncertainty is always top of mind for Web3 founders. Nobody wants to build a business with the threat of getting shut down by the government. The ongoing conflict in Ukraine is stirring up new ways of crowdfunding through DAOs and creating a spotlight on cyberwarfare.
Here’s the Web3 news from the past week
In the biggest crypto news this week, President Biden signed an executive order outlining a national policy for digital assets. The wide-ranging plan includes protections for consumers, investors, and businesses; an “unprecedented focus of coordinated action” to address illicit finance and national security risks; and exploring the potential for a U.S. Central Bank Digital Currency.
Reactions to the executive order:
Biden’s crypto order could end fragmented U.S. regulations, says Ripple CEO: CNBC Crypto World
Crypto trading is “skyrocketing” in both Ukraine and Russia — though what role it’s playing in the war remains unclear. While crypto is being used as a method of raising money for Ukraine, some are concerned that it’s also a way for Russia to get around Western sanctions, prompting certain crypto exchanges to block addresses linked to Russia.
The NFT craze may be slowing down. Average sale prices are down to under $2,000 from a high of nearly $6,900 in January, and trading volumes have dropped by as much as 30% on certain marketplaces.
Investor Shafin Diamond reflects on lessons learned from attempting to purchase a professional hockey team through a decentralized autonomous organization (DAO). Finding investors was a challenge due to the lack of a regulatory framework, and the NHL itself wasn’t willing to get on board with the DAO model. Still, Diamond sees DAOs as a “radical equalizer” — enabling people who can’t afford assets like real estate or art to make those purchases as part of a group.
An organization called Ukraine DAO, formed by a member of the band Pussy Riot, raised $6.75 million in ETH to support the country in its defense against Russia. (They sold a NFT of the Ukrainian flag.) This is a case study in the potential impact of DAOs, argues Daniel Roberts: “DAOs are at their best when they harness crypto people around a legitimate cause, and that's what Ukraine DAO did: it raised money quickly, then sent it to the cause quickly.”
New entrants to the DeFi space are killing their predecessors, at least when it comes to token performance. For instance: Uniswap has increased by just 6% in the last 30 days, compared to 38.7% growth from Terra’s LUNA.
DeFi projects promise huge returns but carry the risk of “rug pull” scams, where bad actors take capital from investors, then disappear. Investors want protection, prompting the rise of watchdog groups like RugDocs, a 30-plus person team that tracks and rates the risk level of crypto projects.
Nobody really knows how we’re going to shop in the metaverse (Fast Company)
Shopping is going to be a big element of the metaverse, from buying homes and clothes for digital avatars to paying taxes. What exactly it will look like is an open question. If there are malls in the metaverse, will there also be a Cinnabon stand?
Early bids to dominate the metaverse from players like Microsoft and Meta run the risk of repeating the “format wars” that have played out in centralized tech, to the detriment of users. (See: Facebook versus Myspace, or Netflix versus Hulu.) Justin Sun argues that decentralized metaverse initiatives are the way forward: “From the users’ perspective, the DAO model offers unbeatable value. We all know that in the traditional social media model, we – or rather our data – are the product that generates value… A social network based on a DAO upends this model to return value to those who generate it.”
Content creators are likely to see “disproportionately strong disruption” thanks to the metaverse. Through VR and AR tools, they’ll be expected to produce content that’s increasingly immersive, and AI tools could change how they create that content. They’ll also have the opportunity — and perhaps obligation — to connect with fans in “new and deeper ways.”
Other stories I found interesting
The Ugly, Embarrassing Spectacle of ‘Milling’ Around Online (The Atlantic)
Social media reactions to the war in Ukraine have been messy, bizarre, and frequently unhelpful, ranging from celebrity spoken word poetry to elisions of the real-life conflict with the Marvel Cinematic Universe. Kaitlyn Tiffany diagnoses this social behavior as a form of milling: “It’s the agitated, aimless buzzing of the type of crowd that gathers in the aftermath of some bewildering catastrophe… We are all just chattering away in restless and confused excitement as we try to figure out how to think about what’s happening.”
The propaganda war has eclipsed cyberwar in Ukraine (MIT Technology Review)
The war between Russia and Ukraine involves not only physical attacks, but cyber warfare. Ukraine-aligned groups say they’ve breached Russian government databases and are targeting railroad infrastructure and power grids. But these claims are hard to verify — making cyber operations “one of the big unknowns looming over the entire war.”