Leaked draft of the Digital Commodities Consumer Protection Act (DCCPA) has mixed reactions + All the Web3 news you missed this week
Leaked draft of the Digital Commodities Consumer Protection Act (DCCPA) has mixed reactions + All the Web3 news you missed this week
This week, A leaked draft of the Digital Commodities Consumer Protection Act (DCCPA) has earned both approval and concern from members of the crypto community. While FTX CEO Sam Bankman-Fried has commented that the bill appears to protect consumers without hurting DeFi, Alliance DAO has said that it threatens DeFi innovation and sacrifices decentralization. As regulatory pressure heats up, its unclear if there is an obviously unified position for the crypto industry. I suspect there will be a push and pull between various stakeholders striving for different versions of an ideal Web3. Without a unified front, there are surely alliances to be formed to push forward different agendas on the policy front - possibly leading to regulatory whiplash in the coming months.
Here’s the Web3 news from the past week
General
Why Web3 Won’t Go Mainstream — Yet (Knowledge at Wharton)
The high level of technical skill required to complete crypto transactions is hindering the growth of Web3, write Kartik Hosanagar and Myriam Brouard. Figuring out how to invest in an NFT project can be excessively difficult, smart contracts can be impossible for the layperson to parse, and the speed required to complete a transaction can result in people falling prey to scams or missing out on a purchase entirely. Some solutions? Simple transaction language, flags on potentially malicious contracts, and better educational resources.
DAOs
DAOs need to neutralize whales (and more) if they want better governance (Cointelegraph)
A lack of checks and balances in governance has resulted in DAOs that are highly centralized or minority-controlled. One alternative is a tier-based governance system with an agile core team that executes on projects and reports to an intermediary group staffed by elected community members.
Inside a Social DAO: How an Online Community Becomes a Digital City (CoinDesk)
Kelsie Nabben took a look inside Friends with Benefits, a social DAO that aims “to allow people to gain agency through the creation of new economies and propagate cultural influence.” Nabben clearly finds this a compelling proposition, noting that she will most likely join FWB at some point. But, she writes, “This DAO community, like many others, hasn’t yet figured out decentralized governance. For its next phase of growth and mission to empower its constituency and multiply its influence, it has to.”
Metaverse
I Tried the $1,500 Quest Pro and Saw the Best of the Metaverse (New York Times)
After testing out Meta’s new Quest Pro goggles, Brian X. Chen came to this conclusion: Mark Zuckerberg may have high hopes for a metaverse that will transform our work days and social lives, but video games remain the best use case for virtual reality. “We shouldn’t spend our dollars on a company’s hopes and promises for what a technology could become. We should buy these headsets for what they currently do,” writes Chen. “And based on what I saw, for the foreseeable future, the Meta Quest Pro will primarily be a gaming device.”
Nvidia Fashions Industrial-Strength Metaverse-As-A-Service (Forbes)
The metaverse isn’t just for people — it’s for machines, too. Nvidia has released simulations for developing and testing AI robots and self-driving cars, part of its Omniverse Cloud suite of services for metaverse applications. “It is the company’s first software-and-infrastructure-as-a-service offering, which is already being used by the likes of Siemens, Europe’s largest industrial manufacturer, and Croatian luxury carmaker Rimac,” reports Forbes.
While Meta’s core business faces significant headwinds, Zuck’s future-focused metaverse projects are racking up discouraging results. Horizon Worlds has just 200,000 monthly active users, for instance, with most users leaving the platform after a single month.
Gaming
The complicated economics of play-to-earn video games (Morning Brew)
When a video game lives on the blockchain, developers lack a “financial God mode” to keep their economies stable. In the case of Axie Infinity’s play-to-earn model, this resulted in a case of hyperinflation that ultimately tanked the value of the game’s currency, depressing players’ real-life incomes. The incident prompted Axie Infinity parent organization Sky Mavis to switch to a “play and earn” model that stresses fun over making money.
Regulatory
UK Law Commission to review international laws on crypto to consider legal reforms (Cointelegraph)
Against a backdrop of legal uncertainty around cryptocurrency and blockchain technology, the Law Commission of England has launched a review of crypto-related legal challenges. Per Cointelegraph, the aim of the project is to “outline current international legal rules and their application to digital contexts with the purview of making recommendations for legal reforms to keep United Kingdom laws relevant.”
DeFi vs. regulators: Who's winning? (Politico)
Last Friday marked a symbolic moment in the fight between DeFi regulators and crypto purists who would prefer that sanctioned individuals still have access to the blockchain. For the first time ever, more than 50% of blocks on Ethereum were being compiled by services that complied with government sanctions.
The competing priorities facing U.S. crypto regulations (Brookings Institute)
The US government has two goals for the crypto industry that are often at odds: It wants to avoid blocking crypto transactions in order to support the growth of the sector, and it also wants to crack down on illegal crypto activities, particularly those that benefit foreign enterprises. Crypto regulation would benefit from a two-phase plan, writes Josephine Wolff. First, the publication of “up-to-date lists of sanctioned intermediaries” and instructions for how to determine whether you’re doing business with these parties, and second, “a large-scale analysis of whether these efforts were actually reducing illicit financial flows to criminal enterprises.”
In case you missed it - this was the most opened article from last week’s news roundup
$1.2 Billion Metaverse Horrified By Report It Only Had 38 Active Users (The Byte)
Decentraland, the metaverse with a market cap of $1.2 billion, logged a mere 38 active users in a 24 hour period, according to DappRadar data. Decentraland says that this figure only includes users who interact with its contracts and that the total user average is more like 8,000 per day. But, writes Victor Tangermann, “even 8,000 users on a given day is dismal for something that's supposed to be the future of online communities.”
About Me
Hi, I’m Andrew Chang - I created the Web3 Roundup to share what I’m learning in this space. I’ve spent my career at the forefront of the technology industry in areas such as crypto/blockchain (Former COO @ Paxos, co-founding partner of Liberty City Ventures), video and adtech. I learn by meeting with founders, investors and other thought leaders and approach Web3 with the same enthusiasm – and skepticism – I had about crypto/blockchain technologies 10 years ago.
You can connect with me on LinkedIn or Twitter (@DigitalDrex)