We're not all going to make it + All the Web3 news you missed this week
I was at the Permissionless conference earlier this week, where predictably, much of the talk was about the UST/Luna fall out. People’s viewpoint on the subject were typically one of the following:
I knew it was a scam, but didn’t say anything publicly because I didn’t want to get crucified by crypto twitter
I knew it was a scam, but I thought I could ride the wave up
UST/Luna was an exception, nothing like that could happen again
UST/Luna? Oh, that - that’s last weeks news
Each of these viewpoints were disappointing in different ways. Regardless of your perspective, the reality is that a broader economic downturn will expose the flawed business models. If your company exclusively relies on ever-increasing token values or your business model assumes only best case scenarios - you’re in for a rocky ride. Yesterday, Y Combinator advised founders to “plan for the worst” - a sentiment I echo. If it’s any consolation, the same is true inside and outside of crypto. No matter what sector you’re in, it’s time to buckle up…
Here’s the Web3 news from the past week
Good Times in The Great Revaluation (Newcomer)
Eric Newcomer gives a rundown of how prominent investors are thinking about the stock market downturn. While Marc Andreessen says that a funding price reset will be “the next card that will turn over,” that doesn’t mean growth investments are dead. “Many of the firms that are sounding the alarm about falling prices are still out investing,” writes Newcomer.
Web3 DEVs Must Heed the Lessons of Past Tech Bustups (The Defiant)
What can today’s crypto players learn from ambitious companies that went belly up during the late ’90s dotcom boom? “First movers face just as many perils as they do opportunities, and operating two steps ahead of the market is just as dangerous as lagging one step behind,” writes Alex Shipp. The dotcom darlings who survived, like Amazon, balanced their big dreams with realistic thinking about the internet’s actual capabilities at the time.
Why Build in Web3 (Harvard Business Review)
Web3’s focus on interoperability and user-owned assets will create more value for everyone, write Jad Esber and Scott Duke Kominers. Interoperability enables platforms to tap into a wider world of content networks, expanding their scale, while user ownership can create a greater sense of investment in a platform, fostering stronger community ties.
Are NFTs Dead? Don't Count on It (CNet)
Proclamations of the death of NFTs — prompted by recent low trading volumes — are off-base, argues Daniel Van Boom, noting that the economy in general is in a tough spot. Meanwhile, a decline in the number of NFT sales could be counterbalanced by a trend toward purchases of more expensive NFTs and fewer cheaper ones.
Crypto Market Downturn Leads to Steep Drop in Blue-chip Ethereum NFTs (Blockworks)
As crypto prices have fallen, the value of NFTs has too. That’s even true for high-profile NFT projects: Bored Ape Yacht Club trading recently hit its lowest point, with its floor price dropping to 89 ETH on May 12 (compared to 152 ETH at its peak).
Spotify experiments with musician NFT galleries (The Verge)
Spotify has given a trial group of artists the ability to display NFT collections on their profiles, with links to OpenSea, where fans can purchase them. (For the time being, Spotify isn’t taking a cut of those sales.)
Building meaningful communities in a digital world, an interview with Zvi Band, Founder of Camp Social (Web3 Roundup)
This week I interviewed Zvi Band, who is building tools designed to incentivize DAO and Web3 community members to form real bonds with each other. Human connection drives value for these kinds of organizations, but it’s also a salve for loneliness, which Band sees as one of the biggest problems of our time.
Working in the metaverse: What virtual office life could look like (Fast Company)
VR workplaces — complete with hallways as well as conference rooms equipped with virtual whiteboards — could offer certain advantages to teams suffering from Zoom fatigue, creating the opportunity for chance encounters and more dynamic meetings. Meanwhile, virtual avatars present the possibility of minimizing bias in hiring conversations.
97% of Crypto Hacks Were Against DeFi Projects: Report (CryptoPotato)
A new report from Chainalysis found that money laundering and DeFi hacks are the most common criminal activities in the crypto world. A whopping $1.7 billion in digital assets have been stolen this year — 97% of it from DeFi protocols — with much of that going to hackers linked to North Korea.
Crypto VCs can’t just buy ‘community’ (TechCrunch)
The recent decline in the crypto market has revealed a key problem in the sector: Uninspired crypto products, play-to-earn games, and NFT projects only work when users have a strong financial incentive to get involved. “In the gold rush of web3, blockchain founders forgot what it meant to love something because it was a great product and over-indexed on the sustainability of consumer greed or financial desperation,” writes Lucas Matney.
In case you missed it - this was the most opened article from last week’s news roundup
UST Stablecoin Loses Dollar Peg for Second Time in 48 Hours, LUNA Market Cap Falls Below UST's (CoinDesk)
UST, a stablecoin engineered to maintain a price of $1, fell below its dollar peg on Monday, the second time it had done so in three days. Its sister token, LUNA, saw its own price drop 44% to $35, sinking its market cap below that of UST — which “potentially throws the foundation of UST's entire stabilizing mechanism into jeopardy.”
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)