0x26f3
May 21st, 2022

The concept of public goods in crypto is pretty popular. It’s discussed a lot with regard to layer-1s, protocol treasuries, and ecosystem growth. The term has also begun to pop up in investment announcements.

I find this last part especially interesting — prior to seeing firms “invest in public goods,” I had never really thought of public goods as an asset class. To be honest, I still don’t.

It’s worth taking a step back and thinking about what actually constitutes a public good. Outside of crypto, public goods might include national defense, clean air, and public parks. They’re non-rivalrous and non-excludable. Within crypto, public goods might include layer-1 security, wallets, and open information/data.

0x26f3
March 22nd, 2022

In crypto, people talk a lot about the concept of incentive alignment.

Different mechanisms for “incentive alignment” have emerged, including staking, vote-escrowed tokens (aka veTokens), and lockdrops. All of these are ways protocols can encourage participants to have skin in the game. The idea is that this skin in the game means the protocol’s interests will become partcipants’ interests.

Yet underlying these mechanisms is the question of how long tokens should be locked. Most determine the lockup on a time basis — weeks, months, years, and so on. But that’s where I think the discussion of incentive alignment starts to unravel. Time is somewhat arbitrary. For instance, what incentives are aligned with a five-year lockup but not a four-year one? How do you determine the right time horizon from one protocol to the next? If the protocol only takes three years to grow to a size people thought would take five years, should participants be allowed to unlock early?

0x26f3
February 13th, 2022

The United States operates under a system of representative democracy. Constituents vote for Congresspeople, who in turn will vote on issues of governance. But when a citizen votes for a representative, are they voting for that rep because the rep best aligns with their individual views, or because they most align with that rep’s views?

It’s a subtle difference, but one that I think is important. There’s no real way to answer it within the constraints of our current system. However, I think it’s one area DAOs could be effective in exploring.

Enter: dynamic delegation

A model of dynamic delegation would operate somewhere between a direct and representative democracy.

0x26f3
January 23rd, 2022

Transportation provides an interesting mental model for thinking about components of crypto:

  • Blockchains are roads
  • Wallets are cars
  • Dapps are often the destination
0x26f3
December 30th, 2021

My senior year of college, a panel of VCs spoke to one of my finance classes. It was senior spring, so attention spans were at somewhat of a low. All classes were being conducted over Zoom, which also didn’t help. But in the middle of the discussion, Sarah Guo, one of the panelists, said something that struck me then and has stuck with me ever since: “understand the user that isn’t you.

It’s worth mentioning that I take pride in my sense of individualism. I’m a twin, and I went to college with my twin, so I’m used to being (often unintentionally) paired with/compared to someone else. A constant desire to feel unique kind of comes with the territory. So trying to understand the user that isn’t me? Challenge accepted.

What followed was a few days of me looking at what apps I had on my phone, asking my friends what apps they had on their phones, looking at what apps were trending on the App Store, and trying to compare all three. I figured the apps on our phones — and the frequency with which we used each — were a good proxy for our habits as consumers.

0x26f3
December 13th, 2021

I recently wrote about how web2 companies interested in crypto — companies I called “web2.5” — have the potential to control the crypto narrative for much of the world, in large part because they have orders of magnitude more users.

The solution to this, of course, is to onboard more people to crypto-native, web3 platforms & applications. The faster more people are onboarded, the less likely it is that web2.5 can control the narrative.

But onboarding isn’t easy. People are often hesitant to use new technology — there can be security concerns, skepticism of a technology’s usefulness, and a steep learning curve.

It’s also difficult to ensure certain values — like a belief in the need for true decentralization — are maintained by new adopters, especially when those values come at the cost of things like high transaction fees. People join for different reasons, from wanting to: make a quick buck, bet on the next big thing, build with friends, decentralize institutional power, or join for the “vibes.”

0x26f3
November 26th, 2021

These are 10 analogies for understanding concepts in web3.

These analogies are far from perfect, but I’ve found them useful in explaining crypto to my friends trying to learn about the space for the first time.

#1. NFTs: a regular baseball could be considered a fungible “token”. A non-fungible token (NFT) is akin to a baseball signed by Mickey Mantle. One is common, the other has a unique signature.

0x26f3
November 13th, 2021

What is web2.5 and why does it matter?

To understand web2.5, we should start by briefly outlining web3 and web2.

Web3 values openness, transparency, composability, and participation. The platforms are owned and governed by the users, not by any one individual or corporation. Crypto is the enabler of this new form of ownership and governance.

Web2 is the older version of the internet. Access is open but ownership is closed. Think: social networks and platforms that aggregate content. That content is user-generated but corporation-owned. Value accrues to the aggregators, not the creators.

0x26f3
November 11th, 2021
Not an actual Bowie Bond. Image source: Philly Mag
Not an actual Bowie Bond. Image source: Philly Mag

It’s unlikely that many have heard of Bowie Bonds.

I hadn’t until my junior year of college, neck-deep in finance courses. At the time, I was taking a course on capital markets and one of the lectures focused on different forms of securitization. Most of the lecture was about the 2008 financial crisis — collateralized debt obligations, mortgage-backed securities, and the whatnot. But for five minutes at the end, my professor brought up Bowie Bonds.

In 1997, David Bowie wanted a liquidity event. Instead of steadily receiving royalties from his 25-album music catalog throughout the next decade, Bowie decided he’d rather receive a lump-sum payment. This led to Bowie Bonds: a set of bonds backed by the royalties from Bowie’s music catalog. Notably, Bowie wasn’t selling his music indefinitely. The bonds had a maturity of 10 years so, in 2007, Bowie regained the rights to the catalog’s income stream.