📝 Web3 Field Notes #15

Markets in free fall; Ethereum's big upgrade; US vs crypto narrative is forming; Gary Gensler & Goldman Sachs CEO op-ed on crypto; Bitcoin ordinals; Amazon enters NFTs; new start-ups & more.

Marc Baumann

Mar 10, 2023

“We should reward people, not ridicule them, for thinking the impossible.”– Nassim Taleb

📚 Readings:

Reflections 2023, Danny Ryan’s. Rare, unfiltered insights from an Ethereum core developer. Link
All about ERC-4337, Zeneca. Link
How complex systems fail. Timeless. Link
Politico: Crypto firms brace for ‘carpet-bombing moment’ in U.S. Link
Getting crypto firms to do their work within the bounds of the law. Op-ed by Gary Gensler, Chair of the SEC. Link
Blockchain is much more than crypto, by David Solomon, Chairman and CEO of Goldman Sachs. Some good old “Blockchain, not crypto”-vibes (which makes no sense), but nevertheless an worthwhile perspective. Link
The Coinbase secret master plan, by Brian Armstrong. Over six years old, still true and still worth revisiting. Link
ConsenSys: Your ultimate guide to staking withdrawals. Link
Stablecoins: the crypto’s killer use case 🧵. Link

🚨 What caught my eyes:

Markets crash after New York Attorney General alleges that ETH is a security in KuCoin lawsuit. Link
Biden budget proposes a 30% tax on crypto mining electricity usage, aimed to “reduce mining activity.” Currently, almost 40% of the Bitcoin hash-rate (aka mining power) comes from the US. Miners are mobile, they can flock elsewhere. Nevertheless, this would be a big blow for Bitcoin. Link
Ethereum ERC-4337: This is likely the biggest infrastructure upgrade since the Merge last summer. It makes wallets usable without private keys, enables wallet recovery, bundled transactions, and a lot more. All in all, it makes Ethereum significantly more user friendly. More on that in a separate post.
Bitcoin NFTs, aka ordinals, gain traction. The first 10k collections dropped (Bitcoin Punks), early communities are forming and Yuga Labs auctioned its first collection TwelveFold, which generated $16.5m in 24hrs. It’s also becoming apparent that early inscriptions will become more valuable. Again, I don’t think Bitcoin ordinals are a fad. There's something special about being able to inscribe a file onto the most immutable and secure database and know that it will still be around in 1000 years.
- If you’re interested in buying ordinals: Ordinals.Market is the preferred exchange at the moment.
Notable NFT launches: GQ launched “GQ3 Issue 001: Change Is Good”, Animoca Brands launched “Mocaverse”, and Starbucks dropped “The Siren Collection”, its first limited NFT drop. While GQ flopped, Animoca Brands and Starbucks both sold out. Looking at GQ: NFTs are hard. They embody culture, utility, community. You can’t solve that overnight with an NFT drop.
Amazon to reportedly launch NFT marketplace – without crypto. Meaning, NFTs would need to be purchased through credit cards. Still many open questions. Will NFTs be held in Amazon accounts? How will users transfer them out of the Amazon ecosystem? What we know so far contradicts the Web3 ethos of decentralization and interoperability. Link
Wallet week: In December, I wrote about Web3 catalysts for 2023. Above them all: mobile and wallets. Better wallets to manage digital assets, better Web3 browsers to increase accessibility to dApps. This week, Coinbase launched Wallet as a Service, which will allow companies to easily embed custom digital wallets directly into their applications. Uniswap announced its own wallet this week, with a simple UI and integrated swapping (of course, over Uniswap). Wallets will be the main consumer interface of Web3 – what browsers were for the internet.
DeFi x CeFi: Liquid staking now possible in a regulated and decentralized environment through Coinbase Institutional and Bitcoin Suisse. This allows institutional investors to unlock and reinvest their Ethereum stakes back into the ecosystem. A first. Link

🚀 Interesting Web3 start-ups:

Mint.fun: This is becoming the preferred minting frontend for many emerging NFT projects.
Tiplink: Send crypto to anyone with TipLink, even if they don't have a wallet ($6M seed round with Sequoia & Multicoin Capital).
Generative: A new art platform for Bitcoin ordinals.

💡Word on the street:

Remember Nic Carter’s Operation Choke Point 2.0? Politico wrote about a ‘carpet-bombing moment’ in U.S. for crypto. There’s a narrative forming:

Crypto bank Silvergate announces liquidation. Nic Carter speculates that it was deliberately attacked by the US government. The two narratives: Silvergate failed because it was involved with risky crypto assets and illegal actions vs. it failed because it followed the rules and had a bank run, aka a failure of banking, not crypto.
Biden budget proposes 30% tax on crypto mining electricity usage, aimed to “reduce mining activity.”
NYAG sues KuCoin and alleges that ETH is a security.
Gary Gensler publishes an op-ed, implicitly saying: most of crypto is non-compliant.

I think it’s unlikely that all of this happening within a week is a coincidence.

That’s all for now, folks.
Back to building! 🚀

– Marc