Crypto Market Rollup - 1

Here we go. Episode 1 of my "Weekly Crypto Rollup". Since this is the first Newsletter, let me dedicate some time to introduce what I will write about. As you can guess from the title - Crypto. We should remember, though, that Crypto is more than just a six-letter word. For me, it represents a movement - not a niche investment for a selected few. Together we'll look at DeFi, GameFi, Infrastructure, Decentralization, Regulation, Blockchain Technology, NFTs, and many other areas of interest. Once in a while, I might also talk about some "non-crypto" events and developments that I find important for the overall adoption of the industry.

"Crypto represents a movement - not a niche investment for a selected few"

For today's issues, there are three areas I want to deep-dive into. 1) Exploits 2) Guccification and 3) DAOs. If you have some interesting views on any of these topics, then let's connect and chat! If you have any topics you want me to talk about in the future, then let's connect and chat! You see where I am going with this.

1) Exploits

This was an intense week. The Solana ecosystem was the victim of crypto’s latest exploit, with users reporting that their funds have been drained without their knowledge from major internet-connected “hot” wallets, including Phantom, Slope, and TrustWallet. The affected wallets were all confirmed to be either created or used in the Slope mobile wallet app. So the encouraging news here is that it was not a bug with Solana core code. Instead, it was the software used by several wallets.

We also saw how the cross-chain bridge Nomad was exploited just earlier this week. A total of nearly 200 million USD was drained from the protocol. This was not the first time that a cross-chain bridge was targeted.

It sucks to see how people are choosing to exploit projects. Being a white hat hacker is more than lucrative and the better path to take if we want to advocate for further crypto adoption. Unfortunately, it will likely not be the last time that we see these kinds of exploits, and it's essential to keep a few things in mind:

• Hardware wallets are important! If you don't have one yet, seriously consider changing that
• Cross-Chain Bridges are a scary place and need to see further development to ensure that funds are secure. If we want to see them prosper, we need to see them being secure first.
• Even with secure code, software, and many additional layers add to the level of complexity and introduce new risks to a protocol. You can never ensure 100% security - But you can minimize risk by a lot! We as members of the industry need to continue to make security a priority.

2) Guccification

Don't get me wrong, Gucci is actually pretty cool. I love how they turn fashion into art. I wouldn't wear it, I am way too pragmatic for that, but I do enjoy their advertisement campaigns. What I call Guccification is the move of more and more high-fashion brands such as Tiffany & Co., Gucci, and Balenciaga into the crypto space. Oftentimes, they do this through digital art collectibles, high-end accessories, clothing, and more. The easiest entry point for them is through NFTs since they offer multiple overlaps with the high-end fashion space.

Guccification is the move of high-fashion brands into the crypto space

Gucci has been particularly active in crypto. Their first NFT trial started in May 2021. Before that, they actually even sold online items on game platforms such as Roblox. Let's focus on crypto, though, in this newsletter.

This week stood out with two high-fashion brands (Tiffany & Co. and Gucci) both embracing the crypto space further. "NFTiff" is Tiffany's new NFT collection which allows Punk holders to redeem it for a custom pendant. The NFTs sold out in less than 20 minutes (despite the 30 ETH price tag) and even increased CryptoPunk's daily trading volume by 1,847%. Gucci also continued its crypto journey, expanding the range of cryptocurrencies for in-store purchases in the US, now accepting BAYC's ApeCoin.

NFTiffs show how lucrative it is for high-fashion brands to embrace crypto (if done right). Most likely, we will see the Guccification continue with more initiatives and high-fashion brands adopting crypto. Now proud Punk owners can even make their girlfriends happy with a nice pendant.

3) DAOs

Decentralized Autonomous Organizations (DAOs) are blockchain-based structures that enable the coordination of people and resources through a formalized, transparent, and binding set of rules deployed on a public blockchain in a decentralized way. Simply put, they help to organize and manage crypto protocols and start-ups. Structuring a crypto protocol as a DAO has several benefits. By using a DAO structure, decision-making can become more transparent, secure, and autonomous. More importantly, with a DAO structure, it is easier for members to take on responsibility and create innovation. I actually wrote a full report about DAOs that goes into a lot more detail, so why not check it out?

There's a reason why I chose to talk about DAOs in this first edition of my newsletter - while DAOs can offer a lot of benefits, they are not (yet) the holy grail many crypto believers and I want it to be. Admitting this is quite important since we would otherwise neglect innovation. Instead of accepting the status quo, we should focus on building - making sure we create the future we want to live in.

I am convinced that having a plutocratic system that is controlled by wealth and income is undesirable not only since it can lead to class conflict, corruption, greed, and hedonism but also because it goes against the hopes of many that increased adoption of cryptocurrencies and crypto-native products will lead to more equality.

"having a plutocratic system controlled by wealth and income is undesirable"

The data are not in favor of us yet. As a matter of fact, they show that the majority of proposals are driven by just a few DAOs. Over 65% of all proposals come from just 10% of DAOs. To add to this, while voting increased, the majority of DAO participants still only voted less than two times, with more than 50% of users only having voted once.

We still have a long way to go, but the directionality is there, and people are aware of the downsides of DAOs. I'm optimistic, to say the least...

That's it for today. Thank you for reading!!! ...Hasta la vista, baby.

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