Newsletter: The Goose "Boost"

This week we cover the Sotheby's 3AC NFT Auction, 1kx team analysis on digiphysical, the Other Internet latest research on DAOs and labor, Uniswap V4 draft, plus Market Trends (community powered curation), mainstream news and Signal TL;DR.

Good morning and welcome to edition 145th of the FF Newsletter.

This week we cover the Sotheby's 3AC NFT Auction, 1kx team analysis on digiphysical, the Other Internet latest research on DAOs and labor, Uniswap V4 draft, plus Market Trends (community powered curation), mainstream news and Signal TL;DR.

Let's get to it.

Week’s Highlight

The $11M NFT Auction

Sotheby's recently concluded an auction of an NFT from Three Arrows Capital (3AC), the bankrupt crypto hedge fund, resulting in sales of over $10.9 million. The auction, held in New York, featured pieces from the "Grails" collection, showcasing the works of generative artists such as Dmitri Cherniak, Tyler Hobbs, and Jeff Davis, among others. Notably, Dmitri Cherniak's Ringers #879, commonly known as "The Goose," was a highlight of the event. Initially expected to sell for $2-3 million, the bidding frenzy drove the final sale price to a staggering $6.2 million, with prominent NFT investor 6529 emerging as the buyer. Sotheby's noted this as the second-highest sale ever for a generative artwork.

3AC co-founders Su Zhu and Kyle Davies having acquired "The Goose" in August 2021 for approximately 1,800 ETH (equivalent to about $5.8 million at the time). Michael Bouhanna, Sotheby's head of digital art and NFTs, praised the piece as a significant contribution to Cherniak's portfolio and a notable work in the generative art movement. The buyer, 6529, expressed the cultural significance of "The Goose" in the NFT community, highlighting the act of faith involved in on-chain long-form generative art. The artwork represents the unpredictable nature of generative NFTs, where the algorithm's outputs cannot be predetermined. 6529 believes that "The Goose" has embarked on a historic journey through pivotal moments in NFT history and anticipates that its journey is far from over.

Take Note. Even in a bear market with regulatory scrutiny at an all-time high, the NFT ecosystem plays by different rules. The cultural significance of "grail" NFTs will only develop over time, creating a lasting legacy in the world of art and internet culture.

What's Poppin'

Making DAOs Work Other Internet has been working on an inquiry in the web3 work environment with an extensive literature review, focusing on DAOs and their impact on the future of work. The inquiry consists of three phases: a literature review, mapping the dimensions of DAO work, and exploring non-DAO analogs for workers' organizing. The literature review examines existing studies and understandings of DAOs, addressing the question of whether DAOs are the future of work or a form of gig labor. The mapping phase explores the complex organizational landscape of DAOs and their hybrid nature, combining multiple identities and institutional logics. The exploration of non-DAO analogs investigates historical models such as mutualist organizations and cooperatives, seeking insights for improving web3 work. This particular update concludes by outlining three hypotheses for further research and sharing OI's plans for conducting ethnographic interviews to better understand the experiences of DAO contributors.

Digiphysical Goods: Bringing Programmable Utility to Physical Products The 1kx team has been going deep on "digiphysical" goods, and this essay is a great summary of that analysis. The piece discusses the potential of digiphysical consumer goods, which are physical products that maintain a cryptographic link to their digital record on the blockchain. These goods can bring onchain interactions to physical environments and enable programmable utility for any physical product. They can be used for various applications such as creator monetization, fan engagement, decentralized authentication, and proof-of-ownership. The infrastructure layer for digiphysicals includes hardware interfaces, creator tools, vaulting and escrow services, supply and value chains, and financialization through NFTs. The application and utility layer involves token-gating, ticketing, memberships, live minting, and community engagement. The piece concludes by anticipating further experimentation and adoption of digiphysicals, with chips becoming more affordable, increased consumer expectations for interaction with physical products, and the use of NFTs to represent ownership of physical assets.

Building Token-Powered Consumer Products Tokens have the power to transform the consumer experience on the internet. This essay from Collab+Currency explains how tokens can align incentives between consumers and products, giving consumers a stake in the success of the platforms they use. Tokens also enable users to have more control over the products and communities they participate in, allowing for user-owned and operated internet experiences. Tokens can foster community building and social belonging, creating internet-native communities around shared ownership. The post also highlights novel applications of tokens in areas such as data aggregation and curation, advertising and marketing, networked physical products and experiences, and decentralized physical infrastructure networks. These applications demonstrate how tokens can transform various aspects of the consumer experience and blur the boundaries between the virtual and physical worlds.

Overcoming 'Token Debt' This essay from Variant is relevant to virtually every community or protocol that launched pre-2023. The essay introduces the concept of "token debt," which refers to the challenges faced by crypto projects that have issued a token but need to make significant protocol changes to optimize its value. Token debt combines financial, social, and technical debt, making it more damaging than technical debt alone. Financial debt arises when token incentives don't yield the desired results, while social debt occurs when tokens lose utility and cause rifts in communities. Technical debt arises from rearchitecting tokens and protocols. The essay highlights the importance of token design and provides examples of projects like Helium, Ethereum, and Friends With Benefits that have successfully addressed token debt through token redesign and product pivots. It concludes by encouraging teams to think of tokens as products and proactively address token debt to ensure long-term success.

Uniswap Labs Announces Uniswap V4 Last week, the Uniswap Labs team announced Uniswap v4. Uniswap v4 enables powerful new ways to customize liquidity pools by introducing "hooks". Hooks add entirely new functionality to pools, such as dynamically adjusting fees or creating new order types. Some examples of hooks include a time-weighted average market maker (TWAMM), customized onchain oracles, onchain limit orders, and much more. Because each pool can be customizable, the team expects to see pools of all shapes and sizes and made several architectural changes to help support this diversity. Congrats to the Uniswap team -- this will soon become critical infrastructure for the ecosystem!

Onchain or Nowhere: Data Composability Station, Privy, and Turnkey co-hosted a salon last week as part of their OnchainOrNowhere series on data composability. In this summary of the event, the team emphasizes the importance of concrete data composability when building and highlights the benefits it offers in terms of seeding datasets and creating utility for users. They caution against a narrow focus on tokenization and encourages developers to explore highly interactive systems and products. It suggests that wallets provide insights into the market's take on composability and advises looking for signs of composability beyond simple tokens. The piece also addresses the challenges of backwards compatibility, privacy concerns, and the need for user-centric design. It concludes by emphasizing the importance of serving users and collaborating for progress in the web3 space. We're excited to see more insights from future OnchainOrNowhere events.

Latest on Mainstream...

First, the SEC responded to Coinbase's petition for rulemaking by asking for additional time to respond. This is after SEC initiated its own lawsuit against the company.

Next, Blackrock's (BLK) iShares Bitcoin Trust application to the SEC this week might stand a better chance than previous attempts by other fund managers thanks to the promise of a "surveillance-sharing agreement" between exchanges.

Finally, a federal judge signed off on a temporary agreement between the SEC, global crypto exchange Binance and its U.S. affiliate to have Binance.US take steps to ensure only local employees can access customer funds as the regulator and companies work through an SEC lawsuit.

Signal TL;DR

Community Unchained This piece by Rafa discusses the power and potential of community-driven initiatives in the world of cryptocurrencies and decentralized finance (DeFi). It highlights the transformative impact of community ownership and governance in shaping the future of financial systems.

Fungible

On "Fungile" Arthur Hayes highlights how fungibility plays a crucial role in the adoption and success of cryptocurrencies, particularly in terms of liquidity and usability. It emphasizes the importance of understanding and preserving fungibility as a fundamental characteristic for the growth and acceptance of digital assets in the broader financial landscape.

▹ Deep Dives - Breaking Ground
▹ Opinion - DAO Gov Minimalism
▹ Thread - On The Goose
▹ Collab - Adidas x Fewocious
▹ Interesting - Wallet Posting
▹ Cool - Songcamp Rebrand
▹ Legal - ZachXBT Legal Fight
▹ Data - Q2 Crypto Trading Volumes
▹ Techy - On Uniswap V4
▹ Business - Wyre Winding Down
▹ Tooling - Mint All

◎ Check out Signal  for daily top web3 social headlines

Market Trends

The Power of Community Curation

This interview with JPG highlights the team's perspectives on community curation in web3. The team highlights the value of the public process of curating artworks and the importance of the collaborative and shared experience offered by JPG. They emphasize the role of community dialogue, open conversations, and collective decision-making in shaping cultural value and meaning in the NFT space. Discord is recognized as a central platform for communities in Web3, but its accessibility and limitations are also discussed. The tension between traditional art and the NFT space is examined, with an emphasis on the redefinition of the arts ecosystem and the need for new measures of cultural significance. The interview also covers the importance of critical frameworks and the exploration of new conceptual possibilities in evaluating digital art after the emergence of NFTs.

At Forefront, we're deep in experiments with community curation and its power in an infinite media environment. Spotlight is our most recent product in this vein, giving FF community members an opportunity to curate some of the best media NFTs in the ecosystem for the rest of Forefront's audience to collect. The goal is to create a community-powered signal machine for the media NFT ecosystem.

There will be many, many more experiments in this space, and we're excited to continue to discuss and explore how they might play out.

For the Culture

The information in this newsletter is not intended to constitute legal, financial or investment advice and should not be construed or relied upon as such. Any opinions reflected are the opinion of the author(s) of the newsletter only and not necessarily of Forefront. Please DYOR.