Newsletter: Social "Protocolization"

This week we cover Social “Protocolization”, Worldcoin <> Crypto community, Jaya Klara Brekke on decentralization, SEC <> Coinbase, plus Market Trends (Barbie Marketing Genius <> C00 IP), mainstream news and Signal TL;DR.

Good morning and welcome to edition 151th of the FF Newsletter.

This week we cover Tokenized Communities, Worldcoin <> Crypto community, Jaya Klara Brekke on decentralization, SEC <> Coinbase, plus Market Trends (Barbie Marketing Genius <> C00 IP), mainstream news and Signal TL;DR.

Let’s get to it.

Week’s Highlight

Social Protocolization': Ensuring Long-term Sustainability and Growth for Tokenized Communities

0xJustice believes that Social DAOs (aka Tokenized Communities) can and should transition to "social protocols," and this week he published an essay explaining how.

Tokenized communities [reference] focus on pooling and re-allocating funds to community projects and fostering a sense of community, while Protocol DAOs are typically associated with governing DeFi protocols. 0xJustice emphasizes that any systematic process can be protocolized, and Social Protocols can be designed to protect, improve, and grow tokenized communities.

The proposed approach includes creating a handbook or constitution, defining game cycles and phases, and componentizing the system into self-sustaining mechanisms. The "game cycles" are particularly interesting. By setting a game cycle along with the goals, agents, and incentives, you can capture learnings and make small changes to improve outcomes with every iteration.

The essay provides an example using BanklessDAO (bDAO) to illustrate how each stage of the transformation can be formalized as a self-sustaining mechanism, promoting innovation and reducing coordination overhead.

0xJustice warns that tokenized communities should consider protocolization to ensure long-term sustainability and protection from internal and external threats. The optimum defense is to preemptively and progressively move ossified elements of the DAO onchain as Social Protocols. The ultimate advantages of this approach are scale, efficiency, and capture resistance. This line of thinking is the primary value proposition of building onchain.

Take note: In recent months, tokenized communities of all shapes and sizes are slowly losing steam as members lack clarity and avenues for consistent involvement. The protocolization of these communities not only provides legibility, but allows community members to participate with no or clear barriers to entry, a critical component to a community's success.

What's Poppin'

Spotlight Capsule 005: Onchain Audio/Visual

Spotlight curates ideas and experiments worth collecting. Our fifth capsule highlights the opportunity for audio and visual works to be tokenized, supporting artists and communities onchain. Capsule 005 contains work from some fantastic musicians (Reo Cragun, The Park, etc.), creators (Night Run, etc.), communities (GEMMA), and more. These pieces were hand-curated by the Forefront community, and we encourage you to head to onspotlight.xyz to collect these works and support onchain creation.

Proof of History: Against Decentralization

The essay from Jaya Klara Brekke critiques the concept of decentralization, pointing out its misinterpretation and misuse. Brekke highlights the concept's origination during the Cold War as a means to ensure survivability against attacks. Later, "decentralization" evolved into a tactic for resisting centralized control. The idealized depiction of decentralized networks with identical nodes oversimplifies reality, neglecting the value of diversity. Coordination and trust issues arise between decentralized nodes, leading to new problems. The essay warns against the trap of equating freedom with individualism and calls for a more nuanced understanding of decentralization's limitations while recognizing its tactical and technical usefulness. Given the misunderstanding of the term across the ecosystem, this is a fantastic essay for those looking to form their own opinion on the benefits and drawbacks of decentralized networks, and the future we should really be working toward.

A World of Controversy for Worldcoin

Lucas Matney writes for Bankless: "I'm not sure whether the crypto community should give Worldcoin a shot." The essay begins with critiques inherent to biometric "proof-of-personhood" and Worldcoin's individual implementation (we covered Worldcoin launch in our previous edition). The biggest fear being discussed today is whether Worldcoin is gobbling up millions of eyeball scans and holding all of the biometric keys and their associated identity links. Worldcoin claims they're only holding the hashes associated with this information, but folks are still weary. The essay then discusses the distribution of WLD. "There's something ethically murky about a speculative UBI token that's already pre-allocated to private investors and insiders to such a substantial degree," the author says. VCs are WLD whales, and will need to be rewarded accordingly for such a project to be a worthy venture investment. All in all, Worldcoin skepticism is widespread, and folks should continue to be skeptical as more information surfaces.

How to Find your Community Wedge

This piece from David Spinks explores how to find your "community wedge" and create a unique community in a noisy market. David highlights five key factors: size (is the community large, medium, or small?), benefits (what benefits do they offer?), flavor (the culture of the community), identity (the type of person the community is targeting), and format (how and where do members gather?). The framework is simple but very effective, and the essay includes both explanations and a chart that you can fill out for your own community. David concludes with some communities that have found their wedge, and explains how they each fit into the framework he has described.

Analyzing Web3 Social Infrastructure and Apps

The essay explores the distinction between infrastructure projects and applications in the web3 social space. Infrastructure projects aim to serve developers and builders, prioritizing decentralization and credibility neutrality. They focus on enabling decentralized social experiences and interoperability. On the other hand, applications target end-users, such as creators, collectors, and consumers. They have a more diverse set of personas and narratives and may prioritize user experience over full decentralization initially. The essay introduces a triad framework consisting of user personas, web3ness (degree of decentralization), and narratives to analyze and understand web3 social projects. It also highlights various narratives in web3 social apps, including community growth, reclaiming attention, multiplayer experiences, creator monetization, and on-chain discovery.

SEC Told Coinbase to Stop Trading in all Cryptos Except Bitcoin Before Suing

This week, it became known that the SEC had asked Coinbase to stop trading in all cryptocurrencies other than BTC prior to suing the crypto exchange, according to a Financial Times report, citing Coinbase CEO Brian Armstrong. The SEC told the FT its enforcement division did not make formal requests for "companies to delist crypto assets." Coinbase CEO Brian Armstrong told the Financial Times the SEC recommendation left them no choice but to head to court.

Latest on Mainstream...

First, Binance and its CEO Changpeng Zhao have filed a motion to dismiss a complaint against the cryptocurrency exchange by the U.S. CFTC, the company said in a court filing on Thursday. The CFTC sued Binance, Zhao and former Chief Compliance Officer Samuel Lim in March, alleging they violated the Commodity Exchange Act and certain related federal regulations, and for operating what the regulator said was an "illegal" exchange and a "sham" compliance program.

Next, France's privacy watchdog CNIL said on Friday it is aware of ChatGPT-founder Sam Altman's Worldcoin project and that the legality of its biometric data collection "seems questionable".

Finally, Meta's metaverse-related losses topped $3.74 billion over the second quarter with the Big Tech player spending $7.7 billion on its virtual reality business so far in 2023, according to latest report.

Signal TL;DR

The Paradox of Talent in Web3

The article discusses the paradox of talent in Web3, where work boundaries dissolve, but decentralized talent marketplaces face challenges. To succeed, they need data ownership, interoperable tools, and flexibility for workers. Token rewards alone won't drive demand; real value and addressing pain points are crucial to democratizing opportunities in the future of work.

▹ Read - Introduction to Urbit
▹ Collab - MintFund x Gemma
▹ Deep Dives - Web3 Growth Industry
▹ Interesting - Law of Chains
▹ Cool - Songcamp Sessions Vol. 1
▹ Regulation - Binance Illegal in Nigeria
▹ DeFi - Curve $70m Hack
▹ Listen - Hypercultures W/ LGHT
▹ New - PGN Is Live
▹ Research - BlackRock #bitcoin Study
▹ Interesting - Lacoste's Virtual Store

◎ Check out Signal  for daily top web3 social headlines

Market Trends

Welcome to another installment of Market Trends, in this segment, we'll explore the hottest trends shaping the social crypto landscape. In the previous editions we've covered: NFT financialization, Community Curation, and Metaverse.

Share your feedback, suggestions, or any topics you'd like us to explore further in this space. Your valuable input will help shape the future of this section, making it a valuable resource for all our readers! 🙌💬

It's a Barbie World, we're just living in it.

Greta Gerwig's comedy-drama film "Barbie" has taken over box offices and with it came an aggressive "world genius" marketing campaign -- a Barbie summer, if you will.

Spanning more than 100 international partnerships, "Barbie's" campaign has infiltrated homes to ensure awareness of its summer spectacle. There's Barbie-themed ice cream, roller skates, and a Barbie Xbox. A trip to any mall in the US means you'll likely see Barbie-licensed clothing, perfume, and sunglasses in both high-end and more affordable retailers --- from Forever 21 and Zara to Gap and Bloomingdales, targeting a range of demographics.

In April, the campaign kicked into high gear when WB unleashed a poster generator online, allowing social media users to personalize and insert themselves into shareable content, which, of course, also served as free promotion. "Barbie kind of just sold its namesake to these companies to leverage the hype that's going on right now and it's very, very smart, but it's not something that hasn't been done before. They've just taken it to a different level."

The color pink has become synonymous with the Barbie brand this summer, and is taking the internet (and the world) by storm. But unlike what we're used to with cc0 culture in web3, Barbie owns their color pink, opening anyone who uses it up to potential lawsuits.

Will Barbie capitalize on these lawsuit opportunities? Probably not, as the money from this user-generated promotion far outweighs the alternative.

But the Barbie movie really opens eyes to new opportunities in the world of marketing and brand-building, and takes much of what we've been discussing regarding community-driven brands to the extreme -- extremely successfully.

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.