Newsletter: Who's Got the Goods?

Coinbase Request For Builders, Digiphysical Goods, RWAs, And More...

Happy Monday!!

Welcome to edition 156th edition of the Forefront Newsletter. If you’re new here, we give you a weekly roundup of the best news and insights at the intersection of crypto, culture, and community.

This week we’re covering:

• Coinbase's Request for Builders...
• ...tokenized real world assets (RWAs)...
• ...speculation as a growth strategy...
• ...RARE Protocol and Foundation Moments...
• ...and more.

Let's get into it...

Week’s Highlight

This week, Coinbase reaffirmed their commitment to working to update the financial system that was built over 100 years ago by enabling a broad set of crypto use cases that create more economic freedom and opportunity in the world. In addition to products/services that Coinbase is developing internally, the company shared a Request for Builders covering 10 ideas they believe are exciting and critical for the space to galvanize the next generation of crypto startups.

Some examples have been tried but lacked effective implementation -- for example, a "flatcoin" that is pegged to US Dollar + inflation. Onchain capital formation and job marketplaces have also been attempted multiple times with varying degrees of success.

However, one area of experimentation that seems to be catching steam again is "tokenizing real world assets (RWAs)." Coinbase mentioned this as a category in their Request for Builders, highlighting USDC as the first successful example of a tokenized RWA.

Quoted in a piece for Coindesk, Prof. Jason Potts notes, "Now that we can tokenize all the world's physical products and services into a common, interoperable format; list them within a single, public ledger; and enable market transactions with low cost of trust, which are governed by rules encoded within and enforced by the underlying substrate, what then? Then, computable capital enables 'programmable commerce,' but more than that -- it enables what we might call a 'turing-complete economy'."

The piece explains how NFT-backed "claims" on an asset will likely be more practical and effective than trying to tokenize the asset itself. OpenSea affirmed this belief this week, announcing "Redeemables." The team published ERC-7496, ERC-7498, SIP-14, and SIP-15, standards for redeemables and a commitment to working with the community to ensure they fit the ecosystem's needs.

Take Note. RWAs and Redeemable tokens will likely see more traction and experimentation in the world of L2s, where gas fees are no longer a barrier to transactions or claims. Check out this thread on "digiphysical goods" from Peter at 1kx to learn more about the companies building in this space.

What's Poppin'

Speculation as a growth strategy for social apps

This transcript of an internal Variant Fund Slack discussion revolves around the use of speculation as a growth strategy in social networks. It highlights the division over the speculative nature of a specific platform, where a small group of power users drives revenue. Concerns are raised about how speculation might hinder user retention and content quality in certain networks. Distinctions are made between networks where speculation benefits, such as parasocial and solicitation networks, and networks where it could hinder growth due to noise and shallow connections. The balance between financial incentives and content quality is emphasized, suggesting speculation-driven products might resemble games more than social networks. The conversation also touches on the timing and implementation of speculation as a feature in projects, and the difference between social tokens and NFTs in terms of intrinsic value.

Rare Protocol: an open curation and P2P reputation protocol

This week, SuperRare launched Rare Protocol, a peer-to-peer system where anyone can vouch for the authenticity and appeal of another actor by staking $RARE on them. This data can be used by anyone to signal value, assess authenticity, and check out social connections. $RARE is the native token of Rare Protocol. You can stake any amount of $RARE on any artist (or collector) with an Ethereum address. This admits you into the Community Pool. This is an interesting experiment in web3 social + onchain finance, essentially opening the door to a social network-based credit score. Very interested in seeing how this develops and is used.

Foundation Moments: create events around your tokens Foundation launched "Worlds" as an onchain storefront to help creators and communities reach new audiences in a curated fashion. However, every solo show, exhibition, or seasonal collection starts with an idea, develops into a story and comes to life with an audience. With Moments, worldbuilders can now spotlight specific themes, creators, live events and more within their Worlds. Moments brings a sense of temporality to Foundation Worlds and allows creators to more intuitively engage with their audience in a curated way. You can track the performance of your Moment in real-time and get a better look at how it impacts your overall sales and reputation.

Seed Club Consumer Crypto Conversations at FWB Fest One of the most talked about parts of FWB Fest was Eyewitness, Seed Club's Consumer Crypto summit. The goal was to host conversations, not talk or pitch or present. There were a wide range of discussions, from "L2s as Consumer Products" to discussions of brand in a world of open infrastructure and infinite media. There was also a deep dive on token models, an area Seed Club is very familiar with given their roots as a social token incubator. If you missed this event, be sure to check out "The Event," Seed Club's next Demo Day for their consumer crypto cohort on Sept. 28th!

Swift unlocks potential of tokenisation with successful blockchain experiments

Financial platform Swift released a report following months of experimentation with blockchains and the potential of tokenization. Swift collaborated with several major financial institutions on the experiments, including Australia and New Zealand Banking Group Limited (ANZ), BNP Paribas, BNY Mellon, Citi, Clearstream, Euroclear, Lloyds Banking Group, SIX Digital Exchange (SDX) and The Depository Trust & Clearing Corporation. In addition to demonstrating that existing Swift infrastructure can provide a secure, scalable way for financial institutions to connect to multiple types of blockchain, they advanced understanding around the technical and business requirements for interacting with business and public blockchains. The experiments also explored the value of a blockchain interoperability protocol for securely transferring data between existing systems and a potentially unlimited number of blockchains.

Crypto Needs its Captcha Moment The essay from FF Member Kairon explores the concept of "Captcha Moments", instances where subtle human interactions facilitate AI optimization and training, not just in identifying objects in Captchas, but also in shaping product readiness through data collection. It underscores how AI models like ChatGPT and LLMs analyze language using user-generated content, aiming for a fair representation. Moreover, the complexities and potential of onchain data, including its role in secure transactions, preserving privacy, and tackling issues in decentralized finance, are examined. The piece suggests that web3 social interactions and content creation could pave the way for widespread adoption of crypto, akin to Captcha Moments. It promotes decentralized social engagements as they offer smooth adoption and inherent value. Lastly, the essay encourages further exploration of Captcha Moments to foster engaging and substantial experiences in the crypto realm.

FF Hangout w/ Denis from Mirror** + **Spotlight Capsule 008 This week, the Forefront Community hosted a Hangout with Denis from Mirror. We discussed all things onchain media, the nature of collecting, and how a mint acts as a social connection between two (or more) people onchain. The conversation also dove into some of the opportunities for "pop-up social networks" for mints that are representative of a niche interest or a moment in time. The conversation was a follow-up to a Spotlight Capsule on Writing NFTs that Mirror helped to co-curate. You can collect the capsule and work your way up the leaderboard at Spotlight.xyz.

Mainstream headlines this week…

Bitcoin Spot ETF Delayed.Despite broad optimism on a future ETF, Bitcoin briefly dropped below $26,000 early this morning as optimism around the approval of a Bitcoin ETF application was again delayed.

X Financial License.Rhode Island's regulators have granted X (Twitter) a currency transmitter license, marking a step forward for the company's foray into the financial services sector. 

Robinhood x SBF.Popular trading platform Robinhood (HOOD) has agreed with the United States Marshal Service (USMS) to buy back $605.7 million in stock previously owned by Sam Bankman-Fried, founder of the now-bankrupt crypto exchange FTX.

Inbox Signal TL;DR

The seventh edition of Inbox Signal just went out to Forefront Members this weekend. Here's a taste of the stories:

• HATS.The onchain roles protocol.
• DAUs.Jacob Horne on Farcaster DAUs.
• TWEET.Jihad on why Ethereum needs curation.
• PYUSD.Coinbase set to list PayPal stablecoin.
• LUFTHANSA.Airline launches reward program on Polygon.

Forefront Members get full access to Signal -- our daily curated feed on consumer and creator crypto -- every day. You can become a Forefront Member by minting a 2023 Annual Pass here.

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.