Web3 Wednesday: Blockchain Cities, Moonbirds, & Instagram 🏙 🌚 🐦

Issue #12

Apr 20, 2022

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My goal is to bring diverse minds together to accelerate our web3 education to build a better future. I hope that these recaps will be in service of that objective.

Here is today’s roadmap

Tweet: Blockchains are Cities
Article: Instagram’s CEO on Web3
Bonus: Moonbirds on the moon

P.S. If you are new here, take a look through this web3 starter guide to get caught up to speed :)

Haseeb Qureshi @hosseeb

1/ Blockchains are not networks—they're cities. 🏙️ This simple mental model will help you understand why the L1 wars are evolving the way they are. New blog post + short 🧵 medium.com/dragonfly-rese…

medium.comBlockchains are citiesWill we live in a multi-chain world, or will there be “one chain to rule them all”?

Blockchains are hard to understand. When you finally understand one, you learn there are like seven more to figure out. Each has its benefits and downsides. It’s also hard to know which one you should use or build on. Everyone you ask has their own bias because they have most likely invested $$ into that ecosystem.

This thread and article were a helpful mental model for understanding blockchains. The writer, Haseem Quereshi, compares blockchains to cities.

Everyone complains about Ethereum. It's expensive, slow and congested. Only the wealthy can afford to live there. Ethereum is New York. Like New York, Ethereum has the biggest banks, the celebrities, and brands.

If you’re an up-and-comer, you’re priced out. Maybe if you bought assets early, you could’ve gotten rich. But today, the prices will eat you alive, and there’s just not enough room to fit everyone. The billionaires might be fine, but the next generation will have to go elsewhere.

Quereshi talks about people needing to migrate to new cities because of a lack of space and costs in old ones. This is analogous to users deciding to leave Ethereum and build on Solana, Polkadot, or other chains today.

He thinks there will be more than one chain, just like there is more than one major city. Each chain will have its own flavor, people, and vibe.

Like cities, he believes there will be a power law of “residents” who use these chains. The top five US cities make up most of the country’s population. He suggests the same will occur with blockchains.

Where do you want to live? Will New York always be the best place to go? SF may be expensive and dirty, but it’s always nice out! Why not check out a bunch of them and see what’s best for you?

Article

Instagram’s CEO on the creator economy & blockchains

When a sizeable web2 platform leader speaks about web3, you listen. What these companies do will shape the future of this space. Adam gave a TED talk last week and was later interviewed by Ben Thompson. A few takeaways:

Meta’s L1 Chain?: I think Meta may have ambitions to build their own L1 chain (e.g., Ethereum, Solana, etc.). They tried to do this with Libra but failed for reasons highlighted here. Meta has enough users in its ecosystem to drive traffic to “their chain.” That could incentivize other social apps to build on top of them, especially if their users would find value in taking their content/following/credibility across apps (e.g., take my LI followers to Twitter). Meta could generate revenue through the value of their tokens increasing plus transaction fees for building on their ecosystem. Adam did hint at this in the interview when asked if Meta would help develop this infrastructure…
- “I think we’re definitely interested in it. To be totally transparent, part of the reason why I want to talk about it publicly is to apply some pressure and get some excitement around the idea and build some momentum. I can’t talk about or I’m not going to talk about the specific companies I’ve been talking to, but I’ve been trying to talk to as many people as I can at all the different levels; at the payments level, at the authorization level, at the platform level. There’s a lot of interest, but to make this happen is far from a sure thing. It’s like you’re trying to align a bunch of different cultures and a bunch of different sort of philosophies around this idea.”
Regulation: Adam’s thoughts may be meant to get ahead of upcoming regulations. Legislation coming out of the EU (e.g., Digital Market Acts) will push to make large platforms to be more interoperable. For example, a few weeks ago, the EU announced they’re exploring requirements to make iMessage and WhatsApp work together. Openly stating they want creators to take their content and following across platforms may be aligned with that.
Public Perception: Meta also said last week it would charge creators 47.5% of digital goods and experiences sales through its VR platform Horizon Worlds. Horizon Worlds is like the Apple app store but for VR. Once you have an Oculus, you can access them. They have the majority of the VR market today. People in web3 were upset when they heard they’d be charging THIS MUCH (Apple charges 30% and gets a lot of shit for it). Given the negative perception of Meta, their PR team probably figured having Adam come out publicly a few days later with this topic would increase positive sentiment and spur a slightly more positive discussion.

This will not be the last time we hear Adam speak about this. Instagram is focused on supporting creators. Creators want to be able to grow and monetize their audience. The ideas in web3 can deliver on the promise of both. Instagram is too savvy to let these innovations just happen without them and will be taking steps to be a leader in the space.

Bonus

The Moonbirds NFT collection made waves this past weekend. They have $230M in total sales in 5 days. Their floor price was 2.5 ETH at the mint and it’s now 18 ETH. Where is all this money coming from?!?

A couple of thoughts:

Why did this project blow up? The creator is well known. Kevin Rose was the founder of Digg and well connected in Silicon Valley. He’s also created a successful NFT access card called Proof.
It seems the volume and price increased because a portion of this money may have been venture-driven. Kevin is a VC himself and has stated multiple times publicly that his firm True Ventures would put NFTs on their balance sheet. Did other VCs use this as their entry into the market? This is speculation on my end; hard to find data on this to date.
NFTs might become a fundraising tool moving forward. Instead of going to angels or friends/family, articulate your vision, launch an NFT collection, raise funds, and execute. The majority of these projects will go to zero. Although, I’m starting to see reputable founders use an NFT drop as their start-up capital. Let’s see how long this lasts.