Join the creators, students, early career professionals, founders, executives, and more focused on learning and empowering each other on web3 concepts by subscribing below.
My goal is to bring diverse minds together to accelerate our web3 education to build a better future. My hope is that these recaps will be in service of that objective.
Here is today’s roadmap:
Article: Soulbound NFTs
Tweet: India announces crypto regulation
Podcast: All that is wrong with web3
P.S. If you are new here, take a look through this web3 starter guide to get caught up to speed :)
Article:
Soulbound - Vitalik Buterin
Let’s do a quick recap on what NFTs are. When Chris Dixon described it as the new version of a webpage it finally clicked for me. When the webpage was invented in 1991, people often described it as a digital brochure.
“Imagine if you could put a brochure on the internet!”
This definition of a webpage was limiting. The “webpage” is the foundation of our internet today. I’m writing this on a google doc (webpage), going to share it on substack (webpage), and you’ll probably find this on your email, LinkedIn, or Twitter (yup, all webpages). We no longer think of the webpage as a piece of new technology. Chris believes that this is how we will view the concept of an NFT in the future. It will be with us wherever we go online—a foundational piece of infrastructure in the new web.
“Imagine if you could have ownership on the internet!”
The first examples of digital ownership include assets like art, real estate, music, and collectibles. All these assets are tradable on secondary markets (e.g. OpenSea), which is great for creators and traders. This is one of the reasons driving the dramatic increases in prices over the past year.
Digital ownership is more important than just making money. Digital ownership can also represent the skills you have learned and the experiences you have had. If those parts of your digital identity were tradable, it would reduce the impact of those accomplishments (imagine if someone could buy my work experience at LinkedIn or my degree from UBC).
Another problem with trading digital ownership occurs within DAOs. DAO owners are given governance tokens to make decisions within their DAOs. Ideally, these tokens are used to vote on the future of the DAO (e.g. who to hire, what product to develop, what to invest in, etc). But today, the fact that these tokens are tradable leads to the following issues:
Governance is meant to be widely distributed. Trading tokens can lead to concentrated interests buying up voting rights and centralizing power.
Governance is meant for active participation, not only as an investment. I have admittedly owned ‘governance tokens’ in DAOs and not cared to involve myself in the day-to-day decision-making of the organization, and care more for the price of the token to increase.
So how do you solve the problem of wanting parts of digital ownership through NFTs or tokens to be non-tradeable? You make them soulbound. Vitalik in this piece takes inspiration from World of Warcraft to share his vision of non-tradeable NFTs.
Here are a few takeaways:
In WoW, the most powerful items are earned and cannot be traded.
A common criticism of web3 is how money-oriented everything is. Financialized NFTs are great and can support artists, charities, and creators to better monetize.
However, as shared above, there are limits to that approach for ownership of your work history, education history, the skills you’ve earned, and voting in DAOs.
There are technical limitations today to make this possible, but NFTs like ENS names are showing what an NFT can look like where owners are unwilling to trade away.
Working on this problem can broaden the ecosystem of blockchain applications and bring more people into the space who care more than just trading.
Tweet:
Increased regulation of crypto is a good thing. It provides for guardrails of existing builders and consumers of the space on how to best operate. It also provides legitimacy for larger institutions to build on or to invest in the space.
The Indian Finance Minister took this to heart and announced the following this week:
A 30% tax on income from the transfer of virtual digital assets
Plans for the digital rupee to be launched this year or next
Both of these are positive signs for the adoption of cryptocurrencies in the second-most populous country in the world.
Video:
I’m bullish on the long-term implications of web3. Despite that, I try to have an objective view of where things are today in this space. This video is a critique of the entire industry with a special dislike of NFTs. It was well-researched thought-provoking and an important watch for people like us that have been going deep into the rabbit hole.
As I have written about previously, if you look deep enough you can see the potential of these new technologies, or you might see the opposite. Just like any new technology (e.g. social media), both can be true. It’s up to the early builders and users to dictate which direction this goes.
People feel the need to pick a side. Like most areas of life, the reality of web3 is somewhere in the middle (albeit trending positively). Instead of trying to state why the other side is wrong let’s try to learn from one another. This video was important, and frankly quite unsettling, for me to watch. I would encourage you to lean into that discomfort as well.
Bonus:
https://solana.com/news/solana-pay-announcement
Solana Pay was announced this week. This will allow merchants to be able to accept USDC, a stablecoin backed by the US dollar, through users' Solana wallets. Merchants have been able to accept cryptocurrency in the past, but there is reason to believe that this product may lead to more adoption for the following reasons:
Merchants have only been able to accept BTC or ETH in the past. This is too volatile for business owners to use or save. USDC is the US dollar but in cryptocurrency. Once you purchase USDC, using the token is faster and easier to use than Venmo, Apple Pay, etc.
Consumers will be able to create a deeper relationship with merchants through NFTs. For example, if you buy shoes from Nike, you will get an NFT of that shoe, access to a community of fellow shoe owners, which could lead to more brand loyalty
I know I’ll be one of the first set of consumers to test out how this will work. Stay tuned.
Additional links
That does it for this week of Web3 Wednesdays.
Till next time,
Jay 💕
discourse.nouns.wtf/t/proposal-nouns-non-transferables-factory/551/15?u=waterdrops
NounsDAO proposal - exploring soulbound tokens use-cases.
discourse.nouns.wtf/t/proposal-nouns-non-transferables-factory/551/15?u=waterdrops
NounsDAO proposal - exploring soulbound tokens use-cases.