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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: Former Meta employees launch ETH & Solana competitor
Tweet: Benedict Evans with a prescient message
Video: Indonesians like crypto, their religious authorities do not
Bonus: Tom Brady & Vitalik
P.S. If you are new here, take a look through this web3 starter guide to get caught up to speed :)
Article:
Ex-Meta employees raise $200M from a16z, Tiger, Multicoin to realize Facebook’s crypto dreams
This caught my attention last week. The Meta employees who had been working on their blockchain projects Diem left to start their own layer one blockchain called Aptos. This would be a competitor to Ethereum, Solana, and other L1s. This is an interesting move with potential implications across web2 and web3. Let’s break this down.
Context
Facebook created the Libra Foundation in 2019. They hoped to launch a stablecoin (e.g. USDC, USDT, etc) that would integrate into their existing products. Imagine being able to send payments via WhatsApp to your family back home through crypto.
They came in HOT with partners. Stripe, Mastercard, Visa, eBay, Paypal, and others came in as participants in the Libra Foundation. In theory, the stablecoin launched by Libra would be used by all of these partners across their millions/billions of customers.
Less than a year later many of these partners pulled out of the organization. This was due to the regulatory scrutiny Facebook was getting for potentially launching a competitor to the US dollar.
In February of 2022, Diem sold their assets to a holding company called Silvergate Capital. This was driven by continued regulatory pressure.
I assumed this would be the end of the project but only a few months later the former team who built Libra/Diem raised $200M to build another layer 1 blockchain.
What I’m thinking about…
I wonder how much involvement Meta has in this project. The Aptos team has publicly stated that “they have no formal partnership with the company”, but their co-founder Avery has spent almost a decade at Meta/Facebook, and has led their blockchain efforts. My assumption is that the majority of the work that went behind building Diem is being used today to build Aptos (e.g. their code base, their technical architecture, prospective partners, etc).
It's really hard to get another layer 1 solution off the ground. You need to1.) incentivize developers to build applications that2.) bring in users, and 3.) have those users provide more interest to even more developers, then repeat.
Aptos seems to be structuring their ecosystem similar to how Solana did. They have a core team and are hiring for specific roles just like Solana has. That goes against the “decentralized” ethos of web3, but I think it’s better for the growth of the space. If something goes wrong with your decentralized application, you can at least call the CEO of Solana or Aptos to get it fixed. Vitalik is the co-founder of Ethereum but probably won’t answer your call.
One L1 that I think is pretty cool is Deso. They’re focused on building a blockchain specifically for social applications (e.g. the crypto version of Facebook, LinkedIn, Twitter, etc). I really liked using their products, told all my friends about it, and invested quite a bit. Although, it has been difficult for them to date to bring in more developers (~200 today) leading to minimal consumer usage (~3k DAUs). I still have faith in Deso, but it’s a great example of a useful blockchain that isn’t valuable at scale until they have more developers in their ecosystem. Aptos may face a similar problem.
Why does it Meta?
I think Meta has more involvement in this project than is publicly shared. That’s neither good nor bad. Just important to highlight if Aptos gains serious traction.
I think Aptos first big splash will be a partnership with Meta. I can imagine WhatsApp, Messenger, etc enabling crypto payments through Aptos. I sense this will come with regulatory scrutiny.
Blockchains (or L2s like Polygon that have a strong core team) that have teams behind them will most likely win. They will have someone to help form partnerships, take feedback from their customers/developers, and can help with support issues. Web2 companies will find that familiar to their day-to-day operations and will lean towards building on these chains vs fully decentralized ones.
Tweet:
This was an incredible take from Benedict Evans. He’s one of my favorite tech writers (check out his blog here). There’s still a lot of innovation that is happening within web2 incumbents. Many of the ideas that were popular in the early 2010s are only now starting to be built out.
Blockchains are the next computing platforms. You can be aware of that now, and not see the real use cases until years later. People knew that mobile was going to be important even before Blackberry came out in 1999. It took another 8 years after that until the iPhone was released, subsequently delivering the promise of real-world use cases for mobile phones (e.g. Uber, Instagram, Google Maps, etc).
As my friend Patrick shared recently in this blog, web3 might be overhyped today, but may soon not be…
“... if we pull out to a longer-term view, the digital-native economy is barely more than 10 years old, and some key aspects of it (NFTs, exchanges) are much newer. As Chris Dixon recently pointed out, today, there are only about 10 million Ethereum users, which is 0.2% of the total number of internet users. Adoption is likely to massively scale over the coming decade.”
“The internet-native economy is therefore in its infancy. Builders and creators now have a generational opportunity to meaningfully impact the next era of the internet.
As for the public — just as the narrative that the early internet or that mobile was a novelty with no real-world usage died once internet adoption scaled to billions of people, so too will this narrative die when adoption for web3 scales to the point that its real nature is clear to a broad base of users.
It's likely just a matter of time.”
Video:
Cryptocurrency is booming in Indonesia, with millions looking to crypto as a way to make money after two years of pandemic. But in the world’s most populous Muslim country, religious authorities have spoken out against the risks of cryptocurrency and declared crypto transactions against the rules of Islam.
I guess it makes sense that other religions may not like cryptocurrencies. The industry itself can at times behave like its own religion. Will be fascinating to see how this plays out.
Bonus:
This is an exchange with Vitalik and Tom Brady. Vitalik was on the cover of Time Magazine last week. Haters said some mean things about him. One of the disses was how he looks like a knock-off, skinny version of Tom Brady. Vitalik tweeted that he had no idea who Brady was. Brady then retweeted him thanking him for his work on Ethereum, which has led to his own NFT platform Autograph!
I love and hate Twitter for moments like this.
Additional Resources:
That does it for this week of Web3 Wednesdays.
Till next time,
Jay 💕