DAOs are legal entities in Marshall Islands.
The Pacific island state recognizes decentralized autonomous organizations.
The Republic of the Marshall Islands has recognized decentralized autonomous organizations (DAOs) as legal entities, giving collectively owned and managed blockchain projects global recognition.
The Marshall Islands' amended the Non-Profit Entities Act 2021 that now recognizes DAOs, which are blockchain-based entities governed by self-organizing communities. Incorporating Admiralty LLC, the island country's first DAO, was made possible thanks to the amendement. MIDAO Directory Services Inc., a domestic organization established to assist DAOs in the Marshall Islands, assisted in the incorporation.
The new law currently allows any DAO to register and operate in the Marshall Islands.
“This is a unique moment to lead,” said Bobby Muller, former Marshall Islands chief secretary and co-founder of MIDAO. He believes DAOs will help create “more efficient and less hierarchical” organizations.
A global hub for DAOs, the Marshall Islands hopes to become a global hub for DAO registration, domicile, use cases, and mass adoption. He added:
"This includes low-cost incorporation, a supportive government with internationally recognized courts, and a technologically open environment."
According to the World Bank, the Marshall Islands is an independent island state in the Pacific Ocean near the Equator. To create a blockchain-based cryptocurrency that would be legal tender alongside the US dollar, the island state has been actively exploring use cases for digital assets since at least 2018.
In February 2018, the Marshall Islands approved the creation of a new cryptocurrency, Sovereign (SOV). As expected, the IMF has criticized the plan, citing concerns that a digital sovereign currency would jeopardize the state's financial stability. They have also criticized El Salvador, the first country to recognize Bitcoin (BTC) as legal tender.
Marshall Islands senator David Paul said the DAO legislation does not pose the same issues as a government-backed cryptocurrency. “A sovereign digital currency is financial and raises concerns about money laundering,” . This is more about giving DAOs legal recognition to make their case to regulators, investors, and consumers.
More on Web3 & Crypto
Vitalik
3 years ago
Fairness alternatives to selling below market clearing prices (or community sentiment, or fun)
When a seller has a limited supply of an item in high (or uncertain and possibly high) demand, they frequently set a price far below what "the market will bear." As a result, the item sells out quickly, with lucky buyers being those who tried to buy first. This has happened in the Ethereum ecosystem, particularly with NFT sales and token sales/ICOs. But this phenomenon is much older; concerts and restaurants frequently make similar choices, resulting in fast sell-outs or long lines.
Why do sellers do this? Economists have long wondered. A seller should sell at the market-clearing price if the amount buyers are willing to buy exactly equals the amount the seller has to sell. If the seller is unsure of the market-clearing price, they should sell at auction and let the market decide. So, if you want to sell something below market value, don't do it. It will hurt your sales and it will hurt your customers. The competitions created by non-price-based allocation mechanisms can sometimes have negative externalities that harm third parties, as we will see.
However, the prevalence of below-market-clearing pricing suggests that sellers do it for good reason. And indeed, as decades of research into this topic has shown, there often are. So, is it possible to achieve the same goals with less unfairness, inefficiency, and harm?
Selling at below market-clearing prices has large inefficiencies and negative externalities
An item that is sold at market value or at an auction allows someone who really wants it to pay the high price or bid high in the auction. So, if a seller sells an item below market value, some people will get it and others won't. But the mechanism deciding who gets the item isn't random, and it's not always well correlated with participant desire. It's not always about being the fastest at clicking buttons. Sometimes it means waking up at 2 a.m. (but 11 p.m. or even 2 p.m. elsewhere). Sometimes it's just a "auction by other means" that's more chaotic, less efficient, and has far more negative externalities.
There are many examples of this in the Ethereum ecosystem. Let's start with the 2017 ICO craze. For example, an ICO project would set the price of the token and a hard maximum for how many tokens they are willing to sell, and the sale would start automatically at some point in time. The sale ends when the cap is reached.
So what? In practice, these sales often ended in 30 seconds or less. Everyone would start sending transactions in as soon as (or just before) the sale started, offering higher and higher fees to encourage miners to include their transaction first. Instead of the token seller receiving revenue, miners receive it, and the sale prices out all other applications on-chain.
The most expensive transaction in the BAT sale set a fee of 580,000 gwei, paying a fee of $6,600 to get included in the sale.
Many ICOs after that tried various strategies to avoid these gas price auctions; one ICO notably had a smart contract that checked the transaction's gasprice and rejected it if it exceeded 50 gwei. But that didn't solve the issue. Buyers hoping to game the system sent many transactions hoping one would get through. An auction by another name, clogging the chain even more.
ICOs have recently lost popularity, but NFTs and NFT sales have risen in popularity. But the NFT space didn't learn from 2017; they do fixed-quantity sales just like ICOs (eg. see the mint function on lines 97-108 of this contract here). So what?
That's not the worst; some NFT sales have caused gas price spikes of up to 2000 gwei.
High gas prices from users fighting to get in first by sending higher and higher transaction fees. An auction renamed, pricing out all other applications on-chain for 15 minutes.
So why do sellers sometimes sell below market price?
Selling below market value is nothing new, and many articles, papers, and podcasts have written (and sometimes bitterly complained) about the unwillingness to use auctions or set prices to market-clearing levels.
Many of the arguments are the same for both blockchain (NFTs and ICOs) and non-blockchain examples (popular restaurants and concerts). Fairness and the desire not to exclude the poor, lose fans or create tension by being perceived as greedy are major concerns. The 1986 paper by Kahneman, Knetsch, and Thaler explains how fairness and greed can influence these decisions. I recall that the desire to avoid perceptions of greed was also a major factor in discouraging the use of auction-like mechanisms in 2017.
Aside from fairness concerns, there is the argument that selling out and long lines create a sense of popularity and prestige, making the product more appealing to others. Long lines should have the same effect as high prices in a rational actor model, but this is not the case in reality. This applies to ICOs and NFTs as well as restaurants. Aside from increasing marketing value, some people find the game of grabbing a limited set of opportunities first before everyone else is quite entertaining.
But there are some blockchain-specific factors. One argument for selling ICO tokens below market value (and one that persuaded the OmiseGo team to adopt their capped sale strategy) is community dynamics. The first rule of community sentiment management is to encourage price increases. People are happy if they are "in the green." If the price drops below what the community members paid, they are unhappy and start calling you a scammer, possibly causing a social media cascade where everyone calls you a scammer.
This effect can only be avoided by pricing low enough that post-launch market prices will almost certainly be higher. But how do you do this without creating a rush for the gates that leads to an auction?
Interesting solutions
It's 2021. We have a blockchain. The blockchain is home to a powerful decentralized finance ecosystem, as well as a rapidly expanding set of non-financial tools. The blockchain also allows us to reset social norms. Where decades of economists yelling about "efficiency" failed, blockchains may be able to legitimize new uses of mechanism design. If we could use our more advanced tools to create an approach that more directly solves the problems, with fewer side effects, wouldn't that be better than fiddling with a coarse-grained one-dimensional strategy space of selling at market price versus below market price?
Begin with the goals. We'll try to cover ICOs, NFTs, and conference tickets (really a type of NFT) all at the same time.
1. Fairness: don't completely exclude low-income people from participation; give them a chance. The goal of token sales is to avoid high initial wealth concentration and have a larger and more diverse initial token holder community.
2. Don’t create races: Avoid situations where many people rush to do the same thing and only a few get in (this is the type of situation that leads to the horrible auctions-by-another-name that we saw above).
3. Don't require precise market knowledge: the mechanism should work even if the seller has no idea how much demand exists.
4. Fun: The process of participating in the sale should be fun and game-like, but not frustrating.
5. Give buyers positive expected returns: in the case of a token (or an NFT), buyers should expect price increases rather than decreases. This requires selling below market value.
Let's start with (1). From Ethereum's perspective, there is a simple solution. Use a tool designed for the job: proof of personhood protocols! Here's one quick idea:
Mechanism 1 Each participant (verified by ID) can buy up to ‘’X’’ tokens at price P, with the option to buy more at an auction.
With the per-person mechanism, buyers can get positive expected returns for the portion sold through the per-person mechanism, and the auction part does not require sellers to understand demand levels. Is it race-free? The number of participants buying through the per-person pool appears to be high. But what if the per-person pool isn't big enough to accommodate everyone?
Make the per-person allocation amount dynamic.
Mechanism 2 Each participant can deposit up to X tokens into a smart contract to declare interest. Last but not least, each buyer receives min(X, N / buyers) tokens, where N is the total sold through the per-person pool (some other amount can also be sold by auction). The buyer gets their deposit back if it exceeds the amount needed to buy their allocation.
No longer is there a race condition based on the number of buyers per person. No matter how high the demand, it's always better to join sooner rather than later.
Here's another idea if you like clever game mechanics with fancy quadratic formulas.
Mechanism 3 Each participant can buy X units at a price P X 2 up to a maximum of C tokens per buyer. C starts low and gradually increases until enough units are sold.
The quantity allocated to each buyer is theoretically optimal, though post-sale transfers will degrade this optimality over time. Mechanisms 2 and 3 appear to meet all of the above objectives. They're not perfect, but they're good starting points.
One more issue. For fixed and limited supply NFTs, the equilibrium purchased quantity per participant may be fractional (in mechanism 2, number of buyers > N, and in mechanism 3, setting C = 1 may already lead to over-subscription). With fractional sales, you can offer lottery tickets: if there are N items available, you have a chance of N/number of buyers of getting the item, otherwise you get a refund. For a conference, groups could bundle their lottery tickets to guarantee a win or a loss. The certainty of getting the item can be auctioned.
The bottom tier of "sponsorships" can be used to sell conference tickets at market rate. You may end up with a sponsor board full of people's faces, but is that okay? After all, John Lilic was on EthCC's sponsor board!
Simply put, if you want to be reliably fair to people, you need an input that explicitly measures people. Authentication protocols do this (and if desired can be combined with zero knowledge proofs to ensure privacy). So we should combine the efficiency of market and auction-based pricing with the equality of proof of personhood mechanics.
Answers to possible questions
Q: Won't people who don't care about your project buy the item and immediately resell it?
A: Not at first. Meta-games take time to appear in practice. If they do, making them untradeable for a while may help mitigate the damage. Using your face to claim that your previous account was hacked and that your identity, including everything in it, should be moved to another account works because proof-of-personhood identities are untradeable.
Q: What if I want to make my item available to a specific community?
A: Instead of ID, use proof of participation tokens linked to community events. Another option, also serving egalitarian and gamification purposes, is to encrypt items within publicly available puzzle solutions.
Q: How do we know they'll accept? Strange new mechanisms have previously been resisted.
A: Having economists write screeds about how they "should" accept a new mechanism that they find strange is difficult (or even "equity"). However, abrupt changes in context effectively reset people's expectations. So the blockchain space is the best place to try this. You could wait for the "metaverse", but it's possible that the best version will run on Ethereum anyway, so start now.
Elnaz Sarraf
3 years ago
Why Bitcoin's Crash Could Be Good for Investors
The crypto market crashed in June 2022. Bitcoin and other cryptocurrencies hit their lowest prices in over a year, causing market panic. Some believe this crash will benefit future investors.
Before I discuss how this crash might help investors, let's examine why it happened. Inflation in the U.S. reached a 30-year high in 2022 after Russia invaded Ukraine. In response, the U.S. Federal Reserve raised interest rates by 0.5%, the most in almost 20 years. This hurts cryptocurrencies like Bitcoin. Higher interest rates make people less likely to invest in volatile assets like crypto, so many investors sold quickly.
The crypto market collapsed. Bitcoin, Ethereum, and Binance dropped 40%. Other cryptos crashed so hard they were delisted from almost every exchange. Bitcoin peaked in April 2022 at $41,000, but after the May interest rate hike, it crashed to $28,000. Bitcoin investors were worried. Even in bad times, this crash is unprecedented.
Bitcoin wasn't "doomed." Before the crash, LUNA was one of the top 5 cryptos by market cap. LUNA was trading around $80 at the start of May 2022, but after the rate hike?
Less than 1 cent. LUNA lost 99.99% of its value in days and was removed from every crypto exchange. Bitcoin's "crash" isn't as devastating when compared to LUNA.
Many people said Bitcoin is "due" for a LUNA-like crash and that the only reason it hasn't crashed is because it's bigger. Still false. If so, Bitcoin should be worth zero by now. We didn't. Instead, Bitcoin reached 28,000, then 29k, 30k, and 31k before falling to 18k. That's not the world's greatest recovery, but it shows Bitcoin's safety.
Bitcoin isn't falling constantly. It fell because of the initial shock of interest rates, but not further. Now, Bitcoin's value is more likely to rise than fall. Bitcoin's low price also attracts investors. They know what prices Bitcoin can reach with enough hype, and they want to capitalize on low prices before it's too late.
Bitcoin's crash was bad, but in a way it wasn't. To understand, consider 2021. In March 2021, Bitcoin surpassed $60k for the first time. Elon Musk's announcement in May that he would no longer support Bitcoin caused a massive crash in the crypto market. In May 2017, Bitcoin's price hit $29,000. Elon Musk's statement isn't worth more than the Fed raising rates. Many expected this big announcement to kill Bitcoin.
Not so. Bitcoin crashed from $58k to $31k in 2021. Bitcoin fell from $41k to $28k in 2022. This crash is smaller. Bitcoin's price held up despite tensions and stress, proving investors still believe in it. What happened after the initial crash in the past?
Bitcoin fell until mid-July. This is also something we’re not seeing today. After a week, Bitcoin began to improve daily. Bitcoin's price rose after mid-July. Bitcoin's price fluctuated throughout the rest of 2021, but it topped $67k in November. Despite no major changes, the peak occurred after the crash. Elon Musk seemed uninterested in crypto and wasn't likely to change his mind soon. What triggered this peak? Nothing, really. What really happened is that people got over the initial statement. They forgot.
Internet users have goldfish-like attention spans. People quickly forgot the crash's cause and were back investing in crypto months later. Despite the market's setbacks, more crypto investors emerged by the end of 2017. Who gained from these peaks? Bitcoin investors who bought low. Bitcoin not only recovered but also doubled its ROI. It was like a movie, and it shows us what to expect from Bitcoin in the coming months.
The current Bitcoin crash isn't as bad as the last one. LUNA is causing market panic. LUNA and Bitcoin are different cryptocurrencies. LUNA crashed because Terra wasn’t able to keep its peg with the USD. Bitcoin is unanchored. It's one of the most decentralized investments available. LUNA's distrust affected crypto prices, including Bitcoin, but it won't last forever.
This is why Bitcoin will likely rebound in the coming months. In 2022, people will get over the rise in interest rates and the crash of LUNA, just as they did with Elon Musk's crypto stance in 2021. When the world moves on to the next big controversy, Bitcoin's price will soar.
Bitcoin may recover for another reason. Like controversy, interest rates fluctuate. The Russian invasion caused this inflation. World markets will stabilize, prices will fall, and interest rates will drop.
Next, lower interest rates could boost Bitcoin's price. Eventually, it will happen. The U.S. economy can't sustain such high interest rates. Investors will put every last dollar into Bitcoin if interest rates fall again.
Bitcoin has proven to be a stable investment. This boosts its investment reputation. Even if Ethereum dethrones Bitcoin as crypto king one day (or any other crypto, for that matter). Bitcoin may stay on top of the crypto ladder for a while. We'll have to wait a few months to see if any of this is true.
This post is a summary. Read the full article here.
Rishi Dean
3 years ago
Coinbase's web3 app
Use popular Ethereum dapps with Coinbase’s new dapp wallet and browser
Tl;dr: This post highlights the ability to access web3 directly from your Coinbase app using our new dapp wallet and browser.
Decentralized autonomous organizations (DAOs) and decentralized finance (DeFi) have gained popularity in the last year (DAOs). The total value locked (TVL) of DeFi investments on the Ethereum blockchain has grown to over $110B USD, while NFTs sales have grown to over $30B USD in the last 12 months (LTM). New innovative real-world applications are emerging every day.
Today, a small group of Coinbase app users can access Ethereum-based dapps. Buying NFTs on Coinbase NFT and OpenSea, trading on Uniswap and Sushiswap, and borrowing and lending on Curve and Compound are examples.
Our new dapp wallet and dapp browser enable you to access and explore web3 directly from your Coinbase app.
Web3 in the Coinbase app
Users can now access dapps without a recovery phrase. This innovative dapp wallet experience uses Multi-Party Computation (MPC) technology to secure your on-chain wallet. This wallet's design allows you and Coinbase to share the 'key.' If you lose access to your device, the key to your dapp wallet is still safe and Coinbase can help recover it.
Set up your new dapp wallet by clicking the "Browser" tab in the Android app's navigation bar. Once set up, the Coinbase app's new dapp browser lets you search, discover, and use Ethereum-based dapps.
Looking forward
We want to enable everyone to seamlessly and safely participate in web3, and today’s launch is another step on that journey. We're rolling out the new dapp wallet and browser in the US on Android first to a small subset of users and plan to expand soon. Stay tuned!
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James White
3 years ago
Ray Dalio suggests reading these three books in 2022.
An inspiring reading list
I'm no billionaire or hedge-fund manager. My bank account doesn't have millions. Ray Dalio's love of reading motivates me to think differently.
Here are some books recommended by Ray Dalio. Each influenced me. Hope they'll help you.
Sapiens by Yuval Noah Harari
Page Count: 512
Rating on Goodreads: 4.39
My favorite nonfiction book.
Sapiens explores human evolution. It explains how Homo Sapiens developed from hunter-gatherers to a dominant species. Amazing!
Sapiens will teach you about human history. Yuval Noah Harari has a follow-up book on human evolution.
My favorite book quotes are:
The tendency for luxuries to turn into necessities and give rise to new obligations is one of history's few unbreakable laws.
Happiness is not dependent on material wealth, physical health, or even community. Instead, it depends on how closely subjective expectations and objective circumstances align.
The romantic comparison between today's industry, which obliterates the environment, and our forefathers, who coexisted well with nature, is unfounded. Homo sapiens held the record among all organisms for eradicating the most plant and animal species even before the Industrial Revolution. The unfortunate distinction of being the most lethal species in the history of life belongs to us.
The Power Of Habit by Charles Duhigg
Page Count: 375
Rating on Goodreads: 4.13
Great book: The Power Of Habit. It illustrates why habits are everything. The book explains how healthier habits can improve your life, career, and society.
The Power of Habit rocks. It's a great book on productivity. Its suggestions helped me build healthier behaviors (and drop bad ones).
Read ASAP!
My favorite book quotes are:
Change may not occur quickly or without difficulty. However, almost any behavior may be changed with enough time and effort.
People who exercise begin to eat better and produce more at work. They are less smokers and are more patient with friends and family. They claim to feel less anxious and use their credit cards less frequently. A fundamental habit that sparks broad change is exercise.
Habits are strong but also delicate. They may develop independently of our awareness or may be purposefully created. They frequently happen without our consent, but they can be altered by changing their constituent pieces. They have a much greater influence on how we live than we realize; in fact, they are so powerful that they cause our brains to adhere to them above all else, including common sense.
Tribe Of Mentors by Tim Ferriss
Page Count: 561
Rating on Goodreads: 4.06
Unusual book structure. It's worth reading if you want to learn from successful people.
The book is Q&A-style. Tim questions everyone. Each chapter features a different person's life-changing advice. In the book, Pressfield, Willink, Grylls, and Ravikant are interviewed.
Amazing!
My favorite book quotes are:
According to one's courage, life can either get smaller or bigger.
Don't engage in actions that you are aware are immoral. The reputation you have with yourself is all that constitutes self-esteem. Always be aware.
People mistakenly believe that focusing means accepting the task at hand. However, that is in no way what it represents. It entails rejecting the numerous other worthwhile suggestions that exist. You must choose wisely. Actually, I'm just as proud of the things we haven't accomplished as I am of what I have. Saying no to 1,000 things is what innovation is.
Alex Mathers
3 years ago Draft
12 practices of the zenith individuals I know
Calmness is a vital life skill.
It aids communication. It boosts creativity and performance.
I've studied calm people's habits for years. Commonalities:
Have learned to laugh at themselves.
Those who have something to protect can’t help but make it a very serious business, which drains the energy out of the room.
They are fixated on positive pursuits like making cool things, building a strong physique, and having fun with others rather than on depressing influences like the news and gossip.
Every day, spend at least 20 minutes moving, whether it's walking, yoga, or lifting weights.
Discover ways to take pleasure in life's challenges.
Since perspective is malleable, they change their view.
Set your own needs first.
Stressed people neglect themselves and wonder why they struggle.
Prioritize self-care.
Don't ruin your life to please others.
Make something.
Calm people create more than react.
They love creating beautiful things—paintings, children, relationships, and projects.
Hold your breath, please.
If you're stressed or angry, you may be surprised how much time you spend holding your breath and tightening your belly.
Release, breathe, and relax to find calm.
Stopped rushing.
Rushing is disadvantageous.
Calm people handle life better.
Are attuned to their personal dietary needs.
They avoid junk food and eat foods that keep them healthy, happy, and calm.
Don’t take anything personally.
Stressed people control everything.
Self-conscious.
Calm people put others and their work first.
Keep their surroundings neat.
Maintaining an uplifting and clutter-free environment daily calms the mind.
Minimise negative people.
Calm people are ruthless with their boundaries and avoid negative and drama-prone people.
Tanya Aggarwal
3 years ago
What I learned from my experience as a recent graduate working in venture capital
Every week I meet many people interested in VC. Many of them ask me what it's like to be a junior analyst in VC or what I've learned so far.
Looking back, I've learned many things as a junior VC, having gone through an almost-euphoric peak bull market, failed tech IPOs of 2019 including WeWorks' catastrophic fall, and the beginnings of a bearish market.
1. Network, network, network!
VCs spend 80% of their time networking. Junior VCs source deals or manage portfolios. You spend your time bringing startups to your fund or helping existing portfolio companies grow. Knowing stakeholders (corporations, star talent, investors) in your particular areas of investment helps you develop your portfolio.
Networking was one of my strengths. When I first started in the industry, I'd go to startup events and meet 50 people a month. Over time, I realized these relationships were shallow and I was only getting business cards. So I stopped seeing networking as a transaction. VC is a long-term game, so you should work with people you like. Now I know who I click with and can build deeper relationships with them. My network is smaller but more valuable than before.
2. The Most Important Metric Is Founder
People often ask how we pick investments. Why some companies can raise money and others can't is a mystery. The founder is the most important metric for VCs. When a company is young, the product, environment, and team all change, but the founder remains constant. VCs bet on the founder, not the company.
How do we decide which founders are best after 2-3 calls? When looking at a founder's profile, ask why this person can solve this problem. The founders' track record will tell. If the founder is a serial entrepreneur, you know he/she possesses the entrepreneur DNA and will likely succeed again. If it's his/her first startup, focus on industry knowledge to deliver the best solution.
3. A company's fate can be determined by macrotrends.
Macro trends are crucial. A company can have the perfect product, founder, and team, but if it's solving the wrong problem, it won't succeed. I've also seen average companies ride the wave to success. When you're on the right side of a trend, there's so much demand that more companies can get a piece of the pie.
In COVID-19, macro trends made or broke a company. Ed-tech and health-tech companies gained unicorn status and raised funding at inflated valuations due to sudden demand. With the easing of pandemic restrictions and the start of a bear market, many of these companies' valuations are in question.
4. Look for methods to ACTUALLY add value.
You only need to go on VC twitter (read: @vcstartterkit and @vcbrags) for 5 minutes or look at fin-meme accounts on Instagram to see how much VCs claim to add value but how little they actually do. VC is a long-term game, though. Long-term, founders won't work with you if you don't add value.
How can we add value when we're young and have no network? Leaning on my strengths helped me. Instead of viewing my age and limited experience as a disadvantage, I realized that I brought a unique perspective to the table.
As a VC, you invest in companies that will be big in 5-7 years, and millennials and Gen Z will have the most purchasing power. Because you can relate to that market, you can offer insights that most Partners at 40 can't. I added value by helping with hiring because I had direct access to university talent pools and by finding university students for product beta testing.
5. Develop your personal brand.
Generalists or specialists run most funds. This means that funds either invest across industries or have a specific mandate. Most funds are becoming specialists, I've noticed. Top-tier founders don't lack capital, so funds must find other ways to attract them. Why would a founder work with a generalist fund when a specialist can offer better industry connections and partnership opportunities?
Same for fund members. Founders want quality investors. Become a thought leader in your industry to meet founders. Create content and share your thoughts on industry-related social media. When I first started building my brand, I found it helpful to interview industry veterans to create better content than I could on my own. Over time, my content attracted quality founders so I didn't have to look for them.
These are my biggest VC lessons. This list isn't exhaustive, but it's my industry survival guide.