More on NFTs & Art
Tora Northman
3 years ago
Pixelmon NFTs are so bad, they are almost good!
Bored Apes prices continue to rise, HAPEBEAST launches, Invisible Friends hype continues to grow. Sadly, not all projects are as successful.
Of course, there are many factors to consider when buying an NFT. Is the project a scam? Will the reveal derail the project? Possibly, but when Pixelmon first teased its launch, it generated a lot of buzz.
With a primary sale mint price of 3 ETH ($8,100 USD), it started as an expensive project, with plenty of fans willing to invest in what was sold as a game. After it was revealed, it fell rapidly.
Why? It was overpromised and under delivered.
According to the project's creator[^1], the funds generated will be used to develop the artwork. "The Pixelmon reveal was wrong. This is what our Pixelmon look like in-game. "Despite the fud, I will not go anywhere," he wrote on Twitter. The goal remains. The funds will still be used to build our game. I will finish this project."
The project raised $70 million USD, but the NFTs buyers received were not the project's original teasers. Some call it "the worst NFT project ever," while others call it a complete scam.
But there's hope for some buyers. Kevin emerged from the ashes as the project was roasted over the fire.
A Minecraft character meets Salad Fingers - that's Kevin. He's a frog-like creature whose reveal was such a terrible NFT that it became part of history – and a meme.
If you're laughing at people paying $8K for a silly pixelated image, you might need to take it back. Precisely because of this, lucky holders who minted Kevin have been able to sell the now-memed NFT for over 8 ETH (around $24,000 USD), with some currently listed for 100 ETH.
Of course, Twitter has been awash in memes mocking those who invested in the project, because what else can you do when so many people lose money?
It's still unclear if the NFT project is a scam, but the team behind it was hired on Upwork. There's still hope for redemption, but Kevin's rise to fame appears to be the only positive outcome so far.
[^1] This is not the first time the creator (A 20-yo New Zealanders) has sought money via an online platform and had people claiming he under-delivered. He raised $74,000 on Kickstarter for a card game called Psycho Chicken. There are hundreds of comments on the Kickstarter project saying they haven't received the product and pleading for a refund or an update.
Scott Duke Kominers
3 years ago
NFT Creators Go Creative Commons Zero (cc0)
On January 1, "Public Domain Day," thousands of creative works immediately join the public domain. The original creator or copyright holder loses exclusive rights to reproduce, adapt, or publish the work, and anybody can use it. It happens with movies, poems, music, artworks, books (where creative rights endure 70 years beyond the author's death), and sometimes source code.
Public domain creative works open the door to new uses. 400,000 sound recordings from before 1923, including Winnie-the-Pooh, were released this year. With most of A.A. Milne's 1926 Winnie-the-Pooh characters now available, we're seeing innovative interpretations Milne likely never planned. The ancient hyphenated version of the honey-loving bear is being adapted for a horror movie: "Winnie-the-Pooh: Blood and Honey"... with Pooh and Piglet as the baddies.
Counterintuitively, experimenting and recombination can occasionally increase IP value. Open source movements allow the public to build on (or fork and duplicate) existing technologies. Permissionless innovation helps Android, Linux, and other open source software projects compete. Crypto's success at attracting public development is also due to its support of open source and "remix culture," notably in NFT forums.
Production memes
NFT projects use several IP strategies to establish brands, communities, and content. Some preserve regular IP protections; others offer NFT owners the opportunity to innovate on connected IP; yet others have removed copyright and other IP safeguards.
By using the "Creative Commons Zero" (cc0) license, artists can intentionally select for "no rights reserved." This option permits anyone to benefit from derivative works without legal repercussions. There's still a lot of confusion between copyrights and NFTs, so nothing here should be considered legal, financial, tax, or investment advice. Check out this post for an overview of copyright vulnerabilities with NFTs and how authors can protect owners' rights. This article focuses on cc0.
Nouns, a 2021 project, popularized cc0 for NFTs. Others followed, including: A Common Place, Anonymice, Blitmap, Chain Runners, Cryptoadz, CryptoTeddies, Goblintown, Gradis, Loot, mfers, Mirakai, Shields, and Terrarium Club are cc0 projects.
Popular crypto artist XCOPY licensed their 1-of-1 NFT artwork "Right-click and Save As Guy" under cc0 in January, exactly one month after selling it. cc0 has spawned many derivatives.
"Right-click Save As Guy" by XCOPY (1)/derivative works (2)
XCOPY said Monday he would apply cc0 to "all his existing art." "We haven't seen a cc0 summer yet, but I think it's approaching," said the artist. - predicting a "DeFi summer" in 2020, when decentralized finance gained popularity.
Why do so many NFT authors choose "no rights"?
Promoting expansions of the original project to create a more lively and active community is one rationale. This makes sense in crypto, where many value open sharing and establishing community.
Creativity depends on cultural significance. NFTs may allow verifiable ownership of any digital asset, regardless of license, but cc0 jumpstarts "meme-ability" by actively, not passively, inviting derivative works. As new derivatives are made and shared, attention might flow back to the original, boosting its reputation. This may inspire new interpretations, leading in a flywheel effect where each derivative adds to the original's worth - similar to platform network effects, where platforms become more valuable as more users join them.
cc0 licence allows creators "seize production memes."
Physical items are also using cc0 NFT assets, thus it's not just a digital phenomenon. The Nouns Vision initiative turned the square-framed spectacles shown on each new NounsDAO NFT ("one per day, forever") into luxury sunglasses. Blitmap's pixel-art has been used on shoes, apparel, and caps. In traditional IP regimes, a single owner controls creation, licensing, and production.
The physical "blitcap" (3rd level) is a descendant of the trait in the cc0 Chain Runners collection (2nd), which uses the "logo" from cc0 Blitmap (1st)! The Logo is Blitmap token #84 and has been used as a trait in various collections. The "Dom Rose" is another popular token. These homages reference Blitmap's influence as a cc0 leader, as one of the earliest NFT projects to proclaim public domain intents. A new collection, Citizens of Tajigen, emerged last week with a Blitcap characteristic.
These derivatives can be a win-win for everyone, not just the original inventors, especially when using NFT assets to establish unique brands. As people learn about the derivative, they may become interested in the original. If you see someone wearing Nouns glasses on the street (or in a Super Bowl ad), you may desire a pair, but you may also be interested in buying an original NounsDAO NFT or related derivative.
Blitmap Logo Hat (1), Chain Runners #780 ft. Hat (2), and Blitmap Original "Logo #87" (3)
Co-creating open source
NFTs' power comes from smart contract technology's intrinsic composability. Many smart contracts can be integrated or stacked to generate richer applications.
"Money Legos" describes how decentralized finance ("DeFi") smart contracts interconnect to generate new financial use cases. Yearn communicates with MakerDAO's stablecoin $DAI and exchange liquidity provider Curve by calling public smart contract methods. NFTs and their underlying smart contracts can operate as the base-layer framework for recombining and interconnecting culture and creativity.
cc0 gives an NFT's enthusiast community authority to develop new value layers whenever, wherever, and however they wish.
Multiple cc0 projects are playable characters in HyperLoot, a Loot Project knockoff.
Open source and Linux's rise are parallels. When the internet was young, Microsoft dominated the OS market with Windows. Linux (and its developer Linus Torvalds) championed a community-first mentality, freely available the source code without restrictions. This led to developers worldwide producing new software for Linux, from web servers to databases. As people (and organizations) created world-class open source software, Linux's value proposition grew, leading to explosive development and industry innovation. According to Truelist, Linux powers 96.3% of the top 1 million web servers and 85% of smartphones.
With cc0 licensing empowering NFT community builders, one might hope for long-term innovation. Combining cc0 with NFTs "turns an antagonistic game into a co-operative one," says NounsDAO cofounder punk4156. It's important on several levels. First, decentralized systems from open source to crypto are about trust and coordination, therefore facilitating cooperation is crucial. Second, the dynamics of this cooperation work well in the context of NFTs because giving people ownership over their digital assets allows them to internalize the results of co-creation through the value that accrues to their assets and contributions, which incentivizes them to participate in co-creation in the first place.
Licensed to create
If cc0 projects are open source "applications" or "platforms," then NFT artwork, metadata, and smart contracts provide the "user interface" and the underlying blockchain (e.g., Ethereum) is the "operating system." For these apps to attain Linux-like potential, more infrastructure services must be established and made available so people may take advantage of cc0's remixing capabilities.
These services are developing. Zora protocol and OpenSea's open source Seaport protocol enable open, permissionless NFT marketplaces. A pixel-art-rendering engine was just published on-chain to the Ethereum blockchain and integrated into OKPC and ICE64. Each application improves blockchain's "out-of-the-box" capabilities, leading to new apps created from the improved building blocks.
Web3 developer growth is at an all-time high, yet it's still a small fraction of active software developers globally. As additional developers enter the field, prospective NFT projects may find more creative and infrastructure Legos for cc0 and beyond.
Electric Capital Developer Report (2021), p. 122
Growth requires composability. Users can easily integrate digital assets developed on public standards and compatible infrastructure into other platforms. The Loot Project is one of the first to illustrate decentralized co-creation, worldbuilding, and more in NFTs. This example was low-fi or "incomplete" aesthetically, providing room for imagination and community co-creation.
Loot began with a series of Loot bag NFTs, each listing eight "adventure things" in white writing on a black backdrop (such as Loot Bag #5726's "Katana, Divine Robe, Great Helm, Wool Sash, Divine Slippers, Chain Gloves, Amulet, Gold Ring"). Dom Hofmann's free Loot bags served as a foundation for the community.
Several projects have begun metaphorical (lore) and practical (game development) world-building in a short time, with artists contributing many variations to the collective "Lootverse." They've produced games (Realms & The Crypt), characters (Genesis Project, Hyperloot, Loot Explorers), storytelling initiatives (Banners, OpenQuill), and even infrastructure (The Rift).
Why cc0 and composability? Because consumers own and control Loot bags, they may use them wherever they choose by connecting their crypto wallets. This allows users to participate in multiple derivative projects, such as Genesis Adventurers, whose characters appear in many others — creating a decentralized franchise not owned by any one corporation.
Genesis Project's Genesis Adventurer (1) with HyperLoot (2) and Loot Explorer (3) versions
When to go cc0
There are several IP development strategies NFT projects can use. When it comes to cc0, it’s important to be realistic. The public domain won't make a project a runaway success just by implementing the license. cc0 works well for NFT initiatives that can develop a rich, enlarged ecosystem.
Many of the most successful cc0 projects have introduced flexible intellectual property. The Nouns brand is as obvious for a beer ad as for real glasses; Loot bags are simple primitives that make sense in all adventure settings; and the Goblintown visual style looks good on dwarfs, zombies, and cranky owls as it does on Val Kilmer.
The ideal cc0 NFT project gives builders the opportunity to add value:
vertically, by stacking new content and features directly on top of the original cc0 assets (for instance, as with games built on the Loot ecosystem, among others), and
horizontally, by introducing distinct but related intellectual property that helps propagate the original cc0 project’s brand (as with various Goblintown derivatives, among others).
These actions can assist cc0 NFT business models. Because cc0 NFT projects receive royalties from secondary sales, third-party extensions and derivatives can boost demand for the original assets.
Using cc0 license lowers friction that could hinder brand-reinforcing extensions or lead to them bypassing the original. Robbie Broome recently argued (in the context of his cc0 project A Common Place) that giving away his IP to cc0 avoids bad rehashes down the line. If UrbanOutfitters wanted to put my design on a tee, they could use the actual work instead of hiring a designer. CC0 can turn competition into cooperation.
Community agreement about core assets' value and contribution can help cc0 projects. Cohesion and engagement are key. Using the above examples: Developers can design adventure games around whatever themes and item concepts they desire, but many choose Loot bags because of the Lootverse's community togetherness. Flipmap shared half of its money with the original Blitmap artists in acknowledgment of that project's core role in the community. This can build a healthy culture within a cc0 project ecosystem. Commentator NiftyPins said it was smart to acknowledge the people that constructed their universe. Many OG Blitmap artists have popped into the Flipmap discord to share information.
cc0 isn't a one-size-fits-all answer; NFTs formed around well-established brands may prefer more restrictive licenses to preserve their intellectual property and reinforce exclusivity. cc0 has some superficial similarities to permitting NFT owners to market the IP connected with their NFTs (à la Bored Ape Yacht Club), but there is a significant difference: cc0 holders can't exclude others from utilizing the same IP. This can make it tougher for holders to develop commercial brands on cc0 assets or offer specific rights to partners. Holders can still introduce enlarged intellectual property (such as backstories or derivatives) that they control.
Blockchain technologies and the crypto ethos are decentralized and open-source. This makes it logical for crypto initiatives to build around cc0 content models, which build on the work of the Creative Commons foundation and numerous open source pioneers.
NFT creators that choose cc0 must select how involved they want to be in building the ecosystem. Some cc0 project leaders, like Chain Runners' developers, have kept building on top of the initial cc0 assets, creating an environment derivative projects can plug into. Dom Hofmann stood back from Loot, letting the community lead. (Dom is also working on additional cc0 NFT projects for the company he formed to build Blitmap.) Other authors have chosen out totally, like sartoshi, who announced his exit from the cc0 project he founded, mfers, and from the NFT area by publishing a final edition suitably named "end of sartoshi" and then deactivating his Twitter account. A multi-signature wallet of seven mfers controls the project's smart contract.
cc0 licensing allows a robust community to co-create in ways that benefit all members, regardless of original creators' continuous commitment. We foresee more organized infrastructure and design patterns as NFT matures. Like open source software, value capture frameworks may see innovation. (We could imagine a variant of the "Sleepycat license," which requires commercial software to pay licensing fees when embedding open source components.) As creators progress the space, we expect them to build unique rights and licensing strategies. cc0 allows NFT producers to bootstrap ideas that may take off.
middlemarch.eth
3 years ago
ERC721R: A new ERC721 contract for random minting so people don’t snipe all the rares!
That is, how to snipe all the rares without using ERC721R!
Introduction: Blessed and Lucky
Mphers was the first mfers derivative, and as a Phunks derivative, I wanted one.
I wanted an alien. And there are only 8 in the 6,969 collection. I got one!
In case it wasn't clear from the tweet, I meant that I was lucky to have figured out how to 100% guarantee I'd get an alien without any extra luck.
Read on to find out how I did it, how you can too, and how developers can avoid it!
How to make rare NFTs without luck.
# How to mint rare NFTs without needing luck
The key to minting a rare NFT is knowing the token's id ahead of time.
For example, once I knew my alien was #4002, I simply refreshed the mint page until #3992 was minted, and then mint 10 mphers.
How did I know #4002 was extraterrestrial? Let's go back.
First, go to the mpher contract's Etherscan page and look up the tokenURI of a previously issued token, token #1:
As you can see, mphers creates metadata URIs by combining the token id and an IPFS hash.
This method gives you the collection's provenance in every URI, and while that URI can be changed, it affects everyone and is public.
Consider a token URI without a provenance hash, like https://mphers.art/api?tokenId=1.
As a collector, you couldn't be sure the devs weren't changing #1's metadata at will.
The API allows you to specify “if #4002 has not been minted, do not show any information about it”, whereas IPFS does not allow this.
It's possible to look up the metadata of any token, whether or not it's been minted.
Simply replace the trailing “1” with your desired id.
Mpher #4002
These files contain all the information about the mpher with the specified id. For my alien, we simply search all metadata files for the string “alien mpher.”
Take a look at the 6,969 meta-data files I'm using OpenSea's IPFS gateway, but you could use ipfs.io or something else.
Use curl to download ten files at once. Downloading thousands of files quickly can lead to duplicates or errors. But with a little tweaking, you should be able to get everything (and dupes are fine for our purposes).
Now that you have everything in one place, grep for aliens:
The numbers are the file names that contain “alien mpher” and thus the aliens' ids.
The entire process takes under ten minutes. This technique works on many NFTs currently minting.
In practice, manually minting at the right time to get the alien is difficult, especially when tokens mint quickly. Then write a bot to poll totalSupply() every second and submit the mint transaction at the exact right time.
You could even look for the token you need in the mempool before it is minted, and get your mint into the same block!
However, in my experience, the “big” approach wins 95% of the time—but not 100%.
“Am I being set up all along?”
Is a question you might ask yourself if you're new to this.
It's disheartening to think you had no chance of minting anything that someone else wanted.
But, did you have no opportunity? You had an equal chance as everyone else!
Take me, for instance: I figured this out using open-source tools and free public information. Anyone can do this, and not understanding how a contract works before minting will lead to much worse issues.
The mpher mint was fair.
While a fair game, “snipe the alien” may not have been everyone's cup of tea.
People may have had more fun playing the “mint lottery” where tokens were distributed at random and no one could gain an advantage over someone simply clicking the “mint” button.
How might we proceed?
Minting For Fashion Hats Punks, I wanted to create a random minting experience without sacrificing fairness. In my opinion, a predictable mint beats an unfair one. Above all, participants must be equal.
Sadly, the most common method of creating a random experience—the post-mint “reveal”—is deeply unfair. It works as follows:
- During the mint, token metadata is unavailable. Instead, tokenURI() returns a blank JSON file for each id.
- An IPFS hash is updated once all tokens are minted.
- You can't tell how the contract owner chose which token ids got which metadata, so it appears random.
Because they alone decide who gets what, the person setting the metadata clearly has a huge unfair advantage over the people minting. Unlike the mpher mint, you have no chance of winning here.
But what if it's a well-known, trusted, doxxed dev team? Are reveals okay here?
No! No one should be trusted with such power. Even if someone isn't consciously trying to cheat, they have unconscious biases. They might also make a mistake and not realize it until it's too late, for example.
You should also not trust yourself. Imagine doing a reveal, thinking you did it correctly (nothing is 100%! ), and getting the rarest NFT. Isn't that a tad odd Do you think you deserve it? An NFT developer like myself would hate to be in this situation.
Reveals are bad*
UNLESS they are done without trust, meaning everyone can verify their fairness without relying on the developers (which you should never do).
An on-chain reveal powered by randomness that is verifiably outside of anyone's control is the most common way to achieve a trustless reveal (e.g., through Chainlink).
Tubby Cats did an excellent job on this reveal, and I highly recommend their contract and launch reflections. Their reveal was also cool because it was progressive—you didn't have to wait until the end of the mint to find out.
In his post-launch reflections, @DefiLlama stated that he made the contract as trustless as possible, removing as much trust as possible from the team.
In my opinion, everyone should know the rules of the game and trust that they will not be changed mid-stream, while trust minimization is critical because smart contracts were designed to reduce trust (and it makes it impossible to hack even if the team is compromised). This was a huge mistake because it limited our flexibility and our ability to correct mistakes.
And @DefiLlama is a superstar developer. Imagine how much stress maximizing trustlessness will cause you!
That leaves me with a bad solution that works in 99 percent of cases and is much easier to implement: random token assignments.
Introducing ERC721R: A fully compliant IERC721 implementation that picks token ids at random.
ERC721R implements the opposite of a reveal: we mint token ids randomly and assign metadata deterministically.
This allows us to reveal all metadata prior to minting while reducing snipe chances.
Then import the contract and use this code:
What is ERC721R and how does it work
First, a disclaimer: ERC721R isn't truly random. In this sense, it creates the same “game” as the mpher situation, where minters compete to exploit the mint. However, ERC721R is a much more difficult game.
To game ERC721R, you need to be able to predict a hash value using these inputs:
This is impossible for a normal person because it requires knowledge of the block timestamp of your mint, which you do not have.
To do this, a miner must set the timestamp to a value in the future, and whatever they do is dependent on the previous block's hash, which expires in about ten seconds when the next block is mined.
This pseudo-randomness is “good enough,” but if big money is involved, it will be gamed. Of course, the system it replaces—predictable minting—can be manipulated.
The token id is chosen in a clever implementation of the Fisher–Yates shuffle algorithm that I copied from CryptoPhunksV2.
Consider first the naive solution: (a 10,000 item collection is assumed):
- Make an array with 0–9999.
- To create a token, pick a random item from the array and use that as the token's id.
- Remove that value from the array and shorten it by one so that every index corresponds to an available token id.
This works, but it uses too much gas because changing an array's length and storing a large array of non-zero values is expensive.
How do we avoid them both? What if we started with a cheap 10,000-zero array? Let's assign an id to each index in that array.
Assume we pick index #6500 at random—#6500 is our token id, and we replace the 0 with a 1.
But what if we chose #6500 again? A 1 would indicate #6500 was taken, but then what? We can't just "roll again" because gas will be unpredictable and high, especially later mints.
This allows us to pick a token id 100% of the time without having to keep a separate list. Here's how it works:
- Make a 10,000 0 array.
- Create a 10,000 uint numAvailableTokens.
- Pick a number between 0 and numAvailableTokens. -1
- Think of #6500—look at index #6500. If it's 0, the next token id is #6500. If not, the value at index #6500 is your next token id (weird!)
- Examine the array's last value, numAvailableTokens — 1. If it's 0, move the value at #6500 to the end of the array (#9999 if it's the first token). If the array's last value is not zero, update index #6500 to store it.
- numAvailableTokens is decreased by 1.
- Repeat 3–6 for the next token id.
So there you go! The array stays the same size, but we can choose an available id reliably. The Solidity code is as follows:
Unfortunately, this algorithm uses more gas than the leading sequential mint solution, ERC721A.
This is most noticeable when minting multiple tokens in one transaction—a 10 token mint on ERC721R costs 5x more than on ERC721A. That said, ERC721A has been optimized much further than ERC721R so there is probably room for improvement.
Conclusion
Listed below are your options:
- ERC721A: Minters pay lower gas but must spend time and energy devising and executing a competitive minting strategy or be comfortable with worse minting results.
- ERC721R: Higher gas, but the easy minting strategy of just clicking the button is optimal in all but the most extreme cases. If miners game ERC721R it’s the worst of both worlds: higher gas and a ton of work to compete.
- ERC721A + standard reveal: Low gas, but not verifiably fair. Please do not do this!
- ERC721A + trustless reveal: The best solution if done correctly, highly-challenging for dev, potential for difficult-to-correct errors.
Did I miss something? Comment or tweet me @dumbnamenumbers.
Check out the code on GitHub to learn more! Pull requests are welcome—I'm sure I've missed many gas-saving opportunities.
Thanks!
Read the original post here
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Jeff Scallop
2 years ago
The Age of Decentralized Capitalism and DeFi
DeCap is DeFi's killer app.
“Software is eating the world.” Marc Andreesen, venture capitalist
DeFi. Imagine a blockchain-based alternative financial system that offers the same products and services as traditional finance, but with more variety, faster, more secure, lower cost, and simpler access.
Decentralised finance (DeFi) is a marketplace without gatekeepers or central authority managing the flow of money, where customers engage directly with smart contracts running on a blockchain.
DeFi grew exponentially in 2020/21, with Total Value Locked (an inadequate estimate for market size) topping at $100 billion. After that, it crashed.
The accumulation of funds by individuals with high discretionary income during the epidemic, the novelty of crypto trading, and the high yields given (5% APY for stablecoins on established platforms to 100%+ for risky assets) are among the primary elements explaining this exponential increase.
No longer your older brothers DeFi
Since transactions are anonymous, borrowers had to overcollateralize DeFi 1.0. To borrow $100 in stablecoins, you must deposit $150 in ETH. DeFi 1.0's business strategy raises two problems.
Why does DeFi offer interest rates that are higher than those of the conventional financial system?;
Why would somebody put down more cash than they intended to borrow?
Maxed out on their own resources, investors took loans to acquire more crypto; the demand for those loans raised DeFi yields, which kept crypto prices increasing; as crypto prices rose, investors made a return on their positions, allowing them to deposit more money and borrow more crypto.
This is a bull market game. DeFi 1.0's overcollateralization speculation is dead. Cryptocrash sank it.
The “speculation by overcollateralisation” world of DeFi 1.0 is dead
At a JP Morgan digital assets conference, institutional investors were more interested in DeFi than crypto or fintech. To me, that shows DeFi 2.0's institutional future.
DeFi 2.0 protocols must handle KYC/AML, tax compliance, market abuse, and cybersecurity problems to be institutional-ready.
Stablecoins gaining market share under benign regulation and more CBDCs coming online in the next couple of years could help DeFi 2.0 separate from crypto volatility.
DeFi 2.0 will have a better footing to finally decouple from crypto volatility
Then we can transition from speculation through overcollateralization to DeFi's genuine comparative advantages: cheaper transaction costs, near-instant settlement, more efficient price discovery, faster time-to-market for financial innovation, and a superior audit trail.
Akin to Amazon for financial goods
Amazon decimated brick-and-mortar shops by offering millions of things online, warehouses by keeping just-in-time inventory, and back-offices by automating invoicing and payments. Software devoured retail. DeFi will eat banking with software.
DeFi is the Amazon for financial items that will replace fintech. Even the most advanced internet brokers offer only 100 currency pairings and limited bonds, equities, and ETFs.
Old banks settlement systems and inefficient, hard-to-upgrade outdated software harm them. For advanced gamers, it's like driving an F1 vehicle on dirt.
It is like driving a F1 car on a dirt road, for the most sophisticated players
Central bankers throughout the world know how expensive and difficult it is to handle cross-border payments using the US dollar as the reserve currency, which is vulnerable to the economic cycle and geopolitical tensions.
Decentralization is the only method to deliver 24h global financial markets. DeFi 2.0 lets you buy and sell startup shares like Google or Tesla. VC funds will trade like mutual funds. Or create a bundle coverage for your car, house, and NFTs. Defi 2.0 consumes banking and creates Global Wall Street.
Defi 2.0 is how software eats banking and delivers the global Wall Street
Decentralized Capitalism is Emerging
90% of markets are digital. 10% is hardest to digitalize. That's money creation, ID, and asset tokenization.
90% of financial markets are already digital. The only problem is that the 10% left is the hardest to digitalize
Debt helped Athens construct a powerful navy that secured trade routes. Bonds financed the Renaissance's wars and supply chains. Equity fueled industrial growth. FX drove globalization's payments system. DeFi's plans:
If the 20th century was a conflict between governments and markets over economic drivers, the 21st century will be between centralized and decentralized corporate structures.
Offices vs. telecommuting. China vs. onshoring/friendshoring. Oil & gas vs. diverse energy matrix. National vs. multilateral policymaking. DAOs vs. corporations Fiat vs. crypto. TradFi vs.
An age where the network effects of the sharing economy will overtake the gains of scale of the monopolistic competition economy
This is the dawn of Decentralized Capitalism (or DeCap), an age where the network effects of the sharing economy will reach a tipping point and surpass the scale gains of the monopolistic competition economy, further eliminating inefficiencies and creating a more robust economy through better data and automation. DeFi 2.0 enables this.
DeFi needs to pay the piper now.
DeCap won't be Web3.0's Shangri-La, though. That's too much for an ailing Atlas. When push comes to shove, DeFi folks want to survive and fight another day for the revolution. If feasible, make a tidy profit.
Decentralization wasn't meant to circumvent regulation. It circumvents censorship. On-ramp, off-ramp measures (control DeFi's entry and exit points, not what happens in between) sound like a good compromise for DeFi 2.0.
The sooner authorities realize that DeFi regulation is made ex-ante by writing code and constructing smart contracts with rules, the faster DeFi 2.0 will become the more efficient and safe financial marketplace.
More crucially, we must boost system liquidity. DeFi's financial stability risks are downplayed. DeFi must improve its liquidity management if it's to become mainstream, just as banks rely on capital constraints.
This reveals the complex and, frankly, inadequate governance arrangements for DeFi protocols. They redistribute control from tokenholders to developers, which is bad governance regardless of the economic model.
But crypto can only ride the existing banking system for so long before forming its own economy. DeFi will upgrade web2.0's financial rails till then.
Benjamin Lin
3 years ago
I sold my side project for $20,000: 6 lessons I learned
How I monetized and sold an abandoned side project for $20,000
The Origin Story
I've always wanted to be an entrepreneur but never succeeded. I often had business ideas, made a landing page, and told my buddies. Never got customers.
In April 2021, I decided to try again with a new strategy. I noticed that I had trouble acquiring an initial set of customers, so I wanted to start by acquiring a product that had a small user base that I could grow.
I found a SaaS marketplace called MicroAcquire.com where you could buy and sell SaaS products. I liked Shareit.video, an online Loom-like screen recorder.
Shareit.video didn't generate revenue, but 50 people visited daily to record screencasts.
Purchasing a Failed Side Project
I eventually bought Shareit.video for $12,000 from its owner.
$12,000 was probably too much for a website without revenue or registered users.
I thought time was most important. I could have recreated the website, but it would take months. $12,000 would give me an organized code base and a working product with a few users to monetize.
I considered buying a screen recording website and trying to grow it versus buying a new car or investing in crypto with the $12K.
Buying the website would make me a real entrepreneur, which I wanted more than anything.
Putting down so much money would force me to commit to the project and prevent me from quitting too soon.
A Year of Development
I rebranded the website to be called RecordJoy and worked on it with my cousin for about a year. Within a year, we made $5000 and had 3000 users.
We spent $3500 on ads, hosting, and software to run the business.
AppSumo promoted our $120 Life Time Deal in exchange for 30% of the revenue.
We put RecordJoy on maintenance mode after 6 months because we couldn't find a scalable user acquisition channel.
We improved SEO and redesigned our landing page, but nothing worked.
Despite not being able to grow RecordJoy any further, I had already learned so much from working on the project so I was fine with putting it on maintenance mode. RecordJoy still made $500 a month, which was great lunch money.
Getting Taken Over
One of our customers emailed me asking for some feature requests and I replied that we weren’t going to add any more features in the near future. They asked if we'd sell.
We got on a call with the customer and I asked if he would be interested in buying RecordJoy for 15k. The customer wanted around $8k but would consider it.
Since we were negotiating with one buyer, we put RecordJoy on MicroAcquire to see if there were other offers.
We quickly received 10+ offers. We got 18.5k. There was also about $1000 in AppSumo that we could not withdraw, so we agreed to transfer that over for $600 since about 40% of our sales on AppSumo usually end up being refunded.
Lessons Learned
First, create an acquisition channel
We couldn't discover a scalable acquisition route for RecordJoy. If I had to start another project, I'd develop a robust acquisition channel first. It might be LinkedIn, Medium, or YouTube.
Purchase Power of the Buyer Affects Acquisition Price
Some of the buyers we spoke to were individuals looking to buy side projects, as well as companies looking to launch a new product category. Individual buyers had less budgets than organizations.
Customers of AppSumo vary.
AppSumo customers value lifetime deals and low prices, which may not be a good way to build a business with recurring revenue. Designed for AppSumo users, your product may not connect with other users.
Try to increase acquisition trust
Acquisition often fails. The buyer can go cold feet, cease communicating, or run away with your stuff. Trusting the buyer ensures a smooth asset exchange. First acquisition meeting was unpleasant and price negotiation was tight. In later meetings, we spent the first few minutes trying to get to know the buyer’s motivations and background before jumping into the negotiation, which helped build trust.
Operating expenses can reduce your earnings.
Monitor operating costs. We were really happy when we withdrew the $5000 we made from AppSumo and Stripe until we realized that we had spent $3500 in operating fees. Spend money on software and consultants to help you understand what to build.
Don't overspend on advertising
We invested $1500 on Google Ads but made little money. For a side project, it’s better to focus on organic traffic from SEO rather than paid ads unless you know your ads are going to have a positive ROI.
Pat Vieljeux
3 years ago
The three-year business plan is obsolete for startups.
If asked, run.
An entrepreneur asked me about her pitch deck. A Platform as a Service (PaaS).
She told me she hadn't done her 5-year forecasts but would soon.
I said, Don't bother. I added "time-wasting."
“I've been asked”, she said.
“Who asked?”
“a VC”
“5-year forecast?”
“Yes”
“Get another VC. If he asks, it's because he doesn't understand your solution or to waste your time.”
Some VCs are lagging. They're still using steam engines.
10-years ago, 5-year forecasts were requested.
Since then, we've adopted a 3-year plan.
But It's outdated.
Max one year.
What has happened?
Revolutionary technology. NO-CODE.
Revolution's consequences?
Product viability tests are shorter. Hugely. SaaS and PaaS.
Let me explain:
Building a minimum viable product (MVP) that works only takes a few months.
1 to 2 months for practical testing.
Your company plan can be validated or rejected in 4 months as a consequence.
After validation, you can ask for VC money. Even while a prototype can generate revenue, you may not require any.
Good VCs won't ask for a 3-year business plan in that instance.
One-year, though.
If you want, establish a three-year plan, but realize that the second year will be different.
You may have changed your business model by then.
A VC isn't interested in a three-year business plan because your solution may change.
Your ability to create revenue will be key.
But also, to pivot.
They will be interested in your value proposition.
They will want to know what differentiates you from other competitors and why people will buy your product over another.
What will interest them is your resilience, your ability to bounce back.
Not to mention your mindset. The fact that you won’t get discouraged at the slightest setback.
The grit you have when facing adversity, as challenges will surely mark your journey.
The authenticity of your approach. They’ll want to know that you’re not just in it for the money, let alone to show off.
The fact that you put your guts into it and that you are passionate about it. Because entrepreneurship is a leap of faith, a leap into the void.
They’ll want to make sure you are prepared for it because it’s not going to be a walk in the park.
They’ll want to know your background and why you got into it.
They’ll also want to know your family history.
And what you’re like in real life.
So a 5-year plan…. You can bet they won’t give a damn. Like their first pair of shoes.