Ross Shuel

@shuel.eth

120 Following

288 Followers

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We’ve just released our latest State of Crypto report. It shares insights on key trends — like stablecoins, L2s, and AI — plus, crypto’s rise as a hot policy issue, new data on builders and users, and much more. Here are 7 top takeaways ⬇️ 1. Crypto activity and usage hit all-time highs 2. Crypto has become a key political issue ahead of the U.S. election 3. Stablecoins have found product-market fit 4. Major scaling upgrades have drastically reduced onchain transaction costs 5. DeFi remains popular — and it’s growing 6. Crypto could solve some of AI’s most pressing challenges 7. More scalable infrastructure has unlocked new onchain applications Check out the full report: https://a16zcrypto.com/posts/article/state-of-crypto-report-2024/

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The latest @a16zcrypto State of Crypto report is now out, offering a deep dive into major trends such as stablecoins, L2s, and AI. It also explores crypto’s increasing presence in policy debates, along with fresh data on developers, users, and more. https://a16zcrypto.com/posts/article/state-of-crypto-report-2024/#section--1

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In this new episode, we not only break down the recent Compound “governance attack” -- including discussing whether that's the right label for it or not -- but also cover online vs offline governance attacks in general, possible solutions to such governance attacks in the specific, and more. with Andy Hall, @eddy, @shuel.eth, @smc90 🎙 Tune in: https://web3-with-a16z.simplecast.com/episodes/dao-governance-voting-attacks-onchain-vs-political-systems

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On Compound Proposal 304, @a16zcrypto voted YES. Given the current threat model facing the Compound DAO, adding a proposal guardian with veto power is appropriate until longer-term changes are made to Compound governance. https://compound.finance/governance/proposals/304

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The full article is below, detailing our solutions to each of the three challenges and some additional considerations.https://a16zcrypto.com/posts/article/application-tokens-economic-model-cash-flows/

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Here's an overview of the fee tracing mechanism from @mason https://x.com/0xMasonH/status/1821566711776047171

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3. Regulated Activity Challenges: Protocols and users profiting from activity that is illegal in their respective jurisdictions creates regulatory and legal risk. This is a particularly challenging problem given the open, permissionless nature of crypto. We have designed a mechanism to trace where fees come from, which would permit the curation of fee pools that are compliant with a respective jurisdiction's regulatory regime. This would provide token holders the ability to earn fees in a compliant manner and enable protocols to maintain compliance with their regulatory regime, all while preserving the open, permissionless nature of crypto.

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2. Value Distribution Challenges: Combining voting and economic rights may raise concerns under U.S. securities laws, particularly with simple and direct mechanisms like pro rata distributions and token buy-and-burns. These mechanisms look similar to dividends and stock buybacks, and can undermine arguments that tokens deserve a different regulatory framework from equity. A favorable alternative to those mechanisms is stakeholder capitalism, in which token holders are rewarded commensurately for meaningful contributions to the project. As an example, individuals that actively delegate their voting rights can be compensated based on this logic. The design space is wide open here – I look forward to seeing what entrepreneurs and DAO members bring forward.

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@mason, @milesjennings, myself and the @a16zcrypto team are proud to introduce a way forward, offering clear solutions to each of these challenges. 1. Governance Challenges: For DAOs with significant U.S. operations, risks may arise if the DAO has control over protocol revenue or intermediates the economic activity of the protocol. To avoid these risks, projects can eliminate the control a DAO has by minimizing governance and making such activity programmatic. For DAOs where that isn’t possible, Wyoming’s new Decentralized Unincorporated Nonprofit Association (DUNA) provides a decentralized legal entity that may help mitigate these risks and comply with applicable tax laws.

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For anyone building at the application layer: Today we introduce cash flows for application tokens. Application tokens — which correspond to smart contract protocols deploying services on top of blockchains that relay rights in “distributed businesses” — have historically lacked economic models connecting the tokens to the cash flows of the underlying businesses they are embedded within. There are three long-standing challenges to connecting cash flows to app tokens. 1. Governance 2. Value Distribution 3. Regulated Activity

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Albert Camus on the most important choice you'll ever face “To decide whether life is worth living is to answer the fundamental question of philosophy. Everything else…is child’s play; we must first of all answer the question.”

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This has Hail Mary vibes

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America is on the path to getting crypto legislation done right. Great news for founders that want to make crypto innovation happen here, in America.

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In addition to @nic and @trustlessstate duking it out, there are two great grappling matches on the card:

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If anyone is going to watch the fight in-person next week, shoot me a direct cast. I'll be there for the second half https://consensus2024.coindesk.com/events/karate-combat/#karate-tickets

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How severe are adverse selection costs in conditional markets aka futarchy? On a range from very high (specific prediction markets) to low (spot equities markets), where do conditional markets fall?

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Anyone coming to consensus and want to get some mat time in?

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Previously lived in WA for several years and never once won the permit lotto for camping dates.

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Hmm. This makes sense but doesn’t answer the question I’m trying to articulate Another way stating this: should we expect conditional markets to “get it wrong” some % of the time? If so, is there a correlation between the pass v. fail market prices and the probability the “worse” proposal passes

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And if so, what is the implication for conditional markets i.e. futarchy? @nicovrg

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