The evolution towards a financial metaverse is rapidly accelerating, with the growth in generative assets, profile picture avatars, the emerging derivative structures that build on their foundation, and DAOs that govern them. This article highlights the most novel developments, and builds the case for what a digital wallet / bank will need to be able to do in order to succeed on the way to this alien destination.
In this conversation, we are so lucky to tap into the brilliant mind of none other than Sheila Warren who sits on the Executive Committee of the World Economic Forum and is a key member in the executive leadership of the Forum’s Centre for the Fourth Industrial Revolution (C4IR), in which she oversees strategy across the entire C4IR Network, consisting of centers in 13 countries. Sheila also holds board member and advisory positions at multiple institutions and organizations including The MIT Press (Cryptoeconomic Systems), The Organisation for Economic Co-operation and Development (OECD), NGO network TechSoup and she is a Member of The Bretton Woods Committee.
More specifically, we discuss her professional journey from small claims court to NGO Aid to refugees to corporate law to The WEF, touching on rational choice theory, corporate personhood and its correlation to the growth around ESG, new substrates, DAOs and protocols, artificial intelligence, the purpose of The World Economic Forum and its impact on governments and society alike, and just so much more!
Gen Z is becoming a cultural force, reshaping culture and online society. This is starting to echo in fintech startups and crypto protocols. We explore how financial communities are beginning to congeal into DAOs, their nature and structure, and potential longer terms outcomes. The analysis identifies the differences in Millennial and Gen Z approaches — however imperfectly — to explain the frontier of social tokens and why ShapeShift chose decentralization, while Revolut chose decacorn funding.
DAOs are not socialist communes built for the benefit of humankind. Rather, they are techno-fortresses to defend, and make valuable, exclusive online tribes.
Whereas Millennials dream about a VC-funded unicorn startup, permissioned into wealth with capital from traditionally successful investors, Gen Z and crypto natives dream about bottoms-up community syndicates with trillions to spend on the sci-fi future, unshackled from regulatory overhang and the sins of the 2008 quantitative-easing past.
Luxury and fashion markets are structurally different from finance or commodity markets in that they seek to limit supply in order to generate value. This increases price and social status. We can analogize these brand dynamics to what is happening in NFT digital object markets and better understand their function as a result.
We’re not cool. That’s why we’re in finance.
But people want to be cool. As highly social and intelligent animals, we want and need to belong, differentiate against each other, and negotiate for status. We create signals and hierarchies to create pockets of relational capital, which we then cash in for real world benefits.
Such mammalian realities are contrary to the economic rendering of the homo economicus, the abstracted rational agent making choices in financial models. In 2021, our financial models are waking up and instantiating themselves, becoming Decentralized Autonomous Organizations (DAOs), spun up by DeFi and NFT industry insiders, and implemented into commercial actions onchain.
In this conversation, we talk with Beatriz Helena Ramos – artist, entrepreneur, film director, producer and illustrator – the mind behind DADA.art. DADA is “a space where everything is about cooperation and solidarity, which are amazing ways to allow self-expression, as well as constant inspiration. Additionally, we provide simple tools to encourage creativity, and erase intimidation.”
More specifically, we discuss Beatriz’s journey to creating DADA, decentralized power structures, community-inspired creative collaboration, assymetric rewards in NFT markets driving new value distribution methodologies, DADA’s latest project called “The Invisible Economy”, and technology-inspired and centric approaches to empower artists in the future.
In this conversation, we talk with Robert Leshner of The Compound Protocol about the early days of crypto and how a fascination with Ethereum smart contracts drove him to build one of the largest DeFi projects to date.
Additionally, we explore the nuances of lending and interest rates, consumer privacy software and data monetization, floating interest rate pools of capital across different token pairs, DAO evolution and its influence on mechanism design, the role Compound plays in chain interoperability, and the discovery of yield farming as a means for user incentivisation.
This week, we cover these ideas:
The difference between building a Fintech company, and building an empire to transform the world
How Warren Buffett is the best in the world at getting leverage through third party capital to grow
How Elon Musk is the best in the world at re-investing capital into his own judgment and view of the future
The $1.2B BitGo acquisition by Galaxy Digital, and the growing footprint of Alameda Research
DAOs as a way for all of us to participate
This week, we discuss the current state of the NFT markets, and our top 5 trends for NFTs beyond the initial hype:
Incumbent media NFTs and enterprise IP networks
Programmatic and generative art, and the blockchain medium
Digital Museums, DAOs, and the growth of the Metaverse
What it means to own the NFT: IPFS and multi chain support
Integration into DeFi and traditional portfolio management
In this conversation, we talk with Rune Christensen of Maker Foundation about how he became one of the most influential builders in the DeFi ecosystem. Additionally, we explore the creation, experiences, and evolution of Decentralized Autonomous Organizations (DAOs), the nuances of stablecoins, the interaction between Maker and DeFi with traditional finance and traditional economies, and Maker’s approach to leveraging layer 2 solutions to aiding scalability and transaction throughput.
This week, I grapple with the concepts of financial centralization and decentralization, anchoring around custody, staking, and DeFi examples. On the centralized side, we look at BitGo's acquisition of Lumina, Coinbase Custody and its similarity to Schwab and Betterment Institutional. On the decentralized side, we examine the recent $500 million increase in value within the Compound protocol, as well as the recursive loops that could pose a broader financial risk to the ecosystem.
