13 Rising Stars in Crypto

The crypto industry may be young in the grand scheme of financial markets, but it’s already produced billionaires, brilliant developers, and cultural celebrities: Satoshi, Vitalik and SBF are a few. Now, as crypto goes from programmable money to decentralized everything—thanks to NFTs, games, finance apps and DAOs—it’s producing a new crop of innovators, artists, and deal-makers who are putting their own stamp on the industry.

Decrypt has put together a list of 13 fresh faces who are already shaping the crypto world—and who, in some cases, might just go on to become as famous as crypto’s early legends. Here, in alphabetical order, is our list of 13 rapidly rising stars in crypto:

Chase Chapman, DAO Whisperer

Chase Chapman. Image: LinkedIn

Decrypt first ran into Chase Chapman in November 2019 when she was a University of Michigan student networking at San Francisco Blockchain Week. Since graduating last year, the co-founder of smart contract marketplace Decentology has charged headlong into the DAO space, contributing to Index Coop, Rabbithole and Forefront while hosting the “On the Other Side” podcast. Chapman’s energy and versatility, combined with a desire to both educate and listen, suggest she’s poised to influence the crypto scene for years to come.

Cobie, Potent Podcaster

Cobie. Image: Up Only

In August 2017, when the price of Bitcoin lounged around $3,000, a FinTech exec tweeted, “If Bitcoin goes over $12,000 in the next 2 years I will give everyone that retweets this tweet $1,000.” He added: “Then I’ll fucking kick you in the face.” Cobie didn’t kick anyone in the face (as far as we know), but is becoming a heavy hitter in the increasingly crowded crypto podcast space along with his cohost, Ledger. The “Up Only” podcast is quickly moving up the ranks of top crypto podcasts by recording drunken interviews with Mark Cuban, Vitalik Buterin, and Michael Saylor.

Marguerite DeCourcelle, Metaversal Talent

Marguerite DeCourcelle. Image: LinkedIn

Marguerite DeCourcelle, aka Coin Artist, is a digital artist and co-founder of Blockade Games, the creator of the Neon District play-to-earn role-playing game. Dedicated to building up the rapidly maturing metaverse, DeCourcelle was recently featured in Fortune‘s NFTy 50 list of the 50 most interesting people in NFTs.

Farokh, Radio Flyer

Farokh. Image: Twitter

Before the internet or TV there was radio. That most analog of technologies is getting a decentralized makeover with Rug Radio, created by crypto entrepreneur Farokh. Okay, so it’s not really AM/FM, but it is a community-driven “decentralized media platform” that combines the spirit of college radio with the possibility of Web3, plus a dollop of NFTs. The pseudonymous Farokh is a personality in his own right—the House of Farokh Discord channel boasts over 27,000 members.

Frances Haugen, Facebook Defector

Frances Haugen. Image: Twitter

During her explosive testimony exposing Facebook’s latest misdeeds, Frances Haugen revealed that she’s financially secure “for the foreseeable future” because she “bought crypto at the right time”—prompting renewed attention on how cryptocurrencies can fund whistleblowing activity. Then she fled to Puerto Rico to join her “crypto friends” there. Haugen has shown she has smarts, courage, and what sounds like a sizable crypto fortune—what will her next move be? Don’t be surprised if it’s in the crypto space.

Izzy Howell, DeFi Storyteller

Izzy Howell. Image: Twitter

A self-described “defi rebel princess,” Izzy Howell is a core contributor at Solana-based derivatives protocol Cypher. But according to the Columbia creative writing grad, she started out 2021 “jobless, purposeless,” and on the cusp of moving back into her father’s house. After her marketing career began to fizzle, she found respite with Cypher, and published a Fast Company article explaining how DAOs can help close the gender pay gap. Sure, Web3 needs developers. But it also needs people like Howell who can explain what it all means.

Joe Lau and Nikil Viswanathan, Blockchain Alchemists

Nikil Viswanathan and Joe Lau

Alchemy co-founders Nikil Viswanathan and Joe Lau have been working together since creating the “Down to Lunch” social app, which spread across college campuses in 2015. Now they may be a little too busy for lunch: the pair has raised and raised and raised again, bringing Alchemy’s valuation to build an “AWS for blockchain” up to $3.5 billion. Viswanathan and Lau still are far from household names, and the same goes for Alchemy, but expect that to change soon.

Jack Mallers, Strike Thrower

Jack Mallers

Jack Mallers was on the main stage at Bitcoin Miami in May 2021 when El Salvador President Nayib Bukele announced the Central American country would accept Bitcoin as legal tender. Strike, where Mallers is CEO, is a Venmo-like platform that lets users move between crypto and fiat currency. The platform has been integral to El Salvador’s controversial embrace of Bitcoin as legal tender, and Strike is planting further flags in the Southern hemisphere: it officially launched in Argentina this January. And Mallers is just 27.

Yosuke Matsuda, Blockchain Games Convert

Yosuke Matsuda. Image: Square Enix

Yosuke Matsuda is president of Square Enix, the gaming development company behind the “Final Fantasy” franchise. He’s quickly becoming a figurehead for those who are excited about blockchain gaming and the future. Amidst ongoing scuffles between old-school gamers and crypto enthusiasts about the merits of blockchain in the gaming world, Matsuda has doubled down. In an end-of-year letter to his fans and followers, Matsuda nailed his colors to the mast when he said Square Enix has identified blockchain games as a new domain on which the company should focus investments.

Erikan Obotetukudo, Audacious Venture Capitalist

Erikan Obotetukudo. Image: LinkedIn

As co-founder of Crypto for Black Economic Empowerment (CBBE), Erikan Obotetukudo helped bring together 100 Black founders and creators to talk about creating generational wealth for African Americans. The VC fund she launched last June, Audacity, extended that out to Africa and the diaspora. “As exciting and interesting as blockchain and crypto is today, it’s still one dimensional in terms of the participants,” Obotetukudo told Decrypt at the time. “Fundamentally, crypto is actually being led and driven by emerging markets.”

Osinachi, Nigerian NFT Artist

Osinachi. Image: Osinachi

Prince Jacon Osinachi Igwe, better known as just Osinachi, is a digital artist from Nigeria whose art, created in Microsoft Word, was featured at Christie’s in September. As chief creative officer of Socialstack, which has built a toolkit to make it easy for DAOs to reward tokens for completing tasks for the common good, Osinacha isn’t just “kicking down the door for African artists to enter the NFT auction market,” as we wrote in October. He’s kicking down the door for decentralized communities around the world. Osinachi should soon join the ranks of the best-known NFT artists.

Sam Williams, Dream (Ar)weaver

Sam Williams. Image: LinkedIn

NFTs took off in 2021, which meant everyone was talking about NFT storage infrastructure. Okay, maybe very few people were talking about it… But Sam Williams, who founded the so-called “permanent hard drive” Arweave, discovered a ready audience of people eager to learn how to keep their digital assets safe over the long run. It’s perhaps no coincidence that the price of the Arweave token (AR) has increased tenfold in the span of one year.

Amy Wu, Web3 Gamer and VC Hall of Famer

Amy Wu. Image: LinkedIn

Amy Wu is well-established enough in crypto that we almost didn’t put her on this list. But the former partner at Lightspeed Ventures, already one of the crypto industry’s most interesting and outspoken commentators on the intersection of blockchain technology and gaming, is about to become more of a household name since she left Lightspeed to take control of FTX’s new Web3 fund, where she plans to focus on crypto gaming. “Every major gaming publisher is exploring blockchain,” Wu tweeted in a viral thread last summer. And with $2 billion at the fund’s disposal, they’ll be exploring with Wu.


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Crypto Ads Set to Invade Super Bowl 56

On February 13, crypto comes to the Super Bowl. 

FTX, the $32 billion crypto derivatives exchange that has been on a sports marketing spending spree in the past year, bought a Super Bowl ad in October. Just days before Christmas, rival exchange Crypto.com followed suit. The cost of an ad in this year’s game (Super Bowl LVI) is $6.5 million for just 30 seconds of airtime—but these crypto exchanges are flush with revenue from trading fees as crypto soared during the pandemic.

Of course, the crypto Super Bowl ads are just part of a larger trend. Cryptocurrency exchanges like FTX, Crypto.com, Coinbase, and Binance are pouring millions into sports marketing to reach new customers and amplify their name recognition. 

And FTX and Crypto.com may not be the only crypto names we see in this year’s Super Bowl.

Crypto’s sports push

Big crypto companies are pivoting to sports advertising for one massive reason: recognition. 

We are really coming from behind on name recognition. When someone’s looking to get involved in crypto for the first time, we’ve found that they haven’t heard of FTX,” FTX CEO Sam Bankman-Fried told Decrypt at a live event last November. 

Going into different sports just allows me to reach everybody where they are. Super Bowl is just one more step into that, where it’s as mass as you get,” echoed Crypto.com CEO Kris Marszalek to the WSJ last month. (It remains to be seen whether it will simply re-air its much-hated Matt Damon ad or something new.) 

And while both FTX and Crypto.com have spent millions on Super Bowl ads, it is far from the first time the rival companies have put their names on sports events, sports arenas, or even sports jerseys. 

In November 2021, Crypto.com paid a reported $700 million for the naming rights to the Los Angeles Lakers’ home stadium, the Staples Center. Now, the Lakers play at the Crypto.com ArenaAlso last year, Crypto.com became a sponsor for Italy’s most prestigious soccer cup tournament final, the Coppa Italia

FTX has been busy too. 

In April, FTX landed a mammoth 19-year deal with the NBA’s Miami Heat that saw the exchange become the Heat’s “official and exclusive” crypto partner. The American Airlines Arena—what the Heat’s home stadium used to be called for over 20 years—also became FTX Arena. 

FTX’s partnership with the Miami Heat is undoubtedly Sam Bankman-Fried’s marquee sports deal, but the FTX CEO has been busy landing an array of other high profile deals. FTX US recently landed agreements with the Golden State Warriors, the Washington Wizards, and the NHL’s Washington Capitals. Umpires in Major League Baseball even sport the SBF-led exchange’s logo on their uniforms. And Bankman-Fried believes it’s working: “Everyone we talk to who knows us a little bit, or a lot, or barely, or intimately, this is top of mind for them,” he said on the first episode of Decrypt‘s gm podcast. “Clearly this has penetrated more than everything else we’ve done combined, in terms of people’s perception of us. Not in terms of installs per dollar spent, though.”

Coinbase—which has not announced a Super Bowl ad—is hot on FTX’s heels in sports spending. In October, the exchange became the NBA’s and WNBA’s official cryptocurrency partner—crowding the basketball and crypto room even further. 

Last month, Coinbase also nailed on a deal with NBA star (and early Coinbase investor), Kevin Durant

NFTs in the Super Bowl

Crypto exchanges aren’t the only ones infiltrating football. NFTs, the red-hot blockchain-based digital collectibles, have pushed their way into sports, and major consumer brands are participating in the NFT boom.

Last week, Bud Light began using a Nouns NFT as its Twitter PFP, seemingly as part of a Nouns DAO vote that could include Nouns imagery being shown at the Super Bowl.

And then there’s Bored Ape Yacht Club. This year’s Pepsi-sponsored halftime show is a who’s who of the world’s most famous rappers, including Eminen and Snoop Dogg, both of whom own Bored Ape NFTs.

Eminem bought his $452,000 Bored Ape last month, and interestingly, the ape looks a lot like Marshall Mathers. Snoop Dogg owns a plethora of NFTs, but did not take the Bored Ape bait until December. “When I APE in I APE all the way in!!” Snoop tweeted last month. 

Mary J. Blige, Kendrick Lamar, and Dr. Dre—who round out the five performing in the halftime show (at least the five who have been named)—haven’t jumped on the NFT bandwagon yet, but with other rappers including Post Malone, KSI, Rich the Kid, and Timbaland all having bought Apes as well, that could change.

Most interestingly, an ambitious DAO (decentralized autonomous organization) tried to throw its hat into the Super Bowl ring as well.

DAOs want in too

A group of crypto enthusiasts operating under the collective SuperDAO had the goal of raising $20 million through the sale of NFTs that would, in turn, finance a Super Bowl ad. The DAO failed to reach its funding goal and has been told that all of this year’s Super Bowl ad slots are now filled, but much like ConstitutionDAO last November, the effort shows the potential for what DAOs could eventually achieve.

SuperDAO’s NFT push was coordinated by a separate entity, BPNFT, which founder Steven Echtman described as “sort of like the company that’s manufacturing the collectibles.” Based in Delaware, BPNFT is essentially an art studio in the business of creating and selling collectibles. “Ultimately,” Echtman said, “the vision is… how do we use this as a vehicle to build awareness of NFTs and build awareness for these artists, and help them to support themselves and each other?”

SuperDAO is now setting its sights on a Super Bowl ad in 2023, but before then, it aims to send a SuperDAO artist to this year’s Super Bowl. A token fundraiser via the SuperDAO community will be used to send “at least one” of the DAO’s artists to this year’s big game, according to Echtman.

And if Bud Light does end up giving a nod to Nouns NFTs based on the Nouns DAO proposal, that would also be seen as a big win for DAOs.


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What Will It Take For DeFi To Go Mainstream? Simplicity, Security And Utility

Complexity is the enemy of mass adoption—and if decentralized finance (DeFi) has been anything to date, it’s complex.

It’s true that a niche of crypto pioneers are comfortable navigating the often challenging DeFi ecosystem, from the various different protocols to the nuances of asset circulation. 

But the average investor needs a simple, intuitive user experience that makes it easy to participate and provides a feeling of security while abstracting underlying infrastructure behind a familiar interface.

Without that, mainstream users will continue to shy away from DeFi, said DJ Qian, CEO of Chainge Finance. Chainge’s DeFi app runs on the Fusion blockchain and allows users to perform complicated operations, including cross-chain bridging and decentralized escrow, with just a few taps.

Although there’s been a boom in DeFi protocols and projects that bring the value of the internet to the blockchain, “they’re isolated from each other and it’s very difficult for them to interact,” Qian told Decrypt.

“It’s not unlike today’s financial world with different banks in different parts of the world that don’t speak to each other,” he said.

In short, for DeFi to thrive and grow, cross-chain communication is key – and it needs to happen automatically in the background without consumers having to worry or even think about it.

Safety first

But before they can embrace interoperability, investors have to feel safe. Security is the first paving stone on the road to wider adoption, Qian said.

“No one wants to use a risky protocol,” he said. “And, unfortunately, there are a lot of scammers in this industry.”

The Chainge app is powered by distributed control rights management (DCRM), a patent-pending cryptographic technology that creates a secure bridge between blockchains so that multiple different digital assets can be moved between them easily and securely.

Building bridges

Generally, moving assets between chains is a hassle. It’s time-consuming, confusing, and can require an intimidating level of technical skill that neophyte investors just don’t possess—and shouldn’t have to, Qian said.

“I’ve been told by so many users that one of the main things they want is for cross-chain transactions to happen in the background,” he said. “This is not something the end-user should have to worry about.”

That’s why Chainge has introduced a cross-chain roaming feature, which allows users to seamlessly make transactions and swaps across decentralized exchanges even if their assets are split between multiple different chains.

Typically, bridging assets can take up to an hour or more, but Chainge can facilitate the process in under a minute for a nominal fee with a couple of taps. The user interface is straightforward and clear. All users have to do is select the receiving address where they want their assets to go, choose the corresponding chain, and hit send.

Currently, the Chainge app supports more than 85 assets that can hop across 16 integrated chains, including Fusion, Polygon, Ethereum, Tron, Binance Smart Chain, HECO, and Bitcoin, with plans to add Kusama, Algorand, Cosmos and others soon.

“Users want cross-chain transactions to happen in the background.”

DJ Qian

“Moving assets from one chain to another is a never-ending need,” Qian said. “A user’s ultimate goal is to focus on the financial action they want to take, whether that’s swapping to another blockchain or adding liquidity without having to care which chain their assets are on.”

Trust the process

But there’s another barrier standing in the way of mass adoption, and that’s being able to execute contracts and move funds without the risk of losing money due to breach or fraud. Retail investors who are new to DeFi are often risk-averse.

It’s a valid concern, Qian said.

“The protocols using a smart contract are not always easy to verify, which is why we’ve seen a lot of hacking incidents over the past few years,” he said. “This is a very big challenge for regular, more mainstream users.”

But it doesn’t have to be an issue. Late last year, Chainge launched an escrow module that allows parties that don’t know each other to do business in a safe, decentralized environment for a small fee—just 0.5%—and without the need for a middleman. (Traditional escrow services generally charge high fees, which can range between 5% and 10% and even hit up to 15%.)

After a buyer initiates an escrow smart contract, both sides agree on basic terms and the collateral is deposited. Neither the buyer nor the seller can touch the collateral until the product is received.

“Even strangers can do business,” Qian said.

Qian himself used the escrow module to buy the domain for anyswap.com from a stranger who reached out randomly by email with the offer. (Anyswap, which rebranded to Multichain in December, is a decentralized exchange co-founded by Qian based on Fusion DCRM technology.)

Rather than using a pricey traditional escrow service, Qian convinced the seller to use the decentralized escrow protocol in the Chainge app. 

Qian initiated the contract, the seller transferred the domain to Qian’s GoDaddy account, Qian released the Bitcoin—and the entire translation was finished within roughly five minutes.

“Trust has always been a problem for people who do business in the digital world, but they can trust the smart contract,” Qian said. “Without permission, the money will never move.”

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Flexible Workers Are Driving A Shift Towards Crypto Payroll Providers

The COVID-19 pandemic has sparked a revolution in the workplace. Many businesses are permanently shifting to remote working, and seizing the opportunities presented by a decentralized working model. For companies, that means a smaller cost footprint, and a more global pool of talent to draw upon.

For workers, the pandemic has accelerated existing trends such as the move towards digital nomadism, the rise of side hustles and the rapid growth of the virtual economy. With the easing of restrictions has come an explosion in pent-up pressure as workers abandon employers who refuse to adapt to this new way of working, in what’s been termed the Great Resignation. A quarter of the global workforce considered changing employers in 2021, with the resulting exodus of undervalued staff being dubbed the Great Resignation.

These dissatisfied workers are demanding flexibility; more than half (54%) of employees globally would consider leaving their job post-COVID-19 pandemic if they are not afforded some form of flexibility in where and when they work, according to the EY 2021 Work Reimagined Employee Survey.

“We’re seeing a broader global shift in how people think of work,” Ivan Hong, content lead at crypto payroll platform Request Finance, told Decrypt. “A lot of people that are working remotely are also working multiple jobs because they now have the freedom to do so.” An October 2021 survey by ResumeBuilder.com found that as many as two-thirds of remote workers in America hold multiple jobs.

This increasingly flexible, global workforce still needs to be paid—meaning that employers will require reliable, cross-border, and mutually accountable payment systems. And with the emergence of the virtual economy, a growing number of workers expect those payment systems to integrate with the booming cryptosphere.

“A decentralized workforce naturally requires more agile, borderless payment methods.”

Estella Shardlow

“A decentralized workforce naturally requires more agile, borderless payment methods,” Estella Shardlow, Senior Editor, Consumer Attitudes & Technology at trends intelligence firm Stylus, told Decrypt. “This isn’t only about bypassing the costly, slow traditional intermediaries, but also dealing with different taxing structures, insurance and benefits across jurisdictions.”

Crypto by Request

Enter Request Finance. The startup, itself a remote-first company with team members based in Singapore and France, is quickly becoming a one-stop-shop for companies using crypto to manage their financial operations and accounting, across different types of business transactions ranging from invoicing to payroll.

One of the major problems companies have when dealing with their crypto assets, is the difficulty of accounting for the transactions made. Strings of hexadecimal wallet addresses with no easily identifiable counterparties, the lack of accompanying paperwork, on top of constantly fluctuating prices and gas fees make accounting in crypto an administrative nightmare.

That’s where Request Finance’s platform comes in, allowing crypto-native companies like The Sandbox to easily create, send, and pay invoices or payslips in crypto.

Built on the protocol’s blockchain, users have full control of their data, while the technology allows for radical transparency in payroll, recording all ingoing, outgoing and outstanding transactions on an immutable ledger. On top of this, Request Finance can also automatically sync crypto transactions on its platform, with existing enterprise accounting tools like Xero and Quickbooks.

Request enables companies to use cryptocurrencies to avoid the inefficiencies and expense of making payments in fiat currency across global borders—a move that will appeal to the new wave of distributed workers.

Users select a—typically fiat—currency to invoice in while payments are settled in the cryptocurrency of their choice. The service is affordable too; clients pay a 0.1% transaction fee, capped at $2 total. According to the company’s monthly report for December 2021, stablecoins like USDC and DAI were the most commonly used currencies, accounting for 24.2% and 18.6% respectively of the nearly $170m in invoices paid in that year alone.

Its first product, Request Invoicing, is soon to be joined by an array of new features including  Expenses, Payroll and Accounting tools—all of which are currently in beta testing, and likely to be progressively made available for users over the next year.

Creating an adaptive payments platform

As of November 2021, Request has over 1,000 companies and decentralized autonomous organizations (DAOs) using its payment functions. “Reaching 1,000 is proof that we’re building something people want. We’re proud to be working with major players in the web3 and metaverse industry, and we aim at reaching 50,000 web3 builders and creators within 2 years,” said Christophe Lassuyt, co-founder of Request.

Request Finance’s appeal lies not only in its utility but also its adaptability across a wide variety of companies looking to manage payments and accounting in crypto. “From hackathons, to managing payroll for remote teams, to NFT marketplaces, all of our users find their own use case for the platform,” Hong explained.

MakerDAO is one such member that uses Request Finance to keep track of payment progress, as recorded on the protocol’s blockchain. “Request gave us more transparency into payment statuses across the organization,” said Amy Jung of MakerDAO. “On top of that, email updates ensure invoices are automatically followed up—a time saver for us.”

“Using Request is an easier and less error-prone way to manage crypto payments in different tokens,” added Frederic Meyer-Scharenberg of the Swiss Blockchain Hackathon, which used Request to distribute crypto prizes for the 2021 edition of the event.

As Request-supported payment options continue to expand (users can process transactions in 40+ stablecoins and cryptocurrencies, and 10+ blockchains and fiat currencies), its promise of financial flexibility is sure to attract even more members.

“Demand for crypto payments is being driven by the rapidly growing small and medium businesses sector,” Shardlow told Decrypt. “For these companies, the merchant fees, exchange charges and delays of SWIFT et al—not to mention the risk of credit card fraud—can be crippling. Crypto and blockchain present a suitably fluid, secure cross-border solution.”

Fixing outdated financial frictions

Request Finance deftly tackles stumbling points typical of the traditional global payment system. In particular, small businesses and freelancers often face the challenge of chasing down payment for invoices—and the pandemic has only increased the incidence of overdue invoice payments. In America, a conservative 71% of invoices are overdue. By contrast, after a year of operation, Request reports that only 31% of invoices had not been paid by their due date.

Thanks to its first product, Request Finance, users can monitor the status of their invoices sent on the Request platform, which automatically sends payment reminders, and flags late or missing payments which also count towards a payer reputation score. Automatic verification of invoice payment statuses via the blockchain also removes the need for awkward follow-up emails.

“Request users can see the status of the invoice that was sent; whether it’s paid, whether it’s approved, or whether it’s ignored. Both parties can see that record, creating a pressure to pay outstanding invoices,” Hong told Decrypt. Providing payment accountability will be vital to winning over members of the global virtual economy.

“Request users can see the status of the invoice that was sent; whether it’s paid, whether it’s approved, or whether it’s ignored.”

Ivan Hong

Since its launch, Request has processed over $170m of crypto invoices and is on course to be a key player in the growing crypto payment space. In the words of Hong, “Crypto is no longer just a speculative asset class, but a global payments tool that is enabling new ways of working, and doing business.”

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How One NFT Project Is ‘Blurring The Lines’ Between Artwork And Assets

Non-fungible tokens (NFTs) can be used to represent almost anything—and while to date, they’ve mostly been associated with digital artwork, there’s no reason that they can’t be used to represent physical objects.

Now, an NFT project based in Malta is testing the boundaries of what’s possible with these unique digital tokens, with an NFT representing a bundle of digital and physical assets—and tackling head-on the thorny question of what legal rights ownership of an NFT confers on the holder.

ETH in Mellieħa consists of an NFT representing a painting by local artist Debbie Bonello, depicting a street scene in the Maltese village of Mellieħa. After being digitized, the original artwork was destroyed in a clifftop ceremony—meaning that the NFT is the only visual record of it.

But it’s what’s depicted in the painting that distinguishes this NFT: grabbing the eye immediately is a car in the foreground, sporting the number plate “ETH”. And that number plate is an integral part of the NFT; alongside the artwork, the NFT confers ownership of the ETH number plate seen in the painting—a process that proved surprisingly complex, as the project’s pseudonymous creator mlh.eth told Decrypt.

Legal eagles

While there have been sales of NFTs that purport to confer legal ownership of an item on the holder before, the actual legalities are rather more unclear, mlh.eth explained. In many cases, the NFT is simply bundled alongside an item that’s being sold, and has no legal status to speak of.

Instead, the ETH in Mellieħa team wanted to ensure that the NFT and the legal right of ownership were indisputably linked. “We don’t want this to be a gimmicky thing,” he said. “We really wanted it to be, there’s no getting out of the fact that the NFT will always be associated with the plate.”

Woman holding painting of street scene
Debbie Bonello with the ETH in Mellieha painting. Image: ETH in Mellieha

To that end, the team engaged leading Maltese law firm Mamo to work with Transport Malta, drafting terms and conditions that would clearly establish that ownership of the NFT is tied to the ETH number plate. “We are setting a precedent for NFTs with underlying assets in Malta,” mlh.eth said. In future, he added, “lawyers will be much more comfortable taking on a task such as this.”

The art of the matter

For all the legal and technical challenges involved in creating the ETH in Mellieħa NFT, creating the artwork itself was more straightforward; Bonello told Decrypt that she “decided to just tackle it as a normal commission.”

Woman painting street scene in artist's studio
Debbie Bonello at work in the studio. Image: ETH in Mellieha

“I had no idea what an ETH project was,” she told Decrypt. After researching NFTs, she added, “I thought it exciting and felt also honored to have the possibility of being involved in such a different project from the norm.”

Destroying the physical artwork wasn’t originally part of the plan, mlh.eth told Decrypt. “I called Debbie the moment we decided we’re gonna burn it,” he said. ” I told her, for this to be really unique, we cannot have an original piece sitting somewhere. It would take away the uniqueness of the NFT—and so we have to destroy it.”

“I don’t think it would’ve been her first choice,” mlh.eth conceded. But, he said, “I think she was very game, honestly.”

For her part, Bonello told Decrypt, “I was totally okay with it.” Although the physical painting was burned, she pointed out, “the image stays forever in the blockchain, so really and truly it was the same as selling a painting to a client; it’s no longer mine, but it hangs on someone else’s wall. This is how I explain it to myself!”

The whole package

So is ETH in Mellieħa a painting? A legal contract? An NFT? Or a physical asset? The artwork, its creators argue, consists of all three elements together. The inclusion of the ETH numberplate, said Bonello, “almost bridges the physical world to the more abstract one.”

“That’s how the concept came about,” explained mlh.eth. “Gradually, we wanted to blur some lines and then wanted to blur more lines, and then it became a whole story.”

The auction consists of “the whole package,” said mlh.eth. “The art comes from combining the whole experience.” That experience includes, alongside the NFT itself, a short documentary and nearly 400 photos of the creative process that will be gradually released over the coming months.

Ultimately, NFTs are a medium just like any other, he argued. “For some forms of art, it might be beneficial. For some, it might be detrimental.”

And while Bonello is still a traditionalist at heart (“I much prefer looking at a work of art hanging on my walls”), she likes the idea of “bridging the traditional with technology, which is forever evolving and progressing.”

Traditional artists, said mlh.eth, shouldn’t just do NFTs for the sake of doing an NFT. “That’s almost like if I am a painter doing oil paintings, and suddenly, colored pencils are really hot. And I just had to do something with colored pencils.” Instead, he argued, we’ll see a new category of NFT artists who play to the unique properties of the medium. “I think what we’re doing is utilizing the unique advantages that NFTs provide. And I would like to believe that’s where the trend is going.”

The ETH in Mellieħa auction begins on February 2 at 4pm on OpenSea.

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Next Earth Brings The Real World Into The Metaverse

The metaverse is the word on everyone’s lips right now, as the persistent, shared virtual world has exploded into the popular consciousness.

A virtual land grab is underway, as parcels of digital real estate, represented by non-fungible tokens (NFTs) are being snapped up for millions of dollars.

Unsurprisingly, big corporate players are making moves in the metaverse; Facebook has rebranded as “metaverse first” company Meta, Microsoft has bought games company Activision in a $69 billion metaverse play, and brands from Walmart to Samsung have ventured into the digital realm.

But decentralized metaverse platforms are pushing back against efforts by legacy tech players to muscle in on the virtual world.

“We believe that the metaverse has to be something different than Web 2.0,” Gábor Rétfalvi, co-founder and CEO of decentralized metaverse platform Next Earth, told Decrypt. “A metaverse that’s not monetized by these companies, but monetized by the users themselves.”

The fast-growing Next Earth offers a stark alternative to corporate-controlled metaverses: a decentralized metaverse infrastructure based on a digital twin of the Earth. That means that unlike other popular virtual land projects, Next Earth’s land tiles aren’t based on an arbitrarily scarce virtual territory; each tile represents a 10m x 10m plot of virtual land, corresponding to a real-world location that can be purchased and built on by members of the community.

“We’re developing the metaverse itself,” Rétfalvi told Decrypt. “It’s a democratized, peer-peer-peer and decentralized metaverse, which I think is especially important since Facebook and other major centralized companies announced their entry to the metaverse.”

Since its launch in August 2021, Next Earth has seen more than 395,000 NFTs minted, with around $895,000 commission earned by users. NFT copies of Manhattan, the most valuable land on the planet, were the first to sell out in Next Earth’s virtual land. The biggest sale so far is the MET New York, resold for $32k with an original mint price of $100. Popular real-world landmarks like the Egyptian pyramids, the Colosseum, and football stadiums also trade like hotcakes. But there’s still plenty more to grab.

“We believe that the metaverse has to be something different than Web 2.0.”

Gábor Rétfalvi

Next Earth is intentionally versatile, with use-cases ranging from commercial activity to monetizable artwork and entertainment, and it’s not about a mint rush for particular tiles. “The platform is all about giving an economic incentive,” Rétfalvi said. “And the way to do that starts with owning land. But it doesn’t really matter if you have those tiles in the middle of London, or if you have those tiles in the middle of the desert, because those tiles will be the key to using different features.”

Settling Next Earth

The early settlers of Next Earth, about 30,000 landowners, have already begun populating the tiles with pixelated arts, advertisements, and more. And they aren’t just farming the land tiles; in fact, one of the emerging art spaces is built on the water, right around the harbor of a popular location.

Rétfalvi is no stranger to the concepts underpinning the metaverse: he’s a serial entrepreneur whose ventures in gaming and VR technologies long predate their integration with crypto and NFTs. VR integration is on Next Earth’s future roadmap, and there’s plenty more on the horizon, including NFT skins, play-to-earn features, a direct fiat on-ramp, and staking.

The project creatively combines different aspects of crypto, like NFTs, DAOs, and decentralized finance (DeFi), to offer users an infrastructure on which value can be generated and maximized in a wide array of ways. “For instance, I can imagine a future where you have your land and you can basically get a loan on that land,” said Rétfalvi. “You have a physical location, and you can render that location virtually and create your own business inside there.”

Next Earth is in its inception phase at the moment, with a land sale and bottom-up community-building efforts. Up next on the agenda is the Next Earth Token, or NXTT. The project is built on the low-cost Ethereum layer 2 solution Polygon because Next Earth is betting on the long-term sustainability of Ethereum, Rétfalvi said.

NXTT is the native currency of the Next Earth metaverse, which will launch in earnest on January 27; community members can secure whitelist spots for the presale through the Next Earth Launchpad from January 22. The presale has a fair distribution mechanism with five tiers (see below).

Image: Next Earth

To participate in the presale, community members need to hold Next Earth NFT land tiles worth at least $100, a measure aimed at excluding token flippers without real conviction in the long-term value of the project.

After the token launch, NXTT will be available for purchase on decentralized exchange (DEX) Uniswap.

Already, 35% of landowners who are eligible for token presales have gone through on completion of KYC, while 10% of buyers have already committed 410,000 MATIC (valued at over $540,000 at current prices).

As well as leading the charge for a fair metaverse, Next Earth is also aiming to effect change in the real world; a portion of revenue from every NFT trade goes to environmentally-conscious causes, determined by the community members. So far the community has voted to send $800,000 of the charity budget to charities including The Ocean Cleanup, Amazon Watch, Kiss the Ground, and SEE Turtles.

The future of Next Earth remains in the hands of its community members, powered by NFTs and governance token NXTT, Rétfalvi said; the community can come together and decide to shape the direction in any way they deem fit. While the team will continue to deliver on the roadmap, as a steering body for the decentralized metaverse, the real masters will be the community members—especially those who joined early and have comfortably established their presence.

Sponsored post by Next Earth

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How Switzerland’s Role in Global Finance Is Evolving With The Crypto Era

Since the eighteenth century, Switzerland has been synonymous with private wealth management and banking, thanks to its history of neutrality, anonymized numbered bank accounts and secure vaults.

Those vaults used to be filled with gold bars and banknotes; estimates put the value of the private fortunes sitting in Swiss banks’ vaults at around $2,500 billion, around a third of all private funds. Now, with the advent of cryptocurrency, the country is reinventing itself as a centre for crypto finance. 

Together with its reputation for watertight security, discretion, and neutrality, Switzerland’s transparent regulations and burgeoning crypto ecosystem make it uniquely suited to the needs of the emerging class of digital asset holders. 

The Swiss seal of security

To meet the needs of these new crypto customers, Swiss firms Numbrs is creating “the experience of a private bank but on Bitcoin,” according to the company’s CEO Fynn Kreuz. 

The Swiss unicorn has evolved from a leading multi-banking application into a technology company that guarantees the secure and discreet self-custody storage of Bitcoin in Switzerland, unencumbered by many of the obligations of banks. 

Screenshots of finance app against backdrop of mountain
Numbrs creates “the experience of a private bank but on Bitcoin”. Image: Numbrs

While it respects the Know Your Customer (KYC) requirements of present-day global finance, it still affords privacy and security to the account holder; Bitcoin does not appear on the company’s balance sheet and no customer data is stored on its servers. 

Its Numbrs Bitcoin account—which launched this week—can therefore be seen as the evolution of the traditional Swiss numbered account, where a client is represented by a multi-digit number known only to select private bankers, suggested Kreuz. 

And while the company considers that KYC and anti-money laundering (AML) regulations have their place—they are rigorously adhered to by other Swiss crypto enterprises such as Bitcoin Suisse—when it comes to storage, “that is up to the people, and ultimately, this supports the idea of Bitcoin in terms of decentralization,” said Kreuz, who has been investing in Bitcoin since 2013.

One vault for all

The gold standard for securing one’s cryptocurrency is a non-custodial wallet, which eliminates the risk of storing crypto on centralized exchanges—as the recent $34 million hack of Crypto.com demonstrates. But “being your own bank” brings its own challenges, not least the need to keep your private keys from falling into the wrong hands.

Numbrs aims to offer its customers the best of both worlds; customers hold their Bitcoin in a non-custodial wallet, and can access their account via a password combined with an email address and authentication check. But their private keys and the encrypted seed phrase needed to access their funds are stored in a military-grade vault in the Swiss Alps. “It’s protected like Fort Knox, with very restricted access and security measures,” said Kreuz. 

Data center
The secure Numbrs data center. Image: Numbrs

Because Switzerland is scrupulous in maintaining its tradition of neutrality—the country is not a member of either the EU or NATO—there’s no risk of outside pressure being brought to bear in order to gain access to a Numbrs customer’s private keys.

In accordance with another Swiss banking tradition, the company’s founders store their Bitcoin using the same Bitcoin Account as their customers. “Their security is our security, and the users can be sure that we have aligned interests,” Kreuz explained. “Our role models are the rich culture Switzerland has in terms of private wealth and private banking.”

In common with private banks, Numbrs also publishes its own Bitcoin research—data and insights that go beyond those accessible to the average private investor.

Kreuz highlighted another curious parallel between Bitcoin and Swiss banking: unclaimed assets worth several billions are estimated to lay dormant in bank vaults scattered around Switzerland, while approximately $140 billion in Bitcoin is also reportedly lost or inaccessible. 

But there’s no danger of that happening with a Numbrs account, he explained. If customers lose their password or access to their email, the system can retrieve it.

A bastion for private wealth

Switzerland’s fabled discretion, reputation for security, as well as political, economic, and fiscal stability, have all contributed to the country’s success. And that’s set to continue as Switzerland reinvents itself for the crypto age.

The country was among the first to regulate crypto enterprises. In 2019, two new crypto asset banks, Zug-based Seba and Zurich-based Sygnum, were granted licenses. Last year, a range of company and financial laws were updated to enable crypto commerce to operate on a solid legal basis.

“Switzerland has always been about balance,” said Kreuz, who is German by birth. “They’ve never been at the forefront of change. But they understood that they have to embrace change, and somehow make it work with the old world.”

For more information on Numbrs and its Bitcoin Account, visit numbrs.com.

Sponsored post by Numbrs

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Bitcoin Mining ‘Is a Perfect Battery’: Why Foundry Insists Green Activists are Wrong

In brief

  • Bitcoin mining’s migration to North America has raised scrutiny of its environmental impact.
  • Mining giant Foundry claims the industry is accelerating a move to renewables.
  • The issue has become hot enough to merit a hearing in Congress.

When Congress meets on Thursday to discuss the environmental impact of cryptocurrency, it will highlight a growing problem for Bitcoin miners: the perception, fair or not, that they are a menace to the planet.

One company that will be watching closely is Foundry, a Digital Currency Group subsidiary whose network of Bitcoin mining machines has quietly become one of the two biggest in the world, the other being China’s Antpool; volume varies from week to week.

Foundry is an American success story, helping its customers rake in thousands of Bitcoins and helping repatriate a growing industry to U.S. shores. But the growing environmental scrutiny could mean Foundry’s future depends on persuading governments and the public to accept a novel and contentious proposition: that crypto mining will play a key role in ushering in an era of renewable energy.

Bringing Bitcoin back home

Bitcoin is a borderless technology, but got its start in the U.S. The first to use it were Bay Area cryptographers, including the coder and Satoshi-confidante Hal Finney, who mined it on home computers. In those early days, many Americans mined Bitcoin on their own—sometimes on cell phones—or started companies to mine it at scale.

By 2015, however, the popularity of Bitcoin meant that anyone who hoped to mine new coins on a regular basis required machines with specialized chips, known as ASICs, dedicated to that purpose. And as with so many other computer components, Asian companies became the ones to make them.

China, in particular, dominated not just the manufacture of Bitcoin “rigs” but also the use of them; Chinese mining pools for years raked in the lion’s share of newly mined Bitcoins. Then in 2020, the North American miners who still held on to about a 15% share of the market got a boost when Foundry entered the field.

Foundry enjoys the backing of DCG, which also owns Grayscale Investments, Genesis Trading, and CoinDesk. DCG’s deep-pocket owner Barry Silbert has said he is operating DCG’s new mining venture on a decades-long horizon.

After mining a handful of Bitcoins with its own rigs in 2020, Foundry switched to a federated model the next year, supplying financing and machines to Bitcoin companies across the U.S. The company also created a pool for U.S. miners to share rewards (a long-standing practice in crypto mining) and pledged guaranteed returns to those who joined it.

Then Foundry and other U.S. miners, including publicly-traded Marathon and Riot Blockchain, got a stroke of luck: China cracked down harder on mining in the spring of 2021, driving nearly all miners out of the country. The result is that some a majority of Bitcoin mining now happens in North America. Meanwhile, Foundry helped Asian miners with the difficult logistics of transferring their machines—and sometimes their entire operations—to U.S. shores.

So far this year, Foundry’s network has already mined 2,826 Bitcoins, or an average of 157 per day. Based on Bitcoin’s recent price low of around $40,000, that translates to a daily average of $6.3 million in earnings—a figure that would be closer to $10 million per day if Bitcoin bounces back to its recent high around $68,000.

Most of this money, until recently, would have gone into the pockets of Chinese companies. Now, it is American investors and operators who are reaping the Bitcoin bonanza and ensuring that, like in crypto’s early days, the bulk of crypto wealth is staying in the United States and Canada.

This would be an unadulterated American success story if not for the growing environmental concerns about Bitcoin mining—concerns that were once muttered by a handful of green activists, but are now the subject of a hearing in the U.S. capitol.

The crypto advocates at the hearing are likely to emphasize that most newer crypto projects, such as Solana or Tezos, use only a tiny fraction of the power used by Bitcoin since they don’t require a “proof of work” system to update their blockchains. (The second-biggest cryptocurrency, Ethereum, is expected to move away from proof of work later this year).

That’s not the case for Bitcoin, which has no plans to abandon proof of work, even as it remains the biggest blockchain in terms of economic value and power consumption. That status means that those who mine Bitcoin are likely to be singled out by environmentalists and lawmakers.

A ban on Bitcoin mining?

Most crypto enthusiasts regard Bitcoin as a marvelous new technology that spreads wealth and financial inclusion across the world. Critics view it differently. They see it as an environmental catastrophe—a computer network that guzzles more energy every year than the entire country of Argentina and that serves no useful purpose beyond enriching selfish libertarians.

In recent months, the critics have had momentum on their side. Their complaints have translated into a bill in New York state (which accounts for 20% of U.S. Bitcoin production) to ban crypto mining.

The industry is faring no better in Europe, where a Swedish push to outlaw Bitcoin mining is gaining steam. Meanwhile, a key financial regulator has proposed implementing a similar ban across the continent.

The Bitcoin community has mostly reacted to its critics with indignation, framing their complaints as ill-informed and driven by spite, and pointing out that the traditional finance industry likewise guzzles immense amounts of energy. Such knee-jerk rebuttals are unlikely to deflect environmental scrutiny, and Foundry and other U.S. miners will need a better narrative to rebut the green lobby.

Foundry’s CEO Mike Colyer thinks he has one. He and other Foundry executives tell Decrypt that Bitcoin mining is helping build a bridge that will help the U.S. accelerate its transition from fossil fuels to renewable sources of energy.

Colyer points to Texas, which is trying to build out its solar energy capacity after an unreliable grid plunged millions into darkness last winter. He notes that Foundry and its partners are signing deals with solar and hydroelectric providers, or sometimes buying them outright, to purchase large quantities of power.

Bitcoin mining operation in Washington run by Scate Ventures, a Foundry partner. (Photo: Scate Ventures)

According to Colyer, pledges by Bitcoin companies to purchase power can tilt the balance when it comes to utilities deciding whether or not to build a solar station or other type of renewable energy plant. Bitcoin mining, he says, “has becomes a powerful flywheel for renewables. It’s a path to a renewable energy future.”

Colyer adds that mining companies can also help with “load balancing,” or drawing energy during off-peak hours when utilities have a surplus. In practical terms, this means a Texas utility might provide the bulk of its capacity to Houston residents cranking their AC during an afternoon heatwave, and then supply power to Bitcoin companies at night when temperatures cool off.

Foundry is already in talks with Texas power companies that have progressed “beyond the learning phase,” says Colyer, though he declined to specify which ones, saying the companies are wary about publicizing the initiatives.

This reluctance is likely the result of hard lessons learned during the Bitcoin boom of 2017 when fly-by-night companies promised a Bitcoin bonanza to public utilities across the U.S., but then vanished when prices collapsed—sometimes leaving damage and environmental degradation in their wake.

The current mining boom is different, according to Colyer, who says Foundry and its parent company are here for the long term and have always taken care to mind regulators and maintain a positive reputation.

Colyer isn’t the only one who claims the North American mining industry has evolved. John Warren, the CEO of a smaller mining firm called Gem that is backed by hedge funds and family offices, makes similar arguments.

“Green power is a more and more important aspect of mining,” says Warren, adding that many people fail to understand that mining operations in North America are much cleaner than those in places like Kazakhstan, another hub of crypto production.

Warren notes that 91% of the energy powering Gem’s Bitcoin rigs is drawn from renewable sources. In the case of Foundry, the company says that number is 71% while the rest of its network’s energy comes from oil, natural gas, and coal.

Even though the energy mix for Bitcoin mining in North America is considerably cleaner than elsewhere, the fact that dirty fuel like coal is powering any crypto operations is unlikely to sit well with environmentalists—indeed, a fossil fuel operation on Lake Seneca in upstate New York has created negative headlines around the world.

Foundry’s claim that Bitcoin mining is accelerating a transition to renewables may allay some of these concerns. But not everyone is convinced its theory holds up.

Balancing profits and the environment

Alex de Vries is a researcher at the University of Amsterdam whose website Digiconomist has become an influential voice in the debate over the environmental impact of cryptocurrency. In an interview with Decrypt, he claimed the “bridge to renewables” thesis put forth by Foundry and others is not persuasive.

According to de Vries, miners’ “load balancing” argument—that they won’t burden energy grids by drawing power primarily in off-peak hours—is improbable given the economics involved with running a Bitcoin rig. He points out that miners are in a race against time since the chips in a rig typically become obsolete within 18 months, which means miners have a strong incentive to run the rigs around the clock.

“If you own one of these machines, the last thing you want to do is shut down,” he says. “You have to ensure you make your profit before that happens.”

And de Vries is skeptical that Bitcoin miners can be a significant spur for developing new renewable power stations. The problem, he says, is that constructing a new power facility takes time—something that miners rushing to deploy their rigs cannot afford.

More broadly, de Vries says he and others—including the environmentalists pushing for an outright ban on Bitcoin mining in Sweden—question whether the benefits of Bitcoin are adequate to justify expanding any renewable energy. Others raising this question include Steve Wright, who manages hydroelectric dams in the Pacific Northwest.

“When you have a green supply of power and you have a carbon-challenged world, people were asking if this is the best use of that power,” Wright told me in a 2020 interview.

For Foundry and millions of Bitcoin boosters around the world, the answer to Wright’s question is an unequivocal yes. To them, Bitcoin mining not only provides benefits in terms of the financial network it offers, but also acts as an important catalyst for expanding the total supply of renewables.

“Bitcoin mining is the path forward to a renewable future,” according to Kevin Zhang, a VP at Foundry. “It is a perfect battery.”

The Foundry executives are convinced their argument is the right one. It remains to be seen if U.S. policymakers will agree.


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Cardashift Is Building a Cardano-Powered Launchpad For Sustainable Impact

Fostering sustainable development has never been more urgent; according to recent research, the COVID pandemic has had a negative impact on 17 sustainable development goals, while nearly four in ten experts believe that a likely effect of the COVID pandemic will be to increase poverty and inequality.

The Organization for Economic Co-operation and Development (OECD) estimates that $2.5 trillion is needed to finance sustainable development throughout the world. To meet this challenge, one start-up is turning to the enabling potential of blockchain and digital currencies.

Paris-based, crypto-powered launchpad Cardashift is building on its founders’ experience and the power of blockchain technologies to fund, champion and guide projects toward transformative impact—in both the digital and physical spheres. 

Cardashift co-founder Vincent Katchavenda told Decrypt how stakeholders will benefit from an entirely new approach to funding and nurturing these initiatives—one that produces results sooner rather than later. 

A blockchain-powered launchpad

Cardashift combines elements of Kickstarter and Y Combinator in a launchpad powered by the cryptocurrency CLAP. CLAP, Cardashift’s utility token, is used by the community to vote on which projects should win their support. 

The launchpad was born out of the merger of three well-established startups: blockchain innovation company SmartChain, design studio Matters, and “radical innovation” consultancy Stim, which specializes in business models that are both profitable and sustainable.

They joined forces in July 2021, and subsequently published their whitepaper in December, with the goal of funding projects that meet key sustainable development goals through a crypto-powered launchpad.

Within weeks, the venture had attracted $1.5 million in a private token sale.

“Our goal is to help entrepreneurs find a new way of doing business in a profitable way while being impact-oriented,” Katchavenda told Decrypt

Transforming the future

However, unlike digital transformation—which can often take place in the blink of an eye— innovation in the real world usually takes much longer. So while future funding prospects include global schemes for NFT-powered sea sponge farming (aquaculture) and identity solutions for refugees, the first tranche of projects to win community funding will be digital in nature to ensure swift results and build early momentum for the launchpad.

Cardashift’s investor base also needs time to acquire the knowledge to make informed decisions about projects requiring more commitment, and those that will take longer to mature, said Katchavenda. “Afterwards we will open up to a larger [project] base but—as for now—we believe, if it’s digital-only, we can have quite a huge impact on the short term,” he explained. 

A crypto wallet and ecosystem to support a factory in the Ivory Coast, so that cocoa bean farmers can book a slot to get their produce transformed into cocoa butter; land management systems and microcredits are all potential projects. 

Cardashift has also been working with IOHK, the team behind Cardano, the blockchain that hosts the launchpad, on identity solutions for refugees and ways to introduce them into the economy.

They concluded that the best way to maximize the project’s impact was to build a Cardano-powered platform. “Cardano’s fundamentals make me highly confident it will last in the long run,” said Katchavenda, highlighting the platform’s grounding in rigorous academic research, its scalability, and its community’s focus on using blockchain for the greater good—all mirroring the values held by the Cardashift team.

Sustainable goals 

Katchavenda expects the launchpad to be up and running towards the end of March, following Cardashift’s initial coin offering (ICO), which starts on Friday, January 21. 

Three to four cohorts of 20 potential projects will be introduced to Cardashift’s investor community this year, having been initially vetted by its internal team. 

Following each appraisal period, five projects will be selected by the community and, to ensure the voting process is as fair as possible, a project must amass at least 10% of the total value staked, as well as winning 10% of the total wallets that are doing the staking, said Katchavenda. (Each investor is allowed one wallet.)

Of these five projects, up to three will be selected by the Cardashift team to receive in-depth support, on everything from potential tokenization to product-market fit, before being presented to the Cardashift community for funding. Successful applicants then follow a six-month accelerator program, with access to mentorship, tools and specialists, and an emphasis on local providers.

Soon, the Cardashift team intends to announce partnerships with leading nonprofits, as well as VCs and banks interested in furthering sustainability goals, said Katchavenda. This will help future, big-impact projects that need more funding in order to scale.

But Cardashift is already primed for community funding and support of the first projects, “in a really short timeframe—two to three months after the ICO,” according to Katchavenda. It’s at the vanguard of a new, more diverse and sustainable online world that will demonstrate the incredible potential of blockchain-based tools to promote better systems of justice and accountability across a spectrum of social and environmental concerns.

Find out more about Cardashift’s upcoming ICO here.

Sponsored post by Cardashift

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Blockchain Courts and Cats That Look Like Dogs: How DAOs Wrestle With the Law

In July 2018, a blockchain project called Kleros organized a competition, “Doges on Trial,” that asked participants to submit images of those cute little shiba inu pups known as “doges” for a kind of curated meme library. 

Kleros asked for shiba inu photographs, but also encouraged participants to challenge dubious submissions through its blockchain voting software; anyone who managed to slip a cat through the net would be rewarded 50 ETH, worth $25,000 at the time. The idea was to test the limits of Kleros’s decentralized arbitration software, and its capacity for keeping a bunch of dispersed, anonymous individuals in alignment with a single goal. (The goal of building a library of doge memes.)

“This 50 ETH reward,” Kleros wrote nearly one year later, “was a way for us to test the cryptoeconomic robustness of the Kleros system, such as resistance to bribe attempts and other attack vectors.”

The problems began when a participant called “Ricky” managed to get an image of a fluffy orange cat—which from behind looked exactly like a shiba inu—onto the list without challenge. It looked like a sure win, and Ricky claimed the reward. 

However, Coopérative Kleros, the French legal entity behind Kleros, issued a counterclaim through Kleros’s own interface. Citing a technicality in the official payout policy, Kleros argued that the submission did not qualify. Adjudication of the matter before a panel of Kleros jurors resolved in Kleros’s favor, and Ricky got nothing. 

To Kleros’s critics, the result was a ludicrous irony: Kleros had designed the competition to see if it would be possible to fool its tech for a prize; when someone successfully fooled it, Kleros leaned on a bad interpretation of its own policy, and an arbitration system rigged to its favor (critics said), to deny the winner his rightful reward.

It was not a fairer system but a replication of the same venal human element that projects like Kleros were purportedly trying to replace with something better: decentralization!

The problem faced by Kleros—how to keep a distributed, leaderless group in alignment—is of increasing concern in the crypto world. DAOs (decentralized autonomous organizations) running on a mix of code-based policies and personal social layer have since become hugely popular, and “the case of the 50 ETH doge,” as it’s widely referred to now, has become something of a cautionary tale as crypto developers try and build systems that work better. 

Broadly, they are trying to solve the longstanding “oracle problem” that arises when a decentralized entity that relies on smart contracts runs into real world complications. 

“Say you want to hire me to build a website for you,” said Jordan  Teague, an attorney based in South Carolina who also works as an arbiter on the blockchain platform LexDAO. “You lock up one ETH in a contract, and if everything goes well and you deliver what I want, the funds are released.” 

But what happens if there is a dispute over whether the work is good?

Some data can reliably be assessed by a smart contract—the price of an asset, the amount of funds in a treasury—but qualitative assessments involving, say, the design of a website, or a picture of a cat that looks like a dog, cannot. In that case, you need to resort to human beings, who can offer something computers cannot: interpersonal mediation. 

That is where people like Teague come in. 

Teague is one of 18  “legal engineers” working with LexDAO, which provides experimental conflict resolution services for DAOs that have run into disputes. When a contractor agrees to payment terms with a DAO, LexDAO (through its “LexLocker” smart contract) offers to hold the funds in question in escrow until the work is complete. If any dispute over the quality of the work emerges, a panel of impartial legal engineers will assess each party’s claims and attempt to mediate, generally through Discord. The funds will only be released once the panel has issued its verdict, which is effectively binding. (Sometimes the release of funds will be staggered as certain milestones of a project are met.) LexDAO takes a percentage cut of the funds held in the contract if it has to get involved.

How does this help? One of the things that caused the Kleros debacle was that the jurors were anonymous, untrained and untrustworthy. Though the point of building this kind of system is, generally, to do away with trust and defer to rigid, code-based principles—the “code is law” tenet—humans cannot yet be removed when it comes to the oracle problem. 

Earlier this year, LexDAO member Pranay Modi wrote at length about the case of the 50 ETH Doge, and noted that many of the amateur “jurors” had offered wholly simplistic assessments of that case. Much of the confusion was around the payout policy, particularly a clause stipulating that, “to be considered valid, a picture must clearly display a doge or a cat,” and that “pictures with hidden doges or cats will not be considered as valid if a normal observer would not be able to see it without help (e.g., an image with a doge only a few px large would not be considered valid, because an observer would be unable to see it with plain sight).’” 

It turned out that clause was too complex for a coterie of remotely distributed amateurs to consider cogently. One juror, who voted in favor of Kleros, took the word “hidden” in the payout policy to refer to the species of the animal, rather than the animal itself; the difference between a cat that looks like a dog and a cat that is difficult to even spot in the image. But Modi argues the payout policy never said a reward would be given for an image that was clearly a cat; that would defeat the purpose of the assignment, which was to try and hoodwink an observer into thinking a cat was a dog. Another juror appeared incapable of even understanding the premise of the competition.  “This is clearly a Doge,” the juror wrote. “People may have been fulled [sic] but it’s fair game.” 

Modi pointed out something yet more alarming: to participate in the Kleros experiment, jurors had to stake a certain amount of Kleros’s native token, PNK. Clearly, these were not unbiased parties but people financially invested in the success of the very platform that was in contention!

Metaverse, meet meatspace

In a way, Kleros was lucky: Ricky submitted to the ruling. But often these decentralized tiffs snowball into real-world legal disputes, with participants resorting to the traditional courts. 

Take the example of Aragon, a popular blockchain court that tries to incentivize jurors by getting them to stake tokens before voting, a portion of which they lose if they wind up in the minority. (Aragon claims that motivates jurors to think deeply, though you could argue it encourages a kind of juridical groupthink.) 

Last year, Aragon offered a grant to Autark, a project building tools for DAOs. But Aragon decided not to give Autark the full amount pledged, saying the project had done a bad job. Ultimately the dispute was settled not in Aragon’s own blockchain court, but in a Swiss one. Aragon reportedly feared that any victory in a blockchain court would just be relitigated in a real one anyway, and endlessly fought. 

Which makes you wonder: What’s the point in building these blockchain courts if there’s so little faith in them that people just revert to the traditional system? Many blockchain types think the existing legal system is bogus, but it’s hard to enforce a blockchain alternative if the traditional route still exists.  

“We’ve been thinking a lot about that question,” said Teague. “Should we follow rules other courts follow or should we make up our own?”

Teague says one potential answer to this question is the US Federal Arbitration Act, which lets a contract delegate the resolution of any conflicts to an independent arbitrator; a court will uphold it if it’s deemed “reasonable” (or even in some cases, Teague says, if it’s not reasonable). A policy stipulated by a DAO, in such a case, would really carry legal water, so long as it isn’t totally absurd. Teague imagines it as a kind of new legal system for the “metaverse” which is distinct from yet legally sanctioned by the traditional justice system. It would, however, have to account for the possibility that a DAO’s members are dotted around the world. 

For a little more courtly recognition, you might want to go further afield. Wyoming passed a law last year entitling DAOs to legal status, provided they specify the extent of human involvement in their organizational structure and identify each relevant smart contract in the incorporation docs. There was some dissent over the law, which requires that smart contracts can be “upgraded” or “modified,” basically meaning that there has to be some degree of centralization—which is not ideal, for a DAO. 

Tribute Labs (formerly OpenLaw) developed a DAO called The LAO that aims to add a little more nuance—though it, too, has had to move cautiously: The LAO is registered in Delaware and is only open to accredited investors (people with a net worth of at least $1 million); otherwise there is a risk of the LAO’s tokens running afoul of securities laws. 

Tribute Labs’s clever idea was to develop a unique markup language that takes a standard legal contract and reduces its language to the kind of data that can be fed into a blockchain—i.e., machine-legible and compatible with smart contracts. That means the best of both worlds—a contract governed by code, and enforceable in the courts. Tribute Labs founder Aaron Wright said this is important because, short of developing a supremely powerful AI juror, the meatspace courts will always be necessary. 

“We can’t automate away humans,”

Wright said. “There are lots of valuable assets in meatspace, and we’re asking: How do you connect to them?”

The aim with Tribute Labs, he added, is to slowly build regulatory acceptance without the usual startup approach of moving fast and breaking things. It’s similar to Coinbase’s approach with regulators, but applied to DAOs and the legal haze around them.  

MetaCartel Ventures, a DAO that invests in Ethereum projects, offers a creative spin on the Tribute Labs design called the “Grimoire,” a “member pact” named after a Dungeons & Dragons spell book. The DAO’s lawyer, Gabriel Shapiro, was able to couch familiar legal concepts in fantasy-oriented terms. In the MetaCartel Ventures white paper, members of the DAO are categorized as either Goblins or Mages, each with their own peculiar legal entitlements under the LLC structure. One characteristically bizarre clause stipulates that “persons who are ‘accredited investors’ under the net asset or income tests of Rule 501(a) of Regulation D may become either Mages or Goblins, as desired, pursuant to Rule 506(c).”

Shapiro was also able to do away with one of the Delaware doc’s foundational  requirements—that companies bear “fiduciary responsibilities,” to their employees, as in, agree to act in their best financial interests—and reframe it in terms of the DAO’s “ragequit” function, which lets DAO members quit with their share of the treasury whenever they choose. 

grimoire DAO mages summoners
Image from the MetaCartel Ventures white paper (via GitHub)

Wright, who was tangentially involved in the Grimoire, noted that U.S. courts do offer a surprising amount of leeway when it comes to things like fiduciary duties, which is to the benefit of DAOs. “You’re permitted to waive fiduciary duties,” he said. “What you can’t waive is a duty of good faith and fair dealing—i.e., you can’t be a bastard.” 

Blockchain lawyers will continue dreaming up ways to transform the material world into something palatable for computers. But it has already become clear that stripping away the human element leaves a cold void. Code may be law in Web3, but it will be humans, with all their flaws, who will have to uphold it. 


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