| What you need to know today in crypto and beyond May 28, 2021 Sponsored By: Welcome to The Node. We will be off next Monday in observance of Memorial Day. The Node will publish next on Tuesday, June 1. If you were forwarded this newsletter and would like to receive it, sign up here. Questions? Feedback? We'd love to hear from you! Simply reply to this email. -Daniel Kuhn Today's must-reads Top Shelf ETH ETF: WisdomTree has filed for an ethereum exchange-traded fund (ETF), according to SEC documents. The ETF specialist firm, which already has a bitcoin ETF before the U.S. regulator, becomes the second U.S. fund shop to also vie for an ether product, after VanEck.
SLOW ADOPTION: Malcolm Wright, the advisory council chair at trade group Global Digital Finance, sounded pessimistic about how successful the world’s governments and crypto industry have been at bolstering anti-money laundering protections ahead of a Financial Action Task Force (FATF) review. “One could perhaps conclude that there’s not enough progress on licensing, that the industry is still not progressing fast enough to respond to compliance and particularly the travel rule,” said Wright.
UNI DEGENS TAKE NOTE: Liquidity mining is coming back soon to Uniswap, the leading automated market maker (AMM) on the Ethereum blockchain, according to its founder. The proposal is being worked through the communities grant program. Laying the foundations for this moneymaker’s return, Omar Bohsali, the entrepreneur-in-residence at Paradigm Capital, has been working on a staking system for the newest version of Uniswap’s software.
FROM PUBLIC TO PRIVATE: Sweden’s Riksbank plans to test its proposed CBDC with commercial bank Handelsbanken as it moves on from having only simulated participants. The e-krona is set to move from the simulation phase to a testing environment with external participants. Meanwhile, the Federal Reserve Bank of Richmond issued a paper saying, under certain conditions, issuing a digital currency can be an attractive alternative to cash for companies. Though the costs could be high.
WE HAVE YIELD FARMS AT HOME! Decentralized finance (DeFi) protocol BurgerSwap suffered a flash loan attack that saw hackers make off with around $7.2 million of altcoins. BurgerSwap is the latest DeFi protocol on the Binance Smart Chain (BSC) to experience an attack of this nature. –D.K. A message from Nexo Your digital assets deserve a savings account in their BEST INTEREST. Leading crypto lender Nexo treats you, your crypto and your fiat to industry-best Crypto & Fiat services, featuring: * Up to 12% interest on digital assets, paid out daily! * Yields available on BTC, ETH, LTC, BCH, XRP, XLM, EOS, TRX, LINK, BNB, PAXG, USDT, USDC, TUSD, PAX, DAI, HUSD, GBP and EUR. * No minimum or maximum limits on funds deposited, offering infinite opportunities to earn. * #ZeroFees on all transactions. * Military-grade wallet security and top-tier insurance on all custodial assets with SOC 2 Type 2 certified crypto custodian BitGo. Get started at nexo.io A message from CoinDesk CoinDesk's new reward token soft-launched at Consensus 2021, but $DESK lives on. Attendees can still cash in at the $DESK store, or hodl and accumulate. Join the Telegram group for announcements and airdrops. What others are writing... Off-Chain Signals Cardano Begins Countdown to Smart Contracts With Alonzo Testnet (Decrypt) Hash or hashrate? U.K. police mistake Bitcoin miners for cannabis farm (Protos) Museum of Crypto Art to launch MOCA token, plans acquisition spree (Cointelegraph)
–D.K. Putting the news in perspective The Takeaway Pull Up a $DESK, This Is Serious Hi, it's Daniel Kuhn. It was always a blow to discover the latest $DESK drop was “depleted,” or that others had gotten to it first, after spending about a minute validating my email with Torus and waiting for the tokens to materialize (or not) in my Unifty wallet. I wanted the tokens, but I wasn’t quite sure why. But when they didn’t come, it made me feel more like a “piranha” than a $DESK whale. Over the four-day Consensus event, CoinDesk ran an experiment in an attempt to bridge the gap between its Web 2.0 media presence and the decentralized, crypto-powered future vision of the web we write about so much. It was a community-building effort, a way for attendees to learn about tokens, experience the redemption process and interact with a fully virtual event. By most accounts, it was successful. “I think it's interesting how quickly it creates a tribal community of people who've never met each other before, all rallying around accumulating more coin,” John Thiel, adviser at Private Ocean Wealth Management, said.
More than 1,300 wallet addresses were made and approximately 22,000 $DESK claims were made with potentially billions issued. Conference attendants exchanged these tokens – which have no direct monetary value, as they exist only on an Ethereum testnet – for crypto-themed non-fungible tokens and experiences, like lunch with Justin Sun.
More than that, a genuine $DESK community emerged. Within the chat rooms alongside the panel discussions, people spoke and joked about $DESK. Every panel subject could be redirected to be about DESK: DESK staking, DESK atomic swaps, DESK layer 2s.
An unofficial Discord channel emerged, where people could share strategies on how to acquire the most tokens (like pointing users to the latest airdrop), as well as a more-official, 366-member (and growing) Telegram channel that creators are still figuring out what to do with.
For years, cryptocurrency enthusiasts have theorized that tokenomics and the “participation economy” could solve some of the pressing issues in the media today. The current internet stack means publishers and readers are beholden to third-party ad sellers and data brokers.
“An open-source, internet-native monetary layer is the makeweight that could tilt value back in favor of writers, broadcasters and other creators, as well as the communities that support them,” Joon Ian Wong, a CoinDesk alum turned independent token adviser and founding co-president of the Association of Cryptocurrency Journalists and Researchers, wrote in a recent op-ed.
Ian Wong thought $DESK, as far as these things go, was “hugely successful” and “exactly what you would want with a pop-up community money.” It showed how even valueless tokens can form bonds between people, “which is what money is supposed to do,” he said over DM.
“I've been in crypto for a long time (2011? 2012?) and this community is an important part of my life. Digital badges allow a sense of pride and social engagement within the community,” John Berger, another Consensus attendee, said.
Berger said on the last day of the conference he woke up at 4:30 a.m. local time and planned to stay throughout the event’s close, partially in a bid to collect as much $DESK as possible. Microcosm
In some sense, $DESK is a microcosm of the cryptocurrency industry at large. It is an expression of how novel technologies, simply by coming into being and offering something new, can gain ground.
Although people weren’t immediately able to trade in bitcoin for branded sweatshirts or NFT representations of crypto micro-celebrities (like CoinDesk CEO Kevin Worth), the idea of a digital asset that can be wholly owned was grasped by a few early adopters.
$DESK, BTC and NFTs have value because they are scarce assets that exist within the context of an ever-widening internet, where ideas and images can be reproduced endlessly, and an ever-expanding monetary regime. (To be sure, $DESK’s scarcity is arbitrary, at the whim of how many drops "the central bank of CoinDesk" decides to issue and the natural demand for the tokens.)
“I think bitcoin was destined to become an asset,” Jenna Pilgrim, one of the contractors who designed $DESK, said. “I don't think $DESK is destined to become an asset because it does have a centralized supply. Like, we own the means of production.”
Perceived scarcity (in terms of the number of drops and how quickly they’re depleted) is one part of the equation, but so is gamification. Pilgrim said the drops were engineered to be random, “to help reward those that were paying attention.”
Both Thiel and Berger admitted half the fun was just accumulating their bags. They just liked watching their balances go up – perhaps a familiar feeling for anyone with a bank account.
These elements of gamification and scarcity are present in any free market society.
Although Pilgrim and other CoinDesk staffers designed strict “guardrails” around the beta $DESK economy, like in any free market, certain players found ways to game the system. By the second day of Consensus, people figured out how to “resell” items on Unifty. A pizza NFT redeemed for 10,000 $DESK was re-uploaded onto the centralized marketplace for 30,000 $DESK. The same thing happened with a T-shirt.
“Everything is well and good until, you know, people start a Uniswap secondary market for $DESK that is now priced at whatever,” Pilgrim said. It doesn’t seem like that has happened, though Pilgrim mentioned the “anxiety” of being a community manager and having to decide when to step in.
No one is exchanging money for $DESK, so it’s likely not a security, she said. So, for the most part, the experiment in open markets was allowed to run.
On the Discord, there were discussions – so far mostly in jest – to port $DESK over from its testnet and build DESKswap, a version of the decentralized exchanges Uniswap and SushiSwap.
So what’s next for this experiment? Pilgrim said it would make sense to move into a live environment, in case Rinkeby ever goes down, but beyond that: “the honest answer is, I don't know.” –D.K. The Chaser... ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. The Node A newsletter from CoinDesk See Previous Editions Copyright © 2021 CoinDesk, All rights reserved. 250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk email. |
