crab notes 🦀 lobsterdao

Only the rich can buy shitcoins

A thread from Jake on why accreditation rules are not supposed to get fully abandoned. The main reason is to not create an ICO craze in the normal world due to information asymmetry... like that’s working 🤷🏻‍♂️

I fully disagree with the arguments though. If you touch something you don’t know about and get burned - that’s your lesson. What do you think?

Accreditation rules: yay or nay?

🤖 twitter.com/jchervinsky/status/1121429980968378368?s=21

The history of IEO... Is it a new concept?

The noise ratio is crazy at the moment. Let's see what has been going recently.

BBQ also known as BQQ, BitSdaq 🐣

These spare ribs are not turning out to be so tasty. Originally hyped as the next Bittrex IEO, the SAFTs even included the clause about "if no IEO, then refund". Because, just like Upbit, it's a white-label of Bittrex. While the negotiations were ongoing, they announced their own launchpad - even before the money was collected and their own token started trading. That's an epiphany of the China Hustle. The pools are flowing and everyone is trying to buy, since the lockups on this one are less harsh (ezi flip u think?). Anyway, the premise is as usual: I make my own token and moon it so everyone will try to buy my launchpad slots. It's a clear business model, sure. Pure casino.

DUO Network ☃️

Ye idk what this is, but there is some wrapped non-custodial stuff, another trading thing. Maybe interesting, can't be bothered to look into it. Insanely harsh lockups, so your favorite influencer is telling you tu put all his money in it - sure, why not. Pure casino. No one really cares these days, and that's the issue. Let's get to that.

I am not trashing IEOs as a fund raising tool. I am trashing the majority of projects' approach - because I usually see nothing beyond PnD 📉

They do not try to show their product. They do not try to build a community. They make no efforts to look legitimate or working whatsoever. Their interaction is at the level of "we all know what is happening. Just deposit here, take your x2, and let us rek our private sale, because screw SAFTs". Fine, we all get it, it's just sad. Content being produced by legitimate projects (raised or to be raised) gets absolutely ignored. IEO calendar tells you to buy at least 5 times a day. But it's all mooning, so what's wrong?

Before I kept hearing how "Korea knows no winter, they raise millions anyway". In fact, IEO is not a new model, it's old!

⛔️ Here is how the proposal of a Korean IEO looked like at the end of 2018:

- you make a small cap for the sale, so it drives artificial demand
- you make the sliding bar go very fast and close the cap yourself
- you do not even need to send money, the exchange just shows it as "sale finished" demand moon lambo
- you publish a lot of news and pay a fakload for pumping, keeping deposits and withdrawals closed (they call it Chinese Wall)
- then you offload the tokens you bought and essentially raise the money that way
- you make the price look stable simply because you control the entire supply
___

🤷‍♂️ To be honest, it's very similar to how fashion brands like Supreme do it. There is no intrinsic value to even those products, so why would they do it differently in magic crypto money... You create hype, demand, and just let it die. It's a get-rich-quick machine. Is it good or bad? Doesn't matter, no one forces you to do it: you wanna get rich quick - then prepared to get poor quick as well. Look at the product and the community, they create changes, not an IEO fact by itself.

Stay SAFU and be honest. Integrity wins in the long run. If you scream in a chat "buybuy" to your friends just to offload your own bags - you are a piece of crap. If you play casino, at least be honest to others and say it's casino. Just a rant as always. I assume you all know it anyway. Sad for crypto, it will pass soon. Don'y be like Bibox announcing 4 IEOs a day. Dumb people copy CZ, and do it very poorly.

PS: I hold none of these coins and never tried. No salt, hidden agenda or anything. Feel free to rebut in @tokencode

​​SpreadYourSheet 🤗

In the era of IEOs, it has become redundant to find new investments because the idea of an IEO is simple: a small circulating supply and moon. It's a no-brainer, read a little rant here: t.me/ivangbi_diary/513. But this is not a rant about IEOs, because an IEO is just a fundraising tool, it's not the end of the world. There is a more sensitive issue. 😰

Because IEOs allow to invest only to participate with that exchange's token, it kills many possiblities of building a community. Crypto projects are often already complicated enough with all their code and stuff. But it was still possible to have a community and get viral because you had token holders being passionate about your vision and following you.

Now people:
1) still don't understand wtf you are building
2) cannot take part in it cause it's a damn research paper
3) can't have skin in the game cause u do IEO

This is why I am not going to touch upon all the forever-developing projects layer-1 scalability smart contracts, too many of those. Coda Protocol, StarkWare, BloXroute, Algorand, and so on. Sure, great research, great code, but it's boring for me and for you. As a project, if your narrative is we can do anything other blockchains can but better then you can't do anything. You can't develop your community, you code in your little basement and write research papers. No business, no community engagement.

I like narratives. You like narratives 🦄

For me and for the community it's about a narrative, about a unique story. This is why people hold your token, why they try to help, why they engage. A technical paper aint gonna cut it. Your BUIDL aint gonna cut it. You need the community and you need users, as well as a clear value proposition.

So this is what I am looking at, not focusing on ROI, aint a skem channel after all. But quite often, if you look beyond 1 day PnD, you will see the bridge future or get rekt like me LOL. I want to see nice tech applications, UX, good communities, strong vision backed up by substance. Quite often I will leave token metrics out up until the last day (hardcap bs etc.) because this is not financial advice. Besides, check this piece to understand how rekt most of the current reviews are and what they do wrong: https://medium.com/@ivangbi/crypto-assets-beyond-pnd-180b08a0cf2c

How much of three-letter symbol space has been exhausted so far? Moar coinz! 🎉

The exact answer is 14%, here is the chart. Only about half (2467 of 4313) of assets listed on coingecko use 3-letter a-z symbols. BTx is the most popular symbol obviously.

Thx @crypto_eli5 lazy boi

Exchanges in 2019: we know how to recycle your 2018 dead bags at the expense of early investors! 👻 Coming soon to your favorite 2018 "Very High" project! Who is next?

Rocco with two cool pieces: on token distribution aka Fair Launch meme + a response to NuCypher's WorkLock model 🎓

On Fair Token Launches
-> http://bit.ly/2I40DGm

How to distribute tokens to as many people in interest as possible in a fair way. Touching upon interesting distributions by Numerai (dedicated data scientist airdrop), Handshake (contributors airdrop), and Livepeer (potential workers airdrop accessible to all ETH holders).

WorkLock --> WarLock
-> http://bit.ly/2K26X43

His idea is to make this like this: Participants receive 25% of their escrow back after ‘x’ work provided. 75% of ETH is pooled and forms an exogenous block reward which is granted in addition to the network’s native block reward...

Imho: this is a positive incentive type for workers to stay in the network. Positive incentives better apply to speculators... no, to be honest, they don't. Speculators would rather get less money but be safu and dump at a smaller profit at the start. If we are talking about the community in actual interest (loyal members), they would not need this superficial extra incentive. However, what it does do is make sure the team, which is able to stake and mine, will not be selling token rewards for USD to fund the development, but will be getting part of that ETH escrowed amount while not actually being in the initial WorkLock contribution (but... zcash premine much?). Share your ideas in @TokenCode

Quantitive analysis of Governance

Sometimes it feels like CoinFund is producing 90% of the crypto content ⚖️ This time Jake with some cool thoughts and data on how to analyze the value of a governance token model: twitter.com/jbrukh/status/1112778758321332224?s=21

NuCypher: NEW crowd sale 🔥

Participants in the token distribution escrow ETH into a smart contract where it is locked. In return, they receive tokens. Participants are free to use those tokens however they like:

- if participants use the tokens for their intended purpose (e.g. running staking nodes) they will recoup their escrowed ETH after producing some amount for work
- if participants choose not to use the token for its intended purpose, they forfeit their escrowed ETH, which is effectively burned.

This means NuCypher is not actually raising money. Thus, the circulating supply can end up being absolutely... negligent. This is insane.

blog.nucypher.com/the-worklock

Lazy. Proud. Shill. 🦐

Ye this is a shill. But Matic's good. This needs a deep code dive, but everything apart from that looks hot. No idea what metrics are, idc. This is about F u N d i M e N T a L z.

What is Matic about? At the core of it, it's a scalability play. I hate those! So what's different here?

Firstly, why I hate TPS coins:
1) Usually the tech implementations are very raw, or
2) TPS coins make new blockchains and have no network effect

Meaning: by the time your new techie thing will be out, you will already be rekt by a new research paper of some PhD student. Also, existing blockchains can just take your open source code, upgrade, and bam easy-peasy. If you start a new blockchain, you are an underdog right away if your only advantage is speed, because it's very superficial. By presumably making a better ETH - you will not get the same people that love ETH, and those people are what makes ETH actually great. It's all about the community. Token holders. Builders.

Matic enables scalability not by making its own entire new public blockchain, but this with Plasma, on ETH. It's an upgrade to Ethereum, it's not a competitor. It adds to the ETH ecosystem by providing scalability and tech implementations, while simultaneously piggy backing on ETH giant community and resources. This is the potential. What is built on ETH, can be routed via Matic. Why: cheaper and faster. You are still essentually using ETH, just via Plasma implementation of Matic.

For example, Decentraland has committed to using Matic mainnet to wire its operations through it. They are also close with DAI (MakerDAO) for the same purposes. To me, the narrative of this is clear: Engine for DeFi. How realistic this is? Well, you just need to be in bed with ETH projects or have huge backing (cough, Coinbase, cough) - and then just make them all wire transactions through Matic. Done. So the buz dev story is clear: first get all popular ETH projects who lack scalability - to use Plasma. And then start building more yourself.

Ok so just to sum up, what gets me hard:
1) They are dev focused, have nice docs and innovations, so it's sexy.
2) They have a clear biz dev / community acquisition strategy. Check all the ethhub and etc. updates about them. Waiting for Vitalik to tweet next LOL.
3) They explain what the token is for (to make plasma implementation permissionless)

Value creation (Plasma as DeFi Engine) -> value capture (Staking for Permissionless Plasma) checks out.

Follow-up reading: https://medium.com/matic-network/what-is-matic-network-466a2c493ae1. FAQ: https://docs.matic.network/faq. They announced 500,000 USD grant for devs. There are a lot of dApps, but hardly any users. Their experience + resources are supposed to help new devs get started: medium.com/matic-network/matic-developer-support-program-df1f0aaa9cd0

About the concept of money, prisoner's dilemma and more sociological-economic modelling, interesting and easy to read 🙏 https://medium.com/coinmonks/a-universal-framework-for-understanding-incentive-design-in-crypto-and-fiat-systems-part-1-e15e8179e2

Binance, OKEx, Kucoin, Bittrex, Huobi... everyone is doing launchpads now. Waiting for Bilaxy launchpad next!

Bilaxy: we will launchpad your token without you even knowing about it!

Exactly one year ago Nic Carter predicted the demise of 15 coins, based on either their price or development hault. Let’s see the results. Quite a fun read, don’t get too emotional 😉

It’s not about the tech, it’s about incentives and economics

… not that I would know, because I was skipping economics classes in uni, but as they say “a dozen of econ medium articles a day, keeps a boring textbook away” (no one says it, don’t trust me). The idea of a distributed database is fine, but then who will maintain it? How do you make it trustless? How do you automate it all? Buuuah, incentives!

This allows you to model behaviour of different actors based on different scenarios. Making the system dynamic can be perceived as bad (forks) or impossibly bad (if implemented with governance, which works like shit for now). In any case, this is true for evertything that we do. Properly mapped out incentives can make you, your dog or your girlfriend (lol, you don’t have one) - do however you model it (don’t try this on people). It can be done via some economic incentives, a loyalty programme, an elite community pass and etc.

Which is why me and a few other homeless investors find token economics to be one of the most interesting and exciting concepts in crypto: because you can game it in various ways and get cool results. I have 1 test drive coming up related to this, but honestly curious to see if there are move ways to do fun things with behavioural psychology.

This is just an intro article on rewards + motivation, but probably lacking an instagram picture with a booty and a motivational quote 👧

Governance tokens: Melonport, 0x, Maker, Aragon

An awesome article about governance and most popular governance tokens. It’s just so on point! 🔖 The maximum price a network participant (maybe a relayer) will pay for 51% of governance tokens is bound by the cost associated with a network fork. Cost is equal to the difference between the net present value of the pre-fork and post-fork business.

The most obvious problems with governance tokens:
1. Plutocracy. Governance tokens which have only coin voting mechanism in place are like pre-selling a new cartel system (the first ones to grab the supply win). So since we moved away from nodes implementing all the changes, and give the power to users - does this model actually solve what we wanted?
2. Hard to calculate the token valuation, or even impossible. The network value here might be completely different from the token value (see Aragon and 0x). The question here is do you really lose the network effect here? You are supposed to, that is the assumption, but perhaps it’s not even the case.
3. Generalized mining, instead of ICOs or private sales, is probably better suited for governance token models. More users, less speculators. But essentially you still end up with speculators there, since coin voting = economic incentives. Maybe it’s escaping the intended scenario yet again.

a) Aragon: probably a bad governance model where latest coin voting had no turnover. (read the edit below)
b) 0x aka ZRX is just a bad model too, and there is not even governance in place yet (hello, hydro fork).
c) MakerDAO is the best concept in place since there is a link between network value and token value (because it is more of an equity token where you can have diluted ‘shares’ in case of bad governance, so essentially it’s a security token much more than the others, not even a doubt).
d) Melonport has a hybrid implementation trying to balance of different councils responsible for different features, where there is still central authority checking off on ‘identities’ - probably too complicated for what it needs to be doing, but creative.

Overall, governance tokens do not seem to be doing much if it’s just coin voting. Implement a link between the token value and the network value, and you end up being labelled as an outright security… so be it? Let’s discuss in @tokencode (and also feel free to join @cryptocodereviews and @de_fi for quality discussions).

EDIT (27.12.2018, 00:00 CET): Aragon has more use cases to its token than ZRX, and ANT is used for staking as collateral where they attempt to minimise the risks of volatility by a reserve fund, and also for governance to control the inflation rate. The token does have multiple use cases within the system, and those look decent. You can find the whitepaper here.

www.opera.com/dapps-store

Shiiit this looks quite neat! Still need to try it out, but looks pretty cool. Not actually using Opera, but maybe will switch to it. (where is my brand contract huh?!)

Talking about trends: today’s guest is NFT

NFT is a non-fungible token. A unique asset - only one of a kind exists on the blockchain, it’s authentic. Think CryptoKitty.

So people started jerking off to NFTs a few months ago. Which always seemed confusing to me. If I just make something scarce, but it has no utility - it will still not appreciate in value. If I make IvanCoin, and burn 90% of the supply - it won’t go x10, because there is still no utility for it. Not even an imaginary perceived value (emotional value people attribute to coins quite often called HODL). For an NFT to really shine, it first needs to represent or acquire that ‘collectible’ value. Again, the blockchain does not solve cancer. There is no default value in NFT.

Think of MTG. One can think that only the physical cards have collectible value since you can touch and feel them. But no, MTGO (online cards) have that too. So do PokemonGo avatars. But that was about transposing the existing user base into the digital world - and making the value travel there. There were already people collecting those things, and then they started attributing value to it. That happens quite rarely, it’s not easy to replicate such a phenomenon. It was not just a no-use-case NFT created from nothing.

So here you go, two nice tech/conceptual rants about NFTs.

ONE & TWO

Best Christmas wishes u ll hear 🎄

https://twitter.com/nlw/status/1076846190883454976?s=21

A step-by-step guide on becoming a crypto maximalist.

Discouragement Attacks

Here is a possible alternative ending: once everyone but the attacker leaves, the attacker slowly exits their validators until only one validator remains… 💠