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Dispatch #49: Twitter Digs in on Decentralized Social Media

Aug 20·4 min read
Dispatch
Dispatch #49: Twitter Digs in on Decentralized Social Media

In this patch of your weekly Dispatch:

  • Twitter hires head for its Bluesky initiative, Vitalik is skeptical
  • Penguins and apes duke it out for NFT superiority
  • Nexo receives prestigious award for financial services

The Big Idea

Can Decentralized Social Media Save Us?

The world of social media is more fraught than ever. Censorship. Deplatforming. FTC antitrust lawsuits. What’s a platform to do?

Well, if you’re Jack Dorsey and Twitter, the answer is you try to decentralize yourself. Back in late 2019, Dorsey announced “Bluesky.” It was meant to be a project like Square Crypto where the company (in this case Twitter) would fund a handful of engineers and designers to reimagine a protocol for central media – without the constraint of having to deliver against the bottom line. Dorsey made clear that Twitter hoped to one day be Bluesky’s first customer.

Now – about 21 months later – that project has been given a shot of adrenaline in the form of a new person in charge: Jay Graber. Graber has deep experience in crypto, contributing to Zcash as well as working on decentralized identity issues with a grant from the Ethereum Foundation. Her hire shows Twitter is serious about this not being some secret corporate initiative.

Still, not everyone is convinced that a big tech firm like Twitter could really do something this decentralized. While he didn’t comment on Bluesky specifically, Ethereum creator Vitalik Buterin did poke holes in another initiative of Dorsey’s – Square’s new plan to build what amounts to DeFi on Bitcoin.

He said ​​"On Ethereum, there's a native functionality that allows you to essentially directly put ETH or Ethereum-based assets into these smart contracts, into these lock-boxes, where there's then arbitrary conditions that can govern how those assets get released. Jack is basically going to have to essentially create his own system that enforces those rules."

Similarly, Buterin, who recently became an advisor to the dogecoin foundation, was skeptical about Zuckerberg's desire to transform Facebook into a "metaverse" company.

Still, for our money, we’re glad to see Bluesky start to put its money where its mouth is. If anyone in big tech has the vision to change the game from within, it’s Jack.

The Latest In…

NFTs

It’s Penguins vs. Apes. If you’ve spent any time on Twitter recently, you’ll have noticed that everyone is running around with an NFT avatar. There have been a surprising number of Pudgy Penguins and Degenerate Apes – the hot new projects that have captured the community’s attention – and because one is on Ethereum (Penguins) and one is on Solana (Apes) there’s an additional element of fervor.

Speaking of fervor, the numbers on NFTs overall are just absolutely soaring. OpenSea volume has more than doubled this month to hit 10 figures for the first time. At the same time, a growing number of artists have reported that their work was tokenized and sold without their consent - often for big bucks. After a few slower weeks, NFTs are not showing many signs of stopping.

The Latest In…

Nexo’s Wins

Know whо else is showing no signs of stopping? Us at Nexo.

This week, our amazing team won in the Financial Services category of The Stevie Awards – the International Business Awards – for a medium-sized company. Nexo is excited that this recognition comes after such an extraordinary year, and we're honored to receive many positive comments from the judges, who applauded the significance of Nexo's business and its technical capabilities in a new industry that's rapidly growing.

The Latest In…

Layer 1 Competition

Thought the Layer 1 battles were over? Think again. In DeFi, they seem to be just heating up. The total value locked in DeFi now stands at $148B, and while the preponderance of that is ETH, other blockchains including Solana and Terra are putting up numbers as well. SOL and LUNA, respectively, have had incredible weeks. SOL is up 71% this week and 177% this month. LUNA is up even more – about 75% on the week and over 360% on the month. Suffice it to say, no one is just going to let ETH ride off into the sunset as the sole currency of the decentralized finance future.

The Latest In…

Regulatory Intrigue

It's exhausting having to cover every week’s attempts to take down our industry. But, it’s important and will shape it going forward, so here are your quick bullets:

  • SEC Chair Gary Gensler said in an interview with the Wall Street Journal that DeFi should probably be regulated – by him and the SEC, of course.
  • Two Congressman sent Gensler an open letter suggesting that he and the CFTC work more closely and that Elizabeth Warren was driving things in a dangerous direction.
  • Two different Congressmen introduced legislation to try to clarify that non-custodial actors don’t count as money transmitters when it comes to new Financial Action Task Force (FATF) rules.

The Week’s Most Interesting Data Story

Has the Flippening Already Happened?

Here’s one sure to make the Bitcoiners angry. The ‘flippening’ refers to the point at which Ethereum would overtake Bitcoin’s total market capitalization. However, depending on which statistics one looks at, Ethereum is already far ahead of BTC in many ways. It’s not even close when it comes to fees, with ETH averaging $20M a day, compared to BTC’s ~$700,000. In one that might hit closer to home, however, Ethereum is also settling nearly 3x the amount of total volume. Now, of course, this is not a marker of Bitcoin’s irrelevance by any stretch of the imagination. It is tailor-made for a specific and incredibly important purpose. But it does show just how active users of ETH are, comparatively.

Hot Topics

What the Community Is Discussing

Well, hot damn – Coinbase is dumping half a billion of its Treasury into crypto.

This could have been a video of Paris Hilton explaining NFTs to Jimmy Fallon. But it’s Graber – the new head of Bluesky we discussed – with a darn good explanation of, essentially, communities.

Chris Dixon always has fascinating ways to look at the future.

What to Watch for Next Week:

  • Can SOL and LUNA keep up their momentum?
  • Will NFT price floors start to come back to earth?
  • Another alt season, this time for real?
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