Welcome to S3T (pronounced "set"). In each issue we examine sets of changes that are impacting the financial, social and natural ecosystems of our world. This month we look at how the emerging decentralized financial ecosystem is impacting regulators, financial advisors, VC and the traditional art world.
Crypto Industry Proposes Regulatory Approaches
As federal regulators struggle to craft a coherent response to crypto, the US crypto industry is putting forward its own regulatory proposals this fall - 3 notable reads:
- Coinbase launched their Digital Asset Policy Proposal (dApp) with the tagline "Safeguarding America's Financial Leadership." and published the proposal as a PDF you can download here, as well as a Github repository to encourage comments and contributions.
- A16Z also published How to Win the Future - a policy approach that focuses on the emergence of Web3.0 and sees crypto as one its manifestations. See also A16Z's policy principles for stablecoins.
- FTX published Policy Goals for Crypto Market Regulation focused on 4 principles (customer & investor protection, market integrity, financial crime prevention, manage systemic risks).
The three harmonize reasonably well, and come amid continuing mixed signals from Washington.
In contrast, the EU has just rolled out a proposed crypto regulatory framework - the Markets in Crypto Assets (MiCA) - targeted to go into effect in 2024. The framework is part of the EU's recent Digital Finance Strategy and was developed based on 2 public consultations that ran from Dec 2019 to March 2020.
Helping Investment Advisors get up to speed on Bitcoin
Registered investment advisors (RIAs) have been largely mute about cryptocurrencies. The most forward leaning RIAs I've heard would go no further than something like "invest only what you can afford to lose, and no more than 1% of your overall investment portfolio." Fine for a quick elevator conversation, but leaves a lot unanswered.
To address the educational needs of RIA's, Coindesk has launched a newsletter aimed at investment advisors, and in a piece that seems to be aimed at investment advisors, Adam Blumberg reviews top 3 motivations for investing in Bitcoin.
Related: Bank of America launches crypto services and a crypto research unit, saying Bitcoin and crypto "too big to ignore".
The unique DIY culture surrounding crypto made it difficult for the established financial advisors, service providers and regulators to find a starting point for learning (outside of their own self initiated experiments). The next item below digs into this a little more.
Why Silicon Valley (and most everyone else for that matter) has been slow to understand Crypto
The following tweet thread by Dan Held provides a helpful overview of why the crypto space slipped under the radar of most VCs: building the base layer of the next financial ecosystem is different from the standard platform innovation playbooks that Silicon Valley has gotten good at over the years. Good insights on the limits and blind spots of Silicon Valley and those who take their cues from SV.
Diversity and Inclusivity in Art
Non-Fungible Tokens (NFTs) are enabling a more diverse set of artists to reach collectors without going through the gatekeepers of the traditional art world (whose aggregate curation is ~80% the work of white male artists).
Stripe, which enables card payments for NFT platform Nifty Gateway, has released stunning figures on the growth of the creator economy. While the majority of creators are still making small amounts of income, the average has risen fast over the past 4 years.
The net net: A broader more diverse group of digital creators are seeking ways to earn a living by doing what they do best, rather than forcing themselves to fit into a material goods economy that is running out of steam.
The traditional art world is coming along too: This fall MoMA reveals a new collection, promising "a broader, more inclusive view of modern and contemporary art."
The Dawn of Everything: A New History of Humanity offers a fascinating panoramic "tour of political diversity" as Daniel Immerwahr notes in his thoughtful review of Dawn, which is the last book by David Wengrow and David Graeber (author of Bullshit Jobs). The authors of Dawn focus on 2 key themes:
- Disputing the notion that the nation state was an unavoidable evolutionary end state, insisting that other options were/are feasible.
- Reviewing a wealth of fascinating often overlooked examples of alternative societal arrangements down through history.
Fascinating book review (and book) for anyone who wants to learn about the implications of decentralized networks of finance and governance - and gain a deeper understanding of the false tradeoff logic that drives the socialism vs capitalism political food fight. It is especially relevant for those who are taking an active role in the build out of the next financial ecosystem. In this build out, the distinction between builders vs leaders - as articulated in Umair Haque's eye opening 2009 Builder's Manifesto - seems more relevant than ever.
400 Million Birds were estimated to be on the move, migrating south, the night of Oct 16, 2021. During migratory months (spring and fall) on any given night several hundred million birds may be in flight.
Note the request in the post above to turn off lights. Here is what happens to migrating birds when they are disoriented by lights during their night migration flights:
Some of the 226 dead birds I picked up this morning while window collision monitoring for @NYCAudubon. 205 from @3NYWTC and @4WTC alone. Many others swept up, inaccessible, or too mangled to collect. 30 injured to @wildbirdfund. If you’re in NYC today, be careful where you step. pic.twitter.com/RTjm82NIpy— Melissa Breyer (@MelissaBreyer) September 14, 2021
You can help by turning off outdoor lights between sundown and sunrise, and by sharing this concern with your local businesses and elected representatives.
Thank you for reading!