Hive Mind brings you weekly insights into DAOs, culture, crypto, and more. Each Friday, our Substack release compiles the week's mini-essays and some favorite links shared from around the space. This week’s roundup includes writing on ICO Layers and bringing America Onchain with smart wallets. Happy Friday!
Favorite Links
Recent NFT purchase flows.
A list of interesting projects on Base.
Blackrock digital asset fund announcement.
Blockchains as locations.
Financial nihilism as a pop culture.
Context on flows between chains.
Spike in Base transactions.
Memecoins and marketcaps.
List of Bitcoin L2s
AI NPCs incoming.
XCOPY’s open edition on Base.
aoComputer and Arweave ecosystem.
ICO Layers
Big shoutout to ChrisF for sparking the idea behind this essay with his latest tweet thread. Do yourself a favor and check that out before jumping in here.
The ICO era of SocialFi and programmable media is here. This doesn’t feel like just another short lived crypto trend - it represents a seismic shift in how value and trust are created online. As investors and more generally, technology enjoyers, we have to recognize this timeline as a pivotal moment where social interaction, finance, and media are converging; creating opportunities that are net-new but also filled with the volatility inherent to any early-stage venture.
Understanding this ICO boom means recognizing it's a layer above traditional crypto. It's a fresh category, emerging atop the decentralized foundation that this ecosystem provides. Lasting experiments prioritize the level of trust built into the system's architecture, allowing creators to experiment with a sense of confidence. Solana's rise in social finance ICOs (or memecoins) highlights another angle, with its focus on speed and affordability. However, its youth compared to Ethereum's proven security comes with some tradeoffs.
The scarcity of trust in newer platforms like Solana is both a risk and an opportunity. It creates an environment perfect for the quick fire exchange of social tokens but also leaves investors exposed to unknown fragility. Projects like Farcaster and Lens strategically position themselves on Ethereum L2s, seeking a balance between both innovation and security. This middle ground provides the soil for many new applications, where trust is less costly than Ethereum's base layer but more secure than newer blockchains. Solana's edge comes from its streamlined approach, appealing to those who value rapid exchanges over multi-layered security. Still, this simplicity also heightens risks, as fewer layers of trust mean greater exposure to potential breaches. Participants should weigh these factors, balancing the allure of quick gains against the need for a robust trust architecture.
Network effects build slowly but can create deeply entrenched ecosystems. In this regard, Solana's trajectory mirrors the early mobile app market, where the dominance of a single layer could make or break entire categories of products. History has shown us the downfalls of such a model; most of our favorite traditional social platforms, for instance, have been known to pull the rug out from under app developers by changing algorithms or policies on a whim. Single-layer trust systems can inadvertently stifle innovation and client diversity. Alright, back to blockchains. In this recent tweet, Chris called to look at the following trust models.
Solana → Memecoin
ETH → Base or Optimism → Social protocol → Memecoin + programmable media tokens + social capital
As we navigate this new ICO era, the scarcity of trust becomes a speculative asset in itself. The potential for outsized returns is magnified in less trusted layers, where the scarcity of trust invites more risk but also greater rewards. The higher the potential climb, the steeper the fall could be.
Wrapping things up, the ICO era of SocialFi and programmable media represents a new chapter in digital asset creation. It challenges us to rethink how we cultivate value online. Long-term value in the SocialFi space isn't just about creating the next viral memecoin - it's about building on a foundation of trust. Does this require stacking scarce digital tokens atop more secure, established layers? In a balancing act between the pursuit of innovation and the imperative of security, this isn't just about playing it safe - it's choosing to build on foundations that are less likely to erode when the market tides shift.
America Onchain (Wallets)
With each cycle of development, crypto inches closer to the mainstream. As giants like Coinbase and Binance climb the ranks in app stores, the vast majority of these newcomers remain locked within the walled gardens of centralized exchanges. Will they ever experience the deeper decentralized ecosystem that represents the true pulse of crypto?
Today, venturing into the onchain landscape can be intimidating. Endless stories of scams and exploits don’t quite create the best backdrop. Managing private keys or seed phrases, where a single misstep can mean total loss, is daunting to even the most online individuals. There's no customer service hotline, no safety net. Despite advancements in technology, wallet management has seen little innovation. User interfaces have improved but only superficially, failing to address the underlying complexities. This stagnation in wallet experience underscores a critical barrier to broader adoption.
Coinbase's strategic moves are setting the stage for a new era in crypto onboarding. While Binance remains a large player, its sheer size can't compensate for the regulatory fog that surrounds it. Coinbase, on the other hand, leverages its compliance to provide a sense of security and ease for newcomers. This approach is slowly but surely laying the groundwork for its integration into markets that value transparency and user-friendliness. The company's focus on regulatory clarity isn't just about playing it safe; it's a calculated bet on the future of crypto adoption. As trust becomes more critical in the wake of high-profile collapses, Coinbase's stance is clear. And as they continue to innovate through bear markets, their commitment to user experience becomes increasingly apparent. They're not just surviving; they're building a brand that users can rely on as the next wave arrives.
Coinbase's resilience during the bear market is more than just luck. They've been aggressively investing, outpacing other many venture firms this past year. Their strategic bets include deploying Base L2 while playing a key role in the development of Optimism's Superchain. Coinbase's latest innovation, smart-wallet.xyz, is a game-changer for wallet management. It allows users to create a new wallet with their private key safely stored in familiar places like iCloud Keychain, Chrome profile, or on a separate device. The security of this key is enhanced by biometric features such as fingerprints or Face-ID. This method is not only intuitive but also quick, taking less than a minute to set up. It's a stark contrast to the jumble of passwords we're used to, offering a seamless transition to the onchain world for everyday users.
Imagine it's June 2024. Bitcoin's surge past $69k has caught your eye, and you're ready to dive back into crypto. You reach for the familiar, Coinbase (redownloaded once again from the app store). A few password hiccups later, you're in, creating a new account or accessing an old one. Coinbase nudges you towards your first purchase: $100 of ETH. The next day brings another prompt: 'Transfer your ETH to Base and mint a free NFT.' Intrigued, you follow the link to smart-wallet.xyz and quickly set up a new wallet. The process is painless, leveraging your iCloud or Chrome profile for secure key storage. Now, with Coinbase Wallet on your phone, you add this new wallet through its user-friendly interface. Your first NFT on Base costs just ten cents to mint—a far cry from the $4 fee Coinbase charged for your initial deposit. And Coinbase covers the cost again if you deposit directly to Base. You mint, swap, and explore the onchain offerings with fees that are just a fraction of what you'd pay on the Coinbase app. The simplicity of the process is bound to resonate. It's so straightforward that a new user could guide someone through it the very next day; transforming novices into confident participants onchain.
Coinbase's strategic positioning is reshaping the crypto entry point. They've crafted a user journey that's intuitive, leveraging their regulatory compliance as a trust signal. The company's strategy is clear: make the entry into crypto as frictionless as possible, and the users will come—and stay. With the smart wallet, we see a glimpse into the future of crypto’s user experience. Coinbase is building, not retreating, and preparing to usher in a new wave of crypto adoption.