Greetings Rainmakers! ⛓️🌴
Welcome to the latest edition of the Chainforest Weekly Recap, where you’ll find up-to-date information on upcoming Chainforest DAO programming and industry events, the community feature of the month, a round-up of the most exciting happenings in our Discord this week, and a welcome to our new Rainmaker’s!
In the past week, 18 new Rainmakers have joined the forest!
The top three channels were: 💬│general-chat, 🔧│gen-infrastructure, and 📥│share-deal-flow.
Upcoming Chainforest Programming ⛓️🌴
Chainforest ETHDenver Happy Hour: Come join us at ETHDenver and socialize with your fellow community members while enjoying a happy hour featuring live music and food!
When: March 3rd, 2023
Details: Full details are in our Discord
Monthly Town Hall: Join us to stay updated on the latest developments at Chainforest DAO including upcoming events, new member orientation, in-depth analysis of deal flow, and much more!
When: March 7th, at 3:00 pm EST in our Discord
RSVP: here
Previous Events & Recordings
Monthly Workshop (February 2023): Did you miss our February Workshop? Check it out here!
On February 17th, Vasanth Thiruvadi (Head of Finance at Chainforest) & Sugam Sharma (Founder of Clearbooks, CPA), hosted a Taxes 101 workshop to help our members get ready for tax season! Topics include NFTs, DeFi, DAOs, airdrops, loss/theft, mining, and a Q&A session
Monthly Town Hall (February 2023): Did you miss our February Town Hall meeting? Check it out here!
Covered during the Town Hall:
Introducing our newest members to the community
Providing exciting updates on our upcoming events, including the Chainforest ETHDenver meet-up and Tax 101 Workshop
Engaging in a lively discussion with the community, sharing progress, and receiving valuable feedback on recent changes
Exploring potential investment opportunities with Amit Mukherjee and Regan Bozman, who presented a promising deal to the community, known as IYK
IYK bridges the physical and digital worlds by using NFC and blockchain technology. By tokenizing physical items and IRL experiences, they are building the tools necessary for brands, companies, and creators alike to deliver new, innovative experiences to their fans
To view the entire duration of the Town Hall, download the file
Twitter Space: A discussion with Jason Badeaux, Co-Founder of React Networks, on Decentralized Energy! (listen here)
Panel: Amit Mukherjee, Nick van der Vick, & Jason Badeaux
Discord Highlights 👀
Chainforest DAO is excited to announce our partnership with the Proof of Teamwork team (Ben Gusberg & Jim Zheng, both Rainmakers!) to bring you an invaluable new community tool for the Chainforest community. The current version of this tool contains a member database, accessible via the link below. The database contains information about each member, including current company, role, expertise, contact information, Core Ecosystems (L1/L2), social media profiles, and more ⭐
Goal: strengthen bonds and drive business prospects within our network, especially during these turbulent market times. We envision this database as a catalyst for forging partnerships, fostering friendships, amplifying deal flow, and unlocking new hiring opportunities
Note: Stay tuned for exciting updates on our community tool! We are committed to continuously enhancing the Chainforest community experience, which is why this tool will be updated periodically with new features and improvements
Link: access the tool here (Members only)
Amit shares his latest thinking on the web3 market. Rainmaker’s share their thoughts 🔥
Point 1: Now that most of the investments of 2021 have settled, it's pretty clear that most of the investment themes of the last couple of years are not going to bear fruit. I've spoken to a lot of top crypto VCs over the past 3 months, and in some of my more candid conversations, there is an acknowledgment that almost nothing is working in the space. The technology behind crypto is unbelievably cool and endlessly fascinating, but to date, I can think of only a few projects and companies where this tech has led to real value creation, which I define as (1) the creation of a product and service that makes people's lives better, and (2) results in a business that generates real cash flow and can be valued by a DCF
The two use cases that have unequivocally proven out in my eyes are (1) generative art (e.g., ArtBlocks), and (2) SoRare (an NFT-based sports game). Other than these two areas, most end-user use cases are speculative in nature or do not have a clear path to monetization
I am seeing sensible uses of the blockchain - whether it is title registration for cars, creating more efficient secondary ticketing markets, or creating new payment rails. I do believe that some of these will bear out over time and that this technology will create businesses that are hard to predict today
While there are some promising potential developments, the current market cap and $ raised to invest in the space feel way overblown relative to value creation. Most of this is due to speculation. Many investors (both retail and VC), are leaning into narratives, and while there is an acknowledgment that the underlying businesses lack fundamentals, the ultimate goal is to make money, which some investors have successfully accomplished
Point 2: The regulatory environment is becoming increasingly difficult. Repasting a good summary by LionTree below
Tyler agrees that the majority is terribly overvalued but would say that more opportunities are opening up for real-world tied use cases that are less speculative but more sustainable long term, like RWAs, AI marketplaces, new tokenization primitives, phygital fashion, etc
Abraham pushes back a smidge in that besides generative art and SoRare, he thinks several other use cases have emerged as compelling:
Stablecoins +/ payments = store of value x instant x cross-border payments
DeFI = permissionless access to financial products
NFTs = ultimate vehicle for provenance, efficient form of membership, the composable standard for on-chain property
Amit responds by noting that his criteria are (1) make people’s lives better AND (2) generates cash flow
Stablecoins absolutely fits this because Circle generates interest income on the collateral holdings
DeFi would not - no revenue or profit is captured by exchanges.
NFTs: I agree there are real use cases, and cash flow has been generated in many ways (by OpenSea, Magic Eden), by individual collections, etc. however, 98% of this is based on monetizing speculative behavior, and thus would fail the "makes people's lives better" question. there are certainly some use cases for which this is not the case. I think we'd want to look at the individual applications of NFTs versus speaking to the NFT primitive more globally, since there are applications that do and do not meet the criteria
Bryan provides pushback on the two use cases you listed being the only two use cases that are unequivocally proven out if you are looking at it from a global perspective. In the US today where most people have access to quality financial products and stores of value (equities mostly), sure that may be the case, but globally I think there are more use cases such as the ones Abraham listed above
Bryan adds In a "fundamental" focused Macro Economic environment (which we are in today) yes "fundamentals" are far more important than growth/speculation. This should change though within a few years at most. Additionally, a small percentage of things that are speculative today will turn into fundamentally strong products/use cases in the future. It's about trying to identify those things today (and approaching it with a futurist mentality)
Ehsanomics responds to Bryan Linton by saying +1 on Defi. I think there are many Defi apps that provide real value to users. The list is pretty long but one of my favorite examples is companies like Ribbon Finance that bring structured financial instruments that have historically only been available to HNWIs, to retail users. They also have a scalable positive cash flow model
Abraham shares an insightful article from Variant, highlighting the valuable lessons that crypto founders can glean from Blur's recent token airdrop 📝
Jason says that it is cool and creative how Blur did this. However, I don’t see how this matters long term. Opensea / magic Eden can do the same thing and everyone will instantly go over to them. There is no moat here. In the end, it just becomes a war for how much these companies want to spend on marketing. It’s a good thing that marketing dollars go right to consumers instead of middlemen. That part is a great innovation
Blake replies that this was a great read! Blake adds, we (Myosin.xyz) have some Magic Eden marketing folks in our community and what we're hearing is they've essentially capped out the TAM, and the only way to grow further is to grow mainstream adoption to the 99% of folks who don't use crypto yet
Everyone's fighting over the small .2% of the world that is web3....agreed that it's a commoditized space for now though. More a Q of how these platforms partner with and leverage mainstream brands to onboard more normies. Much like how Reddit onboarded 6M+ wallets in less than 6 months
Amit asks the community, what are some of the best examples of successful composability in crypto today (how powerful composability can be) 🚀
Abhinav Gaur says that the folks at Moralis, Tatum, Third web, Unlock Protocol, and Helius Labs are great examples of composable code. Building blocks for other builders
Gabe notes another non DeFi up and coming example is dapps building on lens
Gabe adds that his favorite example is how Convex Finance pioneered the concept of controlling governance to create revenue. Convex is built on Curve and controls the most governance tokens. Protocols can go to convex to bribe them in tokens to boost the yield on their LP pools on Curve. (boosted yield comes from revenue from curve protocol swaps)
The community reacts to Coinbase’s new layer-2 network, Base 👀
What is Base? - Base is a secure, low-cost, developer-friendly Ethereum L2 built to bring the next billion users to web3
Check out Coinbase’s Base Introductory blog post here
Jason writes that it looks like a great move. He adds They will have all their DeFi apps seamlessly integrated into a mobile app. I checked out their wallet app to explore a bit. I sent some money from CB to polygon on CB wallet. Swapped and LPd and am farming on quickswap. While it was still a little clunky it was really easy and think the future will be bright once those kinks are worked out
Pal says Coinbase wants to build a lot of on-chain dapps. They had to choose a chain to build them on, and decided to just build their own L2, which they have more initial control and certainty about that is still very connected to other L2s - in this case Optimism
Pal imagines Coinbase wants to make it much easier for an average user to buy assets on Coinbase exchange, move it to Coinbase wallet, and then use the whole "App Store" as Jason said of apps that Coinbase and partners have built for that market - could be DeFi apps, could be games. It'll all run on Base which will ideally be closely tied to the rest of the ETH L2 ecosystem and become decentralized over time
Rainmaker’s discuss the best argument they have read/heard for why we need industry/use-case specific L1s/L2s? E.g., an L1/L2 for gaming and a separate L1/L2 for DeFi 🗣️
Jason Badeaux says that he is very bearish on industry-specific L2s for one simple reason:
If execution layer composability becomes atomic enough to justify industry-specific L2s, we will jump right past it into a world of thousands of sovereign / application-specific rollups
If you can inherit security from the DA / Consensus layer, and you can communicate atomically with other rollups via a shared settlement layer, there are zero reasons to compete with any other application for execution priority/fees
Jason9391 responds that he is bullish on industry-specific L2s. I think it will come down to who will become the leaders in the specific industry. These experts will provide “white glove” services tailored to the industry their chain is supporting. They will make it easier for game devs / DeFi devs to not have to manage any of the underlying infrastructure and will be attractive to them
Upcoming Events 🗓️
ETH Denver - Welcome to the largest and longest-running ETH event in the world! ETHDenver is a community-owned innovation festival
Community Feature of the Month🎉
New Members 🎊
Benjamin Lavergne | ConsenSys
Brian Watson | Project Manager & Investor (Prev. Apple, VSCO, Spark Capital, & Union Square Ventures)
Chris Stevenson | Foster & Foster
Ethan Luc | Lava Network
Gabriel Anderson | Graph Paper Capital
Jim Zheng | Supercharge
Justin Chen | University of Texas at Austin
Lacey Wisdom | Protocol Labs
Max Segall | Privy
Michelle Wu | MetaMask
Nadia Tian | Imagine Labs
Nakul Gupta | Coinbase
Niko Cunningham | Leather.tv & AllianceDAO
Pavel Skalin | Fractal Payments
Sachit Sachdev | Alter VC & YPO NextGen
Sanat Rao | Blocktower Capital
Sugam Sharma | Clearbooks, CPA
Thomas Pan | Consulting
Interested in joining Chainforest? ⛓️🌴
How to apply: You can apply to become a member by completing our application on Typeform. We will review your submission and grant access after approving your profile.
Apply here: https://chainforest.typeform.com/apply
I hope you enjoyed this week’s edition of the Chainforest Weekly Recap!
Till next week,