Chainforest Weekly Recap (03/27/23)
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!
The top three channels were: 💬│general-chat, 📥│share-deal-flow, and ⚡│connect-potw.
Champion of the Forest Challenge Launch! 🏆🐯
Announcement: Last week we launched a new Chainforest x Proof of Teamwork challenge called 🏆 Champion of the Forest 🏆
Over the next 8 weeks, we’re running a series of quests and games in Chainforest. For each quest a member participates in, they will receive TEAM points based on performance. For full event details, check out our announcement post!
Check out our leaderboard to see the latest standings!
Chainforest is excited to announce the launch of our first Champion of the Forest game: 🧠 GIGABRAIN 🧠
Ready for a challenge? Join us on Tuesdays & Thursdays for the next 4 weeks in our Discord and share your insights on thought-provoking questions for a chance to win prizes! 🧠
View the full details (including our point system & leaderboard) here.
Upcoming Chainforest Programming ⛓️🌴
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: April 4, at 3:00 pm EST in our Discord
RSVP: here
Discord Highlights 👀
Chainforest announced a new and improved deal flow tool for the community! 🌟
Have you ever missed an exciting shared deal in our deal flow channel due to not checking Discord? 😢
Have you ever had trouble following deal comments? 💬
Have you ever wanted to search for past deals, but couldn’t? 🔍
NO MORE! We’re launching a new deal tracker in our Proof of Teamwork hub. Starting today, all new deals will be sourced in the deal tracker, with updates automatically shared to Discord (In the #share-deal-flow channel).
With this new tool, you can share new deals, comment or ask questions, tag others, search for past deals, and more!
Access our new deal flow tool here! 👀
For more on how to share a deal or use the deal tracker, check out this instructional video here
Rainmaker’s share examples of crypto use cases with real value today 🔥
Byran: Non-discriminatory, over-collateralized, auto-liquidating loans on Aave, MakerDAO, Compound, etc. This allows anyone that has Ethereum as collateral to take out a loan in a stablecoin and send that money anywhere in the world in seconds.
Nobody can censor them, prevent them from taking out a loan, stop the payment, etc.
The loan has a variable or fixed interest rate on the borrowed amount and pay it back at any time. Once the user pays it back they can withdraw their collateral. If the LTV drops they can also add more collateral to the loan so they do not get liquidated. An extremely simple (but important) financial service that currently is only available to certain privileged individuals around the world, but hopefully one day will be available to anyone that acquires the underlying collateral regardless of their credit score or access to financial institutions.
Pal: When I think of use cases with real value, I have to start with Bitcoin and stablecoins as a way to store and transfer value in places where there is less trust in local currencies and governments
People across the world have always needed a store of value, and in places where people don't trust their government and financial system, this is probably one of their top concerns. People have trusted gold and physical cash for this for thousands of users. Bitcoin is just a much better version. It's more portable, (effectively) infinitely divisible, more resistant to seizure, and doesn't cost anything to hold onto. Internet-native money is a natural extension of gold, physical bills, etc
If you want to evidence of this, take a look at the topic countries by traffic share of localbitcoins.com, a peer-to-peer bitcoin trading service. some of the top countries on LocalBitcoins are places where people might not trust their currency, money, or government. Unfortunately, LocalBitcoins had to shut down, but that doesn't mean it wasn't providing a valuable service.
When the Turkish lira went south, people actually moved into Bitcoin and USDT: https://www.wsj.com/articles/turks-pile-into-bitcoin-and-tether-to-escape-plunging-lira-11641982077 and this is in a country where cryptocurrencies are actually banned!
Store of knowledge/data (e.g. ability to create and save a record publicly and permanently)
Reduced backend system maintenance for certain applications (the blockchain acts as your backend / you don't need to run servers)
The entire lifecycle of on-and-off ramp would be something simple and immediately usable, eg: 1) paying for property rental in Bitcoin (Dubai and some places in Taiwan)
Using your Binance Debit card to buy a Starbucks coffee (many Asian countries)
Entering a concert with a ticket that's an NFT (RFID on said NFT beeped at the entrance). Similarly, several ETHGlobal events give you an NFT and you must custody the wallet and the NFT on-person, to enter.
OTC Trade desks where you can encash Bitcoin and immediately buy* irl goods, services
View more of the community response here!
Community members answer how will the recent collapses of Silvergate, SVB, and Signature impact the crypto industry 💵
Ben: I'm curious whether the bank situation makes it less likely that we get stablecoin (or any clear crypto) legislation in the near term because congress will likely turn its near-term focus toward the tradfi banking system. Particularly, if any other banks fail in the coming weeks.
On the two suggestions above, I'd also lean toward 100% deposit insurance. When ppl put money in a bank, they are expecting that to be the safest possible place to put their money (they're not considering that they're taking on balance sheet risk). In case helpful, here's a graph of FDIC insurance levels since FDIC was first established in 1933:
Amira replies to Ben: There are in-between options to this. One of them, which hews closer to 100% deposit insurance, is the Bank Term Funding Program (https://www.reuters.com/business/finance/feds-new-banking-backstop-could-slow-balance-sheet-drawdown-2023-03-15/), which is what the Fed announced last week. This enables banks to offload their bonds to the Fed for the par value in cash, for up to a year. 100% blank deposit insurance would instigate serious moral hazard and incentivize banks to make risky investment decisions with depositor assets. The Fed is between a rock and a hard place right now, so their current solution feels close to the right one in the ST
Short term: Negative impact through reduced liquidity available to broader crypto markets. Upward pressure on bitcoin and "inflation-proof" assets. Ethereum is inflationary so not sure if this benefits
From here, it becomes uncertain and depends on the path that regulators take. It could be pretty golden for Bitcoin but if the US govt takes a punitive approach then they will start attacking on/off ramps to stop value exiting the $USD
Bryan Linton: It's the first instance of "Something Breaking" during the hiking cycle which ultimately leads to a Fed Pivot. The Truflation number (https://truflation.com/) is already down to 4%. The fed just raised interest rates by 25 basis points (increasing the cost of USD debts/credit), while expanding the balance sheet by $300 billion, eliminating half of the QT implemented over the last year. All of this indicates that in the short-medium term, there will probably be more liquidity flowing into the economy. It is a clear indication that we are in the part of the long-term debt cycle where monetary conditions start to loosen.
From a collective consciousness understanding of "what is money", "is my money safe", and "what is the best way to store my money", the average person is starting to wake up to the fact that when they put more than $250k into a bank, they are making an unsecured loan to a leveraged counterparty that might fail. This will lead to a couple of different paths: 1. Fed guarantees all deposits which drastically increases the money supply 2. People start storing everything beyond $250k elsewhere, causing a massive outflow from banks into US treasuries, money market funds, crypto, or something else, leading to many bank failures
1) will cause inflation of USD relative to scarce assets like Bitcoin and Ethereum and consequently price appreciation for those assets (and is probably what will happen).
2) will lead some small % of these people to move their money to a scarce, decentralized, cryptographically secure, nearly indestructible, easily divisible, easily transferrable asset, i.e. Bitcoin/Ethereum where they can feel safe that the amount of that asset that they own cannot be taken away from them if they self custody it, regardless of if the short term price of those assets go up or down (which will probably also happen to at least a small degree)
Alex shares a piece on how tokenized real-world assets are bringing new yield opportunities to DeFi 💰
Alex adds his comments: Institutional investors follow liquidity. Their primary job isn't maximizing returns, it's managing risk. From Blackrock (1 of 1,300+ ETFs tokenized) to Vanguard, and Hamilton Lane - billions of dollars AUM are not in search of maximum returns. They are, however, looking for liquidity (a word which here means - a market that is open for trading and is efficient at matching buyers to sellers).
Proponents of real-world assets on-chain sometimes erroneously attribute the sector's growth to legacy institutions that are looking to make full use of the idle cash in crypto.
The reality is - it's not legacy institutions that will contribute to this specific sector's fast growth, it's crypto-native protocols that are serving the underserved.
Upcoming Events 🗓️
WOW Summit - This global event will bring together industry leaders, government officials, digital artists, entrepreneurs, companies, and enthusiasts
When: March 29-30, AsiaWorld-Expo, Hong Kong
Details: here
NFT NYC - The Leading Non-Fungible Token Event
When: April 12-14, New York, NY (Time Square & Hudson Yards)
Details: here
Consensus 2023 - Consensus is the world's largest, longest-running, and most influential gathering that brings together all sides of the cryptocurrency, blockchain, and Web3 community
When: April 26-28, 2023, Austin, Texas
Details: here
Community Feature of the Month🎉
Our Community Feature of the Month for March 2023 is Ben Gusberg, Co-founder & CEO at Supercharge; and Professor at the University of Southern California. Check out his full feature here!
Connect with Ben Gusberg:
New Members 🎊
Adam Zasada | 0xKYC
Binyamin Grinberg | Yuga Labs
Brent Matterson | Bankless Ventures
Ernest Cheung | Cut Deck Studio Inc.
Louis Dharma | Hansa Network
Mai Akiyoshi | HeyMint
Matthew de Caussin | PsyDAO
Montgomery Guilhaus | Tru3Mint
Wessel Pannebakker | Signature Ventures
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.
Why join Chainforest?
Becoming a Rainmaker means accessing our Discord, our IRL events, our deep dives, and our complete programming. Most Rainmakers love the community because it offers the best environment for web3 learning and exploration on the Internet today.
Rainmakers also have the opportunity to support Chainforest's VC fund. Rainmakers have the opportunity to earn $RAINDROP, our token backed by carry in our VC fund, in exchange for identifying, evaluating, and supporting investment opportunities. Note that Rainmakers are not required to invest in order to participate, but also do not have a vote on investment decisions.
Apply here: https://chainforest.typeform.com/apply
I hope you enjoyed this week’s edition of the Chainforest Weekly Recap!
Till next week,
Sloan (@sloan0_0)