🌴⛓ Chainletter - Issue #7

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🌴⛓ Chainletter

Welcome to the Chainletter. 

Our new weekly newsletter covers Chainforest - a recap of our latest happenings, our members’ accomplishments, and our projects to come. We’ll also offer a collection of the best threads and articles sparking conversation within our Discord.

This Week - NY Crypto Regulations, a Sushi Scandal, a Polygon Nightmare, a Jack Controversy, and Community Updates and Projects

🗽 NY Crypto Regulation Breakdown

While we could dedicate several Chainletter issues to the topic (and myriad sub-topics) of crypto regulation, today we’re going to focus specifically on NY state’s “Virtual Currency” policies. Though it’s a NY state policy, the bulk of the impact is felt in NYC, given that much of the crypto community driving innovative and promising projects is based here and the surrounding metro area. So what gives with the hyper-intense regulation in the home state of the financial capital of the world?!  

First, we must understand the dreaded BitLicense (aka NY State’s required business license for any crypto company to operate. More details in the above link). Most agree that some level of regulation is good. However, many also agree that NY state’s byzantine approach is stifling participation, for individuals, companies, and DAO’s, in the most disruptive tech movement since the advent of the internet.

Alex Adelman and Aubrey Strobel of Lolli wrote a thoughtful piece - Kill the BitLicense - earlier this fall outlining major pitfalls with this regulatory approach. When creating the BitLicense in 2015, NY state thought it would serve as a model for other states to follow in their regulatory footsteps, yet none of the other 49 states have issued as much red tape. So what’s up??? Per the linked article:  

“Why, then, does New York continue its commitment to the BitLicense? It certainly helps that the primary source of NYDFS funding comes from institutional banks. Bitcoin and cryptocurrency exchanges threaten to disrupt the hegemony of the traditional banking system; therefore, one can easily see why the department would beat back companies disrupting traditional finance.” 

Yikes…but not all hope is lost! A few weeks after this article was published, crypto-friendly Eric Adams was elected as NYC’s newest mayor, taking effect January 1, 2022. While he has already stirred up some controversy with his relationship to bitcoin billionaire Brock Pierce (details here), it’s clear that he’s committed to addressing Albany head-on to positively position NY state on riding the crypto wave instead of letting Miami, San Francisco, and Austin surpass us within the states, and the ROW crypto community at large. While the future of NY state regulation remains uncertain, it’s clear that crypto/web3 is here to stay. We have a once in a lifetime opportunity to embrace a new approach to the intersection of technology, finance, and culture that will benefit the many instead of the few.

🍱 Too Many Cooks in the Kitchen? - A Sushi Scandal

Combined Arca & Frog Nation Restructuring Proposal - Proposals - SushiSwap

Contributors Arca and Daniele/Frog Nation have combined elements of both initial proposals to provide a final version of the proposed restructure.

forum.sushi.com

• The recent report on the Sushi Scandal by rekt.news has demonstrated that the protocol is in need of restructuring.

• Many love the project, such as Daniele, who has called for Sushi to merge with Abra. The proposal has gone through a series of iterations to reach the final stage linked above.

• Many, in and out of Chainforest, are paying close attention to Sushi.

0x7d54

@0x7d54

For my latest long-term investment, yesterday I bought ~500,000 $SUSHI (0.39% of total @SushiSwap circulating supply). I think the risk/potential reward equation with SUSHI is just too good right now.
Here's why: A 🧵
1/

3:11 PM - 20 Dec 2021

😈 A Polygon Nightmare

Polygon's Surprise Code Change Triggers Questions and Controversy - The Defiant

In web3, there aren’t many words more fought over than “decentralization.” So if someone calls a blockchain’s decentralization into question, it’s going to draw a crowd.

thedefiant.io

• While forking is a very standard practice in crypto, unannounced hard forking of a decentralized protocol is not. Especially when the upgrade to the Polygon codebase seems to have happened far too easily to not be centralized.

• At the time of writing, Polygon had yet to formally respond to inquiries regarding the situation. However, Co-founder Mihailo Bjelic, tweeted that a security partner discovered a vulnerability in one of their verified contracts and promised a blog post detailing the situation is underway. Also, co-founder and COO Sandeep Naiwal tweeted the silent upgrade was best to avoid exploiting the vulnerability.

• In the aftermath, many have provided hot takes against Polygon, wondering why anyone is surprised that this project, as well as DeFi overall, is not more decentralized. Much to ponder. 

🌱 Jack and the VCs

jack⚡️

@jack

You don’t own “web3.”

The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label.

Know what you’re getting into…

10:51 PM - 20 Dec 2021

• This controversial take comes from Jack Dorsey, ex Twitter CEO, notable BTC maxi, and now (according to Crypto Twitter) web3 public enemy number one

• Many in Chainforest disagree with his take, specifically the black-and-white way he describes VC/LP “ownership” of web3. In web3, what does that statement mean?

• While there are centralized services and organizations in web3, there is also power in the fact that crypto is lowering barriers to entry in many capital formation and allocation products in ways that have never before been achieved.

🫂 Community Updates

♀️ Women in Chainforest

• The #Women-In-The-Forest channel talked for the first time this past Thursday in the Chainforest Lounge! Spearheaded by Amira, following the holiday season this meeting is hoping to become regularly scheduled, so if you’re a women or nb individual who would like to join, feel free to drop days and/or times that work for you into the channel.

Urbit Learning Group

• The Urbit learning group met on Thursday as well, covering the ecosystem’s basics. If you’d like to learn more about Urbit, you’re encouraged to read and ask questions in the #urbit channel, join in the next group session, or watch this Urbit primer video.

Chainforest Media

• The Chainforest community continues to expand, and Chainforest media is growing into an integral part of it. Over Q1 ‘22 we hope to increase consistency of the Chainletter and expand the in-house media content to include a limited-run Podcast that may or may not be supplemented by Twitter Spaces. More to follow…

🎄⛓ Community Projects

Very $MERRY Gift Basket & Gift List

Following a post by Parker, David and Amira collaborated on a simple tool, allowing you to give $MERRY, a basket consisting of 25% BTC, 25% ETH, 25% LUNA, and 25% MATIC. Built with Set Protocol, $MERRY will be available at verymerry.holiday.

Also, please donate to the below Ethereum address if you’re feeling generous. This will be used to reimburse our team for the expenses incurred from hiring a dev.

0x91cC8CeDE7D959Dba66E174ced6116d88f012cD6

Further, a very $MERRY Holiday also has a gift list component which we would love to get a designer on. Please reach out to ChainforestDAO on Twitter if you’re interested in helping out!

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