mainstreaming NFTs; regulating illicit finance; more zero knowledge
1. Beyond the news: Mainstreaming & use cases for NFTs
Punk6529, Chris Dixon, Sonal Chokshi; Kevin Rose; Scott Kominers; Pyrs Carvolth, Maggie Hsu
There’s been a lot of news and activity lately around major platforms engaging with and growing (or restricting) NFTs: From Instagram/ Meta introducing tools for people to make and sell “digital collectibles”, to Reddit releasing its second set of “blockchain-backed customizable avatars” ...and Apple updating its app store guidelines around NFTs (but that can’t “unlock features” or “include buttons, external links, other calls to action”).
So what do we make of all these moves, and more broadly, the trends they represent? Is it more effective to rename technologies in mainstreaming them — or is it merely a matter of phasing tech adoption? And what IS the bigger picture around NFTs, including art but also beyond? In the latest episode of our web3 with a16z crypto podcast, we discuss all this; plus, new kinds of network effects and regulatory mindsets for innovation.
🔄 👀 see also:
this recent episode which also includes discussion of Instagram moves into the space and what it means for NFTs
this past piece in Bloomberg from (now) a16z crypto research partner on why “social media giants” opened the door to NFTs
this overview from the a16z crypto go-to-market team on building partnerships with NFT projects/ communities
2. Policy commentary: CFTC vs. Ooki DAO; Department of Treasury & illicit finance risks
Miles Jennings; Michele Korver, David Sverdlov
The Commodity Futures Trading Commission (CFTC) filed a federal civil enforcement action in the U.S. District Court for Northern California against Ooki DAO back in September. Since then, a number of industry organizations have filed amicus briefs, because the case could set precedents for the future of web3 given still-emerging models of decentralized community interaction and governance. (Also of note/ being contested: The agency decided to serve DAO members the complaint by posting it in the community’s Discord as well as in the frontend chat box.)
a16z crypto filed an amicus brief as well this week -- sharing the view that regulation is important, and that wrongdoers should be held accountable… BUT, that enforcement doesn’t need to come at the expense of established legal principles or undermine tech innovation; and, that the CFTC should remove the focus on the DAO and instead focus on the specific unlawful governance decisions/ illegal actions of individual members:
The U.S. Department of the Treasury recently requested comments from the crypto industry on illicit finance and national security risks as related to “Ensuring Responsible Development of Digital Assets”; a number of organizations including Coinbase shared their responses.
a16z crypto’s response discusses the benefits of privacy-preserving technologies and enhancements, including in mitigating illicit finance risks; describes the embedded transparency of the DeFi markets, and how an appropriately tailored regulatory framework would involve regulating web3 applications, not web3 protocols; recommends use of existing authorities; describes the unique characteristics of NFTs (and how those can mitigate illicit finance risks); and identifies efforts to enhance blockchain cybersecurity that the government could support:
🎧👂 hear also:
this past episode of our podcast, which provided an overview of illicit finance and crypto regulations, including key agencies and frameworks to know
3. Field notes: Zero-knowledge proof workshop at CESC
The Crypto Economics Security Conference (CESC), which aims to bring together researchers and practitioners to showcase and discuss the most recent developments in blockchain and web3, just took place at U.C. Berkeley. Affiliated with the event was a one-day workshop last weekend on zero-knowledge proofs that covered recent advancements, state-of-the-art frameworks, and other related topics.
We’ve shared some highlights/ field notes from the event below, given our ongoing series of field notes from top conferences. [In case you missed it: see past notes for the Science of Blockchains Conference at Stanford University here (including notes from surrounding workshops on zero knowledge, and DeFi, here); as well as notes from the ACM Conference on Economics and Computation earlier this year, here.] All of our notes include links to select talk slides/ videos/ papers, where available.
--Sonal Chokshi, Robert Hackett, Tim Sullivan and the a16z crypto team
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