How Crypto Can Make an 'Impact'
How Crypto Can Make an 'Impact'
Jake on "impact litigation" for crypto; what to watch for in Denver; portfolio news
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If you’re flying in for ETHDenver, you’ll definitely need caffeine to battle the jetlag. So it’s a good thing we’ve rented out a cafe! Stop by the Variant co-working space for coffee, networking, and a warm place to log on.
Whether you’re in the departure lounge or sitting this conference out, enjoy our curated reads below, including Jake’s opinion piece on the crypto industry’s shift toward impact litigation. We’ve also got Li’s thoughts about loyalty and points programs, as well as Alana’s take on new opportunities in the Farcaster ecosystem.
Speaking of Farcaster, make sure to follow Variant on Warpcast, where you can check out Jesse’s /0to1 channel for early-stage builders and Li’s /web2web3 channel for insights on how to apply best practices from web2 to crypto.
Bon voyage!
ETHDenver Events
Where to find us in the Mile High City
February 29 (11 am - 4 pm)
Variant Co-working + Coffee
Where: Register here to find out https://lu.ma/gcq8nxy8
February 29 (5:45 pm)
Fireside chat with Jesse and Jake: Why Sufficient Decentralization Is No Longer Sufficient
Where: Atlantis Main Stage
March 1 (2:15 pm)
Li panel moderation: How Modularity Drives the Next Wave of DeFi Lending
Where: Atlantis Main Stage
Crypto Goes on Offense in the Courts
Jake Chervinsky, Amanda Tuminelli
It’s no secret that the crypto industry has a chilly relationship with the U.S. Securities and Exchange Commission (SEC). It wasn’t always this way, though — the SEC’s views on crypto have shifted over time. In Bitcoin’s early days, the SEC’s approach to crypto was largely benign neglect. During and after the ICO bubble of 2016 and 2017, the SEC started to take interest in the space, engaging in selective enforcement and providing the beginnings of guidance.
In recent years, however, the SEC has taken a strong position in the anti-crypto camp. The current SEC appears to believe that the securities laws apply to the vast majority of crypto transactions and that most crypto industry participants are breaking the law. The agency has shown no signs of pursuing a path to compliance for the industry, instead prioritizing regulation by enforcement against stalwart companies like Coinbase and Kraken, among many others.
The SEC’s hostility toward crypto leaves the industry in a difficult spot. Many builders are afraid to operate in the United States due to fear of an SEC enforcement action. Even builders who spend hundreds of thousands of dollars on law firms still feel the chill of the SEC’s threat, since the high cost of defending an enforcement action can be devastating to a young company regardless of the outcome. As a result, many crypto companies are forced to act like sitting ducks, keeping their heads down and hoping the SEC looks elsewhere.
But this week the industry went on offense.
Read the full post on our site.
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More fresh posts from Variant
Li Jin, Jake Chervinsky: Dissecting the Points Meta: Best Practices for User Loyalty
Recently, we hosted a fascinating discussion about loyalty and points programs at the Variant office. The conversation covered best practices from the web2 loyalty space and how they could be cross-pollinated to crypto; the distinction between points and tokens; what kind of rewards and redemption experiences users care about; and whether to put points onchain.
Alana Levin: New Opportunities in the Farcaster Stack
We’re seeing the emergence of a new social graph in real-time: Farcaster. Up until [a few] weeks ago, today’s most popular client (Warpcast) looked, at face value, similar to a Twitter clone. Then the team launched Frames and it kicked off a wave of growth as it became clear that Farcaster’s permissionless infrastructure enables a new distribution channel.
But even beyond Frames, there’s a rich stack of layers that the Farcaster network has unbundled and made open to developers. And with that unbundling comes new opportunities.
Updates from our portfolio
February highlights from the startups we’re proud to invest in
Reservoir released Relay, a protocol for cheaply and quickly executing transactions across chains.
Magic Eden took its Ethereum marketplace live and introduced its Mint to Earn feature to reward users who support NFT creators.
Syndicate launched Frame Chain, an Optimism L3 built on Base so Frame developers can benefit from lower gas costs.
Sound introduced channels to enable community-powered discovery of new music.
Blockaid became the default security setting for the Metamask extension.
Morpho became the second-largest DeFi lender in Ethereum, as measured by volume borrowed.
See you next issue. And if you read this on Substack or in your inbox, remember you can also read on Mirror, where you can collect this issue as an NFT.
Disclaimer: This post is for general information purposes only. It does not constitute investment advice or a recommendation or solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision. It should not be relied upon for accounting, legal or tax advice or investment recommendations. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by Variant. While taken from sources believed to be reliable, Variant has not independently verified such information. Variant makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. This post reflects the current opinions of the authors and is not made on behalf of Variant or its Clients and does not necessarily reflect the opinions of Variant, its General Partners, its affiliates, advisors or individuals associated with Variant. The opinions reflected herein are subject to change without being updated.