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Twitter gets the NFT treatment

Posted by
Ilya Abugov

Dapp Digest | Week #52 | by Ilya Abugov

Macro news stole the headlines this week, as the legal drama around Ripple Labs and the fallout from the Ledger leak generated a lot of buzz. The industry has also been in reflection mode. A number of end of the year reports went out, and DappRadar published its 2020 Dapp Industry Report last Thursday.

Nevertheless, the dapp space remained busy with both DeFi and the collectibles spaces offering up exciting developments.

SEC comes after Ripple Labs

The argument around whether XRP is a security or not has been going on for years, but now the industry may finally get an answer. The SEC is suing Ripple Labs as well as Brad Garlinghouse and Chris Larsen over an alleged multi-year unregistered security sale.

In a recent post, Brad Garlinghouse tried to frame this as an industry battle: “Let me be clear: Ripple, Chris, and I may be the ones named in the filing, but this is an assault on crypto at large.” However, many in the space see the lawsuit as a positive step for the industry. It doesn’t help that there is no love lost between Ethereum and XRP communities, with Vitalik Buterin responding to the insinuation that Ethereum could become “Chinese-controlled” by calling XRP a “shitcoin”.

Still, it is puzzling why the SEC has waited this long to make this move. Jamie Burke of Outlier Ventures calls this a “tax”, rather than something done to protect the retail investor.

It will be important to monitor how the situation develops, to see if there will be any consequences for the rest of the industry.

More concerns about regulations

The industry has been voicing concerns about the proposed KYC regulations regarding transactions from exchanges to wallets. The proposal has been opposed by many in the space and is a concerning sign of potentially damaging regulations.

While the DeFi sector, which offers a no-KYC environment has been growing, stringent regulation of the crypto space, in general, may strain the complicated relationship between regulators and the industry.

It is important to have a constructive dialogue in order for helpful regulations to be put in place that protect the public, and do not hurt and restrict innovation.

The question of privacy

The apparently substantial leak of Ledger customer data disturbed the industry and has underscored, in a painful way, the importance of privacy.

Customers affected by the leak have been targeted in phishing attacks and have received threatening messages. It is unclear what if any recourse these people have, but it has become apparent that Ledger will not be providing reimbursement. The uncomfortable environment that this fosters isn’t the desired user experience associated with security.

The unfortunate circumstances highlight the issue with centrally stored data and the lack of privacy-preserving features. It will be interesting to see if companies and projects (especially centralized ones) start to focus more on privacy in order to avoid similar problems.

Compound developing its own chain

Last Thursday, Compound Labs surprised the industry with a white paper for Compound Chain. Anthony Sassano, in his The Daily Gwei, detailed the confusion regarding this new development. While on the surface the goals are understandable, the solution looks rather questionable.

There are not a lot of layer 1 protocols being launched these days, which makes it even more curious that the team would go from building a dapp to layer 1. Moreover, if the product creates competition for MakerDAO, this may lead to tension within the Ethereum ecosystem. With rival platforms looking to attract away projects, such a competition may become damaging.

Still, this space has been built by people proving doubters wrong, so it wouldn’t be right to just write off Compound Chain.

The Polkadot ecosystem is growing

Polkadot has one of the most active developer communities outside of the Ethereum ecosystem. Competing smart contract platforms appear to be trying to replicate the DeFi functionalities on Ethereum. So Polkadot too has projects looking to offer loans, stable coins, and swaps.

Recently, Tidal Finance announced a $1.95M seed round for its decentralized insurance solution. It appears that rival ecosystems are looking at Ethereum and using it to anticipate issues. With smart contract exploits becoming a bigger concern for Ethereum DeFi it is natural that an insurance project would appear early in the Polkadot space.

Similarly, decentralized data storage is getting some attention on Ethereum, with projects like Filecoin and Arweave. Seemingly mirroring that, Cere Network attracted $1.5M to build a decentralized cloud solution on Polkadot.

Curiously, now Binance looks to be backing Polkadot as well, as it has created a $10M fund to support projects in its ecosystem. The initiative is a bit surprising as Binance has developed its own smart contract platform.

Synthetix is expanding its footprint

The project had a very interesting year. It was one of the first to implement liquidity mining, and it has transitioned from a Foundation driven model to a DAO one. Recently, the project released the Synthetix Staking dApp, and the comment from Kain Warwick underscored that the project has found success with the DAO format.

Also, Curve added an ETH/sETH pool to its platform, and that may prove to be an important step in Synthetix expanding its reach.

For a while, it looked like upstart fork projects have stolen the show from the older, established DeFi brands, but it looks like projects like MakerDAO, Compound, Aave, Uniswap, and Synthetix have retained their place as sector leaders.

Twitter gets the NFT treatment

The past week crypto Twitter went into a mini frenzy over the tweet-NFTs made possible through Valuables. Compared to the concept of signed baseball cards, this goes with the “tokenize everything ethos”. While the product generated some excitement, it remains to be seen if it is able to find long-term demand beyond its novelty status

Source: Twitter

Virtual fashion finds a fit with NFTs

Atari and Enjin together with eBallR Games, The Fabricant, and DressX will work to offer clothing options for Avatars in the virtual worlds. The first collection, Atari Pluriform, by The Fabricant has already been minted.

Digital fashion appears to be a growing niche and a natural fit for NFT technology. If and when the demand for avatars in virtual worlds increases, digital fashion might become a more important part of the sector.

Somnium Space reports that in less than a month, 30+ avatars have been minted, bringing $20K+ in revenue to their creators.

While the number isn’t big, it may be the start of a new segment in the industry.

The information provided here is for informational purposes only. This is not investment advice and should not be treated as such. Strategic Round Capital and/or the author of this article holds a position in ETH.

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2020 Dapp Industry Report

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