The world’s most valuable companies are born during platform shifts. During platform shifts, new entrants have the opportunity to build services that make use of the new functionalities provided by a new platform. Today’s web incumbents (GAFA) managed — exceptionally — to thrive over two platforms as the primary business model (gathering data and selling ad space) remained the same over both the Internet and Mobile eras. When a new computing platform changes the prevailing business model, new entrants have an opportunity to dethrone the incumbents.
Similar to how a publicly listed company can use its stock as money in an M&A transaction, the owners of the Ethereum protocol can use ETH as money to pay for different transactions. Since protocol equity is often freely tradable on the Internet, there are less restrictions for using it as money compared to traditional public company stock. The reason ETH is considered as a premium form of money today — over many other assets — reflects the relative maturity of ETH compared to many other protocol equities in the crypto space.
The cap table shows a company’s ownership percentages among founders, employees, and investors. In other words, it’s a simple ledger or excel file — periodically updated to reflect different shareholders’ contributions — that aligns the incentives of all stakeholders involved. Blockchains are global, distributed ledgers. They allow us to scale cap tables to encompass billions of stakeholder-owners. Now is literally the first time in history that we’re able to achieve economically incentivised coordination of both humans and machines — at a global scale.
Token Terminal is a site that tracks financial metrics for blockchain protocols. These metrics are intended to be comparable to traditional financial metrics, such as Earnings per Share and the Price to Earnings Ratio. Today, the site is launching with simple metrics on the MakerDAO and Augur protocols. Future work will be done to improve the precision of calculations, and add new metrics and blockchain protocols to the site. Note, this is an early release and the site will be continually updated.
Cryptocurrencies, digital currencies, digital assets, cryptoassets, work tokens, utility tokens etc. are abstractions to describe ownership rights in Internet-based companies. The wide use of different and complex terminology reflects the nascency of the space. Over time, terminology should be streamlined to reflect what the technology really is all about. When blockchain becomes a widely used computing platform, we will not talk about cryptoassets or Decentralised Autonomous Organisations or DAOs. Instead, we’ll revert to talking about companies and shares.
This post argues that MKR token holders are incentivised to keep the Dai Savings Rate (DSR) low or close to 0% and that the incentive to keep DSR low increases over time. DSR is for controlling the demand for Dai. Any increases or decreases in DSR are made to manipulate user demand for Dai.
A company’s shareholders influence how the company is operated. Likewise, a protocol’s tokenholders influence how the protocol is operated. A separate share or token offers security to an entity’s governance. If someone would want to meaningfully influence the governance of a specific company, they’d have to buy a significant share of that company’s or protocol’s shares or tokens, increasing the price while doing so. If they subsequently voted to sabotage the company’s or protocol’s operations, they’d be destroying the value of what they just purchased.
Decided to aggregate all Devcon-related talks into one post. Tracking the progress of the Ethereum ecosystem serves as a great proxy for the blockchain space in general. Key takeaway: The community has grown significantly during the past year. Devcon is an annual gathering held by the Ethereum Foundation. For new explorers of the Ethereum space, Devcon is an intensive introduction to new worlds of thought. For those already embedded, it is a family reunion and a source of energy and creativity.
The development of blockchain technology can be divided into three eras, each presenting their own challenges with current regulation. The peer-to-peer era (with Bitcoin), the programmability era (with Ethereum) and the decentralised organisation era (with DAOs).
In only a few decades, the Internet went from a highly decentralised architecture to one controlled by a few powerful gatekeepers. This created monopolies, limited access for developers, and ultimately slowed down innovation. Crypto protocols aim to break up this highly centralised architecture and provide developers a level playing field. Applications can again be solely built on open and permissionless protocols, with additional valuable features to them.