An anonymous crypto hedge fund?!

Web3 vs centralized services, Why I'm bullish on Solana and Mo Salah

Hey there 👋 ,

This week, I read a few Web3-focused posts - the most exciting categories in Web3 based on revenue, Web3 vs centralized services & learning about an anonymous hedge fund DAO (called SquidDAO) with $40m+ and a plan to keep growing.

You don’t have to read everything, just skim through what’s interesting to you and reply back with your feedback.

Living In Beta is a digest of the best links I stumble upon each week, and any new posts from me. If this is your first issue, welcome! You can subscribe below:

Tom Tunguz took inventory of web3 startup categories generating the most revenue.

Layer 1’s or blockchains - the public databases that record transactions - dominate the share of revenue, producing 78% of total revenue.

The article also includes not just revenue share, but market share. This is useful because we see that blockchains command 10 higher percentage points more market cap share, than revenue share - this means investors are applying a premium to them, compared to other nascent sectors.

My take: The sector I’m betting on the most for 2022? Infrastructure. As more developers flood the web3 ecosystem, there will be a greater desire for more tools to empower development teams to build higher-quality web3 experiences.

What would happen if we could move our data from platform to platform? 

For example, I can take all my email subscribers from Substack and move them to another platform. I couldn’t do that on platforms I’ve used in the past.

Web3 advocates for data portability - data protocols that build the infrastructure for users to easily ‘port’ (or move around) their data to wherever they want will win.

Meta, as a platform, is trying to own the whole stack - they want to build the protocol that platforms choose to build on, own their own platform to attract users, and monetize user data however they like.

I’m not down with Meta’s approach (or their intentions) - instead, it would be far better for users to own their data - this allows users to own their own work, monetize their data and set permissions on how other people use their data.

For example, if I create a meme that goes viral, I can ensure I get a % commission every time someone uses it, but also get paid when others remix the meme.

My take: The market for data protocols is growing and I can only see more companies getting into this space. However, with companies like Meta and Microsoft building their own ‘Metaverse’, I’m curious to see how all these different ‘Metaverses’ collide.

SquidDAO’s goal is to create a profitable crypto investment fund - it came about from a number of veterans coming together to build on top of the success of other Decentralized Finance (DeFi) and NFT projects this past year.

The treasury grows in 3 main ways:

  1. NFT Sales - Everyday, 1 Squid NFT is auctioned - avg price of $15k.

  2. Treasury Yield - the existing treasury earns more money through staking or providing liquidity to other exchanges.

  3. Bonding Revenue - When new members join, they can buy newly-minted SQUID at a discount. The revenue goes back into the treasury.

My take: People come together, build on existing ideas from the community, and make money as a group - what’s not to like?. Saying all this, can a group of pseudonymous founders outperform the market? What happens if they decide to leave the project? What happens if the value diminishes or the growth of new members slows?

🐦 Tweet Threads Of The Week

Ndamukong Suh’s investment in Metaplex:

TLDR:

Metaplex is a Solana-powered protocol that allows teams to build their own Solana NFT marketplaces. Solana is a great Layer 1 blockchain because:

  1. Easier to build on - Solana runs on Rust, a widely popular language for developers, that reduces the barriers to entry

  2. Way cheaper - Much cheaper transactions compared to other L1’s

  3. Way faster - 60k Transactions per second (Visa do the same)

  4. Way better for the environment - Solana is a carbon-neutral network

  5. Awesome community - Solana discord has 100k+ members

Lessons in Trust & Sharing Problems To be Solved

TLDR:

  • It’s easy to think we’re protecting our teams by shielding them from problems

  • After everyone knew what problems to focus on, the teams got their mojo back & revenue accelerated again

Key takeaway:

“A leader’s job is first and foremost to create clarity on the problems to be solved.”

Are Centralized Services bad for Web3?

TLDR:

  • No, because the network effects (or benefits) I gain from being part of a network won’t be ‘locked’ to the network in web3, unlike web2.

  • My Twitter followers don’t come with me when I leave Twitter

  • Ethereum allows users to have full control of their data - there are centralized services that let us access this network like OpenSea, Zora, Rarible and others.

  • Web3 portability (see second article!) means I’m not locked to these networks

GQ’s profile of Mo Salah - the sporting accolades are one thing, but Mo Salah the person seems like an incredible person. What an inspiring story.

Fahim’s take: Something a bit different for the newsletter, but if you’re into football, you’ll want to read this profile.

🤭 Funny Tweet of the week

These Not Wordle posts are too much - where my Wordle fam at?!

Until next time

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Until next time,

Fahim