Market Transparency Invitation - Unqualified Opinions #19
we need your help
|Ryan Selkis||Oct 22, 2018|| 1|
I outlined the vision behind Messari a year ago this week during Money 2020. Since then, we’ve built the team and investor base, refined our strategy, and shipped the early product. And Qiao’s pitching Messari in the Money 2020 startup pitch competition finals. We’re onboarding early projects to the Messari registry, a centralized beta for what will ultimately be a decentrally-curated white list of transparent crypto projects. And we need your help to scale things up.
Market Transparency - Unqualified Opinions #19
What a year it’s been from idea to execution at Messari.
Weeks before the final stages of the ICO mania, and days before SEC Chairman Jay Clayton opined on the ICO market (“Looking back at enforcement actions, a common theme emerges — where opacity exists, bad behavior tends to follow.”), I wrote this in the Messari genesis post:
“There are neither legal nor social contracts that require fund managers to disclose when they sell stakes in their positions — and there are generally no lock-up periods.
There are neither legal nor social contracts within the industry for influencers or promoters to disclose advisory or personal investment positions within crypto.
There are neither legal nor social contracts that dictate how a new token project should sell its token “treasury” over time, or behave if its founding team defects and leaves a shell entity with $500mm worth of bitcoin and ether on its balance sheet.”
The truth is token purchasers still have few if any legal rights - no claims to project assets, unclear governance rights, and no ability to demand transparency or accountability from the teams they cut checks to.
But the social contract seems to be changing slowly, but steadily. A 90%+ correction has certainly seemed to help inspire urgency for projects to self-police lest the token bonanza come to a screeching halt. Many teams are pushing the envelope when it comes to transparency with their communities:
Aragon: Not only does Aragon do quarterly reporting, but they wrote eloquently about “Why Transparency Matters” in the first place, and what they’re doing to walk the walk. Reports, public meetings, open-source code and decentralization of the developing organizations, radical transparency re the use of funds, etc.
Decentraland: The NFT market leader has committed an entire sub-domain to its transparency reports for MANA, and does the cleanest breakdown we’ve seen of its supply schedule, including liquid treasury tokens and vesting balances:
District0x: The team pulls together full quarterly reports on its progress and strategy. They share full financial statements, and outline where and how they make updates to their community - biweekly email updates, Slack/Telegram/Twitter, etc.
Ripple: Has done a nice job outlining the progress they have made selling off its XRP balance, and has set clear limits on how much they would sell programmatically. The company liquidates its treasury at a max rate of 0.25% of quarterly trading volume.
The issue is that this stuff isn’t easy to track down.
These are the good teams re disclosures, and yet we have no idea when any of them will drop their next quarterly report. We have no idea what information they will add or remove from future updates as there are no generally accepted standards. The only thing we know is that these will be buried in obscurity and beneath the days breathless crypto news.
We’ve said from day one the industry needs a reliable data aggregator that will not only host this key information in one place, but standardize it, and aggressively push it out to third parties so that everyone can rely on a single public crypto data commons.
We’re excited to announce the first dozen participating projects in November, with a second, similarly-sized cohort expected in December as well.
In the meantime, we need your help as we go from 25 projects to 250 in 2019. Know a token team that’s raised $10mm+ or has a liquid token worth the same? Introduce them to us directly, and we’ll get them on board.
We’ve built a strong foundation. We know we can “self-regulate via transparency.” We know we can create a universal data standard for token teams. And we know we can help good teams better communicate their updates to a global audience.
But it will take a village to pull it off and take a public data commons from beta to global acceptance.
Best of the Rest - What We Missed Last Week
Every weekend, we dig through the past week’s posts from crypto’s other great sources of content to see what we missed in our own weekend reads. Here’s us curating the curators.
Manuel Araoz asks the important question of “what makes an app need a blockchain?” in his latest post on the Zeppelin blog. In short, he says blockchains turned the internet into a digital jurisdiction—now we can all run global coordination experiments using code and incentives, instead of paper and coercion. Given this is a brand new paradigm, code runs in a public realm, and there are no blockchain-specific-UX patterns, we face pressing issues as a community: how do we communicate, collaborate, and scale? We need an “operating system” for crypto.
The Evolution of Digital Cash- Fidelity Digital Assets
Along with Fidelity’s announcement of its digital asset fund, Fidelity also publishes a historical account of the evolution of digital asset, and how its emergence of signals a fundamental change in value transfer. Currently, the tools that are used for transactions with traditional fiat currencies act as innovative front-end user interfaces. Digital assets are different: no central entity oversees the Bitcoin network, and Bitcoin’s supply schedule and monetary policies are fixed. In short, digital money is already changing the way people interact and transact.
An Introduction to Auction Theory: Blockchain Edition- Jinglan Wang
(h/t Token Daily)
Jinglan Wang examines the fundamentals of auction theory and ties them back into cryptoeconomics. For the uninitiated, the objective of an auction is to identify a price for and an optimal allocation of resources. Jinglan explains the 5 types of auction format (e.g. the open-cry ascending auction starts from a very low price which is incremented upwards until only one willing bidder remains), three types of valuations (e.g. in the interdependent values model, bids are affected by signals that other bidders show), and types of auction misbehaviour (e.g. “hill bidding” is the submission of phantom bids with the intent to inflate the price). Then, Jinglan turns to blockchain transactions and draws parallels with auction theory and concludes that the research is leaning towards a hybrid mechanism to incentivize simplicity, more empty block space, and security. The summary here is too brief to do the post justice, and I’d highly recommend taking the time to fully digest the post here.
Did I miss something?
Send me the link, your twitter handle and your best imitation compression algorithm write up. If I like it, I’ll include your bit next issue (with attribution).
🎧 ICYMI, we also host & produce our own podcasts on Spotify, iTunes, and Google Play. In our latest episode, Katherine interviewed Blockchain Capital’s Spencer Bogart (disclosure: he’s a Messari investor) in SF. They chat about fund tokenization, benchmarks for crypto fund performance, and his transition from equity research to venture investing - something that might be interesting to our analyst community.
Some other great episodes are #9 (Tony Sheng on his writing proecess), #6 (Jake Chervinsky’s primer on federal & State crypto regulators), #4 (Nic Carter on data integrity in crypto), and #8 (Conversations on the ground at CryptoSprings).
We want your feedback!
We know Messari can feel like a couple different products right now, and we're working to unify our features into one overarching whole. To that end, We’ve made a Trello board to take in any and all of the feedback you have for us! Have at it 🛠
We need data engineers who want to bring transparency to crypto!
Join a fast growing team in NYC; work with crypto OGs, and former Bloomberg/Palantir engineers; & access a network that sets you up for the rest of your career. Apply here!
Hit us up in these locations:
Money 20/20, Las Vegas, October 21-24th, 2018
Multicoin Summit, New York, October 23rd, 2018
DevCon, Prague, Czech Republic October 30–November 2nd, 2018.
Join Our Community:
If you are interested in helping us crowdsource token project details, or want to join our community to share your expertise, wed love to have you on board! Take a second to fill out an application and we will get back to you soon.
Going forward, we’ll be capping new members at 15 each week to keep things running smoothly. If you haven’t heard back, you are probably in the queue.
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