Weekend Recommended Reading | Vitalik Discusses Network States; A Review of Three Arrows Capital's Downfall
This week's recommendations for 9 outstanding articles in the cryptocurrency industry.Organizer: Hu Tao, Chain Catcher
Ethereum Layer 2 scaling solution StarkWare has continuously released three blogs announcing the StarkNet token economic model, officially stating that the token will be issued this September, becoming another leading Layer 2 solution to issue a token after Optimism.
StarkWare stated that the Alpha version of StarkNet was launched on the mainnet in November 2021, and currently, dozens of teams worldwide are dedicated to it. "Now is the time to promote the decentralization of the network, achieving the activity, censorship resistance, transparency, and inclusiveness required by Ethereum L2."
2. “Vitalik Buterin: My Views on Network States”
Balaji Srinivasan describes his vision of "network states" in his new book, which can be seen as an attempt to succeed the liberal ideology: Balaji repeatedly praises sovereign individuals as important readings and inspirations, but diverges from its ideas in key aspects. Do network states really provide sufficiently exciting benefits? Regardless of the merits of network states, does it really make sense to link this idea with blockchain and cryptocurrency? On the other hand, does this worldview miss something crucial? In this article, Vitalik Buterin will discuss his understanding of network states.
3. “Global Web3 Ecosystem Innovation Observation Report”
This article compiles reports such as Messari's Crypto Theses for 2022, a16z's State of Crypto 2022, and McKinsey's "Value Creation in the Metaverse." It is a comprehensive report observing the industry from a Web3 perspective, starting with the ideas of Web3, which can be traced back to the early thoughts when the internet first emerged in the last century. It then covers the infrastructure at the technical level and current mainstream applications, as well as the hottest development areas in Web3, such as DeFi, NFTs, blockchain games, and DAOs.
4. “The Pros and Cons of CeFi from a Liquidity Perspective”
This article focuses on how CeFi institutions in the crypto market actually play the role of banks, providing liquidity supply, leverage management, and term conversion services to the entire industry, while exploring their flaws and reasons. The author believes that the crypto industry should first fully recognize the problems at hand, and then establish an industry-level collaborative mechanism. Based on mechanisms like SBT, it should explicitly introduce infrastructure such as reputation, credit, and term financial products on the blockchain, and strive to create inter-institutional lending and repurchase markets, establishing a money market separate from the secondary market, so that the crypto industry can enter a relatively stable and healthy development phase, supporting the significant development of Web3 and blockchain industry applications.
5. “New Public Chain Sui: A Layer 1 Built by a Former Facebook Team Valued at $2 Billion”
Mysten Labs, founded by four former Meta engineers, announced its Layer 1 public chain project "Sui" in March 2022 and revealed the economic model of the project's token SUI in May. Figment Capital investor Trace introduced Sui from three perspectives: technology, token economics, and team on his personal social media platform.
6. “Bloomberg: How Three Arrows Capital Collapsed and Triggered a Chain Reaction in the Crypto Industry?”
The crypto financial crisis of 2022 was like all other financial crises: it began with a crazy rise in asset prices, leading to excessive trust in the market, followed by a sudden collapse of confidence. In this report, Bloomberg provides a detailed account of the development history of Three Arrows Capital, how it engaged in high-leverage borrowing, and the related chain reactions.
In just two months, Three Arrows Capital went from managing assets worth tens of billions and being a top industry fund to becoming a heavily indebted defendant that everyone wanted to criticize, prompting reflections on how the former wealthy image was actually built on high leverage and circular borrowing.
Against the backdrop of a bear market, most projects have struggled to escape the decline in primary valuations. Data compiled by Messari founder Ryan Selkis shows that many Web3 unicorn projects now face significant reductions in off-market trading prices compared to their previous funding valuations, including star unicorns like OpenSea, FTX, and ConsenSys. More than 10 Web3 unicorns have seen their valuations shrink by about 50%, with some even reaching 90%.
9. “Overview of the SocialFi Ecosystem: Looking at the Future Development of SocialFi from the Current Market”
Currently, most SocialFi products can only temporarily meet the pure on-chain social + financial needs of Crypto Native users. In the future, there will certainly be SocialFi products that can be widely popularized and meet both on-chain and real-world social + financial needs, helping us integrate social interactions into all aspects of our lives, including video entertainment, gaming, music, fitness, etc. We can join corresponding communities, engage in these interest activities, and earn token rewards; when delightful SocialFi cleverly combines with basic interpersonal relationships, Web 3.0 will become even more powerful, as ultimately, we hope to find mutual connections in this world in a genuine and positive way.
