The Delegate #003: Are you Diplo's newest business partner?
Diplo NFTs, scaling Ethereum, how you can run a sailing team
March 31st, 2022
Hello from Oaxaca, Mexico! This is The Delegate, the newsletter unpacking top web3 headlines and, more importantly, how to understand them.
In this week’s update:
Diplo: A different type of drop.
“The Merge”: The low-down on Ethereum’s major summer move.
Sailing: Larry Ellison calls for a DAO.
Diplo’s coming to crypto
I give Diplo and Skrillex a lot of credit for making me like Justin Bieber again. One of them is letting the people buy the rights to a new song.
Three tiers (starting at $99 for 0.004%) of ownership for Diplo’s new song “Don’t Forget My Love” went on sale this week on Royal, a royalty ownership platform co-founded by DJ 3LAU and Opendoor co-founder Justin Ross.
Diplo joins artists like Nas, Kings of Leon, VÉRITÉ and 3LAU in their exploration of web3 and NFTs as a way to engage their fanbase.
Over the last couple years, people have shown that they’re craving the chance to not just celebrate but own their favorite parts of culture.
There is no better example than NBA Top Shot, which has cleared ~$1 billion in sales across >400K buyers.
Companies like Royal represent a fundamental shift in how artists engage with their fans. It’s closer, more intimate, a direct connection.
In the future, we could see musicians offering exclusive merchandise, events and access to their most loyal fans who hold their NFTs.
“Close to Me”
Zooming out, a big question about NFTs: why are people paying so much for a picture of a rock? How could Top Shots be worth 6 digits?
It’s cultural, and culture is emotional, not logical. Literally, if you know, you know.
And if you don’t, it’s not for you. It’s for a very particular audience, and sometimes that audience has a lot of money.
Avatars, badges and identity verification: Did you know NFTs are more than just art and music? Read more at The Delegate’s Notebook: What NFTs Are Being Used For
One short step forward for Ethereum
There’s a big change coming to Ethereum around June 2022 that everyone in crypto is pretty excited about.
It’s called The Merge. In short, it:
Cuts energy consumption by 99%+
Changes how Ethereum agrees on reality
Cuts how quickly ETH is created
Makes some people some more money
All good things! The greener footprint tackles a longstanding concern about Ethereum.
I’m sensing a “but”…
The problem: Scalability (i.e., making it so that using Ethereum doesn’t cost literally hundreds of dollars per click) is the existential issue. Blockchains need to be able to handle 100-10,000x more stress for true global-scale adoption.
The Merge doesn’t do much for that. The real scalability efforts are at least 1 year (and probably many years) away.
These new efforts all still face major challenges - some technical challenges are the bleeding edge of the field. None of them have seen large-scale adoption.
(This refers to new chains on top of Ethereum that can be 10% cheaper: Optimism and Arbitrum are two examples)
If not The Merge, what does help scalability?
In summary: create more chains, make each chain do less, then connect all of them so they work together.
If you want more detail about the problem and how to understand the solutions in a non-technical way, check out my new entry in The Delegate’s Notebook: What You Need to Know About Scaling Blockchains.
To be clear, I’m both incredibly optimistic and aware of how long the road ahead will be.
This is one of the most exciting reasons to stay tuned to web3. It’s a once-in-a-generation opportunity to see the world’s top talent gathering to solve such a big problem.
I know you and your friends have talked about crypto before. You should send them this post! I do the thinking so you can all sound smart with each other the next time crypto comes up.
Sailing embraces DAO
Sailing will be the first sporting league to publicly invite a DAO to manage a team.
Oracle Chairman Larry Ellison and his sailing league SailGP is partnering with Ethereum competitor NEAR Protocol to establish this DAO.
People who hold the DAO token will be able to vote on team strategy, athlete selection and team management issues.
Haven’t we heard this before?
So far, we’ve seen DAOs form to acquire an F1 team, an NBA team and the Denver Broncos. None of them are close to their end goal yet.
(They join other “let’s buy something!” DAOs hunting for a golf course, Blockbuster, McDonald’s franchise(s), Elvis Presley memorabilia and, of course, the Constitution)
In my book, the “let’s buy something!” DAOs are fun experiments that I fully support for the purpose of being fun. I don’t have any immediate expectations that they will do anything game-changing for web3.
Out of the gate, the new SailGP team DAO is way ahead of all other similar efforts. It has a huge advantage in the inside track to the level of control that other DAOs are only dreaming about, even after months of work.
If it works, it’s a pilot for the future of sports entertainment.
Fantasy leagues, niche media outlets and hyper-strong loyalties to both teams and individual athletes all prove how committed sports fans are.
So as a raving fan of [INSERT SAILING TEAM NAME], imagine actually getting to be the deciding vote on which sailors you’ll have on your roster. Or how you’ll approach the upcoming regatta!
What’d you think of this week’s update?