Week in Ethereum News
December 11, 2016

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Token Sales

  • Mysterium, the Decentralized VPN project from last week, announces a pre-token sale token sale. I’m all for experimentation, but this deal structure does not make sense to me.
  • Iconomi’s Zenel Batagelj on token sale strategies for founders, particularly for deal structure and communications.
  • Coinbase published and then deleted a blog post on a legal framework for token sales.  I’m guessing they jumped the gun (USV, Consensys, and CoinCenter are listed as partners), but you can still see it.
    • Not surprisingly, the proffered advice is on the conservative side – a BigLaw firm doesn’t want to take any risks! – but it is more or less what you’d intuit from Howey and watching the token sales so far.

General

VCs investing in quasi-VC token funds?  

The announcement that USV and A16z are investing in Olaf Carlson-Wee’s quasi-VC token fund is fascinating to me.  Two of the biggest names in VC doing something groundbreaking is a big deal. Some thoughts:

  • The fund solves a need: both USV and A16z evidently wanted more exposure to Ethereum.  But they have a fundamental problem: 1) they can’t possibly run the risk of getting hacked, because they would look bad to their LPs (investors), and 2) they aren’t equipped to deal with security and multi-sigs, etc.  
    • Hiring the Director of Risk from Coinbase to do a fund?  Uniquely solves that problem.
  • Speaking of Coinbase, one of the reasons I ultimately didn’t put money into Iconomi’s ICO is because I worried about their barriers to entry. Specifically, whether Coinbase would try to beat them.
    • Well, that competition has almost sorta kinda happened?
  • Deal structure: how do they have confidence that Carlson-Wee knows when to sell?
  • I love the name of Carlson-Wee’s firm.  Polychain Capital: down with maximalism!
    • A month ago, I heard from a friend in the Valley about this “crypto hedge fund” that was getting started.  I laughed, because the idea of doing stat arb or long/short in crypto is hilarious to me.  But this is less hedge, more VC.
    • As I discussed in my token sale doc, one of the main ways token sales differ from a venture investment is that liquidity comes very early.  
      • Selling is the arguably the hardest part of investing.  VCs have never had the same temptation of holding liquid assets. To oversimplify: they just sell whenever the IPO market heats up.

Dates of note                                                                                                

[I aim for a relatively comprehensive list of Ethereum sales, but make no warranty as to even whether they are legit; as such, I thus likewise warrant nothing about whether any will produce a satisfactory return. This is not investment advice.]                 

1000 subscribers by year end?

Over the last 2 weeks, we went from 650 subscribers to 930.  Thank you!  Getting to 1000 by the end of the year went from being a “stretch goal” to something we might hit this week.

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