Sam Bankman-Fried’s hedge fund Alameda Research struck a deal with crypto lender Genesis, two bankrupt firms that both sought reimbursement from the other. According to court documents, Alameda is likely to receive $175 million from the Digital Currency Group lending subsidiary, a significant reduction from the $4 billion FTX originally sought. FTX’s Chief Executive Officer John J. Ray III called the deal fair and noted there were legal uncertainties surrounding the matter. DCG also owns CoinDesk. In other news, SBF is back in jail.
Airdrop Blues
Holders of the Sei blockchain’s recently launched token seem to have dumped it en masse following complaints over a planned airdrop. The token’s price dropped as much as 24% to 18 cents 24 hours after launch; the total market capitalization is hovering around $315 million. Sei Labs configured the airdrop to go to Ethereum, Solana and Binance Smart Chain users if they bridge capital to the new network. Though confusion about the timing of the event led to a “fiasco.” The Sei team initially deployed 18% of the total supply of 10 billion tokens with the bulk going to the SEI founding team, private investors, an ecosystem reserve and the SEI Foundation.
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Trump’s Wallet
Donald Trump owns more crypto than we previously knew about, new disclosures published by government watchdog Citizens for Responsibility and Ethics show. The former president (and crypto skeptic) held $2.8 million in ETH in a wallet as of early August and earned $4.87 million in licensing fees from his NFT collection. CoinDesk previously reported Trump disclosed up to $500,000 held in digital assets according to a government document dated April 14. Separately Arkham Research apparently located the wallet, which also contained minor amounts of wETH, MATIC and USDC.
The Takeaway: Social Media Good
(TIME)
When Vitalik Buterin calls something “the closest thing to an instantiation of ‘crypto values’…in the mainstream world,” you’ve got to listen. In this case, the Ethereum co-founder was reviewing X’s Community Notes feature (originally called Birdwatch), a crowdsourcing tool for people to add context and rate the truthfulness of posts (RIP tweets) which launched back when the platform was called Twitter and before Elon Musk made the worst deal of his life. I’m not sure why VB chose now to write a 4,300-word blog about a pilot program that launched last year, but I’m glad he did.
And so was Elon Musk, who retweeted the slightly esoteric example of software criticism — bringing Vitalik’s ideas about decentralization and user autonomy to new heights. It’s funny too because throughout the post, VB was not afraid of laying in to Musk, who is known for running companies like autocracies and was at least at one point the world’s richest man. Despite the fact that Musk, as a boss, basically represents everything crypto would dismantle if it could, he’s yet to dismantle Community Notes like he’s derailed much of what made Twitter special.
For Buterin, Community Notes is a case study in decentralized governance. In short, it’s a Wikipedia-like system that anyone can apply to join that can be written and voted on by anyone, and which is run and ultimately kept in check by an open-source algorithm. Buterin says the machine learning algorithm which surfaces posts is seemingly able to straddle the deep ideological divisions online to surface non-partisan, “impressively useful” and credible information.
“It’s not perfect, but it’s surprisingly close to satisfying the ideal of credible neutrality,” he wrote. Credible neutrality being the term of art used to describe things like blockchains, built to avoid discrimination of all kinds. Since the very beginning the goal for Ethereum, for Buterin, has been credible neutrality: a universally accessible machine that people truly believe is so trustworthy it transcends the category and becomes trustless. So when Buterin sees a Community Note, he can generally trust X isn’t giving him the runaround or information someone paid for him to see.
Community Notes is transparent and consensus-driven, but it’s not quite crypto. For instance, VB notes there’s evidence suggesting Musk may have mucked with a corrective note mentioning the Uygher genocide, given his vast business interests in China. Buterin doesn’t come down one way or another on the matter, but he does note after examining and not finding direct evidence in the source code that there are many technical and social ways to game public votes. It’s worth mentioning that crypto hasn’t exactly found a solution to Sybil attacks, brigading or the problem of money in politics.
The tool isn’t only important as a mainstream experiment with digital democracy. It also points to what crypto could be. VB has never been one to bite his tongue when it comes to crypto’s problems, and I’m thankful he never flatout suggested blockchain as a solution for X’s issues. But as a sober analysis of a “very-large-scale” application that will probably be the closest many come to interacting with “crypto values,” VB’s reflections on Community Notes are a reminder that some problems just cannot be solved.
That isn’t even defeatist. Perhaps the most lucid section of the blog is when VB addresses recent commentary suggesting Community Notes is not “brave” enough and doesn’t go far enough to address misinformation. Buterin flat out states that it should not be the goal for systems like these to catch every falsehood or lie. He’d rather see 10 “misinformative tweets go free” than for one to be judged “unfairly.” “The goal,” he writes, “is to remind people that multiple perspectives exist.”
Today it’s more common to see attempts to cure the problems of “public epistemology” by presenting expert opinion as the ultimate source of truth — whether that’s the CDC during Covid or Facebook interjecting Snopes-approved facts in a political debate. VB appreciates top down decrees, saying that experts rarely lie (and if they do, it’s usually by leaving facts out, aka a “sin of omission”). He sees Community Notes as a worthwhile experiment in spreading verifiable and credible information in an age of incredulity, but hardly the only solution (ahem, prediction markets).
This is worth bearing in mind in crypto, too. The aim shouldn’t be to solve all the world’s ills. Far too often blockchain projects are looking to disrupt and replace what already exists. It’s not out of the question to think this cockiness can have a negative backlash, feeding the general skepticism around blockchain and people’s anger when things inevitably go wrong — much like how social media fact checking has spurred distrust and the general collapse of the faith in institutions. Hopefully, open, permissionless crypto networks are already built for a world filled with many opinions — but perhaps they should be built for a world with many options, too.
As a global hackathon community platform, DoraHacks has supported hackers, developers and builders worldwide to get over $30 million fundings since its launch. To further create a decentralized network of resources for builders, the team launched Dora Factory in 2021, developing new and innovative ways for sustainable funding and governance mechanisms.
After our previous conversation with DoraHacks partner Steve Ngok, CoinDesk had the opportunity to speak with Eric Zhang, the founder of DoraHacks and architect of Dora Factory. Dora Factory has recently launched innovative solutions for funding public goods in blockchain ecosystems through public good staking, as well as unique ways to create governance structures among a global decentralized network of BUIDLers.
In our conversation with Eric, we learn more about the challenges of creating a sustainable open source community and how Dora Factory is uniquely positioned to support decentralized technology.
