Sup, nerds!

Here’s what you’re getting in today’s edition:

• 💅 This is cool: CaaB (Communities as a Business)

• 🔎 This seems important: The dark side of the Bitcoin ETFs

• 🤝 Partner: This market with 63% price growth isn't just for billionaires anymore…​

• 🔪 Let's dissect this: MakerDAO is preparing for the worst (and that’s a good thing)

Terms used in this edition (click for an explanation, or ask Web(GPT)3!):
DAO, Wallets, Stablecoin, Bull Run.

💅 This is cool:

SaaS? Nah, Try CaaB (Communities as a Business)

In one sentence: Wyoming just became a legal safe haven for DAOs (aka ‘communities as businesses') — which means we may well be seeing a DAO boom in the coming years.

Let’s say you’re part of an online community…

Let’s make it something normal like, idk, a closed community for fans of singer-songwriter Natalie Imbruglia.

No? Ok. Fine. Let’s pretend its a hiking club (normal enough?).

Say this hiking club starts getting requests from brands wanting to promote their goods to members…the community collectively decides:

“Sure, why not, we’ll take some discount codes and a bit of cash…but on that last bit — how do we disperse the funds fairly?”

One option would to be create a Decentralized Autonomous Organization (DAO), aka an automated piggy bank for the community — with set rules, eg:

• You become a moderator → you get rewarded with DAO tokens.

• You share new trails/routes → you get rewarded with DAO tokens.

• You give helpful responses in the share forum → DAO tokens.

The idea being that these tokens reward active members, and can be converted into fiat cash, or held / used to vote on how to spend the community funds (the more tokens you hold, the more votes you get).

Sounds awesome right? Only problem is…

Legal frameworks for DAOs are rickety at best.

Some jurisdictions might even try and take your sweet lil’ hiking community (or Natalie Imbruglia fan club) to court for selling unregistered securities (aka unregistered public shares in a company).

Here’s the cool part of this story:

Wyoming's Gov. Mark Gordon just signed a bill into state law that adds to growing codes for DAOs, which have already been cleared to establish themselves as limited-liability corporations there.

Translation: Wyoming just became a safe haven (or ‘oasis’ as a16z have put it) for DAOs.

We LOVE to see it.

🥇 Want the news before anyone else?

🔎 This seems important:

The Dark Side of the Bitcoin ETFs

In one sentence: The firms running the BTC ETFs have enough money to buy up a significant portion of the circulating Bitcoin supply, stoking centralization fears.

Most people are stoked on the Bitcoin ETFs, cause they're pushing the price of the crypto market up.

(ICYMI: we just saw another all time high in BTC price over the weekend).

But others are ringing the alarm bell…

Here’s the basic gist of their argument:

By making it easy/legal for big players in the traditional financial (TradFi) world to invest in Bitcoin via Exchange Traded Funds (ETFs) — we’re inviting centralization risk into Bitcoin and any other crypto that has an ETF built around it.

The idea being:

Sure, Bitcoin is a $1.3T asset — but the management firms that are running these ETFs have tens of trillions of dollars to play with.

And the fear is, over time, with a small percentage of their total funds, these firms could own a significant portion of the Bitcoin supply — enough to easily manipulate the price, and concentrate a silly amount of wealth in one place.

Here’s our take (which we kinda stole from Satoshi):

Satoshi once celebrated lost Bitcoin, in that…

The more is lost → there less there is → the more scarce BTC becomes → the more valuable the BTC we all have in our personal wallets becomes.

While the concerns surrounding TradFi players hoarding BTC are absolutely valid — it does come with its upsides…

These asset managers tend to have a ‘buy and hold’ strategy, which means more Bitcoin is being taken off the market, for longer.

(Making it scarcer/more valuable).

🤝 Partner:

This Market With 63% Price Growth Isn’t Just for Billionaires Anymore…

Over the last 20 years, record prices achieved for Banksy’s art have grown at an astounding 63% compound annual rate. Even more impressive? It's not just the ultra-wealthy benefiting from this phenomenal growth. Thanks to Masterworks.  

Masterworks enables its 820,000+ users to access investments in multi-million dollar artworks by artists like Banksy, Basquiat, and Picasso for just a fraction of the cost of an entire piece. 

When Masterworks sells a painting, like the 16 it’s already sold, investors can get a return on their investment. With 3 recent sales, Masterworks investors realized net annualized returns of 17.8%, 21.5% and 27.3%*.

Every offering is limited, and shares can sell out in just minutes, but Web3 Daily readers can skip the waitlist with this exclusive link.

^{*Past performance is not indicative of future returns, investing involves risk. See disclosures masterworks.com/cd}

🔪 Let's dissect this:

MakerDAO Is Preparing for the Worst (And That’s a Good Thing)

In one sentence: MakerDAO voted to increase fees for their stablecoin, $DAI, to help push reserves from 5% to 15% as they expect increased selling pressure.

MakerDAO just implemented some fee changes to stock up on their DAI Token Reserves. 

Which could be seen as really annoying, but similar to the friend who takes extra time to pack a surplus of snacks for the road trip…

95% of the time we are really happy they did it. 

Here’s what the stablecoin is up to: 

MakerDAO runs the stablecoin $DAI, which is softly pegged to the US dollar. 

The DAO is known for their structural safety — they run tons of audits and research.

Which, in turn, makes a lot of investors trust $DAI to store long-term value, or use it for day-to-day transactions of Real World Assets (RWA’s), like purchasing cars. Pretty cool.

All this stacks up, making sense of why MakerDAO is ‘over’ preparing. 

As we come into a bull run, the volatility of the space is getting more hefty, and coins like $DAI are seeing more selling pressure. 

Think: more people selling stablecoins to buy BTC/ETH/SOL etc.

Which brings us to the take away:

Increasing reserves from 5% to 15% will help sustain the coin if there is a liquidity crunch (aka: a bunch of folks trying to sell their $DAI tokens at once).

Who knows if this is needed for the long term — either way, a strategic preemptive move like this can make or break a project when markets turn.

So this is a smart move by MakerDAO.

How Does MakerDAO & DAI Work?