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RelayNode NYC #34 - January 6

David Gogel

Welcome to RelayNode NYC Area edition! The NYC blockchain ecosystem is growing rapidly. Our goal is to harness its energy and innovation for the benefit of New Yorkers and provide a weekly curated list of interesting content, upcoming events, and local jobs.

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Welcome back! Wishing everyone a happy 2020! Excited for the decade ahead!

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RelayNode NYC is curated by:

David Gogel Advisor & Finance Lead @ Paperchain fmr Associate @ Techstars' Blockchain Accelerator, Co-president @ Wharton FinTech, Corp dev @LinkedIn @AIG

Hsin-Ju Chuang Founder @Dystopia Labs. Former-Head of Growth @Stellar/Lightyear, Solana. Ex-Director at Tezos (TQ)

1 Big Thing: Platform Risk

A wave of app store rule enforcements has highlighted platform risk for crypto companies. Google temporarily suspended Metamask from the Play Store and banned certain crypto YouTube videos. More recently, Coinbase Wallet, Coinbase's mobile crypto wallet, announced it may remove its DApp browsing feature "in order to comply with [Apple] App Store policy."

According to CEO Brian Armstrong "Apple seems to be eliminating usage of Dapps from the App Store. If Apple customers want to be able to use Dapps, we may need to make this request known to Apple in some way. This is an important area of innovation in finance, and many developers and early adopters of this technology have millions of dollars worth of crypto tied up in these financial applications, which they will no longer be able to use on Apple mobile devices if this app store policy continues.”

Why it matters: DappRadar released its annual overview of activity across the dapp ecosystem. Ethereum remains the most significant smart contract platform in terms of the number of active dapps deployed, the depth of its development community, and user growth. Throughout 2019, daily active unique wallets across the Ethereum dapp ecosystem rose 118%, with daily value in US dollars terms up 166%. Despite this growth, Apple can make Dapps and wallets extremely difficult to access limiting mass adoption.

The other side: Apple app developers have to abide by Apple's lengthy guidelines if they want to sell their products to iPhone consumers. Apple can exclusively decide when it doesn't want certain apps on its phones. And you, as a customer, are free to not use Apple’s products. 

The big picture: Apple and Google have long had a complicated relationship with crypto in their app stores. Crypto apps are potentially a threat to the platforms’ stronghold on in-app payments and 30% cut of in-app purchases. Imagine developers having to pay 30% fees to Apple for users collateralizing a MakerDAO contract or buying a NFT? 

The big questions: Do Dapps violate Apple’s Terms of Service? Why does Apple not charge a 30% fee for buying Apple stock on Robinhood or sending payments on Venmo?

I browsed through Apple’s App Store Guidelines to find potentially relevant clauses:

  • 3.1.5(a) Goods and Services Outside of the App: If your app enables people to purchase goods or services that will be consumed outside of the app, you must use purchase methods other than in-app purchase to collect those payments, such as Apple Pay or traditional credit card entry.

  • 3.1.5(b) Cryptocurrencies:

    • (i) Wallets: Apps may facilitate virtual currency storage, provided they are offered by developers enrolled as an organization.

    • (ii) Mining: Apps may not mine for cryptocurrencies unless the processing is performed off device (e.g. cloud-based mining).

    • (iii) Exchanges: Apps may facilitate transactions or transmissions of cryptocurrency on an approved exchange, provided they are offered by the exchange itself.

    • (iv) Initial Coin Offerings: Apps facilitating Initial Coin Offerings (“ICOs”), cryptocurrency futures trading, and other crypto-securities or quasi-securities trading must come from established banks, securities firms, futures commission merchants (“FCM”), or other approved financial institutions and must comply with all applicable law.

    • (v) Cryptocurrency apps may not offer currency for completing tasks, such as downloading other apps, encouraging other users to download, posting to social networks, etc.

Dapps appear to potentially violate several ToS including: 

  • 2.5.2: “Apps should be self-contained in their bundles, and may not read or write data outside the designated container area, nor may they download, install, or execute code which introduces or changes features or functionality of the app, including other apps.”

  • 2.5.8: “Apps that create alternate desktop/home screen environments or simulate multi-app widget experiences will be rejected.”

  • 3.1.1: “In-App Purchase: If you want to unlock features or functionality within your app, (by way of example: subscriptions, in-game currencies, game levels, access to premium content, or unlocking a full version), you must use in-app purchase. Apps may not use their own mechanisms to unlock content or functionality, such as license keys, augmented reality markers, QR codes, etc. Apps and their metadata may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.”

Go deeper: In October 2018, the Supreme Court upheld the Ninth Circuit Court of Appeals’ decision in Apple v. Pepper, agreeing in a 5-4 decision that Apple app buyers could sue Apple for allegedly driving up prices by charging third-party app developers a 30% commission. In contrast, while Google also collects fees on purchases of apps from Google Play store for Android devices, it neither holds a monopoly on phones, nor prevents apps to be sideloaded from other app stores.

The bottom line: Web3 is increasingly in direct competition with policies from incumbent phone hardware manufacturers and centralized app store operators. We should expect continued censorship on MetaMask, Coinbase, & other dapp browsers on Apple and Google devices and the slow emergence of alternative platforms.

Things to read

🌐 Why Bitcoin?

  • Happy Birthday Bitcoin! Bitcoin Magazine profiles Bitcoin’s 11th year by the numbers.

  • Bitcoin finished the year +85.4% which is actually the “worst” positive year on record (slightly edging out 2015’s +88.1%). Gains were entirely driven in the Feb-June time period with 2H19 decidedly negative (-33.3%) with 5 of 6 months closing in the red. Reptr45 has an excellent tweetstorm looking at various trading metrics.

  • As we approach the Bitcoin halving in May 2020, a heated debate has raged among Bitcoiners about whether the issuance change is being anticipated by the market or not. Those who downplay the purported impact of the issuance change tend to make references to market efficiency. Nic Carter, Partner at Castle Island Ventures, has an excellent post on the Efficient Market Hypothesis and how it applies. Kyle Samani, GP at Multicoin, also shares thoughts on the BTC halvening and why it is “extremely bullish”.

  • Balaji Srinivasan, founder of Earn.com and former CTO at Coinbase, pens a Nakamoto post explaining how Bitcoin (and crypto more broadly) encodes the implicit values of technology. It is internationalist, capitalist, decentralized, hyperdeflationary, networked, encrypted, digital, volatile, ambitious, and quietly revolutionary.

🌐 More 2019 Year in Review / 2020 Outlooks

💰 Funding, M&A, & Exits

  • Haseeb Qureshi, Managing Partner at Dragonfly Capital Partners, announced the fund’s investment in Nervos, a permissionless, scalable public blockchain launched in China. The Nervos blockchain pioneers a new concept: a layer-1 blockchain built for layer-2.

  • BitOoda, a U.S.-based crypto agency brokerage, raised a $7M Seed round from several notable commodity investors including Dr. Gary Ross, former Head of Global Oil Analytics & Chief Energy Economist at S&P Global Platts; Calvin Schlenker, former Head of North American Natural Gas Trading at BP; and Roy Salame, former MD, Head of Global Investment Opportunities Group, & Head of Commodities Sales & Structuring at J.P. Morgan. Funds will be used to scale in the U.S., Asia, and Europe.

  • Deribit has an excellent post on the race to crypto banking. Over the next years, competition between crypto exchanges, wallets, and custodians will shift from horizontal expansion to vertical integration. While coming from different directions, they all share the same goal of becoming a crypto bank. Their leading indicator of success will be AUM, which they monetize via financial services. Nice M&A playbook for exchanges.

🔓 DeFi / OpFi

  • Tarun Chitra, Founder and CEO of Gauntlet, explores the future evolution of crypto trading by reviewing market structure and historical developments in traditional finance. 

  • Taiyang Zhang, the CEO of Ren protocol, announced the launch of KeeperDAO, an on-chain liquidity underwriter for DeFi, built on top of Ethereum. KeeperDAO acts as a decentralized insurance fund for DeFi, enabling participants to pool capital to collectively profit from on-chain opportunities such as arbitrage and liquidations.

  • According to the Block, MakerDAO stakeholders failed to approve an executive vote on the Governance Security Module proposal enabling a 24H delay before any governance executive votes are enacted intended to address a reported exploit risk. $340M+ worth of Ether collateral potentially remains at risk. 

💸 STOs / Stablecoins / Tokens

  • Roy Learner, Tom Lombardi and Andrew Ballinger from Wave Financial, published an excellent State of Digital Securities report, deep diving into the advantages, challenges, regulation, and key offerings of blockchain based digital securities.

🏦 Institutionalization

  • Caitlin Long published an article on the hidden costs of delayed net settlement systems. She argues that if the Federal Reserve, the Bank of Japan, the Bank of England or the ECB were to issue a central bank digital currency that offered real-time gross settlement, corporate treasurers would have a strong economic incentive to switch to it as an intermediary currency in global trade. 

🍰 Layer 1 

  • Following Ethereum’s recent Istanbul upgrade, the Muir Glacier hard fork was successfully implemented at block 9,200,000. Muir Glacier delays the difficulty bomb, a measure to increase block times in order to push the network to upgrade to PoS, by 4 million blocks (~611 days). Had this not been implemented, block times would have increased 2-3x. One more small step toward Eth 2.0.

  • Alethio published interesting research on smart contract weaknesses after running all distinct Ethereum bytecodes through the contract security analysis framework MythX.

  • Nic Carter, Partner at Castle Island Ventures, explores the tradeoffs between different launches for proof of work, a discussion of the current issues with fair launches, and a proposal for a new launch method.

  • Vitalik Buterin, Co-Founder of Ethereum, explains what is the minimal functionality that constitutes "functionality escape velocity" for layer1.

🍰🍰 Layer 2 

  • Doug Petkanics, Co-founder of Livepeer, announced that the Streamflow protocol update is set to launch on January 13, enabling the Livepeer public network to be used at scale by video platforms and applications for video transcoding. It introduces a number of changes to the Livepeer internals including probabilistic micropayments, GPU transcoding, and a new orchestrator/transcoder architecture.

⚖️ Legal

  • Telegram was ordered by a judge to hand over financials concerning its $1.7B ICO. District Judge P. Kevin Castel of the New York Southern District Court ordered Telegram to turn over banking records following a request from the SEC. According to the SEC, “defendants are now refusing to disclose the bank records concerning how they have spent the $1.7B they raised from investors in the past two years and to answer questions about the disposition of investor funds.”

🎥 Podcast & Video of the Week

  • Chris Dixon, GP at a16z crypto, discusses what’s next for the internet with Jonah Peretti, Founder & CEO of BuzzFeed. Their conversation ranges from the early days of the web to the way innovation happens to blockchains as an extension of open source.

Highlighted Industry Jobs (non-exhaustive list for NYC / remote):

If you would like to highlight jobs or internships in future editions, please email links here.

Lighter week ahead.

⚡Introduction to Blockchain + Open Floor for Presentations & Questions⚡

When: Monday, January 6th, 2020 at 6:30 PM – 9:00 PM EST

Where: WeWork Dumbo Heights, 81 Prospect St · Brooklyn

The Flatiron School // Access Labs are proud to support the NYC Blockchain Devs. This is a regular gathering for Blockchain Devs of all levels to learn, present, work on in collaboration with one another or on solo projects in this fast-growing field. Our community is a welcoming space where any de-centralized ledger related question is fair game, be it beginner, intermediate, or advanced.

🎤 6:30pm - 7:30pm: Intro to Blockchain

‍🎤 7:20pm - 9:00pm: Open floor for presentations + Q&A

Anthony Albertorio will go over the basics of blockchains and decentralized systems.

BitDevs: Socratic Seminar 100 (Free)

When: Thursday, January 9, 2020, 7:00 PM to 9:00 PM

Where: NYU Stern, 44 West 4th Room 1-70 · New York, ny

Discussion Topics: Please see our link aggregator for a list of potential discussion topis. A final topic list will be posted on bitdevs.org the day before the event. Feel free to make topic suggestions in the comments section below. https://www.zotero.org/groups/691739/devsny/items/collectionKey/FAJRFUWQ

Upcoming events

Core Developers Meetup (Free)

When: Tuesday, January 14, 2020, 6:00 PM to 8:00 PM

Where: Distributed Global, 16 Vestry St · New York, NY

This is a series of regular monthly meetups for core devs - current and aspiring! The event will feature talks from R&D staff, core developers, protocol designers, and cryptographers working on various projects. After that, we'll open the floor for questions and discussions about topics of interest.

Understanding Decentralized ID (Free)

When: Tuesday, January 14, 2020, 6:00 PM to 9:00 PM

Where: IBM Garage, 368 9th Ave 16th Floor · New York, NY

Get an education on what Decentralized ID is and what some of the use cases are.

How the "Tech" In FinTech Is Built - with MarketAxess (Free)

When: Tuesday, January 14, 2020, 6:30 PM to 8:30 PM

Where: MarketAxess, 55 Hudson Yards · New York, NY

NYC FinTech Women is kicking off 2020 with MarketAxess for a discussion on the intersection of cloud engineering, big data and agile product management.

#TNYSCM18 – Blockchains in Supply Chain (Free)

When: Thursday, January 23, 2020, 5:30 PM to 7:30 PM

Where: TBD

As the hype around cryptocurrencies and blockchains is cooling off, a few committed entrepreneurs, innovators, technologists, and academics continue to build products to solve problems that have plagued enterprise supply chains for years. This event will feature some of those people and the products they are bringing to market.

NYC/XRP IV - Seeing 20/20!

When: Tuesday, January 28, 2020, 6:00 PM to 9:00 PM

Where: Location, TBD

The last year has been a very exciting time for both the NYC/XRP meetup and the larger global #XRPCommunity. Ripple Labs engineers and directors will be invited to share their stories and journeys as part of a fireside chat. 

TRUST-LESS 2020: Proof of Stake (PoS) Validator Summit

When: Sat Feb 1st - Sun Feb 2nd 2020

Where: Virtual

This is one of those pivotal moments in blockchain history. With ETH 2.0 & multiple PoS layer-1 blockchain protocols slated to launch early 2020, it's an opportunity for developers & students to enter the blockchain space & learn how to build one of the few viable business models that can earn money: staking-as-a-service. Attendees Will Learn:

  • What The ETH 2.0 Roadmap Looks Like  + How Staking Will Work

  • How To Stake On Different Layer-1 Blockchain Networks

  • How To Participate (As A Validator) Via Incentivized Testnets

  • How To Build Your Own Staking-As-A-Service Startup

  • Staking-As-A-Service Models: Economics, Custody, & Security

  • Frameworks For Treasury Management

  • How To Think Through Crypto-Taxes 

  • and more!

Notable Conferences

Nothing written in RelayNode NYC is legal or investment advice and should not be taken as such. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence.