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Welcome back to 0xResearch. Here's what we've got for you today: |
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On the decentralization of DAOs |
The idea of a decentralized autonomous organization (DAO) is kind of incredible, when you really think about it. |
What is a DAO? |
A DAO is like a private company that is perfectly okay with hundreds of token (equity) holders debating publicly on an open forum about product and organizational strategy. |
A private company where the core security underlying the company's product (smart contracts) are fully viewable, where all the data you need to write a scathing data analysis on a company you don't like is readily available. |
In the non-Web3 world, markets would kill to have any clue as to what their competitors are thinking of launching, let alone detailed forum discussions of how that conversation is taking shape. Having all that information out in the open would invite endless media and regulatory scrutiny, taking precious time away from actually building to fend off annoying lines of inquiry. |
These are handicaps that no startup wants. And yet in Web3, $21.4 billion of value rests on these norms. In Web3, it's par for the course. |
Of course, most DAOs are actually only partially decentralized. |
When Uniswap announced its plans around Unichain last month, Stanford Blockchain Club's head of governance Billy Gao said the announcement left most DAO delegates "in the dark," and excluded them via their lack of "a voice at any stage of the process — whether through forums, private discussions or any other means." |
 | Billy Gao @__billygao |  |
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1/ @Uniswap's sudden launch of @unichain has raised serious questions about DAO governance and caught many of us off guard. Is this a bold leap forward for DeFi, or a worrying step back for decentralization? Here's our breakdown of what unfolded, why it matters, and what's next. | | | 11:08 PM • Oct 19, 2024 | | | | | | 728 Likes 85 Retweets | 59 Replies |
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It's not just Uniswap either. Optimism DAO's governance contracts are not controlled by its tokenholders, so voting with OP largely serves as an informal signal to the Optimism Foundation (for now). |
And it's widely known that most DAO treasuries or smart contracts are still controlled by a few trusted stakeholders via a multisig wallet. |
So when we tout DAOs as decentralized autonomous organizations, in truth, there are many shades of gray within that spectrum of decentralization. The devil's in the details. |
When I asked Tally founder and CEO Dennison Bertram about it, he begrudgingly agreed that DAOs have a ways to go regarding decentralization, but also that partial transparency is still better than complete opaqueness, which would be "much more dangerous." |
Bertram pointed to how Twitter/X under Elon Musk could unilaterally turn off its API, or how Facebook choked off the wildly popular FarmVille game by Zynga from its platform. |
Yet, despite the many shortcomings around DAOs, the real silver lining — I think — is the industry's overarching commitment to the values of decentralization, which to me seems wildly underrated. |
DAOs can hand-wave and virtue signal about decentralizing all they like, but the fact that they operate in an industry where "decentralization" is still held up as a beloved virtue is what allows the crypto industry to call out and question the centralization vectors that DAOs are still riddled with. |
That informal institution has slowly been eroded and will only continue to do so as crypto continues to go "mainstream." Cherish it while it still lasts. |
— Donovan Choy (X: @donovanchoy | Farcaster: @donovan) |
P.S. We're looking to improve the 0xResearch newsletter and make it more relevant to your interests. Help us out by giving us your feedback in this 2-minute survey. |
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Polymarket all-time highs in open interest: |
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It's election week. Polymarket continues to rack up consecutive daily all-time highs in open interest. Sunday saw a record $466 million in open interest, of which $332 million was in the elections category. The second-biggest category of Polymarket markets was in politics ($89 million), followed by crypto ($12 million) and sports ($11 million). |
— Donovan Choy |
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With a day to go before the US presidential election, prediction markets give an edge to Trump over Harris. |
On the crypto side, Polymarket gives Trump roughly 58/42 and leads in open interest. Adding to the crypto landscape, Drift Protocol's BET platform, built on the Solana blockchain, has emerged as a notable contender. BET touts a daily trading volume of $20 million and gives Trump a 61% chance as of 11 am ET today. |
Betfair Exchange, a UK-based betting platform, reports total bets amounting to 136 million pounds (about $176 million). |
In the US, Kalshi, a recently legalized event futures exchange, has seen over $12 million in user bets since its launch. PredictIt, which has the candidates neck and neck, maintains a significant user base, though specific open interest figures are not publicly disclosed. |
Robinhood and Interactive Brokers joined Kalshi as betting options available to US citizens after the latter two won a ruling against the CFTC to allow election outcome trading. Interactive Brokers has reported over a million contracts traded since launching its market on Oct. 3. Robinhood's open interest numbers aren't readily available. |
— Macauley Peterson (X: @yeluacaM | Farcaster: @Macauley) |
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Bitcoin is further away from all-time high than you think |
It turns out that bitcoin never actually hit an all-time high in March. Thanks a lot, inflation. Read more → |
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Funding Roundup: Glow, Nillion and Ellipsis all announce big raises |
Spire, Citrea and Nillion also announced raises this week. Read more → |
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 | Justin Ðrake 🦇🔊 @drakefjustin | |
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TLDR: I dropped the EigenLayer advisorship, left the ultra sound team, and made other changes to double down on neutrality and focus on L1 research and coordination. In September I let go of the EigenFoundation advisorship. I want to apologise to the Ethereum community and EF… x.com/i/web/status/1… | | | 3:27 PM • Nov 2, 2024 | | | | | | 2.36K Likes 194 Retweets | 228 Replies |
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|  | Dankrad Feist @dankrad | |
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I have decided to resign from my Eigenlayer advisorship. While I believe that the role was negociated in good faith and with the aim of making sure that Eigenlayer is well aligned with Ethereum, I understand that the perception of this relationship has been different and that for… x.com/i/web/status/1… | | | 3:27 PM • Nov 2, 2024 | | | | | | 1.24K Likes 91 Retweets | 93 Replies |
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