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Hey friends 👋
Welcome back to the Mirror edition of my monthly newsletter, Thumbs’ Update.
When this newsletter lands in your inbox, there’s a good chance you won’t even notice, because right now you’re in Denver, Colorado for ETHDenver, the largest and longest running Ethereum event in the world.
If you frequent crypto twitter, you probably knew this, regardless of whether you’re a developer, investor, or just crypto curious. But even the more social media averse Ethereans could probably tell something was up, because gas fees on the network have been pretty consistently low since the conference started.
This supposed correlation is nothing more than speculation of course, but given that many of Ethereum’s power users are currently listening to keynote presentations or competing in hackathons, it does seem plausible.
CRYPTO TIP:
If you’ve never used Etherscan’s Gas Tracker, it’s a great tool to monitor network usage and estimate the cost of your transactions.
In wallets that let you set a custom gas fees, manually inputting the estimation under low, average, or high (according to the speed at which you want your transaction added a block) can often save you money over your wallet’s default estimations.
That said, doing this, especially during periods of gas market volatility increases the risk of failed transactions. So don’t go crazy!
Part of me wishes I could be there in Denver. Not for the hackathons or to take a selfie with the Bufficorn… well maybe… but really the best part of this year’s conference was surely PoolyCon.
That’s right, everyones favourite Defender of DeFi, Pooly made an appearance at an all day event February 28th, alongside a slew of industry who’s who that came together to talk about all the big changes coming to PoolTogether.
It’s turns out this little protocol I’ve been preaching about for years is finally starting to get some recognition in the broader crypto community. In fact, on the day of the event, popular Ethereum mobile wallet Rainbow announced a collaboration with PoolTogether on an NFT mint that helps fund DeFi advocacy through CoinCenter and Friends of Pooly (oh and the best part is that it unlocks a custom icon for the Rainbow Wallet app)👇
And that’s not even the only PoolTogether NFT that dropped this week. Chuck Bergeron, one of the co-founders, released an animated NFT open edition (free to mint until March 2nd) to commemorate PoolTogether’s 4 year anniversary. And, Friends of Pooly has launched the first season of their Pixel Pooly NFT fundraising initiative.
It might seem like a lot of news right off the bat, but settle in friends, because this is just the tip of the iceberg of what’s happened since we last spoke.
So let’s start at the beginning.
Home: Base
On February 22nd, the publicly-traded crypto exchange, Coinbase ($COIN) posted a cryptic tweet…
The tweet was immediately met with speculation about a potential listing of the Arbitrum networks’s rumoured-to-be-coming token. However, a similarly cryptic tweet from Optimism added to the confused speculation.
Suffice to say, the majority of that speculation was proven false. Arbitrum did not announce an airdrop. Coinbase did not launch a token… well they kind of did, but not a fungible one. Allow me to explain.
What Coinbase introduced was an Ethereum layer 2 (L2); more specifically, an optimistic rollup, built on the open source OP Stack which is developed by the team at Optimism. Hence the aforementioned cryptic tweet.
Coinbase’s L2 will be called Base.
Crucially, there was no airdrop.
Still, the scammers were ready the second the announcement went live. With fake Coinbase twitter accounts sharing fake links to fake websites to claim fake airdrops, they surely duped a handful of people into signing malicious smart contracts.
In the last issue of the newsletter, I gave you some tips to help avoid scams like these and I’ve got some more coming up in this issue. But in case you missed it, make sure to go back and read that one 👇
Now, despite what I just said, Coinbase did kind of announce a token related to Base. In this case, it was a non-fungible token (NFT) in partnership with Zora.
In fact that NFT, called Base, Introduced (available for a limited time only) quickly became the most minted NFT ever on Zora.
But I think we can beat it 😉
Anyways, let’s rewind for a second and talk about something I know you’ll be interested in…
How to Find Airdrops
I recently discovered I had missed the opportunity to claim an airdrop for a free NFT that is now worth over $1000. As you can imagine I was pretty upset.
When I shared the above tweet, someone pointed me to a free-to-use service called Daylight which I immediately fell in love with. Little did I know that just a few weeks later, Daylight would be integrated directly into my two favourite wallet apps: Taho (formerly TallyHo) and Zerion.
This makes it easy to know if you’re eligible for any airdrops, free NFT mints or burn-to-mints, and even token gated access to online services or merchandise. It’s easy to use and can help you stay safe by informing you of real abilities and linking to real sites.
In fact, just the other day I was able to see that I was eligible for the Collabland airdrop. I’ve talked about Collabland before, and even made a video demonstrating how to use it. But the majority of that airdrop came from minting their free Member NFT some time ago. Those who minted the paid Supporter NFT got a larger airdrop.
All of which was done on their official website wagmi[dot]collab[dot]land. Once again, the scammers came out in full force and services like Daylight and EarniFi really showed their value.
But there was another airdrop recently, one that I didn’t qualify for.
As Ethical Lines Blur
When the NFT marketplace, Blur announced their token launch and an airdrop for heavy users, I have to say I was pretty proud not to have earned any. Don’t get me wrong, if I had received some, I would have been grateful, sold them, and reinvested the money elsewhere, but Blur is sort of the antithesis of what I stand for with respect to NFTs.
If you haven’t heard about it, Blur became popular with heavily active NFT traders (often referred to as flippers) because it offers a marketplace with no fees. That’s all well and good, but when they say no fees, they mean no fees, because at the time of launch, they made the contentious decision to override the royalties build into the NFT contracts.
For those of you who don’t know, NFTs often sell for very low value at the time of minting. This offers a low barrier to entry and a much higher potential return, but it also necessitates royalties on secondary sales.
Royalties can range from around 1% up to around 10% and while there are good arguments to be had about what royalties should be set at, especially for mainstream, high trading value, 10,000+ token collections like Bored Apes or Crypto Punks.
For independent artists, it’s clear, royalties are the key benefit that NFTs offer over other methods of digital art distribution. Many big names from the NFT space took to twitter to make their case.
Now, if you follow me on twitter, and pay attention, I’ve always believed in royalties. I think they’re one of the foundational benefits of NFTs. Whether they need to be reduced or removed from high-velocity projects like BAYC is up to Yuga and its stakeholders; including Ape holders and $APE holders.
In case you missed them, here are some of my key takes on royalties from the past few years.
That last one is perhaps the most important point: regardless of what you think about the royalties, they were there, in the terms of service, right from the beginning.
Now this is not the first time the royalties debate has come up as blur is not the first market to allow traders to opt-out of paying them. But Blur is the most successful implementation because it rewards traders with free tokens incentivizing high velocity of trading.
Of course, this model is flawed in other ways. For one, it incentivizes wash trading and reward farming and does nothing to prevent or even disincentivize the practice. And because the token has no real demand drivers and whales keep dumping their rewards it’s just straight ponzinomics at play.
For more on Ponzi schemes, check out my recommendations at the end.
So I personally avoided the real Blur, but once again scammers were everywhere phishing users into visiting fake Blur websites and getting them to sign malicious contracts. Given the target audience for Blur, it was a no-brainer for scammers.
Wallets full of high value NFTs, eagerly signing transactions without a second thought.
In the last issue, I alluded to some tools to protect yourself from misleadling malicious smart contracts. But let’s take a deeper dive into this subject.
Safety Dance
I’ve already mentioned the fantastic browser extension Fire. This extension shows you a plain language explainer of what a given transaction will do. It shows the tokens moving in and out of your wallet and helps you make an informed decision before you click confirm. They’ve even added quick links to access the trusted websites of many popular protocols to further protect you.
But Fire isn’t the only option. I’ve recently learned of several others that are also worth checking out:
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Pocket Universe is nearly identical to Fire in its functionality
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Rabby Wallet is a full browser extension wallet with native transaction previews. It’s open source, multichain, and built by the team at DeBank, so you know you can trust it.
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Coinbase Wallet can now simulate transactions before they are executed providing all the same information as Fire, Rabby, and Pocket Universe, and then some. Here’s a great thread all about Coinbase Wallet’s safety features.
These kinds of tools are a huge leap forward in protecting users from the often confusing world of smart contract interactions, but there’s actually another way to protect oneself that adds a whole other layer of protection.
Wallet Delegations FTW
I’m a little embarrassed to say it, but I only just learned about wallet delegations. I came accross them in this quest from Layer3 and I have to say I’m bullish on this framework.
In simplest terms, wallet delegation allows you to sign a contract with one wallet (ideally a hardware wallet storing your valuable NFTs) and grant permission to another wallet (like your browser extension or WalletConnect hot wallet) to invoke certain contract interactions.
This can be used to allow for claiming of airdrops, accessing token gated content, and more.
You can learn all about it in the aforementioned Layer3 quest and this issue of the Bankless newsletter.
Speaking of granting special rights to NFT holders, I’ve got some news.
NFTQ&A
As of the time of writing, there are over 10 holders of my patronage NFT, Hey Friends!
All along, I’ve wanted to find ways to give back to my supporters and recently, while listening to an episode of StarTalk, I was inspired by something they do for their Patreon supporters: they let them ask questions, which they answer on the show.
Now I don’t have a podcast, and I have no immediate plans to start one, but I do have a newsletter, so I was thinking, starting now, holders of the Hey Friends! NFT can message me their questions, and I’ll try to fit them into upcoming newsletters.
I’ll only be answering questions that are respectful and relevant to other readers (if you just have a simple question or comment I’ll respond one on one, within reason), but I think this could be a fun opportunity to collaborate.
What do you say? You can become a supporter by minting Hey Friends! on Zora or by tipping with at least 0.02 Ξ on Juicebox.
In upcoming issues we’ll be looking at Bitcoin, Stablecoins, ZkRollups, public goods and a whole lot more. So start thinking of questions!
Now if you’ve stuck around this long, you must be looking for…
Recommendations
First off, if you read the above section and thought to yourself, “there’s a Thumbs Up NFT?” you should definitely check out this post, where I explain the story behind the project. It covers the ways creators typically make money, and my argument for forging a different path. I’ve just finished rewriting it for clarity and to expand a lot of the ideas, so I’d love if you’d take the time to read it.
The Next Chapter: Non-Fungible Patronage
Near the top of this newsletter, I told you about Coinbase’s new L2, Base. I also mentioned that it’s built on the OP Stack. What I didn’t mention is that this all part of Optimism’s Superchain scalability roadmap. It’s as exciting as it is complex and nuanced, so I definitely recommend reading the official explainer from the OP Stack Docs.
For the tl;dr, check out this post from the Optimism Collective Blog on Mirror
Optimism Goes m̶u̶l̶t̶i̶ Superchain
And lastly, as promised, we can’t talk about Ponzi schemes if we don’t understand what they are. And what better way than to learn the history of Mr. Ponzi himself. It’s a entertaining story and a cautionary tale rolled into one. I hope you enjoy it as much as I did.
And somehow I managed to write a nearly 3000 words newsletter. If you made it to the end, thanks, you’re awesome!
Until next time,
Thumbs Up
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