July 15th, 2022

When Amazon’s Greg Linden applied for a patent for “item to item collaborative filtering” in 1998, he couldn’t possibly have imagined the societal impact it would have. Previously, Amazon had used data based on an individual's purchases to recommend a product they might like; this approach was inefficient because it recommended things that were extremely similar to what the customer had bought before. In fact, this first method of using data was so bad that Amazon was almost better off having their team of book critics pick what to promote on the landing page. Linden’s technique was revolutionary because it made associations across products and customers - if there were correlations between buying a bike and sneakers, then a customer who bought a bike would be shown sneakers as well. Today this seems obvious, but this technique is responsible for turning data collecting, buying, and selling into an annual 100 billion dollar industry.

Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2025
Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2025

Data is the new oil

The practice of using ‘Big Data’ to inform business may have started with Amazon, but now, almost every company with an online presence uses data in a variety of ways. Walmart uses correlation between what products are bought at the same time (and even what the weather is like when certain products are bought) to decide how to organize their store and boost sales. Google records user search data to sell to advertisers so they can decide exactly what to show you based on your interests. At its most extreme, this practice is known as surveillance capitalism; one of the harshest critics of intrusive data collecting, Harvard professor and renowned author Shoshana Zuboff  defines the web2 business model as the “unilateral claiming of private human experience as free raw material for translation into behavioral data.” New laws aimed at protecting consumers from data leaks and hacks, like the EU General Data Protection Regulation passed in 2018, are a good step to improving privacy but do not address the root issue; that is, companies are incentivized to collect data because it is profitable and therefore will continue to do so unless it stops being profitable.

Alex Debayo-Doherty
0xd36C
June 13th, 2022

By: Alex Debayo-Doherty

Cover Art: Seerlight - High-Rise

Examining the Challenges, Intrinsic Strengths, and Target Design Principles of the Emerging DAO Ecosystem

June 3rd, 2022

Introduction

DeFi options have seen phenomenal growth in 2021 and now 2022, with its Total Value Locked (TVL) booming from 92 million dollars a year ago to over a billion as of May 2022.

Data from: https://defillama.com/protocols/Options (link accessed 04/10/2022)
Data from: https://defillama.com/protocols/Options (link accessed 04/10/2022)

This article introduces DeFi Option Vaults (DOVs) as a new financial innovation within the DeFi options space and examines how DOVs work and their four unique value propositions: accessibility, sustainable yield, altcoin options liquidity, and composability. The article will also take a closer look at the yield representation and performance of various protocols to date and provide some thoughts on how best to assess DOVs.

0x6477
June 1st, 2022

A clear highlight of the club’s first year was HBC 2022, the inaugural blockchain and web3 conference hosted by the blockchain clubs at Harvard Business School, Harvard Law School, and ourselves at Harvard College. 

The mission behind the conference was to bring together thinkers, investors, builders, and policymakers at the cutting edge of web3 and have them share their perspectives (and maybe spill a little alpha!) on the decentralized economy. The conference was completely free and attracted over 1200 attendees from the Boston area and beyond. 

We were also fortunate to welcome over 100 speakers from across the industry—including HBS alumnus John Wu, Harvard College alumni Jai Ramaswamy and Amy Wu, and Alchemy’s Nikil Viswanathan—over the course of two days for a mixture of panels, fireside chats, and keynotes. We are extremely grateful to them for taking three days out of their extremely busy lives to come speak to members of the burgeoning blockchain scene in Boston. 

In addition to the talks, our attendees were able to meet over 20 teams at our career fair, where they were able to network with industry professionals and learn more about career opportunities in web3. None of this would have been possible without the generosity of our sponsors: a special shoutout to Ava Labs, BitDAO, and EduDAO, who were our largest contributors. We are greatly indebted to them for their support and for sharing our vision to make web3 more accessible to students. Many thanks to Gemini for hosting our welcome dinner for speakers at the Harvard Club, as well as Ava Labs and dYdX for hosting a happy hour and brunch during the conference, respectively. 

May 30th, 2022

Squeeth is a new DeFi product released by Opyn in January. As the first on-chain power perpetual, Squeeth is similar to an option without an expiry date or a strike price. In addition to increasing liquidity in the options market, some have suggested that Squeeth can be used to hedge Uniswap LPs, hedge all ETH/USD options, and predict the volatility of ETH in the short term. This piece will investigate whether Squeeth adequately serves this purpose.

Different Types of Volatility

Before we analyze how effective the price of Squeeth is in predicting the future volatility of ETH, we should describe which metric is the most accurate in measuring volatility.

Volatility is defined as the dispersion of price of a given stock. In other words, the more volatile a stock is, the riskier an investment in that stock becomes. If the volatility of a given stock is high, then traders should expect the prices of that stock to fluctuate greatly in value. In traditional finance, there are several ways to measure the volatility of a given stock.

May 24th, 2022

Recent innovation in the NFT space has unlocked more growth potential by introducing utility. These NFT 2.0 projects are distinguished by their team-led initiatives to grant users deliverables, including yield generation, merchandise, private yacht parties, exclusive access to Michelin-starred omakase, coffee beans, membership to alpha groups, play-to-earn video games, musical compositions, meetups with celebrities, and IRL events and parties. Where NFT 1.0 projects like CryptoPunks and Art Blocks triumphed by building gated cliques around their digital collectibles, NFT 2.0 teams instead focus on storytelling and worldbuilding using the Web3 tech stack, creating positive system dynamics. NFT 2.0 teams try to build a socio-cultural milieu—a belief system—that lends itself to organically forming Web3 lifestyle brands that are collectively and decentrally owned and governed.

This development has made the space more difficult to navigate. As such, this piece aims to help the reader identify quality projects. As someone who’s been embedded in the NFT space for several years, I present a methodology for appraising NFTs, particularly avatar or “metaverse” NFTs on Ethereum as they account for the vast majority of today’s volume.

Evaluating NFTs

Whereas NFT 1.0 projects were appraised as art, NFT 2.0 projects can be appraised as ventures. Namely, the life of a project hinges on smart monetary resource allocation that will produce long-term holder benefits that, in turn, feed back into increased demand for the underlying NFT. As business sustainability is a precondition for long-term value generation, identifying successful NFT collections becomes analogous to identifying successful growth companies with sound business models.

0x6477
December 30th, 2021

By Joshua Yang and Andy Zeng

In the 80s, text-based, MUD (multi-user dungeons) games dominated the landscape. Adventurers enjoyed multiplayer real-time RPGs featuring rich lore, fantasy worlds, cogent mechanics, and RNG-based gameplay with P2P elements roped in; this sounds a little like, what we would call in 2021, the metaverse. But back then, one critical piece of the puzzle was missing: vibrant in-game economies powered by blockchains. Prodigious progress has been made since then following a whitepaper by Satoshi Nakamoto. With the introduction of Ethereum, smart contracts, DeFi, and NFTs, we have witnessed the emergence of on-chain gaming like Ether Bots and Crypto Crabs, the exponential growth of play-to-earn games like Axie Infinity, and the birth of gaming guilds like YGG. Layer 1s like Solana and Wax have emerged as the rails for new entrants with their cheap transaction costs and high efficiency, and a lot of VC money has poured into the industry (FTX and Lightspeed Venture Partners’ $100 million and Binance and Animoca’s $200 million, for example). This year also saw the birth of Dom Hofmann’s The Loot Project—“Randomized adventurer gear generated and stored on chain”—a bottom-up reimagining of MUD games in Web3.0, leading us full circle.

Loot and a Return to the MUD Games
Loot and a Return to the MUD Games

There is a lot to look forward to. The synergy is palpable: blockchains foster the organic formation of neoclassical gaming economies as the games provide utility and adoption for the blockchain while the chain provides security and real asset value to games in return. For example, Axie Infinity, a Pokemon-like card game, has provided many pandemic-stricken families with a way to earn income by selling the axie NFTs or ERC20 tokens like $SLP through their play-to-earn model. Many new gamers and nongamers alike—with stimulus checks in hand—learned what Ethereum, DeFi, proof-of-stake, impermanent loss, and broader blockchain technology all were as they interacted with the game and through Katana, Axie’s own decentralized exchange (DEX) for their sidechain Ronin, kickstarting a virtuous cycle. Axie Infinity’s governance token $AXS has a total market cap of over eight billion dollars.