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One weird trick to sell your punk for half a billion

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One weird trick to sell your punk for half a billion

Plus Ethereum hits a new all-time high and Facebook is just, like, so Meta now

KF
Oct 30, 2021
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In this issue:

  • Facebook is just, like, so Meta now

  • One weird trick to sell your punk for half a billion

  • Don’t worry your money is safe with us


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Facebook is just, like, so Meta now

In 2012 I was working as a Product Manager on the Chrome browser when Russian Search engine Yandex.ru released their own competing browser. Yandex was and still is much smaller than Google but they are very sharp competitors and the browser they built was a good one - it was based on Chromium so it launched with almost all the same features Chrome had at the time. We weren’t concerned exactly but we were definitely paying attention.

When the Yandex browser launched they had a problem: most users don’t really know or care what a browser even is. From surveys we knew that almost half of all Chrome users thought their browser was Google and around 1 in 5 thought they were using Internet Explorer. Most people just don’t think about their browser very much, so it is very difficult to convince them to try a new one. To establish a new brand for their browser Yandex had to compete not just with Microsoft and Google but with the monumental indifference of users themselves. So Yandex did something I thought was rather sneakily clever: they named their browser Internet.

1

Want to go to the Internet? Click the Internet icon. No need to trouble yourself with building a mental model of what a browser is or which one you want to use. It was honestly kind of genius. They’ve since rebranded to the more traditional but less amusing Yandex Browser

2
— I’m not totally sure why. But I’ve never forgotten their launch strategy and how they realized an aggressively generic brand could potentially capture and redefine the meaning of otherwise neutral words.

Twitter avatar for @nealstephenson
Neal Stephenson @nealstephenson
Since there seems to be growing confusion on this: I have nothing to do with anything that FB is up to involving the Metaverse, other than the obvious fact that they're using a term I coined in Snow Crash. There has been zero communication between me and FB & no biz relationship.
10:45 PM ∙ Oct 29, 2021
1,032Likes242Retweets

Anyway, on Thursday the-company-formerly-known-as-Facebook announced it’s much anticipated rebrand to Meta. We talked about the Metaverse a little earlier this month and about Facebook’s vision for the Metaverse last week. The Metaverse is a frustratingly loose term that essentially means "the Internet, only more so." It is the foundational digital universe within which all other virtual worlds are contained. Facebook — pardon me, Meta — would like to own it.

Unfortunately for an enormous number of people around the world Facebook will likely be their first encounter with the idea of the Metaverse and may well be the only part of the Metaverse they ever see. They may well conclude that the Metaverse is whatever Facebook says it is, just as many users already think of Facebook as synonymous with the Internet. Mark Zuckerberg is building a virtual walled garden and inviting the whole world inside.

It's a Trap! | redpepper

Twitter avatar for @TitanXBT
TITAN // @TitanXBT
Why I bought cryptopunk #9998 for 124,457 $ETH ($532M USD) Because I wanted to show Mark Zuckerberg he’s poor and shouldn’t make a metaverse.
12:24 AM ∙ Oct 29, 2021
8,861Likes1,455Retweets

One weird trick to sell your punk for half a billion

On Thursday the LarvaLabs contract that manages the marketplace for CryptoPunks registered a sale of Punk #9998 for 124,457.07 ETH (~$532M at the time). The purchase transaction embedded the message "looks rare" in the metadata. We briefly mentioned the previous high-water mark in CryptoPunk sales this summer - an alien CryptoPunk (of which there are nine) sold at Sotheby’s for $11.8M. This half a billion dollar purchase wasn’t actually a real one, though.

Twitter avatar for @cryptopunksbot
CryptoPunks Bot @cryptopunksbot
Punk 9998 bought for 124,457.07 ETH ($532,414,877.01 USD) by 0x9b5a5c from 0x8e3983. larvalabs.com/cryptopunks/de… #cryptopunks #ethereum
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11:52 PM ∙ Oct 28, 2021
12,805Likes2,808Retweets

What happened was this: the buyer listed their own punk for an outrageous price. Then they used a flash-loan to borrow an outrageous amount of money. Then they bought their punk from themselves and used the proceeds of that sale to pay back their flash-loan. The entire transaction cost roughly ~0.19ETH (~$800 at the time). Here’s a good thread that lays out the mechanics in more detail if you are curious.

So for a brief glorious moment it was the largest sale in CryptoPunk history - until the referee stepped in and ruled it out of bounds:

Twitter avatar for @larvalabs
Larva Labs @larvalabs
PSA: This transaction (and a number of others) are not a bug or an exploit, they are being done with “Flash Loans” (ethereumprice.org/guides/article…). In a nutshell, someone bought this punk from themself with borrowed money and repaid the loan in the same transaction. 1/2
Twitter avatar for @cryptopunksbot
CryptoPunks Bot @cryptopunksbot
Punk 9998 bought for 124,457.07 ETH ($532,414,877.01 USD) by 0x9b5a5c from 0x8e3983. https://t.co/dmT6jDRC1W #cryptopunks #ethereum https://t.co/UQlmm1oqkj
1:57 AM ∙ Oct 29, 2021
959Likes281Retweets
Twitter avatar for @larvalabs
Larva Labs @larvalabs
Some recent large bids were done the same way. The ether is offered and removed in a single transaction. So, while technically briefly valid, the bid can never be accepted. We’ll add filtering to avoid generating notifications for these kinds of transactions in the future. 2/2
1:57 AM ∙ Oct 29, 2021
423Likes27Retweets

I assume the next step is to sell the punk at market value and realize a half-billion dollar capital loss for tax purposes. Or maybe that punk is priceless now? It’s part of the history of DeFi and NFTs.

3


Twitter avatar for @mayazi
Maya Zehavi @mayazi
The regulatory battle over stablecoins is as much a fight over private monies & M2 over consumer deposits at the Fed. Biden’s OCC nominee is a proponent of essentially eliminating a lot of the roles of retail banks, paving the path for CBDC
wsj.comBiden Expected to Nominate Wall Street Critic as Top Banking RegulatorCornell law professor Saule Omarova will be named Comptroller of the Currency, say people familiar with the matter
3:30 PM ∙ Oct 2, 2021
14Likes2Retweets

Don’t worry your money is safe with us

Earlier this month the Vanderbilt Law review published a paper titled "The People’s Ledger: How to Democratize Money and Finance the Economy" by Saule Omarova, a public policy advisor and Joe Biden’s nominee for head the Office of the Comptroller of the Currency (OCC). The OCC is the branch of the US Treasury Department that charters, regulates and supervises banks that operate across US state lines.

In the paper Omarova proposes some fairly radical changes to banking in America:

  • Eliminate the Federal Deposit Insurance Corporation (FDIC).

  • Migrate all commercial banking accounts from private banks to being directly managed by the Federal Reserve.

  • Empower the Fed to confiscate deposits in those accounts as necessary to combat inflation.

  • Empower the New York Fed to respond to "rises in market value at rates suggestive of a bubble trend," by "short[ing] these securities, thereby putting downward pressure on their prices."

  • Consolidate all banking regulation under the OCC (and hence, Omarova).

So translating that back into humanspeak the proposal is to get rid of deposit insurance for ordinary people, make business accounts subject to arbitrary seizure by the government and invite the Fed to use their infinite arsenal of money to manually override any price trends they disagree with. If it wasn’t so long and boring I would have assumed it was satire.

I don’t think any part of this proposal is especially likely to become law - in part because it is a bad idea and in part because America is barely able to pass laws at all. But I do think it is remarkable to hear views like this being advanced by a major regulatory leader in a contemporary publication. Government seizure of civilian assets and intervention to control prices are pretty radical departures from the traditional American approach to markets.

The paper also touched on Central Bank Digital Currencies (CBDCs). People tend to imbue CBDCs with vague strategic powers and ask why America isn’t building one, but as Omarova points out most of the things that a CBDC could accomplish can be done more simply, cheaply and straightforwardly by just allowing the Fed to provide accounts to non-banks. A CBDC is useful if you want to constrain government but if your goal is to empower regulators it’s mostly redundant.


Other things happening right now:

  • Ethereum’s price has reached an all time high (~$4400/ETH at time of writing). Ethereum’s transaction fees are also surging (~$37/transaction) but have not quite reached all time highs yet.

  • Here is a long interesting thread accumulating a bunch of market indicators and making the argument that we are still early in the bull market and estimating that Bitcoin will reach between ~$100k-$200k/BTC in the next peak. If you like math flavored hopium, this is of excellent quality.

Twitter avatar for @WClementeIII
Will Clemente @WClementeIII
We've been tracking the macro price reversal since summer using on-chain. Now what clues can it provide us in our effort to identify the macro price peak over the coming months? First we'll start with behavioral trends and then everyone's favorite, price targets. [THREAD 1/22]
8:09 PM ∙ Oct 27, 2021
6,834Likes1,950Retweets
  • Presented without comment:

Twitter avatar for @bradmillscan
Brad Mills ✍️🔑 #FreeRoss @bradmillscan
There were 3 exploits today in DeFi. $60 million rugpull in Anubis DAO PebbleDAO was rugpulled AAVE seems to be imploding currently for $1 billion+ (developing situation) The masses need to focus on #Bitcoin. DeFi is for VCs, insiders & traders with very high risk tolerance.
4:32 PM ∙ Oct 29, 2021
265Likes37Retweets

1

Actually they named it Интернет. Yandex is Russian.

2

Or rather, Яндекс.Браузер.

3

It actually isn’t the largest flash-loan powered NFT nonsense purchase in history - in February a HashMask was sold for 139,000 ETH. Fewer people watch the HashMask contracts, I suppose?

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