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Blockchain & Web3 Weekly Bytes Edition #17
DAOs in Action, BlackRock’s Big Move, and Teaching Kids Bitcoin
May 18, 2024
Hello Fellow Enthusiast,
This week, I have some interesting updates to share with you. Here's a peek of what's inside:
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Tech Spotlight: Discover how DAOs are changing decentralized governance with real-world examples.
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Week's Highlights: Catch up on BlackRock's Bitcoin ETF, the US Senate's latest crypto regulation moves, and Morgan Stanley's significant Bitcoin ETF holdings.
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Digital Asset Spotlight: Learn about Maker (MKR) and its role in the DeFi space.
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Chart of the Week: See how different investments compare against inflation.
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Video Spotlight: Find out how to teach your kids about Bitcoin with an easy-to-follow guide for parents.
Let's jump into this week's updates and see what's new in blockchain and Web3!
Weekly Trivia
What is a "51% attack" in the context of blockchain technology?
A) When hackers control 51% of all blockchain nodes
B) When a single entity gains control of 51% of the network's mining power, risking double-spending
C) When 51% of blockchain transactions are deemed fraudulent
D) When 51% of user wallets on a network are compromised
*Find the answer at the bottom of this newsletter.
Tech Spotlight – Decentralized Autonomous Organizations (DAOs)
Decentralized Autonomous Organizations, or DAOs, are transforming how groups make decisions and manage projects. Using blockchain technology, DAOs ensure that governance is transparent, democratic, and efficient.
Understanding DAOs
DAOs are organizations governed by smart contracts—self-executing contracts with the terms directly written into code. This setup allows members to vote on proposals and make decisions collectively without needing a central authority. Every action and decision is recorded on the blockchain, ensuring transparency and trust.
Why DAOs Matter
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Member Empowerment: Every member has a say in the decision-making process, ensuring that the organization reflects the collective will.
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Full Transparency: All transactions and decisions are public and verifiable, eliminating the risk of fraud or hidden agendas.
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Operational Efficiency: Without intermediaries, DAOs reduce administrative overhead and operate more efficiently than traditional organizations.
Real-World Success Stories
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MakerDAO: MakerDAO governs the DAI stablecoin, a cryptocurrency that maintains a stable value relative to the US dollar. MKR token holders vote on key decisions, such as adjustments to the DAI savings rate, ensuring community-driven stability and growth.
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Uniswap: Uniswap is a decentralized exchange where users can trade cryptocurrencies directly from their wallets. Governance is handled by UNI token holders, who vote on protocol updates and new features, maintaining the platform's user-centric focus.
The Future of DAOs
DAOs offer a compelling vision for the future of organizations—one where power is distributed among all members, transparency is guaranteed, and efficiency is maximized. Whether managing digital assets, supporting creative projects, or driving social change, DAOs are redefining how we collaborate and make decisions.
This Week’s Blockchain and Web3 Highlights
BlackRock's Bitcoin ETF Boasts Over 400 Institutional Holders: Bloomberg's ETF analyst Eric Balchunas calls it "mind-boggling" that more than 400 holders report owning BlackRock's spot Bitcoin ETF, with Millennium Management leading in total shares owned.
DTCC's Smart NAV Pilot: Bridging Trusted Data with Blockchain: The DTCC, leveraging its extensive experience in financial markets, launched the Smart NAV pilot, integrating Chainlink's technology to enhance cross-chain interoperability and blockchain abstraction.
CME Group's Spot Bitcoin Trading: A New Opportunity for Wall Street: CME Group's plans to offer spot Bitcoin trading on its futures exchange could pave the way for greater Wall Street participation in crypto, appealing to hedge and pension funds.
U.S. Senate Votes to Withdraw SEC Accounting Bulletin: The Senate passed a resolution to overturn the SEC's SAB 121, which sets accounting standards for crypto custody firms. The resolution is expected to face a presidential veto.
Morgan Stanley Reveals Significant Bitcoin ETF Holdings: Morgan Stanley disclosed that it holds $270 million worth of spot Bitcoin ETFs, making it one of the top holders as of March 31.
Macro Environment's Influence on Crypto: Coinbase reports that macroeconomic factors continue to drive crypto performance, as evidenced by Bitcoin's rebound following a softer CPI print in April.
Vanguard's New CEO and Potential Shift Towards Bitcoin ETFs: Vanguard's new CEO, who previously played a key role in launching BlackRock's spot Bitcoin ETF, might steer the company towards embracing crypto funds.
Crypto Industry Supports House Bill for Digital Asset Regulation: The FIT21 legislation aims to establish a regulatory framework for digital assets in the U.S. and is set for a floor vote next week, with strong industry backing.
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A Little Blockchain Humor Break
Source: CoinMarketCap
Chart of the Week: Beating Inflation with Annualized Returns
This week's chart examines how various investments compare against the backdrop of inflation and money printing. To safeguard your wealth, an annualized return of 10%-15% is essential. Here's how different assets measure up:
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Bitcoin (BTC): Bitcoin leads the pack with annualized returns ranging from 25% to 80%. This makes it a strong contender for those looking to outperform inflation.
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Venture Capital: Typically, venture capital investments offer returns between 20% and 30%, showcasing significant growth potential.
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S&P 500 (SPX): The S&P 500, a benchmark for U.S. equities, averages around 11% in annualized returns.
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Gold: Traditionally seen as a safe haven, gold provides returns around 8%.
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Bonds: Bonds offer the lowest returns in this comparison, averaging about 5%.
What This Entails
Understanding these returns helps in making informed investment decisions. Bitcoin's high return rates indicate its potential as a hedge against inflation, outperforming traditional assets like gold and bonds. Diversifying into high-performing assets like Bitcoin can be a strategic move for those aiming to protect and grow their wealth amidst monetary expansion.
Source: Willy Woo
Weekly Video Spotlight: Teaching Kids About Bitcoin — A Simple Guide for Parents
Introducing complex topics like Bitcoin to children can be challenging. This week's video, "Teaching Kids About Bitcoin—A Simple Guide for Parents," offers a straightforward and engaging approach to helping parents explain Bitcoin to their kids.
Why Watch This Video?
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Easy to Understand: The video breaks down Bitcoin into simple concepts that kids can grasp, making it accessible for all ages.
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Educational Value: It provides a great opportunity for parents and kids to learn the basics of Bitcoin and digital currency together.
Whether you're a parent looking to educate your child about the future of money or simply want to understand Bitcoin better yourself, this video is an excellent resource. Check it out here.
Thank you for joining me for this week's edition of Blockchain & Web3 Weekly Bytes. From the transformative power of DAOs to the latest moves by BlackRock and the US Senate, and tips on teaching kids about Bitcoin, we've covered some exciting developments.
Trivia Answer: B) When a single entity gains control of 51% of the network's mining power, risking double-spending.
I hope these updates have sparked your interest and deepened your understanding of blockchain and Web3. Stay engaged and informed—there's always something new on the horizon. Looking forward to bringing you more insights next week!
Best Regards,
Ajay Tomar
Disclaimer:
Content in this newsletter is for educational and informational purposes only and is not intended as financial, tax, or legal advice. Always do your research and consult with a professional before making financial decisions. As a solopreneur, I may earn commissions from affiliate links in this newsletter at no extra cost to you. This support helps me bring you valuable content. I only endorse products I trust and believe could benefit you.
Weekly Digital Assets Spotlight
Spotlight on Maker (MKR)
Maker (MKR) is a governance token used in the MakerDAO ecosystem, which manages the DAI stablecoin. MKR holders participate in decision-making processes that impact the protocol, such as adjusting risk parameters or implementing system upgrades.
How Maker (MKR) Functions
MKR tokens give holders voting rights, allowing them to help shape the future of the Maker Protocol. This decentralized approach ensures that the community has a voice in important decisions. Additionally, MKR is used to pay for stability fees in the system, and these tokens are burned, reducing the total supply over time.
Recent Updates
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Governance Enhancements: MakerDAO has rolled out new tools and interfaces to make the governance process more user-friendly and transparent.
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Strategic Partnerships: Maker continues to grow through partnerships, integrating DAI into various DeFi platforms to increase its usability and liquidity.
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System Improvements: Recent upgrades have focused on enhancing security and scalability, ensuring the Maker ecosystem remains robust and efficient.
Why Maker (MKR) Is Important
MakerDAO's governance model allows the community to have a direct say in how the system is run. This decentralized decision-making process helps maintain the stability and growth of DAI, making it a reliable stablecoin in the DeFi space. As the DeFi sector expands, MakerDAO and MKR play a vital role in fostering a stable and inclusive financial environment.
