Jalak Jobanputra

After The DAO failed in 2016 as a decentralized autonomous organization, new protocols have been experimenting with the balance of autonomous smart contracts, crowdsourced decentralized governance, and centralized decision making. This morning, Decred (DCR) announced they are handing over their $21M treasury to its holders, slowly moving to a decentralized governance model (from Coindesk, link below): He’s told the community that he intends only to use these powers if a specific proposal puts the project itself or the legal entity that manages it into jeopardy. ‘Once the smart contract replaces the corporate entity as the holder of the Treasury funds, there is no longer a legal entity to target with sanctions or other penalties that could result from certain stakeholder-backed actions,’ he told CoinDesk.

Meanwhile many citizens there, ignoring President Erdogan’s calls to exchange gold and foreign currencies to local currency, tapped into the crypto market: “Bunyamin Yavuz, a cardiologist in Ankara, said he no longer trusts local banks and now buys XRP, monero, lumens, among other cryptocurrencies as part of his investment portfolio. Yavuz told CoinDesk his holdings now consist of 30 percent cryptocurrencies, 20 percent U. S. dollars, and just 10 percent lira. this past April, Venezuelans spent a record $1M worth of bolivar to buy bitcoins, often converting them to dollars to bypass currency controls or to pay for goods using dollars instead of the devalued bolivar. While many of us debate whether bitcoin will ultimately realize Satoshi’s vision of “a new electronic cash system that’s fully peer-to-peer, with no trusted third party” or simply a store of value, it’s important to remember that others worldwide view cryptocurrency as a survival mechanism in response to damaging government monetary policies.

The big news this morning is that Intercontinental Exchange, parent of the New York Stock Exchange, announced the formation of a new company, Bakkt, a global platform to allow consumers and institutions to buy, hold and store digital assets. In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, we aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets,’ said Jeffrey C. Sprecher, Founder, Chairman and CEO of Intercontinental Exchange. As an initial component of the Bakkt offering, Intercontinental Exchange’s U. S.-based futures exchange and clearing house plan to launch a 1-day physically delivered Bitcoin contract along with physical warehousing in November 2018, subject to CFTC review and approval. As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks,” said Maria Smith, Vice President, Partnerships and Payments for Starbucks.

Last week in NYC I shared a panel with Valerie Szczepanik, SEC’s “crypto czar We had a wide-ranging discussion on self-regulation, utility tokens, the SEC’s role in protecting investors, and accredited investor definitions. While the conversation was under Chatham House Rules and I can’t discuss her specific comments in this newsletter, she is very open to collaboration with the crypto community, while being clear that the SEC continues to actively investigate token offerings for potential violations of current securities laws. I’ve been saying for the past year that even the most liquid tokens look more like venture investments than public equities, and Auger’s 2 year beta period displays that getting decentralized tech right is a multi year process with much more development to come.