Bill Gates’ Take on NFTs: They’re Based on ‘Greater Fool Theory’

When it comes to technology and who people will listen to, Microsoft founder Bill Gates is high up on that list of influential thought leaders. He recently broached the subject of NFTs during a climate change event hosted by Tech Crunch noting his dislike of them due to his view that they’re “100 percent based on greater fool theory”.

Greater fool theory is a well-known financial concept whereby overpriced assets can still be sold at a profit if the seller can find someone (the fool) willing to pay a higher price, even in a market bubble. “Obviously, expensive digital images of monkeys are going to improve the world immensely,” he remarked, in reference to Bored Ape Yacht Club (BAYC), one of the most well-known NFT collections.

Gates went on to discuss what he preferred to invest in, saying: I’m used to asset classes, like a farm where they have output, or like a company where they make products.” Referencing both crypto and NFTs, he added: “I’m not involved in that, I’m not long or short any of those things.”

This isn’t the first time Gates has voiced his scepticism on the world of cryptocurrencies, noting the volatile nature of the industry. And that’s not unreasonable in the current climate. Whilst Bitcoin has hit highs of $64k in 2021, that’s now tanked alongside the rest of the industry, currently sitting around $21k.

Bored Ape Yacht Club
Bored Ape Yacht Club. Image credit Shutterstock

That’s seen prices of NFTs fall including those of BAYC and CryptoPunks in what’s termed a bear market. Prior to the overall market decline, cashes like Terra’s stablecoin UST and its native token LUNA have only added to cryptos’ woes of late.

NFTs aren’t going away anytime soon though, more and more keep cropping up. Some are tied to celebrities whilst platforms including Instagram have been experimenting with integration. Bill Gates isn’t going to be buying NFTs at any rate, but if you are then check out gmw3’s NFT Spotlight.

Metaverse Weekly: Terra Luna Loses Nearly $20 Billion in Crypto’s Largest Collapse in History

Terra Luna, the protocol behind the TerraUSD (UST) and the LUNA token effectively collapsed after back to back trading sessions that saw its stablecoin UST lose its 1:1 peg with the dollar.

The project is infamous for its use of the widely controversial algorithmic stablecoin model. Algorithmic stables work to maintain dollar pegs through code rather than simply backing the coin with collateral like USDC or DAI.

Collapse of UST peg – Messari

How Terra Luna Works

Terra operates by creating an equilibrium between the UST and LUNA tokens through the incentives of arbitrage

This is how that works. Say an investor wants to mint UST. To do that, LUNA must be purchased and swapped for UST with the LUNA being burned afterwards. This constricts the supply of LUNA, placing upwards price pressure on the token.

Opposite of this, LUNA can be minted by converting over UST tokens which are then burned. This puts upward price pressure on UST. The key here is the gains made through arbitrage, the core incentive for willing investors to take on the associated risks with the tokens.

Arbitrage is simply when a trader is able to profit from slight price discrepancies. For instance, if UST is trading at $0.99, traders have the incentive to burn LUNA for UST at 0.99. When the price of UST rises above $1, traders can then flip that small profit into buying more LUNA.

Image credit: The Tie

Anchor Protocol

An additional Terra ecosystem incentive that encouraged traders to join the ecosystem in the first place was the extremely generous 20% APY on Anchor Protocol that UST holders could earn. This attracted a tremendous amount of growth to the protocol.

The problem here was that such a high APY was completely unsustainable long term. The Luna Guard Foundation (LFG), an associated organization, were managing Terra’s treasury fund to inject liquidity into Anchor to artificially keep rates high.

Why Terra Failed

The short answer to why Terra failed is nothing short of a rapid loss of confidence followed by a bank run on the protocol.

The UST stablecoin went through a major stress event in January 2022 after the unravelling of the Frog Nation DeFi ecosystem. This plunged the price of LUNA and forced UST from its dollar peg. The event actually prompted Terra to raise $1 billion in Bitcoin (BTC) to provide additional collateral to the UST peg. Additional purchases were also in AVAX.

On May 9th, the cryptocurrency market began experiencing more extreme selling pressure which led to a significant decline in LUNA and in Bitcoin. This created a massive problem for Terra. As selling occurred, it depegged the price of UST.

UST and LUNA achieve equilibrium through the redemption power of burning/minting tokens. If there are more UST tokens in circulation, there are less LUNA and vice versa. The problem that occurred here is because of the depegging and the price of LUNA falling, the redemption cost of gaining LUNA was high.

Put simply:

  • Markets declines, causing LUNA to decline and UST to depeg
  • Panic ensues and UST tokens are burned for LUNA
  • The LUNA is immediately sold due to the collapsing price
  • This further destabilizes the UST peg, creating more panic
  • Repeat

A ton of LUNA tokens were being minted and then thrust back into the market as investors left UST. This made the supply expand rapidly, creating enormous downward pressure on price.

Even worse, LFG sold their Bitcoin at a substantial loss to inject more money into the protocol to help save the UST peg. This obviously failed and the protocol fell into a total meltdown. 

Collapse of LUNA price –  Messari

The price of UST fell to as little as $0.19 at one point, with LUNA collapsing in price from an all-time high of $119 USD just one month ago to a price point of $0.90 – a 99% collapse in value. In total, Terra Luna saw some $20 billion disappear from the protocol in just 24 hours, making this the single largest cryptocurrency collapse of all time.

How Brands are Embracing Web3

The history of brands on the web to date is a bumpy one. After the invention of the web in the late eighties, the potential for brands was largely unrealised – until the development of graphical, user-friendly, web browsers enabled the dot-com boom around the millennium. The subsequent bust helped bring about Web 2.0, where centralized platforms such as Google, Facebook and Apple reigned supreme, codifying the ways brands and consumers interact via advertising on social media.

This brings us to the status quo of today, where brands have largely discovered how to best work within the constraints of Web 2.0 in order to thrive. That comfortable position that brands and their marketing departments now inhabit is being threatened by the advent of Web3, however. And a shakeup may be coming just in time. Increasingly, brands are backing away from Web 2.0 platforms as they become mired in controversy. Just look at how consumer goods giant Unilever paused its Facebook and Twitter advertising in 2020, citing the polarized atmosphere in the US, with other companies including Coca-Cola following suit.

Web3 promises a more direct relationship between brands and consumers. But just as brands missed the opportunity at the very beginning of Web 1.0, there is a risk that the enormous opportunity Web3 represents will be passed up by brands that aren’t brave enough to experiment with the new technology. To that end, let’s take a closer look at the best practices brands need to bear in mind to make the best use of Web3.


As brands explore new ways to use their existing IPs in the Web3 world, one of the most intriguing possibilities is via the use of NFTs. If you’re unfamiliar with exactly what an NFT is, here’s a quick recap. Simply put, NFTs (or non-fungible tokens) are blockchain-based items which prove ownership of digital assets – everything from a piece of digital art, a weapon in a videogame, or a trading card. The key benefit of NFTs is that they can be traded on the open market, meaning they are simultaneously investments as well as art objects.

The attraction of this format to brands with existing stores of content is obvious, with one of the more successful attempts coming from the NBA with its Top Shot digital collectables that package highlights from games past and present. The sports world has been a rapid adopter of the technology, with the Chicago Bulls having minted and sold NFTs featuring their championship rings.

Get a Zach LaVine Moment™ NFT for USD $4.00

NFTs are perhaps most embedded in the public consciousness as the inescapable profile picture collections such as Bored Ape Yacht Club or CryptoPunks. But NFTs can be far more than that – offering all kinds of utility that brands might find of interest. Take musician Deadmau5, for instance, who created a collection of wearable NFTs compatible with metaverse platforms such as The Sandbox. More than just being clothing items, the NFTs also confer access to a guest list for the musician’s shows.

That additional element is key to your NFTs having staying power (and not quickly burning out as so many have) – including utility alongside aesthetics. According to a report from Cointelegraph, NFT sales topped $17.7bn by the end of 2021. If brands want to cash in on that without crashing the market, they must think about connecting NFTs with real-world experiences and services, whether that’s in travel, food, gaming, banking, or any other sector.

Real examples of what that utility might look like include recent NFTs from clothing brand Coach, which featured characters from a game it had created. The launch was tied into the company’s 80th anniversary, with NFT owners being granted a real-world physical bag. Crucially, the NFTs were given away for free, garnering goodwill with the company’s community. Of course, utility needn’t always be a physical benefit, with the flipside of that approach being ensuring NFTs have utility in the metaverse.

The Metaverse

Surely one of the most enticing possibilities for bands with a certain amount of customer recognition is in creating virtual experiences within the rapidly growing arena of the metaverse and its many virtual worlds. Indeed, the global metaverse market is estimated to grow from $45.4bn in 2019 to $1.5tn in 2030 according to PwC’s Seeing is Believing report. Such initiatives prove attractive to both a brand’s existing customer base and the digital communities already existing within the metaverse, significantly expanding the potential audience they can access.

The metaverse’s continuing growth has been spurred by world events. During the height of the COVID-19 pandemic and the associated lockdowns that led to the closure of many physical retail stores, many pivoted into digital spaces. One such example was sportswear brand New Balance, which partnered with to open a virtual store accessible via a web browser back in 2021. The store was fully explorable, enabling users to purchase clothes after trying them on via a Ready Player Me avatar. Thanks to the interoperability of their offering, the outfits can be used across all the many apps and games which support the platform.  

That was a fairly rote, metaverse-lite reimagining of a physical space, but other brands have pushed the boundaries of what is possible in the metaverse much farther. Yahoo, Selfridges, Pokemon and fashion designer Charli Cohen developed a metaverse experience known as ElectricCity, which allows consumers to simultaneously purchase real and digital copies of the same piece of clothing, again making use of Ready Player Me’s interoperable avatars.

Electric/City - An Immersive shopping experience

That’s far from the only instance of clothing brands entering the metaverse (a process to which they are well-suited thanks to the easily digitisible nature of garments). Pull&Bear, for instance, launched a simultaneous campaign across its real store and the Pull&Bear virtual world.

A step above that is owning virtual land in a dedicated multiverse platform like Somnium Space or Decentraland. Occupying land on an established platform means more eyeballs on your space, as well as less development work with the platform having already done the heavy lifting. 

The Sandbox is another platform particularly well known for hosting branded experiences and content, from heavy hitters like RTFKT (owned by Nike), Snoop Dog, Adidas, and many more.

If actually owning the land is too much risk for a brand to take on, services exist to take the worry away by providing virtual land for rent. Volatility in the digital land market has opened up opportunities to rent virtual spaces rather than purchasing them outright, in order to mitigate the risk of being left with a useless asset. Landowners such as Admix, which holds property across a range of metaverses, help brands to lease land for as long as is necessary. That might coincide with the duration of a particular marketing campaign or event, for example, allowing brands flexibility while ensuring they aren’t exposed to the risk of holding virtual land themselves.

That’s not to say that brands can’t create metaverses of their own, even setting them up in such a way that they can act as brokers for other brands. Volkswagen subsidiary CUPRA, a manufacturer of sports cars, is creating its own metaverse known as METAHYPE, which it describes as “a universe that acts as a collaborative space where brands, start-ups, and content creators provide a wide variety of events, gatherings, and experiences for individuals to create and share culture.” The metaverse platform is planned to enable brands and individuals to highlight NFTs, display digital and physical products, and host virtual events, with CUPRA saying that it intended to collaborate with others such as Barcelone-based music festival Primavera Sound.

METAHYPE | Metaverse Virtual World | Join METAHYPE

It needn’t only be brands in “cool” sectors like fashion, gaming or the automotive industry that can make waves in the metaverse. Look no further than banking giant HSBC, which earlier this year announced a new partnership with The Sandbox to help users engage with the business inside the metaverse. HSBC duly acquired a piece of virtual real estate, which it said it would use to engage sports, esports and gaming enthusiasts.

Suresh Balaji, Chief Marketing Officer, Asia-Pacific, HSBC, said: “The metaverse is how people will experience Web3, the next generation of the Internet — using immersive technologies like augmented reality, virtual reality and extended reality. At HSBC, we see great potential to create new experiences through emerging platforms, opening up a world of opportunity for our current and future customers and for the communities we serve. Through our partnership with The Sandbox we are making our foray into the metaverse, allowing us to create innovative brand experiences for new and existing customers. We’re excited to be working with our sports partners, brand ambassadors, and Animoca Brands to co-create experiences that are educational, inclusive and accessible.”

And while making this leap might seem daunting, we’ve seen plenty of brands dipping their toes via tie-ins with games with metaverse aspirations such as Fortnite or Roblox. whether it’s Marvel skins in Fortnite or the Nike Land experience in Roblox. While it’s true these aren’t truly Web3 partnerships, they suggest the level of interest that already exists in the possibilities of the metaverse for brands, and herald what is to come.


Another stalwart of Web3 is, of course, cryptocurrency. And when it comes to brands, cryptocurrency tokens are gaining ground as a replacement for traditional fan clubs, with fan tokens for football clubs being particularly prominent. Ownership of the tokens typically confers some benefits such as discounts in club shops, and the possibility to win tickets. 

Socios is the largest entity in the space, facilitating the club coins of some of the world’s biggest football teams, including Barcelona, Juventus and Arsenal. One intriguing possibility the fan tokens represent is bestowing upon holders the ability to vote on decisions the team make, with the example proffered by Socios being deciding what is written on a captain’s armband. According to the BBC, more than £262m ($350m) had been spent on virtual currencies by December 2021.

This approach can also serve to regenerate a brand’s image. The storied video game company Atari is just one example, having launched its own Atari cryptocurrency token on the Ethereum blockchain, with the ambitious aim of becoming “the token of reference for the interactive entertainment industry”.

The Challenges

We would be remiss not to mention the difficulties brands face when entering Web3. At the time of writing, the Web3 world is reeling from a cryptocurrency price meltdown, with the Terra Luna cryptocurrency (a key element of one of the most popular examples of a so-called “stablecoin” in TerraUSD) losing almost all of its value. Tally that with huge drops in the price of Bitcoin and Ethereum and it’s thought that over $200bn was erased from the crypto market in a day – potentially spooking brands who might not want to be involved with such a volatile sector. Of course, the fact that the market is currently in the doldrums means the barrier to entry has been significantly lowered – with the price of virtual land also crashing down.

Brands should also be aware that venturing into NFTs might not prove popular with certain audiences. In the gaming space particularly, vociferous opposition to NFTs on the basis that they are simple cash grabs has forced a number of companies into embarrassing climb-downs, including British development studio Team17 and publishing giant Ubisoft.

Aside from the aforementioned issues of the current cryptocurrency climate and a trenchant disdain for NFTs, because paid advertising will become increasingly difficult in the world of near-anonymous users that Web3 encourages, brands will have to shed their existing Web 2.0 expectations and understand how to engage communities of users with similar interests.

Image-conscious brands will also have to reckon with the decentralization inherent to Web3, and what that means in terms of regulation and unintended reuse of your content. On the centralized platforms of today, moderation is a given, but Web3 is rendering these existing approaches to safety unusable.

The Sandbox Press page

In the metaverse, virtual land is populated by anonymous users who are free to do whatever they want with their spaces and behave accordingly.  While the kinds of content that advertisements might appear alongside today is endlessly varied, in the metaverse brands will have to contend with that same variability in the actual platforms hosting the content as well. And in worlds where branded items might be equippable, brands face the risk of unintended association with potentially undesirable behaviour and activities – adding a whole new dimension for brands to consider.

While the unpredictability inherent to the space will mean brand managers have to be on their toes, it’s likely riskier to just wipe your hands of Web3. Instead, brands should be leading from the front to ensure control of their message, heading off users and creating whole new associations for existing properties. In the worst case, we can use the example of Winnie the Pooh, who became the subject of a popular meme used to insult President Xi Jinping of China – resulting in a ban on releasing the film Christopher Robin within China.


The ultimate takeaway is that the brands already succeeding in Web3 are the ones that are able to create communities of passionate users, as opposed to the passive audiences they are used to advertising to in the Web 2.0 era. It’s clear that Web3 is bursting with potential new ways for brands to attract customers, but seizing the opportunity will require bravery and a willingness to adapt new modes of thinking.

Starting a DAO: The Basics

If you’re at all invested in the Web3 space, you’ve doubtless come across the concept of DAOs, and are perhaps even interested in starting one yourself. The good news is that establishing a DAO is a relatively quick affair, with numerous solutions already in place to make the process easier and far less technical. But it’s vital that your DAO also has a plan and a reason to exist in the first place if you want to attract a community of fellow members.

What is a DAO?

Before we delve into the specifics, let’s make sure you’re on board with exactly what a DAO is (and what it is and isn’t good for). Simply put, a DAO (or decentralized autonomous organization) is a new form of distributed group controlled by its members, with its rules and activity recorded on blockchain technology

The autonomous part of the name refers to the fact that most of the work is carried out by smart contracts, programs stored on a blockchain that automatically execute when certain conditions are met, allowing transactions and other operations to happen without the involvement of an intermediary.

Most DAOs also make use of a governance token that confers voting power to holders based on how many tokens they hold. Combine that with smart contracts and DAOs remove a lot of the ambiguity that might be present in an organization run more conventionally, helping anonymous members to come together in an efficient and cheap manner.

Structure, Functionality, & Differences

A DAO can vary depending on a few different variables, similar to that of companies. Purpose, structure, and overall organization play a vital role in how a DAO is formed, what the DAO actually does, and how the DAO operates economically.

DAO Structure
A DAO structure example. Image credit: Redbeard

The main variables that influence a DAO are:

  • What the DAO’s actual function is
  • How the DAO reaches consensus
  • What the DAO utilizes as a governance or share system
  • How the community behind a DAO manages available funds

DAOs can have absolutely anything to serve as their overall function. Some have been created simply to bet on valuable goods or serve as investment funds. Others govern and allocate resources for decentralized apps or protocols.

The determination of how the DAO reaches consensus is what makes it truly unique to corporations. For instance, instead of shares, DAOs use governance tokens or a similar asset to give democratic voting rights to all members.

Including these main variables in some formation gives you the basis of a DAO. Within these variables are different types of DAOs due to how they are formed, operated, and managed.
Some notable types of DAOs include:

  • AMM DAOs – Known as automated market maker DAOs, these organizations leverage smart contracts for decentralized financial services. This includes MakerDAO.
  • Grant DAOs – These DAOs use grants for funding from the community. It allows for a form of crowdfunding to power decentralized applications. Aave is one of the most popular to use this type.
  • Collector / Investment DAOs – Both of these types of DAOs are formed with the purpose of combining funds to either purchase collectables or rare items or simply to form an investment fund.
  • Media, Social, Entertainment DAOs – These DAOs function to manage full communities, run publications, operate games, and more. They serve as decentralized counters to typical centralized companies like Twitter.

Use Cases and Purpose

Within those broad categories, there is a huge amount of differentiation. If you can dream it, a DAO probably exists to fulfil that niche. Because of that, there’s little chance of us exhaustively going through all the use cases for a DAO, but here are some of the highlights.

Among the more popular uses for DAOs are as governance organizations, whether that’s guiding a dapp or decentralized finance projects such as crypto exchanges or investment funds. Some are envisioning DAOs as a potential new form of organization for businesses, including venture capital firm Andreessen Horowitz (a16z), one of the largest Web3 investors. In its outline of Web3 policy, the firm suggests bringing in legislation to make DAOs a potential successor to corporations. 

More esoteric purposes have also been found for DAOs, however. ConstitutionDAO hit the headlines in 2021 after crowdfunding over $45mn worth of the Ethereum cryptocurrency to try and purchase a first printing of the United States Constitution at auction. Remarkably, the project managed to gather over 15,000 contributors in just seven days – although they were ultimately outbid and refunds (minus costs) were offered.

DAO Structure
Image credit: Horizon Academy

Along similar lines to that project is Krause House, a DAO launched in 2021 with the express purpose of buying an NBA team. Should the project succeed, it has said that members will be able to “participate in decisions affecting the operating procedures of a National Basketball Association (NBA) team including but not limited to general management, ticketing, merchandising and partnerships.”

Then there are the DAOs that serve as a kind of professional association for long-established professions. Taking great pains to state that they are not a law firm or offerers of legal advice, LexDAO consists of legal professionals who are working together on blockchain technology for legal processes and services. The group duly maintains a host of decentralized tools including escrow and arbitration systems. 

DAOs have also found a use as decentralized fan clubs. That was exactly how PleasrDAO came about, coming together to buy an NFT from the digital artist pplpleasr. Since then the DAO has evolved to become an investor in digital art, acquiring such pieces as the Wu-Tang Clan’s Once Upon a Time in Shaolin and an NFT of the Doge meme dog.

DAOs are also making their stamp on the metaverse. Decentraland has a decentralized governing body (The Decentraland DAO) that effectively functions as a planning committee for the Decentaland metaverse, allowing virtual landowners to vote on everything from what wearable items are allowed to how land is auctioned off.

Finally, there are a whole subcategory of DAOs functioning as a kind of successor to social clubs. Just one example is Friends With Benefits, which confers numerous perks to members based on how many FWB tokens they hold – such as a newsletter or access to community events and spaces in various cities.

Things to Bear in Mind

Despite their obvious utility, one should be wary of the potential pitfalls of DAOs before jumping in. By their very decentralized nature, creating a DAO means giving up total control over a project. Then there’s the need to make sure the DAO’s rules are very strictly codified, or else risk manipulation. That’s precisely what happened to DeFi project Beanstalk Farms recently when an attacker managed to drain around $182 million worth of cryptocurrency after using a “flash loan” to borrow large amounts of cryptocurrency, buy a majority voting stake, approve the transfer of funds to their own wallet, then repay the initial loan.

In another cautionary tale, a DAO known simply as The DAO played a highly consequential role in the splintering of the Ethereum blockchain into Ethereum and Ethereum Classic. After users exploited a poorly secured smart contract to drain the investment group of funds, Ethereum hard forked in order to refund The DAO’s members – spurring the creation of Ethereum Classic by those who thought the actions of the smart contract should be final. The lesson is to be extremely considerate of how potential bad actors might want to abuse your DAO, and plan ahead to limit their routes of attack.

How to Form a DAO

Depending on the protocol and DAO structure that is chosen, there are many ways to form a DAO. After the initial organization is set, the purpose is determined, and all generic variables are considered, a DAO is ready to be formed.

Most DAOs are commonly formed first by acquiring an Ethereum Name Service (ENS) address or something similar. This also includes a method for handling voting and proposals, generally through the creation and release of a governance token. There are solutions to this depending on the protocol chosen to launch the DAO.

Two popular protocols to launch DAOs through are Aragon and Snapshot.

Aragon assists in the formation of a DAO organization on a few different blockchain networks, most notably Ethereum and Polygon. Funds are needed to purchase the ENS address, mint the DAO via a creation fee, and then link the ENS to the organization through Aragon.

This obviously has a cost to it (usually in ETH), so an appropriate amount of crypto must be raised to cover the fees of genesis.

Snapshot works in a very similar way, though has an off-chain voting mechanism versus Aragon’s on-chain. Snapshot simply uses digital signatures to facilitate voting and proposal creation.

Like Aragon, Snapshot requires an ENS address first and does require the DAO to be on Ethereum. For Snapshot, it is also required that the DAO has one thousand members and is able to verify this community outright.

Governance Examples

It’s worth exploring some examples of popular DAOs to see just how much they vary in the way they operate, despite largely sharing the same core principles of smart contracts and governance tokens.

Uniswap (UNI)

Uniswap, one of the world’s most popular decentralized cryptocurrency exchanges (DEX), is governed by a DAO, with voting rights conferred based on ownership of the UNI token. UNI coins were originally distributed to early adopters of the platform, as well as anyone who had interacted with the platform before a certain date.

Uniswap is a direct example of an AMM DAO. AMM stands for automated market maker, an algorithmic, price-adjusting protocol that creates liquidity pools between users. Uniswap users participating in the DAO receive voting power over how the protocol’s AMM functions work. As the leading DEX in the space, Uniswap has grown to over $7 billion in total value locked (TVL).

UNI - DeFi Llama
UNI – Image credit: DeFi Llama

MakerDAO (MKR)

Stablecoin cryptocurrency Dai is governed by the aforementioned MakerDAO DAO, a particularly interesting example owing to the path it took – as Rune Christensen, founder of MakerDAO, explained in 2021: “Maker has come a long way in a relatively short period of time,” said Christensen. “It’s gone from a DAO, created by myself and a few passionate developers, to a foundation tasked with bootstrapping an amazing project, and back to a DAO. While the Foundation played a specific and important role in the further development of the Maker Protocol and the growth of a global team, it was designed to exist only temporarily.”

MKR - DeFi Llama
MKR – Image credit: DeFi Llama

Compound (COMP)

Autonomous interest rate protocol Compound offers a governance token known as COMP, which allows holders to vote on the platform’s future direction. COMP tokens are distributed as rewards to lenders and borrowers on the platform, meaning that the more people use the platform the more influence in the DAO they can accrue. The DAO has said that only 10,000,000 COMP will ever exist.

COMP - DeFi Llama
COMP – Image credit: DeFi Llama

Aave (AAVE)

Next, there’s open-source liquidity protocol Aave (an example of a grant DAO we covered earlier), which transferred ownership rights from its core developers to AAVE token holders in 2020 – meaning all AAVE holders can propose and vote on changes to the protocol, or delegate those rights to others. As of the writing of the article, there are 108, 337 token holders leading the platform. The platform also maintains a related Aave Grants DAO which funds ideas submitted by the Aave community.

AAVE - DeFi Llama
AAVE – Image credit: DeFi Llama

Aragon (ANT)

As we’ve discussed, one of the heaviest hitters in the space is Aragon, which is particularly notable for this article as it specifically focuses on enabling the creation of other DAOs. Providing an open-source infrastructure for DAO creation, Aragon offers organizational templates for DAOs focusing on areas such as virtual worlds, and DeFi protocols. As of the writing of this article, 1,900 DAOs have been built on the platform, with over 60,000 members.

ANT Price Action - CoinMarketCap
ANT Price Action – Image credit: CoinMarketCap


DAOs are a prominent force within the cryptocurrency market. Many who use cryptocurrencies interact with DAOs virtually every single day and may not even realize it. There are DAOs to fit every niche within crypto, very similar to how companies fill out demand in the traditional economy.

We can only speculate as to how DAOs may influence or replace traditional corporations as of now. The important thing to note is that DAOs provide a highly democratized alternative that is easy to start, giving entrepreneurs a new option in which to launch a venture. 

Hopefully, you now have a better idea of the many potential uses of DAOs, as well as an understanding of how relatively simple it is to create your own community. Before you embark on the journey, however, perhaps the most important thing to bear in mind is that DAOs without a purpose stand little chance of prospering. Zero in on your project goals and potential community, however, and your DAO stands a good chance of prospering.

Starting a DAO: The Basics was co-authored by gmw3 writers William Smith and Zach Lorance.

Terra-Based Play-to-Earn AR Game Expedition Hits 65k Signups in 24hrs

Pokémon GO has been a phenomenally successful videogame that put augmented reality (AR) technology on the map even if you didn’t really need the AR component for most of it. So what happens when you create an AR videogame inspired by Pokémon GO and combine it with a play-to-earn crypto component? You get Expedition, which has already seen its waitlist signups soar to 65,000 after the first day.

Teasing that the first 10,000 signups might see something special, due to the initial signup success Exhibition will now be closing the waitlist today, so you might want to add your interest soon. Apart from the Pokémon GO inspiration mentioned, details regarding Expedition‘s gameplay, design and other features remain very vague.

Simply stating that: “Expedition combines AR technology with crypto all into a mobile game,” the only other details to go on relate to the fact that “Expedition will launch on Terra to harness the power of $LUNA and $UST.”

Using some educated guessing, gmw3 would assume that you’re going to be able to walk around real-world locations to catch some sort of digital creature, earning $LUNA along the way. These creatures will likely be NFTs that you can sell or maybe trade, possibly even upgrade or alter in some way. Plus, other Web3 features such as staking to help increase earns.

Pokemon Go Trainer Battles

How and when this will happen is another mystery, Expedition has yet to reveal a roadmap or even a Discord server at this point – its Twitter account was only open in April. So there’s more than likely a little while to wait until something materialises.

However, Expedition isn’t the first title to go down this play-to-earn/AR route, several others do exist most notably DogemonGO which is already available for iOS and Android.

As further details regarding Expedition are released, gmw3 will keep you updated.

Astra Encourages Creators to its Crypto/VR Metaverse With a $250k Grant Programme

Whether you call them virtual worlds or a metaverse there’s no denying that to build one you need money and plenty of creators to build the thing. Most of the big ones – Horizon Worlds, Rec Room etc – already have grant programmes to encourage those who want to build amazing metaverses to do so. One of the newest on the scene, Astra, has followed suit by launching its own $250,000 programme.


Astra aims to be a one-stop metaverse for shopping, gaming and socialising, leveraging crypto and NFTs as part of its commercial backbone. To do this the platform launched the grant programme earlier this month looking specifically for: “Developers and Creators with an interest in world-building, design, and experience,” to build upon Astra’s existing infrastructure, which uses Unreal Engine – the team were previously awarded an Epic Megagrant.

The programme is designed to cover a wealth of roles across the Web3 ecosystem, from NFT Strategists, Game Economy Designers and Unreal Sound Engineers, to Environment architects, Digital fashion designers and DeFI developers, awarding $10,000 USD to successful applicants. To begin the process you’ll need to join Astra’s Discord channel with a step-by-step guide on the rest of the application process found on this Twitter thread.

As detailed in its whitepaper, Astra will have all the things you’d expect from an up and coming metaverse, events and concerts you can attend with friends, spending your crypto in virtual shops, buying LAND and earning Thrills, Astra’s in-game currency. It’ll heavily utilise NFTs for gaming purposes, playing will enable you to win fashion NFTs for your avatar for example. Astra has already held and will continue to run game days, hosting digital paintball sessions for early adopters.

Astra Roadmap

As the above road map indicates, Astra will be growing its community not only through the grant but also via a hackathon in Q2, followed by launching LAND sales in Q3.

One interesting aspect of Astra’s road map is its virtual reality (VR) plans for the end of the year -(the Apple headset might be a bit optimistic). Making it clear that the company believe’s VR “is the future of Metaverse-based experiences” putting Astra far more in line with platforms such as Somnium Space – which also employs blockchain and NFTs – rather than The Sandbox or Decentraland which have no immersive capabilities.

Astra is one among many metaverses looking to attract fresh talent to help with expansion. As this continues through 2022, gmw3 will keep you updated.

Metaverse Weekly: Ape’s, Chikn’s & a Whiff of Meta

Over the past week, numerous announcements, partnerships, and developments have been announced that have the potential to impact the metaverse space. The market cap of the metaverse cryptocurrency sector ends the week hovering around ~$29 billion USD. Most of the sector was down in price over the past week, though recently released ApeCoin (APE) ended the week up on a 15% gain.

Price action of APE over past seven days. Image credit: CoinMarketCap

Among top mentions in the metaverse market this week include these key players:

  • Avalanche NFTs & DeFi Kingdoms
  • Meta
  • Fidelity
  • Coinbase

Chikn NFTs Arrive in DeFi Kingdoms

The popular gamified DEX DeFi Kingdoms (DFK) recently made a major expansionary move to the Avalanche network. On Avalanche, DFK is utilizing the Synapse bridge to create a brand new realm called Crystalvale. This new realm will come along with a new power token in CRYSTAL.

This expansion to Avalanche has opened up DFK to an additional partnership with Chikn, the young NFT project featuring chickens (and soon roosters) as yield-generating NFT mints.

Chikn has a unique economic structure, deploying three separate tokens to power its ecosystem.

Those three tokens are:

  • Chikn – an upgradeable chicken-inspired NFT that lays $EGG
  • EGG – the governance and utility token for the ecosystem
  • FEED – harvested via the app, FEED is eaten by chikn to entice upgrades and higher yields.

These three tokens provide functionality and a self-sustaining economic system. Now, with an added utility to Chikn NFTs with the coming integration to DFK, both projects can cross-pollinate their user bases to facilitate new growth in the metaverse sector.

Chikn NFTs
Chikn NFTs

Facebook-Rebrand Meta Reveals Hefty NFT Costs

The parent company of Facebook, Meta, recently announced an eye-opening 47.5% cut on NFT sales stemming from its virtual reality platform called Horizon Worlds. This cut makes Meta the most expensive in the entire industry and it isn’t even close.

The fee can be broken down into two different parts. The first part is an immediate 30% hardware platform fee which covers Meta Quest store sales while the remaining 17.5% fee comes from the Horizon Worlds platform.

A comparison between fees across NFT marketplaces is provided below by Twitter user @dustdust213

The massive platforms of Looksrare, Rarible, and OpenSea have substantially lower fees of only 2-2.5%, laughable in comparison to the massive cost pressure Meta is putting on its own creators.

Investment Giant Fidelity to Launch New Metaverse ETF

Fidelity Investments announced its intentions to launch a new metaverse-branded exchange traded fund (ETF). The ETF, called FMET, will enable interested investors the ability to invest in a metaverse-specific fund, providing exposure to the fast-growing asset class.

Assets that can be expected to receive consideration for the fund include the following stocks & cryptocurrencies:

  • Meta
  • Nvidia
  • Unity Software
  • Microsoft
  • Decentraland
  • Axie Infinity
  • The Sandbox

This opportunity provides a brand new on-ramp for metaverse projects to receive liquidity and investment assistance. With new buyers stemming from the Fidelity channel, growth can be more readily achieved moving forward.

This announcement also further solidifies the broader interest in metaverse applications from external investors.

Coinbase Developing a BAYC Movie Trilogy

The most interesting development over the past week was the major Coinbase announcement of a coming Bored Ape Yacht Club (BAYC) trilogy. BAYC is one of the most prominent NFT collections in the world today, with a floor market cap of over 1 million ETH (~$3 billion USD).

Users have the opportunity to participate in the project. The call for the community to participate is essentially a casting call. Those holding BAYC NFTs can deposit them to a Coinbase Wallet and connect them to the website to participate, bringing any ideas for characters and storylines.

The very first instalment of this new trilogy is said to premiere in June 2022.

Metaverse Weekly: The Expanding Tokenomics of GameFi Protocol DeFi Kingdoms

DeFi Kingdoms (DFK) is a young play-to-earn (P2E) gaming protocol built on the Harmony Network. The protocol is fueled by its native cryptocurrency JEWEL. The JEWEL token powers in-game purchases and rewards such as NFTs (Heroes), collectables, and more.

DFK launched in the summer of 2021 with the intention to develop a gaming-powered yield farm. By leveraging the smart contract applications of the Harmony blockchain combined with Uniswap’s V2 protocol, DFK has managed to attract a healthy usage for its JEWEL token.

DeFi Kingdoms: Serandale: 

Tokenomics of JEWEL

The JEWEL token essentially works to function entirely like a gamified DEX (decentralized exchange). JEWEL employs basic DEX tokenomics in that DFK users essentially participate in yield farming to earn JEWEL tokens.

The JEWEL token itself has two key functions to understand overall. They are:

  • Depositing at the DFK Bank
  • Delegating JEWEL to a liquidity pool in the Gardens

When JEWEL is deposited at the Bank, users can exchange it for xJEWEL governance tokens which come with a yield, incentivizing participation. The other option is to simply delegate tokens to a liquidity pool, meaning that the user exchanges their liquidity to the pool to generate higher returns.

At genesis, 10 million JEWEL tokens were pre-mined and distributed out to multiple channels, including:

  • 5 million towards game development
  • 2 million towards marketing
  • 2 million to form the original liquidity pool
  • 1 million to the founding time

While the initial distribution of tokens was highly centralized, JEWEL has a fixed supply of 500 million tokens, meaning that only a small percentage of tokens was pre-mined and airdropped in the original distribution.

JEWEL token is capped at a fixed supply of 500 million possible tokens. The remainder of those tokens will be introduced into DFK via the yield farming mechanisms and follow the following supply curve:

Source: Messari

An important note about DFK’s JEWEL token is that the max supply can be changed at any time through governance. Users participate through the DFK Bank (via xJEWEL governance tokens) in which they receive governance power and rewards in exchange for their liquidity.

Criticisms of DeFi Kingdoms

While the tokenomics of JEWEL function properly, the current development of DFK  has been a subject of criticism as the protocol lacks a true gaming experience. The label of being a “gamified DEX’ is something that developers have even acknowledged.

As Ismail Mert Tarihci of Admix stated: “DeFi Kingdoms has been thriving on the future implied development of an actual game being built on top of the current DEX (decentralized exchange) mechanics of DFK.”

A push forward in the DFK roadmap is the integration of new realms into DeFi Kingdoms. The first of these new realms is the integration of a new DFK token called CRYSTAL via the Avalanche network.

Integrating Avalanche (AVAX) and the CRYSTAL Token

Towards the end of Q4 2021, it was announced that DFK would be integrated into Avalanche (AVAX) as a new accessible realm powered by its own token CRYSTAL. 

The move allows DFK to take advantage of the low costs and fast transaction times typically associated with the Avalanche blockchain network. It also expands the overall use case of the DFK ecosystem as a whole. This new realm is called DeFi Kingdoms: Crystalvale and is bridged to the main realm of DFK.

DeFi Kingdoms: Crystalvale: 

The CRYSTAL token operates very similar to that of JEWEL. It can be used to purchase or mint new Heroes (NFTs), utilized as liquidity in the DEX or farms, and serves as the Crystavale realm native currency.

The value of both JEWEL and CRYSTAL are linked through shared utility since they power many of the same features (called Power Tokens). Additionally, JEWEL fuels the gas fees for the main DFK blockchain where CRYSTAL transactions are settled, meaning JEWEL literally powers CRYSTAL.

Because of this, the incentives for holding JEWEL have expanded substantially. Those holding JEWEL are now the beneficiaries of increased transaction volume due to CRYSTAL.


The expansion of the DeFi Kingdoms ecosystem to include Avalanche not only provides an improved use case for DFK but also directly incentives higher usage of both the JEWEL and CRYSTAL tokens simply through basic economics.

While the further development of a true game on DeFi Kingdoms remains a speculation of sorts, for now, the protocol experienced substantial growth over Q1 2022 and looks to expand on that growth over the rest of 2022. 

Binance Hints at Coming Play-to-Earn Project Listing

As one of the leading cryptocurrency exchanges and smart chains, Binance has substantial influence over the success of various crypto and blockchain projects. They have managed to establish some unique partnerships recently, including a Mike Tyson NFT drop that has already sold out.

The latest hype surrounding Binance is related to a recent tweet sent out by the Binance Twitter account hinting directly at a coming play-to-earn project listing. 

Binance Tweet

P2E Twitter Communities Collide

It did not take long for speculation to brew over on Twitter about which project Binance could be listing next. While little evidence has been released to confirm a specific project, the following two P2E projects had the most community support for a listing:

NFT Worlds (WRLD) – NFT Worlds is a play-to-earn metaverse build situated on the Polygon L2 blockchain that consists of thousands of worlds in which users can partake in. This includes an accessible world with one of the most popular gaming titles of all time, Minecraft.

Verasity (VRA) –  Verasity is a versatile protocol build that encompasses a media platform hosting esports, video entertainment, and digital content management. Verasity has a built-in advertising stack that offers rewards in the form of its native token VRA.

Example NFT Worlds Minecraft Server

While Binance has no confirmed project in mind at this time of this writing for what their marketing team is alluding to, there are many metaverse/blockchain gaming-related protocols within the space that have managed to establish worthwhile communities.

As an increased emphasis remains placed on metaverse-like titles in 2022, projects such as NFT Worlds could see elevated attention from major names in crypto like Binance. Keep your eyes on centralized exchanges for new coin listings month to month.

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