Here are my notes from Week 5 of a16z Crypto's CSX. This week focused on Decentralization, Governance, and Policy. We also had some fun at Far(away)Con this week!

• Policy vs. Regulatory

  • Policy: Goal for laws and regulation in the future

  • Regulator: Enforcement of the laws and regulations that are here now (i.e. what you need to be aware of and compliant with now)

    

• a16z Crypto Philosophy

  • Regulation should reflect democratic values

    • shouldn't: create new powers, censorship

    • should: support innovative tech, freedom, right to transaction, promote competition

  • Should be appropriate and clear

    • Appropriate: What is the scope of the audience intended to address? is it targeting the right risk?

  • Regulate apps, not protocols

    • “Don't regulate software; regulate businesses”

    

• Policy issues a16z crypto is focused on

  • Launching tokens

    • A regulator path to decentralization

    • How do we create rules that recommend decentralization as a benefit?

  • How to think about DeFi

  • Stablecoins and staking

• What they hear from policymakers?

  • I like blockchain, but not crypto

    • Translate: I like innovation, but I don't like speculation

    • Response: you can't have decentralization without crypto assets, world computer vs. world casino

  • Same activity, same risk, same rules

    • Translate: political tagline, not sure they really mean

    • Response: see it as two questions followed by a statement

  • Crypto is the Wild West

    • Translate: I'm worried about crypto and illicit finance

    • Response: Comes down to data

      • See State of Crypto 2023

        • talks about the amount used in illicit finance

        • definitely a concern, but need to scale appropriately

    

• Remember about politicians

  • Policymakers are extremely busy!

  • They have to have thoughts on every major policy

  • Booked 30min entire day every year

  • Their thought often comes down to "crypto is bitcoin, FTX or defi"

• Where your service is offered is what matters

  • People think where you incorporate is what matters, in fact, what's most important is where you are offering services.

    • If state, you need licenses with the state. The same is true for international

• Top questions a16z hears

  • Sanctions questions

    • if moving any type of value, you have to follow sanctions law

      • whether you are running a business in the US or not

      • you need only a little bit of touch in the US to have liability

    • Think...

      • How would a criminal in XYZ country try to take advantage?

      • What can I do to mitigate?

    • “Im not here to scare you and be the boogeywomen” just here to talk to you about the risk"

  • Tax questions

    • Where you need to pay

    • Do you have reporting obligations

  • Securities questions

    • Love these questions the most: How do we design, launch, and build tokens and token ecosystem

• How to interact with lawmakers

  

  • Reactive

    • Often unpleasant

    • 98% of the time just looking for info in a case

• Legal advice on Crypto Twitter

  • Not who you want to be following when comes to legal and building business

  • Good for humor and excitement

• On crypto in the U.S.

  • No question we're in a fight in the United States

    • Significant legal challenges

    • Anything and everything is part of their regulator's jurisdiction

    • Crypto is going to be around longer than the Chairman of the SEC.

  • There are a lot of good parties

    • I have faith that the courts are going to give us more clarity and info that will cause the agency to go in a different direction or scratch their head that this aggressive approach is needed

  • Tech is here to stay

    • The technology is here to stay. The US will get this right. The question is, will it be in one year or three to five years?

  • a16z Crypto is fighting

    • "Cdixon 150 meetings a year, Sriram, just as many"

    • In those meetings, "you see their lightbulb go off"

• Spectrum of consumer protection/innovation

  • Almost always on a spectrum of consumer protection or innovation

  • Strong protection = anti-innovation

  • Strong innovation = anti-consumer protection

  • Embracing decentralization can do both

• Remember, regulation is needed

  • Protect consumers from the casino

    

• Where to find Brian and Michelle online?

  • Brian Quintenz (Head of Policy) / Twitter

  • Michele Korver (Head of Regulatory) / Twitter

Here are some links that came up this week.

• Frens

  • Frens is a map-based crypto messaging app. The app and screenshots of it came up a ton this week due to Farcon and Far(away)Con. The Frens founders are great ❤️

• EigenLayer

  • EigenLayer came up a couple of times before and after their controversial airdrop.

• Paragraph + Mirror * Kiosk

  • Paragraph announced that it acquired Mirror's assets and raised $5M from USV. The previous Mirror team announced they're working on Kiosk, which looks super cool!

• Leveraging Farcaster for Growth

  • I gave dozens of builders tips on how to leverage Farcaster for growth. tl;dr be consistent, be authentic, and post from founder vs. brand account (more here)

  • Here are the

This week was a record-breaking week! We shipped a couple of new features and lots of small tweaks.

• Edit an image curated from a URL or uploaded.

  

• Frameboard cast action - You can now curate to Frameboard directly from Farcaster

  

👋 See you next week!