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July 2022

The Monthly Ledger Report

By Bryan Wilson, Legal Engineer at Upside
Edition #
Ledger Scan:
July 2022
Posts (month):
Posts (all-time):
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Statement of Commissioner Caroline D. Pham on SEC v. Wahi


July proved to be a busy month for the Security and Exchange Commission. Notably, the SEC filed a lawsuit against a former Coinbase employee for alleged insider trading.  Notably, SEC also attempts to classify nine tokens as securities in the complaint. This was broadly met with criticism by the Web3 community. The SEC has done very little to elaborate about which tokens are securities and which tokens aren't, except to the extent that they file lawsuits against tokens they believe are securities which have not filed the appropriate disclosures. Among these critics are actually Caroline D. Pham, Commissioner of the Commodities and Futures Trading Commission (CFTC). The reason for this particular flavor of ire is the fact that the SEC and the CFTC have seemingly overlapping jurisdiction – one regulating commodities, the other regulating securities. Commissioner Pham took to Twitter to express her frustrations (included to the right).

How this shakes out is anyone's guess. Looking at some of the prepared remarks of Gary Gensler (chair of the SEC) on crypto markets at the Penn Law Capital Markets Association Annual Conference, the view is a bit Draconian. Gensler views the SEC's purview as including three areas: platforms, stablecoins, and crypto tokens (his words). He doesn't view many platforms as being sufficiently decentralized, reckons they are trading securities illegally, and believes the purpose of crypto tokens as being used to raise money for a venture (thus falling into securities territory.

The fact of the matter is: we need regulations for these technologies that take into account their unique circumstances. As someone who got to work on local regulations of sharing economy platforms back in 2016, trying to fit a square peg into a round hole is not generative to innovation and doing nothing except fining people is not much better. As a result, Coinbase has filed a Petition for Rule-making – Digital Asset Securities Regulation

Calling for regulation is all well and good, but actually recommending a starting point for regulation is better. This is exactly what Gabe Shaprio (@lex_node) published a post on Substack that outlines a functionalist framework for DeFi. If you are into policy and Web3, this is a great read.

In The News

There were lots of wild things happening in the Web3 community in July. In addition to the items already mentioned in the previous section, there were some more lows – Voyager Digital's one-of-a-kind bankruptcy and How a fake job offer took down the world's most popular crypto game.

But there was also some really exciting stuff that happened.

The Merge is finally happening – Ethereum developers announce date for Goerli testnet merger.

Some lawmakers are trying to do some actually helpful stuff – The U.S. dropped a massive bill that could change Crypto.

New standards are emerging for better practices w/in crypto broadly NIST unveils four algorithms that will underpin new 'quantum proof' cryptography standards.

Courts and attorneys are doing some cool and interesting stuff – In New Approach, Big Law Firm Uses NFT to Serve Court Papers on Anonymous Defendants

And, perhaps most nostalgically,  LimeWire_is_back_for_good


This is an exciting new feature we are trying out this month. We seemingly added a bunch of educational/pedagogical/theoretical pieces to the are.na board this month. Naturally, it seemed like an emerging category and I think it fits pretty well. 

A working group our team at Upside is a part of has been exploring new opportunities in ReFi and, in working with Matt Pirkowski, a really great series of his came up – Crypto Beyond Capitalism – it has five parts too.

A meta theme in this monthly report is sufficient decentralization. This video about Managing Manager-less Processes is a must view for folks truly interested in decentralization.

Another byproduct of the aforementioned ReFi working group is The Good Regulator Theorem, best summarized here as "every good regulator of a system must be a model of that system."

I came across this next article when I was researching a forthcoming post on the ledger. The idea of Web3 as a "speculative community" is particularly interesting given the state of web3 in the broader context of speculation. The takeaway is that communities have historically been unable to speculate on themselves and this is what Web3 enables.

Security Token Custody by Polymath Partners provides a nice overview of a cool security token model.

Stable Network Dynamics in a Tokenized Financial Ecosystem from my research colleagues analyzes some of the characteristics of healthy tokenized financial ecosystems to better understand how they can produce better communities.

Play Long-term Games With Long-term People – this is a simple but powerful quote from Naval Ravikant. It refers to compounding interest of social situations. 

The best explanation of Bitcoin you will ever hear is actually a tik tok of Peter Van Valkenburgh's testimony to the United States House of Representatives Committee on Financial Services Subcommittee on Oversight and Investigations. It's what you want to show your relatives who don't understand Bitcoin.

I came across this article when searching for a taxonomy of digital assets. It has some really great and explanatory charts in it.  Understanding token-based ecosytems - a taxonomy of blockchain-based business models of start-ups (see below) 

Courtesy of Stefan Tönnissen, Jan Heinrich Beinke & Frank Teuteberg

How Florence Nightingale Changed Data Visualization Forever is a great historical insight into how Data Visualization emerged. 

Tribalism, Meritocracy, Money: What Sports and Crypto Fans Have in Common explores parallels between sports teams and crypto communities

DAO-velopment Trends

If you're interested in this section of the report, a great starting point is Kevin Owocki's piece on Impact DAOs, available at The World as Perpetual Beta.

DAOs have always seemed quite interesting, but they sometimes have trouble finding use cases. This month, I was excited to see a few different but related efforts to build out Real Estate DAOs. @lex_DAO: A proof of concept effort born from our Real World Assets Working group - Crypto real-estate company CougarDAO gets a bank account: How you can too!

I almost made a whole section on tokenomics this month, but decided against it. Instead, I'll recommend checking out this great overview of Maker DAO's tokenomics here and leave something else a bit later in this report – Evaluating MKR's Tokenomics.

Coming up with a viable stack for DAOs that functions with the same congruity of full stack programmers (there's a back-end piece of the stack, a front-end piece of the stack, and any other pieces as necessary). I'm excited to continue to come across new orgs working on the different components of the organizational stack for DAOs. A few are listed below:

Finally, I was really excited to come across this legal/philosophical talk by @Fatalmeh from EthCC on The (legal) laws of form. Go watch it now.

Also, a great tweet from @fiona_mugure

Art Stuff

It is often said that life imitates art… so why are people buying jpegs? This is a question that NFT minimalists pepper maximalists like it is going out of style. But let us level set first and analyze this as though we were scholars. The selling of art in its variety of forms has perplexed many for quite a while. As noted in, Hate NFTs? I have some bad news for you, "art markets can be irrational, arbitrary, and subject to the same scams and schemes as any market. And maybe a few shenanigans that are unique to the art world." This brings the entire field of selling goods back and forth between merchants and sellers as being subject to the same type of corruptness that is present in other industries and even brings up a very salient point – "Almost every mainstream critique leveled against NFTs applies just as easily to art markets."

However, art also plays a critical role in getting people to open up to new ideas about the opportunities for culture. I believe in this way, art and crypto are also quite similar and that we are in store for some very interesting futures ahead.


There's an old saying - be the change you wish to see in the world - and I would love to see more definitions of terms so that everyone has a common understanding. All these jargon-y words are tiring and create confusion. As a note about the format about this section, I'm not going to define the term but link to a couple pieces that define terms and explain why I think they're important.

Private Sale - the first in the list is private sale because it is relatively unexplored piece of the fundraising spectrum.

Sufficient Decentralization - this is a term that has become widely used following various interpretations of the Howey factors. It's extra important if you want to launch a Utility token.

Asset-Referenced Tokens - this term ties into the real-estate focus of the week. Personally, I love this concept and am looking forward to exploring it more in upcoming articles.

Tokenomics ; What is Tokenomics and Why Is It Important - following up on my promise from the DAO-velopment Trends section, I am including two articles about tokenomics that explore their utility for people interested in designing tokens.

VUCA - Acronym for Volatility, Uncertainty, Complexity, and Ambiguity; this has been a helpful anchor for trying to design simplified products that help people with novel solutions in web3.

Dynamic NFTs - this is a pretty interesting concept defined by Chainlink that takes NFTs to a bit of a new level, application-wise. The graphic below also shows how they might be applied in real estate, so there's that as well.

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