MATIC Outperforms, Aragon and The MetaFactory, and Going Down The Gen Art Rabbit Hole

Chart of The Day: MATIC Outperforms Major Layer-1s As Market Bounces

• Major layer-1s are staging a relief rally from a technical bottom in late June. In particular, Polygon’s MATIC token has outperformed all major layer-1 protocols. MATIC has gained more than 62% over the past week, while ETH, BNB, SOL, and AVAX have gained between 15-40%.
• This relative outperformance of MATIC can be largely attributed to Polygon’s selection as one of six companies for Disney’s accelerator program last week. Additionally, Polygon is set to unveil a scaling upgrade involving Ethereum on 20th-July.
• Meanwhile, ETH has gained 40% over the same time period, after Ethereum developers proposed 19th-Sept as a tentative target date for the Merge. While the proposed date is part of a roadmap, instead of an actual deadline, it will secure Ethereum’s transition to Proof-Of-Stake, if successful.
• During the previous bear market, BTC eventually found its bottom after falling 85% from its 2017 high, whereas ETH experienced a 94% drop. However, the current market drawdown appears to be macro-driven rather than crypto-native, implying that past performance may not be a useful guidepost. In this case, a crypto market bottom is unlikely until we see signs of a turnaround in the macro backdrop.
• For more on the overall market outlook, Delphi members can read the most recent Market Insights report here.

Aragon’s New Stack and the MetaFactory Collection

[Excerpt from a Delphi Insights report]

• 1inch has approved two proposals that affect their treasury.
  • 1IP-08, creates a process for 1inch to diversify its treasury. Currently, 1inch swaps revenue solely to USDC. This proposal instead creates a process where 1inch retains revenue earned in ETH, WETH, WBTC, DAI, and USDT. The proposal is the beginning of 1inch diversifying its treasury in a more risk-diverse way, and halting swaps on these assets should allow the DAO to save on gas fees.
  • 1IP-09, uses revenue to buy 1INCH tokens when the price is below $1.30 and reverts back to buying USDC tokens when the price is above $1.70. This creates a buyback process for 1INCH and an automatic risk-off process when the token is valued higher.
• Due to the Harmony Bridge exploit, Aave has voted to freeze all reserve assets on their v3 deployment on Harmony. This proposal disables the ability to borrow or deposit on the app. However, users will still be able to repay debt, liquidate debt, and withdraw their funds.
• In a frustrated-sounding proposal, Friends With Benefits is voting on a process requiring their leadership team to set a strategic direction and set of KPIs for the DAO. The proposal cites the “limited community oversight and transparency” of the leadership team as a cause for concern. Specifically, after the proposal has passed, the team has 60 days to deliver a long-term vision and KPIs for the DAO, and will also be required to provide quarterly updates on their progress. The FWB token is down 93.8% from its all-time high in August 2021.
• Gnosis DAO is voting on a proposal to fund Dark Forest DAO to continue developing their Arena Game Mode on Optimism. The proposal requests $159k from Gnosis for the continued development of the game. The Dark Forest team originally made a funding agreement with the xDAI team, but as the former team has disbanded due to the merger, they have shifted the request to Gnosis.
• Metafactory has voted to spend €17k + 1,080 ROBOT tokens to fund the development of a clothing line. The three-part proposal lays out a process where the DAO will fund the development of a MetaFactory branded clothing line for their Berlin and Web store. To broaden its relevance beyond web3, MetaFactory has decided to target the high-end streetwear market – citing brands like Brain Dead and Online Ceramics. Notably, the budget for this proposal leads to the creation of the collection, and not an entire retail production run.
• For more information, Delphi members can see read the full Delphi Insights report here.

Generative Art Takes Off – Is It The Defining Art Movement Of The Century?

[Excerpt from a Delphi Pro report]

• GEN.ART is a generative art platform that takes a different approach from Art Blocks, focusing on a membership and community-driven model instead. There are 5,000 standard member passes and 100 Gold member passes, which can be purchased on OpenSea.
• A few key differences from Art Blocks:
  • You need to own a member pass to mint GEN.ART collections. Gold members are generally given priority to mint.
  • Drops are small in size, typically between 100 – 1000.
  • Fixed price per mint, typically between 0.1 – 0.2 E, but will be shifting to a Dutch Auction style drop soon.
  • DAO model with a live governance token. Community members get to vote on major decisions.
• GEN.ART has been struggling to grow collector demand for its artworks. There have been under 2,000E in secondary sales on all its collections on OpenSea till today. Except for Toha and Fjall, the rest of the collections have less than 100E in secondary sales volume. To put this in context, a single ABC collection like Memories of Qilin has done more volume (2,400E) in secondary sales than all the GEN.ART collections combined. In that sense, many GEN.ART collections appear to be comparable to Art Blocks Factory collections.

• Toha by Rich Poole can be considered the top collection on GEN.ART, with the highest secondary sales volume of ~600E and a floor price ~2X from the mint. Toha explores the beauty of constrained motion. 500,000 particles trace independent paths to create an endless array of beautiful patterns, evoking forgotten memories and discoveries. The outputs from the algorithm are quite varied and interesting, and they are beautiful when printed out. It has also seen interest from high-profile collectors including Cozomo di Medici & Pranksy.
• As a DAO, GEN.ART has a publicly-traded governance token with voting rights which was airdropped to member pass holders. There was also a public token sale in January this year. The $GENART token has a maximum supply of 100M, resulting in a fully-diluted valuation of $2.6M at current prices. Thus far, there has been 1 proposal that has been put up for voting and approved: the introduction of dutch auction drop mechanics and a staking platform. The smart contracts for these changes have been developed and are currently undergoing a bug bounty review before going live.
• GEN.ART has found a niche by providing a more affordable platform for collectors of generative art, with most collections available for purchase for under $500, some even <$100. Many are aesthetically pleasing and would make for a great display piece at home or in a virtual gallery. It also has a print shop that makes it easy to order high-quality printouts of the art you own so you can hang them on your wall.
• At this time, it is difficult to imagine its current collections becoming as culturally important as ABC collections like the Fidenzas or Chromie Squiggles. As a platform, GEN.ART has its work cut out for it ahead — it needs to source for great new artists to work with while managing a DAO & a token. It remains to be seen if its approach enables it to become a key player in the generative art space in the future.
• For more information, Delphi members can read the full Delphi Pro report here.

Notable Tweets

Takeaways From the 3AC Liquidation Document

1/ Had a chance to skim through this document. Interesting points (which I will go through in more detail):

(1) The yacht
(2) Why 3AC went under
(3) Kyle / Su being uncooperative
(4) Tai Ping Shan

— wassielawyer (@wassielawyer) July 18, 2022

Guide to Option Strategy Vaults

I Breakdown How Option Strategy Vaults Work

A 🧵Demystify how option strategy vaults earn yield to newbie

A good way to deal with this bear market is to arm yourself with knowledge to prepare for the next bull run.

🧵👇

— kyxoan17 (KYC) (@kyxoan17) July 18, 2022

Obol Network Launches Public Testnet

Today we are excited to announce on-boarding to our first public testnet for at-home validators, Athena!!

— Obol Labs (@ObolNetwork) July 19, 2022