Saffron Weekly (05/27/22)
What’s new in the week of 5/26/22–6/01/22.
More drama permeates the markets as Terraform Labs founder Do Kwon’s proposal to relaunch Terra blockchain passes with a 65.5% majority, longs got liquidated to the collective tune of over $500 million, and analysts debate on whether or not to add a new segment to the Fear and Greed Index — purportedly called “ultra super extreme fear”. In all seriousness, that last news item is a bit tongue-in-cheek but I feel a little levity never hurts in times of uncertainty. I don’t think there’s any qualms left about admitting that we’re definitely in a bear market at this point. On the bright side, as I mentioned a few weeks ago this also presents a great opportunity for developers to hunker down and build while investors are able to thoroughly research protocols and accumulate.
I apologize for the slight delay in getting the weekly out as I’ve been traveling across the country. Earlier this week Saffron attended our first in-person event for the Chamber of Digital Commerce — the DC Blockchain Summit —a a one-day, premiere gathering of the most influential people who are focused on public policy action for digital asset and blockchain innovations.
Note: The opinions below are mine and mine alone, and do not represent the opinions shared by the Saffron team.
DC Blockchain Summit 2022
As an American, one of the biggest misnomers in our industry is the viewpoint that the majority of our government is against us — this is an opinion that I admittedly shared when I first started working in the industry years ago. While that may have been the case last decade, we are beginning to see a massive paradigm shift in Washington. Thanks to the continued and concentrated efforts of people like Perianne Boring, the Founder & CEO of the Digital Chamber of Commerce, we have powerful trade associations that are working to combat the stigmas surrounding our industry and dispelling the notion that cryptocurrency is a partisan topic. Economic freedom is something that has no place being a left or right issue, and with how badly millennials are being boxed out of the current economy cryptocurrency and digital assets are an opportunity to level the playing field and have an opportunity to hit the same age-related financial milestones as our parents did.
From the word go, one of the first panels at the DC Blockchain Summit featured SEC Commissioner Hester Peirce and CFTC Commissioner Christy Goldsmith Romero having a candid discussion about how regulators navigate the balance between innovation and regulation in this industry and the relationship the CFTC and SEC have — and that discussion helped set the tone for the entire event. As one might expect they acknowledged that the Terra/Luna fiasco has only moved the time table up for regulation coming to our industry, but that isn’t necessarily a bad thing. I haven’t shied away from my position last year that I believe regulation is a necessity for the widespread adoption of digital assets — but that brings me to my next point: our industry has not been given guidelines at all and we’re all left more or less fumbling in the dark.
The most important request that protocols working with digital assets want is clarity and transparency from our regulatory bodies so we can comply and continue to present economic opportunities for investors and create jobs for workers, and this sentiment was echoed repeatedly by the majority of attendees — both by the presenters on stage and in the audience. As it stands currently we are in a bit of a gray area as we have not been provided adequate guidelines, and so it necessitates erring on the side of caution with a conservative approach. It is our intention to have Saffron be the premiere DeFi risk adjustment protocol for years to come and it’s exactly why we were so methodical with our approach to focusing on retaining a corporate lawyer with extensive experience leading companies through venture financing and initial listings. In fact, it was the first proposal we prioritized and passed as soon as our DAO was set up, even if at the time it was a decision that puzzled some of the members of our community.
Unfortunately as one might expect no real regulatory answers were provided during the summit, but as the event continued it became quite the morale boost for every developer and investor in the audience to hear so many of these highly influential government representatives recognizing the economic potential digital assets and cryptocurrency have for our country.
Creating the necessary framework to facilitate this economic boom is something that regulators are combing over with caution, and while I am impatient for finally getting that clarity I understand why Washington is taking their time. In their eyes there has to be a delicate balance to avoid muting technological innovation but also prevent cases like Terra/Luna from happening in the future. Amidst the continued inflation and supply chain issues that are already plaguing our lower and middle class, I believe one of the worst mistakes the US could make is pushing away the next generation of technological innovators and the cascading ramification it could have on our economy — this is something that they cannot afford to get wrong. One of the reasons why the US held its strong position on the world stage during the advent of the internet is because regulators were mostly hands off when it came to innovation, which allowed for titanic juggernauts like Amazon, Facebook, Twitter, Google, etc. to be created and prosper in America — generating billions of dollars for our economy and creating hundreds of thousands of jobs over the next two decades.
In 2022 it is estimated that around 90% of cryptocurrency transactions are from outside the United States, yet the majority of IP that are facilitating these transactions is American-based. What will happen if America scares away these innovators with heavy-handed regulations? It’s not going to stop Americans from buying these assets and investing in these protocols, the only real consequence of this is that these companies and IP will no longer be American-based. Moving off-shore doesn’t “protect” Americans from accessing this technology, they are going to use it regardless — so why risk being left behind by our economic rivals that welcome this new tech with open arms? Fortunately, President Biden’s recent Executive Order inspires a lot of optimism that the White House understands this and that work is being done to ensure that America stays at the forefront of technological innovation.
One of the prouder moments of the event (at least for me) was seeing Senator Cory Booker recognize what digital assets — and by extension DeFi — are trying to do for people across the globe. We want to allow anyone, regardless of race, creed, religion, gender to be able to have access to the same premiere financial systems and not be shut out from participating. I believe that it’s that kind of economic freedom that drives healthy markets — and that includes the freedom to be able to make mistakes and make poor investments. We live in an age of crowd-sourced investment information, at this point we should not have individuals be prohibited from participating in emerging markets because they don’t meet certain qualifications of being an accredited investor.
An easy example of this is one I’ve talked about on the Saffron Academy podcast in regards to Americans trying to invest into the Ava Lab’s Avalanche. The average American was shut out of buying the $AVAX token for the better half of 2021 while our European counterparts were able to freely invest in the network at $10 a token (which would go on to eventually reach over $135 at the height of the bull run). For those unfamiliar with the token, $AVAX is not some random meme coin — from the get-go it was evident that it was a serious Ethereum competitor built by a team with an impressive pedigree. It wasn’t until the price had more or less quintupled that most — not all - US citizens were finally able to buy the asset without federal/state restrictions getting in the way. This isn’t just a one-off occurrence either, there are plenty of other examples of residents of certain states (with New York still unfortunately being one of the biggest offenders) being boxed out of participating in various aspects of our industry.
Outside of the event, the DC Blockchain Summit presented Saffron with an incredible opportunity to network with several prominent players in the industry and we made sure to take full advantage of this. We’re looking into new EVM-compatible chains to deploy to next and in Washington we met with a popular chain that’s recently rolled one out. We don’t have anything to share on that front just yet, but here’s a great tidbit that we can share going back to last week’s update on the KuCoin Community Chain Unicorn Contest:
Saffron Wins “Most Innovative Technology” Award
We announced that we made the Top 10 Projects list in KCC’s Unicorn Contest last week, but this week we’re pleased to reveal that we’ve officially won the “Most Innovative Technology” Award in the contest. I’d love to pat myself on the back for this but all I do is write a bunch of words and occasionally smile for the camera — the real victory lies with our all-star development team for putting in the work to bring this technology to life and our bizdev department for getting us in the contest. We’re incredibly thankful to KCC for putting this together and we can’t wait to continue working with them in the future.
Saffron May Town Hall
The May Town Hall will be held this Sunday, May 29th @ 12pm EST on our Telegram. Make sure to mark your calendars and think about what questions you’d like to ask the team! We’ll have members of the Saffron Finance team answer questions surrounding V2, our partnerships, new bridges, the future of Saffron, and more. If you happen to miss the event we’ll have a transcript of the Town Hall published afterwards. We can’t wait to see you all there!
Closing Thoughts
All in all I left the summit incredibly optimistic about the future of digital assets and being very excited to see what the future will bring. I will not mince words however, I do believe that 2022 will continue to be turbulent for the market. But from all of the regulators and staffers I’ve had a chance to talk to, it is abundantly clear that the pendulum is starting to swing in our favor in Washington and that our moves now in this bear market have the potential to be game-changing for our protocol. While our industry continues to build momentum it’s important to keep in mind that DC is notorious for being slow and methodical in their approach, so we may have to continue to weather this storm for a time.
But I know in the end, we will all be glad we did.
Community resources
Web3 app: https://saffron.finance
Governance: https://gov.saffron.finance
Telegram: https://t.me/saffronfinance
Discord: https://discord.gg/pDXpXKY
Twitter: https://twitter.com/saffronfinance_
Github: https://github.com/saffron-finance/saffron
