White Star Capital Digital Asset Fund - newsletter #98
Identity 3.0 with decentralized revolution
Identity 3.0 with decentralized revolution
White Star Capital Digital Asset Fund - newsletter #98
What is a decentralized identity?
Decentralized identity is an emerging Web3 concept based on a trust framework for identity management. Such decentralized identity management includes an approach to identity and access administration that allows people to generate, manage and control their personally identifiable information (PII) without a centralized third party like a registry, identity provider or certification authority.
Considered to be private and sensitive data, PII refers to the body of information about specific individuals that directly or indirectly identifies them. Usually, it combines name, age, address, biometrics, citizenship, employment, credit card accounts, credit history, et cetera. In addition to PII, information that forms a decentralized digital identity includes data from online electronic devices, such as usernames and passwords, search history, buying history and others.
With a decentralized identity, users can control their own PII and provide only the information that is required to be verified. Decentralized identity management supports an identity trust framework where users, organizations and things interact with each other transparently and securely.
What are Soulbounds Tokens and their impact on the economy?
SBTs (Soulbounds Tokens) can be simply thought of as a permanent and non-transferable token on a public blockchain, like the popular World of Warcraft video game that the coauthors borrow the “soulbound” metaphor from. They can be issued in various forms — a scholastic achievement, a financial debt, an employment contract — by anyone, be it an individual, private company, university, commune, or government.
Why do we want these facets of our identity to be non-transferable and permanent?
When two people have a handshake on their first meeting, that relationship exists only in their fleeting memories. SBTs are an attempt to formalize that handshake on a public blockchain that the rest of the world can witness and verify. In doing so, it allows us to color a person’s identity with social context, opening up a world of coordination possibilities that until now wasn’t possible without a middleman.
In essence, SBTs are a codification of social capital (i.e., reputation) into formal property ownership. By “baring our souls”, individuals can stake their reputation openly and prove the authenticity of who they say they are.
Here are a few examples of the kinds of economic innovation SBTs can unlock:
Art: A struggling artist without professional accreditation but has received endorsement from a grassroot community can prove their “street cred” through SBTs
Education: Those who cannot afford an expensive university degree can prove their educational credentials through SBTs obtained from avenues of informal learning
Banking: Loan applicants can prove their trustworthiness through the absence of bad credit history, or by showcasing their good reputation through an SBT collection, removing the need for capital-inefficient overcollaterization models commonly used in DeFi (Upon repayment of the loan, another SBT could be issued as proof of repayment)
Governance: DAOs can improve their collective decision-making systems by safeguarding against whales (you can’t buy an SBT). DAOs can also avert a tyranny of the majority consensus through a more inclusive voting system design by issuing SBTs to trusted outsiders
Record management: SBTs can reduce the friction of exiting existing relationships with your medical or insurance providers by easily transporting all your medical records as SBTs
Business Operations: SBTs can improve the efficiency of traditional business functions like sales/HR by easily locating the types of SBTs that potential customers/employees are carrying
Identity 3.0’s adoption thanks to DeSo
The open social stack – social networks built on permissionless protocols – is nascent. But at scale, an open social stack with Identity 3.0 features will enable various benefits related to user and developer freedom and agency thanks to DeSo (decentralized social media) approach:
portability of data to other applications,
composability of experiences and content,
and the ability to introduce token incentives.
Users will benefit from decentralized social networks that provide new experiences that are more entertaining or useful. Many social networks have succeeded as compelling experiences to showcase users’ taste and curation (e.g., Tumblr and Instagram). A web3 counterpart could allow users to express their taste with real skin in the game, showcasing digital assets they own. OnCyber and Context offer this feature already. The best is yet to come!
🔦 White Star & Portfolio Spotlight
Lighthouse announce the upcoming release of their Closed Beta
The Closed Beta will open on the 21st of September, waitlist access is now open.
Ledn appoints Deloitte as its external audit partner
Deloitte was appointed after a thorough evaluation process and the decision has been approved by Ledn's Board of Directors.
🏦 Enterprises & Institutions
Coinbase to update exchange fee schedule
The new fee structure better incentivizes higher-volume traders.
New Bitfarms Operation in Argentina Slashes Costs With Natural Gas
The Canadian mining company says its Rio Cuarto facility has already boosted its hashrate.
In Nod to Multichain Future, Startup Layer-1 Eyes Solana Scaling Solution
Sei Labs is prepping Nitro, a Solana Virtual Machine (SVM)-compatible blockchain, as a gateway between Solana and Cosmos.
Binance partners with Ukrainian supermarket chain to accept crypto through Pay Wallet
Customers who use the Binance Pay Wallet to pay for their orders will be eligible to enter a rewards program.
Bandai Namco, SEGA among gaming giants eyeing blockchain gaming
Big gaming firms are working to spur mainstream blockchain gaming adoption, and don’t want to “change that policy” even if it causes pushback from some.
⚖️ Government & Regulation
Biden administration takes a step closer towards a digital dollar
Federal regulators will meet regularly to support the Fed’s research into a possible digital dollar launch.
💰 Funding & Exits
A16z leads $51.5m round for Web3 fraud protection startup, Sardine
A16z led the Series B funding round for Sardine, a real-time fraud prevention product for financial technology and Web3 customers. The capital will be used to accelerate product development and marketing and sales efforts.
Yellow Card crypto exchange raises $40 million in Series B round
Pan-African exchange Yellow Card Financial raised $40m in its latest fundraising round.
Token management platform Magna closes $15m funding round valuation
Token management platform Magna has raised $15 million at a $70 million valuation. The company was founded this year and allows users to airdrop, stream and distribute tokens to investors and employees.
Binance Labs doubles down on Aptos bet ahead of blockchain launch
The venture wing of Binance is increasing its investment in Aptos. Bloomberg reported that Aptos Labs’ valuation is now up to $4 billion.
Ex-Citadel Securities employees raise $50 million for crypto market maker
Former Citadel Securities execs have raised $50 million as their crypto market maker Portofino Technologies emerges from stealth.
J.P. Morgan invests in trading network Ownera’s $20 million raise
Representatives of J.P. Morgan and LRC Group will join Ownera’s $20 million raise.
🚀 Project Launches & Updates
Sam Bankman-Fried: FTX has $1 billion to spend on acquisition
FTX CEO Same Bankman-Fried revealed that the exchange has a ‘ballpark billion’ to spend on companies and projects.
Fortnite creator’s Epic Games Store launches first NFT Game
Mythical Games’ Blankos Block Party, which the studio claims has more than a million players, is now available on the Epic Games Store.
Guild of Guardians partners with the biggest names in Esports to bring Web3 gaming to millions
Guild of Guardians has entered a multi-year partnership with eight of the world’s most prominent teams in esports to bring Guild of Guardians to the largest esports communities around the globe.
🔥 Other Bits We're Excited About
PGA Tour and sports memorabilia firm Autograph to launch a golf-focused digital collectibles platform
This new platform is expected to launch in 2023 and will sell PGA Tour highlights as digital collectibles.
Solitaire, Counter-Strike, Snake: How casual gaming could be a ‘huge’ Bitcoin on-ramp
Gaming companies Zebedee and Thndr are taking advantage of the Lighting Network, atop Bitcoin, to entertain and onboard gamers into Bitcoin.