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In 2014, the Ethereum Foundation was established in Switzerland as a non-profit organization. In 2015, Vitalik Buterin, a Canadian-Russian prodigy who won the World Technology Award, served as the chief scientist and led the project's development.

The Ethereum project began a 42-day crowdfunding campaign on July 22, 2014, where investors could participate by sending Bitcoin to the address 36PrZ1KHYMpqSyAQXSG8VwbUiq2EogxLo2. To incentivize early participation, the exchange rate for the first 14 days of the crowdfunding was set at 1:2000, after which the exchange price increased linearly, reaching 1:1337 on the last day. The foundation stated that it had the right to use funds of up to 5000 Bitcoins to accelerate development during the crowdfunding period. There was no upper limit set for the crowdfunding, and by the end of the campaign on September 2, a total of 31,529 Bitcoins had been raised, valued at approximately $18.4 million at the market price of Bitcoin at that time. According to subsequent statistics, a total of 60,099,765 Ethereum tokens were sold, with the average cost of acquiring one Ethereum token during the crowdfunding period being about $0.3.

From August to the end of 2015, the price of Ethereum stabilized in the range of $1 to $1.5, representing an increase of more than three times compared to the crowdfunding price. However, unexpectedly, starting from early 2016, the price of Ethereum began a dramatic rise, peaking at 0.033 Bitcoin in mid-May, which was approximately $15 based on the Bitcoin price at that time ($440). This represented a 50-fold increase from the crowdfunding price. In July 2015, one year after the crowdfunding, the genesis block of the Ethereum blockchain was created, containing 60 million Ether from the crowdfunding and an additional 12 million Ether from the development fund, totaling 72 million Ether. The first phase of the Ethereum blockchain operation was called Frontier, which was similar to a public test, providing developers and stakeholders with a development environment close to real applications, enhancing security levels, distributing tokens, and further gathering community popularity and developers.

The crowdfunding provided ample funding for developers, and the open-source nature of the project attracted global developers, allowing the development team to use various programming languages such as Golang, C++, and Python simultaneously, which also contributed to the decentralization of the development team. Additionally, Ethereum software nodes could run on various operating systems such as Windows, Linux, and Mac OSX, achieving good cross-platform compatibility.

In March 2016, starting from block 1,150,000, Ethereum entered the Homestead phase. This phase marked the formal commercial use of Ethereum, with a surge of projects developed around it. According to statistics from the ethercasts website, there are currently 298 distributed application (Dapps) projects submitted.

Although there are many projects, not all of them can be successfully implemented. Below are a few assets based on Ethereum with significant market capitalization and trading volume.

Augur is a decentralized prediction market platform based on Ethereum blockchain technology. Users can make predictions and bets using digital currency, relying on the wisdom of the crowd to anticipate the outcomes of events, effectively eliminating counterparty risk and the centralization risk of servers, while issuing the REP token as an incentive system for the entire ecosystem.

Augur aims to achieve predictions of real-world events through crowd wisdom prediction technology. In a 45-day ICO from August to October 2015, Augur raised a total of 18,639 Bitcoins and 1,171,816 Ether, corresponding to 11 million Augur tokens. Each token cost approximately $0.483. With a crowdfunding amount of $5.32 million, Augur successfully entered the top ten crowdfunding projects globally.

In March 2016, the platform released its public beta version of the application.

In October 2016, Augur tokens were listed on major trading platforms, and after listing, their price experienced significant fluctuations, currently around $4.5. Before Augur, websites like bitbet.us and predictious.com accepted Bitcoin bets on some public events, categorizing the events into five major categories: sports events, political events, economic predictions, entertainment, and technology.

Unfortunately, there has yet to be a typical event prediction contract seen on the Augur platform. Although the Augur application hopes to better predict real-world events through a decentralized wisdom platform, the line between betting and gambling is blurred, and if exploited by others to become a tool for illegal profit, it will face significant regulatory pressure.

DigixGlobal is a distributed autonomous organization team based in Singapore, with products being tokens issued on the Ethereum blockchain, characterized by tokens backed by physical gold. Digix is a platform that tokenizes physical gold assets, placing ownership of physical gold on the Ethereum blockchain, which can be verified by anyone.

The ICO started on March 30, 2016, and within 14 hours, 2 million tokens were sold out, raising funds that reached the $5.5 million fundraising cap, greatly exceeding the original minimum target of $500,000, which was astonishing in terms of funding enthusiasm.

According to the project's design, there are two types of tokens: one is the DGD token, which pays dividends quarterly, with profits coming from transaction fees generated by DGX tokens; the other is the DGX token, where 1 DGX token equals 1 gram of gold. Since DGX token transactions incur a 0.13% fee, these fees will become the source of dividends for DGD tokens. During the ICO, 2 million DGD tokens were issued, with each DGD token costing approximately $2.75 at that time. By the end of October 2016, its trading price was around $11.

The main risks of this project lie in high costs and the uncertainty of whether trading volume can stabilize. Additionally, due to historical cases like E-gold and Liberty Reserve, which issued digital gold used in pyramid schemes, the project also faces compliance issues in various regions.

As of October 2016, DGD holders had not received any dividends, as DGX tokens had not officially launched for trading, thus generating no transaction fees.

"First Blood": $5.5 Million Raised in 10 Minutes#

In May 2016, the "First Blood" project was launched. "First Blood" originates from the well-known online game Dota, where a corresponding text and voice prompt appears when a player successfully takes down the first enemy. The team includes founders Joe Zhou and Marco Cuesta, who previously co-founded the Bitcoin options platform Alt-Options. Team member Zack Coburn is the founder of Ethereum-based applications Etheropt and Etherdelta.

On July 16, 2016, the Pre-alpha version of the game—Trump Dice—was successfully tested on-chain.

In August 2016, the white paper and crowdfunding plan were released.

On September 26, 2016, the "First Blood" project, aimed at creating a decentralized esports platform, launched its crowdfunding.

This crowdfunding only accepted Ether payments, reaching the $5.5 million fundraising cap within "10 minutes," issuing 79,103,203.39 tokens coded as "1ST," raising 465,312.999 Ether. Some analysts later suggested that this was related to the "Power Hour" reward set by the project team. The crowdfunding, originally planned to last 28 days, offered a reward of 100 1ST tokens for 1 Ether if participated in the last week, and a ratio of 1:170 if participated in the first hour of the project launch. Such a significant difference naturally stimulated participants to prepare in advance to obtain rewards.

In fact, the domestic blockchain asset exchange Yunbi had started a pre-crowdfunding, raising a total of 30,000 Ether from nearly 500 users. Due to smart contract limitations, only about 250,000 Ether could be invested, resulting in 42,499,983 tokens. The crowdfunding of "First Blood" set a record for the speed of crowdfunding in the blockchain field.

The "First Blood" team uses the Ethereum blockchain and Oracles to handle and settle players' funds through decentralized smart contracts, addressing disputes in esports. The system introduces the concept of a decentralized arbitration system (DAMN) and a jury voting pool (JVP). Observers of the game act as witnesses, providing data for the jury (JVP), making it difficult for cheaters to escape within this ecosystem. The pain point the project addresses is that the current esports bounty system lacks guarantees, with many players absconding with funds. By utilizing a smart contract platform on the blockchain to facilitate matches, select winners, collect deposits, and leverage crowd wisdom to resolve cheating and game disputes, players can use virtual tokens to participate in virtual game competitions, all without trusting third-party regulatory institutions and without worrying about match results and fund disputes, as everything is handled according to the contract.

Three days after the crowdfunding ended, on September 28, 2016, Yunbi Exchange launched trading for "First Blood." It is nearly impossible for assets issued in traditional forms to achieve such speed when listed on trading platforms. However, in this case, since information regarding asset registration, issuance, and ownership transfer is recorded on the blockchain, transactions, ownership transfers, and settlements are compressed into a single step, greatly improving trading efficiency.

A report in 2016 stated that blockchain technology is expected to save nearly $2 billion in the clearing process of capital markets. Global consulting firm Accenture reviewed existing capital markets and believed that blockchain technology would significantly shorten the clearing time for capital markets, such as corporate bonds, OTC derivatives, equities, syndicated loans, and private debt instruments, with most transactions expected to be cleared within 24 hours, greatly enhancing efficiency.

As digital assets have become global assets due to worldwide participation, exchanges are distributed around the world, and price differences between different exchanges can provide arbitrage opportunities for global speculators.

Of course, even within domestic exchanges, price differences can occur. For example, at the end of May 2016, during a price explosion, Huobi's price was 200 yuan higher than that of other exchanges, and a few days later, OKCoin's price led again. If operated correctly, one could achieve about 10% profit with low risk or even close to zero risk. It is reported that during that price surge, some professional arbitrageurs made 30,000 yuan profit from a 300,000 yuan principal, which, although not a large absolute amount, still yielded a much higher profit margin compared to other financial management products considering the investment cycle. Arbitrage methods can generally be divided into spot arbitrage, futures arbitrage, and cash-futures arbitrage.

Spot arbitrage refers to buying spot assets on a platform with a lower price at the same time and selling them on another platform with a higher price. After the transaction, the quantity of digital currency remains unchanged while the amount of RMB increases, or the amount of RMB remains unchanged while the quantity of digital currency increases.

Futures arbitrage refers to opening a long position on a contract with a lower price at the same time and a short position on another contract with a higher price. The two contracts can be on the same platform or different platforms, betting that the two prices will converge within a certain time (generally referring to the delivery period). This method is not risk-free, but as long as the price difference is large enough, the win rate is very high.

Cash-futures arbitrage is similar to futures arbitrage, except that the lower price side is the spot, meaning buying cheaper spot assets and opening a short position on a high-premium futures contract, betting that the two prices will converge within a certain time. Based on the actual situation over the past two years, it is common for futures prices to be higher than spot prices on days with market activity, and patience is needed to study the patterns before opening positions.

Cost and Risks of Price Arbitrage#

Price arbitrage is not without costs, so the price difference must be large enough to take action. Taking spot arbitrage as an example, the costs mainly come from withdrawal fees. When withdrawing RMB, platforms usually charge a fee of no more than 0.3% (the rate is higher for trading competitive coins on Bit Era).

Moreover, arbitrage profits are generally calculated in digital currency units. If the price of the spot is in a downward trend, it is possible to earn digital currency but lose total market value. Therefore, most investors participating in arbitrage are generally long-term bullish on digital currency.

In addition to costs, there are also risks. Spot arbitrage can actually be further divided into simultaneous trading and non-simultaneous trading. Simultaneous trading is like having 100,000 yuan, with 25,000 yuan in RMB and 25,000 yuan in digital currency on platform A, and the same on platform B. Once the price difference is large enough, both sides can trade simultaneously, with almost no time difference, and profits are predictable, but the downside is low capital utilization. Non-simultaneous trading involves fully buying the spot on the lower price side, immediately sending the digital currency to the higher price platform, and selling it all. The risk lies in the time difference, as withdrawals often take an hour or even longer, during which time the price may change dramatically, leading to potential losses; the advantage is high capital utilization and profits are calculated in RMB.

However, simultaneous trading also has a variant, which is to bet based on experience that one platform's price will be higher than another's. For example, predicting that OKCoin's price will be higher than Huobi's, one can place 50,000 yuan worth of digital currency on OKCoin and 50,000 yuan in RMB on Huobi, effectively doubling capital utilization. However, if the prediction is wrong, the opportunity will be lost.

Another variant can even avoid withdrawal fees by not withdrawing, waiting for the price difference to decrease or invert before exchanging back. For example, if platform A's price is 1% higher than platform B's, one can sell digital currency for RMB on platform A and buy digital currency on platform B, and when the prices on A and B equalize or B is even higher than A, sell digital currency for RMB on platform B and buy back digital currency on platform A. This way, the amounts of RMB and digital currency will both increase, with risks approaching zero.

Zero risk sounds appealing, but the reality is often not so simple. There has always been a looming threat in the history of digital currency: exchange risk. In early August 2016, the exchange Bitfinex was hacked, losing nearly 120,000 Bitcoins, and the Bitfinex exchange later decided that the loss would be borne by the traders, causing many arbitrageurs to lose their investments, with some even losing their entire capital.

For reference by those involved in quantitative trading.

OKCoin China: https://www.okcoin.cn/about/rest_getStarted.do;

OKCoin International: https://www.okcoin.com/about/rest_getStarted.do;

Huobi: https://github.com/huobiapi/API_Docs/wiki;

BTCC: https://www.btcc.com/apidocs;

Yunbi: https://yunbi.com/documents/api/guide;

Bit Era: http://www.btc38.com/help/document/2581.html;

China Bitcoin: https://www.chbtc.com/i/developer;

Bitcoin Trading Network: http://www.btctrade.com/api.help.html;

HaoBTC: https://github.com/haobtc/API_Docs/wiki;

BitVC: https://www.bitvc.com/help/api;

Coinbase: https://developers.coinbase.com/

Kraken: https://www.kraken.com/en-us/help/api;

Bitstamp: https://www.bitstamp.net/api/;

BTC-E: https://btc-e.com/api/3/docs.

In addition to these official application programming interfaces, there is a website that packages these APIs and provides a trading strategy distribution platform, both paid and free, called BotVS, serving quantitative traders, with the website at https://www.botvs.com/.

Introduction to Coin Crowdfunding#

Coin crowdfunding (Initial Coin Offerings, ICO), also known as token crowdfunding, originates from the term IPO in the securities industry. After an IPO is completed, the company becomes a publicly listed company. Similarly, ICO is a unique crowdfunding financing model in the digital currency community, where startups use internally generated digital cryptocurrencies (native tokens) as a way to finance their projects in return for investors.

Coin crowdfunding is a new phenomenon. In fact, ICOs are so new that at the time of writing this book, there was still no relevant entry for ICO on Wikipedia. ICO is also a form of "public offering," but compared to IPOs, there are three main differences.

First, the objects issued in ICO have changed from shares (securities) to digital currencies.

Second, ICO currently lacks corresponding securities legal regulation and is considered a new phenomenon. Investors participating in ICO do not need to register with any government agency, and their rights are not protected by law, posing certain risks.

Third, if the issuance method uses Bitcoin instead of fiat currency, ICO can achieve global financing, meaning that no matter where you are on Earth, as long as you have Bitcoin, you can become an investor in the project. This is something that the securities industry's IPO cannot achieve. All IPOs have corresponding national, securities affairs regulatory, and investor qualification entry restrictions.

Generally speaking, investors participating in ICO expect that after the digital currency project goes live, its native tokens can be listed on digital currency exchanges, allowing investors to sell the tokens obtained from the ICO on exchanges to realize investment returns and exit. Of course, investors can also trade tokens privately, but it is difficult to determine a reasonable price for the tokens in that case.

Coin crowdfunding has become a popular new way to invest in digital currency projects in recent years. Startup teams can quickly raise initial operating funds for their projects, and the entire ICO process also attracts media attention and reporting, effectively promoting the project. Investors can participate in projects they like with zero barriers. After all, not everyone interested in digital currency has the capability to develop a brand new project themselves.

Currently, most ICOs raise funds in the form of Bitcoin or competitive coins, and some projects also raise funds in fiat currency on crowdfunding websites, such as Yuanjie ICO.

To mitigate legal risks, most ICO projects will rebrand themselves as "software pre-sale tokens" or use terms like "crowdfunding," "crowdsale," or "donation." Some ICO projects even issue disclaimers to inform potential investors that this is not a securities sale. Whether judicial authorities in various countries can distinguish it from securities sales remains uncertain, as so far, no ICO digital currency project has ended up in court.

History of Coin Crowdfunding#

The first ICO project in the history of digital currency was Mastercoin, later renamed OMNI, which was crowdfunded on the Bitcointalk forum. Mastercoin is a second-layer token built on the Bitcoin blockchain, aimed at helping users create and trade cryptocurrencies and other types of smart contracts. The Mastercoin ICO was launched in June 2013, allowing investors to purchase MSC by sending Bitcoin to the Exodus address, with each Bitcoin exchanging for 100 MSC, raising over 5,000 Bitcoins. According to statistics from Coinmarketcap, the current market value of Omni (as of September 2016) is approximately $2.74 million, with the price of one Omni token being $4.95.

Following that, in December 2013, the second digital currency ICO project appeared on the Bitcointalk forum—NXT, which raised 21 Bitcoins, approximately $6,000. NXT is considered a second-generation digital currency, with a completely new codebase, replacing proof of work (POW) with a new 100% proof of stake (POS) design, making it the first PoS blockchain system, avoiding many of the flaws of the first generation of digital cryptocurrencies, such as energy consumption and vulnerability to attacks. It has a one-minute confirmation time and a total supply of 1 billion. At that time, the project was very successful for ICO investors, with NXT's market value exceeding $100 million at its peak in January 2014. NXT thus became the most successful ICO project in the eyes of investors. According to Coinmarketcap, its current market value is approximately $21 million, with the price of one NXT token being $0.021.

After witnessing the success of NXT, a large number of ICO projects emerged from the end of 2013 to early 2014. This period coincided with the explosive rise of Bitcoin, the leading digital currency, and many people hoped to replicate Bitcoin's success through ICOs. Unfortunately, most ICO projects failed due to poor development management, excessive hype, or fraud.

Another ICO project that caused a stir in the domestic digital currency scene at that time was Bitshares. Bitshares has a complex design and architecture, and its development history and market performance have been tumultuous, causing significant controversy both domestically and internationally. It was once touted as one of the "three musketeers of second-generation tokens" (the other two being NXT and CounterParty). Bitshares is a blockchain-based financial services platform that supports an open-source, decentralized exchange system for valuable physical assets, including virtual currencies, fiat currencies, and precious metals. Any individual or institution can freely transfer, lend, trade, and issue assets and smart currencies without authorization, and can quickly build decentralized, low-cost, high-performance virtual currency/stock/precious metal exchanges, leveraged futures exchanges, acceptance gateways, and asset management platforms (crowdfunding) based on this platform. In short, it allows everyone to become an exchange. In August 2014, Bitshares reached a market value of $86 million at its peak. However, after the complex mechanisms and price speculation, the confidence accumulated in Bitshares collapsed, leading to a prolonged downward trend. According to Coinmarketcap, its current market value is approximately $15 million, with the price of one Bitshares token being $0.005.

Other influential ICO projects include MaidSafeCoin, Ethereum, and NeuCoin (NEU).

MaidSafe was founded in 2006 in Dunfermline, Scotland, with the goal of decentralizing the internet, and has been working on the SAFE project for eight years (longer than Bitcoin's existence). On April 22, 2014, when MaidSafeCoin began its crowdfunding, it was originally planned for 30 days, but due to overwhelming investor demand, it was sold out in less than five hours. This crowdfunding primarily used Mastercoin for payments, raising $6 million, with $4 million coming from Mastercoin and $2 million from Bitcoin. The total amount of SafeCoin warrants issued was 429,496,729 (accounting for 10% of future total output). In the initial phase, the proxy coin was MaidSafeCoin, which was recorded on the Bitcoin blockchain. Once the complete SAFE (Secure Access For Everyone) network is operational, MaidSafeCoin will be exchanged for Safecoin at a 1:1 ratio. Safecoin is created and protected by the SAFE network, aiming to decentralize the internet and promote the development of numerous applications that utilize this network, including decentralized cloud storage and secure, unhackable software. According to Coinmarketcap, the current market value of MaidSafeCoin is approximately $42 million, with the price of one MaidSafeCoin being $0.09.

Ethereum is the most successful ICO project in the history of digital currency. In July 2014, the Ethereum project, a blockchain-based smart contract platform, began its ICO crowdfunding, with its corresponding native token being Ether (ETH). Ethereum features a more powerful and Turing-complete scripting language than Bitcoin, supporting many advanced functions such as issuing currencies, smart contracts, decentralized trading, and fully decentralized autonomous organizations. The Ether token exists as fuel to drive the operation of smart contracts built on the Ethereum blockchain. The ICO was a great success, with Ethereum ultimately raising 31,529 Bitcoins, valued at approximately $18.4 million at the time. Despite delays in the launch date, under the leadership of the genius Vitalik Buterin, the Ethereum project succeeded. Currently, Ethereum's total market value is close to $800 million, making it the second-largest digital currency project by market capitalization after Bitcoin.

Three Types of Token Structures in Coin Crowdfunding#

With the development of digital currency crowdfunding, increasingly complex token structures have been invented, including three categories: application tokens (Appcoin), equity tokens (Equity Token), and debt tokens (Debt Token).

Application Tokens#

Application tokens are the most common and widely used ICO tokens, also known as user tokens (User Token). Application tokens are basic trading tokens native to a blockchain, which users need to consume when conducting transactions within that blockchain economy, similar to the role of game coins used in an arcade. Application tokens include Bitcoin, Ether, Litecoin, Ripple, and the entropy (ETP) of the domestic blockchain project Yuanjie (Metaverse).

Equity Tokens#

Equity tokens are used to address the equity identity of blockchain projects and can be understood as shares of the project. Equity tokens represent ownership of a blockchain project, thus having functions similar to company shares, such as dividends and voting rights. The Singapore-based blockchain gold trading platform Digix conducted crowdfunding by issuing an equity token called DGD. DGD is an asset based on Ethereum, representing equity in DigixDAO, characterized by tokens backed by physical gold. DGD holders have the right to participate in company decisions through voting and will also receive a portion of the transaction fees from digital gold DGX as dividends. On March 30, 2016, DigixDAO raised $5.5 million in a public ICO for global investors within 14 hours, with the expected one-month crowdsale ending early. The domestic project Antshares is a similar equity token.

Debt Tokens#

Debt tokens are primarily used to address the liquidity issues of blockchain applications. For example, when a blockchain application suddenly becomes popular or even explodes, a large influx of new users requires a significant amount of application tokens for transactions. However, the vast majority of application tokens are held by old users. To avoid drastic price fluctuations of the internally generated application tokens and to prevent old users from dumping their application tokens (similar to the release of large shareholders after an IPO), debt tokens come into play. Users can purchase debt tokens, which can be sold, exchanged for application tokens, or transferred to others. Additionally, debt tokens can earn interest during the holding period. Currently, a global example of issuing debt tokens is Steemit. Their debt token, Steem Backed Dollar (SBD), can be exchanged for their application token, STEEM.

Of course, a blockchain application does not necessarily have to use only one type of token. Bitcoin, Ether, Litecoin, Ripple, and the domestic Yuanjie only use application tokens. Domestic projects like Antshares, distributed file service Sia, and blockchain gold trading platform Digix use both application tokens and equity tokens. Steemit has all three types of tokens mentioned above.

Domestic ICO Projects#

In 2016, the main digital currency crowdfunding projects in China included Yuanjie and Antshares.

On August 5, 2016, the domestic blockchain project Yuanjie officially launched its ICO, managed by the crowdfunding website under Babit, accepting RMB subscriptions. Yuanjie is a decentralized protocol based on blockchain technology, combining a service framework of smart asset networks (S.P.web), digital identity (D.I.), and value intermediaries (Oracle), developed by the Weiyou team led by Chuhua Hu, aiming to provide an open digital value transfer platform based on trusted assets. By September 5, 2016, at 24:00, this ICO had raised a total of 14.74 million RMB, far exceeding the successful benchmark of 10 million RMB, with 418 participating investors.

On August 8, 2016, the domestic blockchain project Antshares began its second phase of crowdfunding, targeting the equity token Antshares, with a total of 24 million shares, accepting Bitcoin subscriptions, with the crowdfunding site being the Antshares official website. Antshares is a decentralized network protocol that digitizes the assets and rights of the physical world through blockchain technology, enabling peer-to-peer registration, issuance, transfer, trading, settlement, and other financial services. Antshares can be used in equity crowdfunding, P2P lending, digital asset management, smart contracts, and other fields. By digitizing assets, it allows the property rights of any physical asset to become programmable, achieving atomic-level transactions and real-time settlements. Antshares is an open-source system that follows the MIT open-source protocol. If you are interested, you can download, copy, or modify it on GitHub to create new versions. As early as October 2015, Antshares completed its first crowdfunding, raising 2,100 Bitcoins. This round of fundraising ended on September 7, with Antshares ultimately obtaining 5,539 Bitcoins, equivalent to over 22 million RMB, with 1,360 participants.

In summary, the main places for releasing ICO projects in the digital currency space include international forums like Bitcointalk, domestic forums like Babit’s crowdfunding site, and projects that conduct ICOs directly on their official websites without relying on third parties, such as the domestic Antshares. With the increase in ICO projects, the official posts and materials released have become increasingly rich, generally including at least key information about the project, such as white papers, project positioning, strategic goals, ICO timeframes and plans, project development ideas and strategies, source code release and launch arrangements, team introductions, project features, investor rights protection, and other relevant ICO details.

Investors wishing to participate in a digital currency ICO project should conduct thorough research in advance. The risks inherent in digital currency crowdfunding are significant, and careful consideration is essential before investing.

Blockchain technology is reliable, but many people and things associated with it are not.#

However, this does not mean that all investments related to it are reliable; there are many projects in the market that defraud people under the guise of "Bitcoin" or "virtual currency." If the project you are involved with has the following characteristics, please be cautious and avoid them.

● Coins that claim high returns. Digital currencies are entirely priced by the market, and it is impossible to promise returns; they can rise or fall at any moment. Any digital currency that claims or promises high returns can be considered a trap.

● Recruiting members with commissions, such as how much commission for bringing in a member. This characteristic has nothing to do with digital currency and is a unique operational model of pyramid schemes. Please stay away from any project with this operational model.

● Withdrawal restrictions. Although mainstream digital asset exchanges may have daily withdrawal limits, this is mainly in response to anti-money laundering policies. If a trader's identity can be verified, most exchanges can lift restrictions or raise limits. However, if a niche digital currency exchange claims that the withdrawal limit is only 5%, caution is warranted, as it is highly likely that they will abscond with funds.

● Collaboration with listed companies. Some digital currencies claim to collaborate with listed companies, but almost none of the mainstream digital currencies have partnerships with listed companies, as most mainstream digital currencies operate on public blockchains based on decentralization principles. While it cannot be said that digital currencies collaborating with listed companies are necessarily scams, investors must conduct thorough due diligence on the relevant companies if they wish to participate; otherwise, it is better to stay away.

So, does that mean that digital currencies without any of the above characteristics are definitely safe? Certainly not. There are still many so-called digital assets that use the name "blockchain" to deceive people. Here are a few more points to consider.

● So-called digital currencies without a "wallet." If a digital currency's balance can only be viewed by logging into the other party's website and has no client, then that digital currency is almost certainly unrelated to blockchain.

● Even if there is a client, if all client versions do not have a "synchronization" process, then it is definitely a digital currency unrelated to blockchain. For example, in the case of Bitcoin, if it is a third-party "light wallet," it is normal not to have a synchronization process for user convenience. However, the official wallet must synchronize for several days or even weeks to function properly, as this is determined by the working principle of the blockchain. Therefore, if a certain digital currency has a client but all client versions do not require synchronization, it is highly likely to be a scam project masquerading as blockchain.

● Even if a certain digital currency is indeed based on blockchain, and its client is similar to the official Bitcoin client, requiring synchronization to use, it does not mean that this digital currency will not abscond. Since Bitcoin is open-source, creating a copycat coin requires only minor code modifications, which can be done for a few thousand yuan.

To determine whether a blockchain digital currency can exist long-term, the following data should be considered.

The number of nodes, i.e., how many computers globally run nodes on that blockchain; at least hundreds of nodes are needed to consider it widely accepted by the market.

● Hash rate (if the mining method is POW), also known as hash rate; the hash rate should be large and stable; otherwise, once subjected to a "51% attack" or difficulty attack, the digital currency may face termination.

● Whether there are enough exchanges to trade that asset, meaning whether it is convenient to exchange with fiat currency. If there is only one exchange where that digital currency can be traded, it is advisable not to purchase it.

Storage Risks#

If investors are computer enthusiasts, they may consider storing their invested digital currency on their own computers, so that even if an exchange is hacked, absconds with funds, or goes bankrupt, their rights will not be compromised.

However, self-custody of Bitcoin has its pros and cons. If mishandled, it can also lead to the loss of digital currency. In mature exchanges, digital assets are managed by knowledgeable personnel, and unless there is a crisis of trust, their security is generally very high.

If investors choose to self-custody digital currency, they must understand the technical traps discussed below (using Bitcoin Core as an example, but some principles apply even if it is not Bitcoin Core), all of which come from real cases.

If Bitcoin is stolen, given the immutable nature of the blockchain, and since there has never been a precedent for recovering stolen funds through hard forks, it is impossible to recover confirmed Bitcoin transactions through technical means. If one wants to recover stolen Bitcoin, a relatively feasible solution is to find the perpetrator and demand a refund through public relations or legal means. If the exact perpetrator cannot be found, the difficulty of recovery becomes very high. Currently, apart from the Ethereum DAO case, there are no other cases to reference. Of course, there is another scenario where your Bitcoin is entrusted to a platform, and if the platform is hacked, it may compensate for the loss, but this entirely depends on the platform's strength and reputation.

Liquidity Risks#

For investors, liquidity risk means that you may not be able to quickly sell your investment assets for cash (in fiat currency) without causing significant impact on market prices. In simple terms, when you want to buy or sell, you find that you cannot buy or sell.

Liquidity risk can be broken down into bid-ask spreads, market depth, and market and asset characteristics.

The bid-ask spread is the difference between the highest buying price and the lowest selling price in the exchange's public quoting system.

In a public quoting system, there will be a series of quotes from high to low. Unless the buying price equals the selling price, these quotes will not execute. Therefore, facing such a quoting system, every buyer must quote at least the lowest selling price when placing an order to hope to execute at the current market's best (lowest) selling price. Similarly, if a seller wants to sell the asset quickly, they must quote at least the highest buying price when placing an order to hope to execute at the current market's best (highest) buying price. Thus, theoretically, if a trader sells the asset immediately after buying it, the net loss on paper will be the difference between the current highest buying price and the lowest selling price, which is also a very important concept in stock, bond, commodity, and foreign exchange trading.

The following shows the bid-ask spread for Bitcoin on the domestic exchange OKCoin, which is 1.00 yuan.

It is evident that the bid-ask spread for Bitcoin trading on OKCoin is small, and the market capacity is good, easily accommodating buy and sell orders worth hundreds of thousands without causing significant impact.

Market and Asset Characteristics#

The characteristics of the market itself and the asset itself can also affect liquidity, such as bond maturity, new stock listings, or delistings.

For example, newly listed assets on exchanges will inevitably have high trading volumes in the first few months, leading to very good liquidity, as people tend to prefer new things. As prices stabilize, trading activity decreases, and liquidity returns to normal. Additionally, some exchanges may promise to provide certain fee discounts or rebates to incentivize investors to place orders, which can attract more investors to provide liquidity to the market, increasing bid-ask spreads and market depth, thereby reducing liquidity risk and enhancing its appeal to other investors. The liquidity of an asset is not always stable at a certain level; for example, during periods of extreme price fluctuations or prolonged consolidation, liquidity conditions can vary significantly between day, night, and early morning. Some investment products also have a strong time component, such as options and futures, where the price volatility of contracts in the days leading up to expiration will be much greater than usual, affecting market liquidity.

The above analysis is only for assets that are listed on exchanges and have publicly available quotes at all times. However, some assets may not be traded on exchanges at all, lacking publicly available reference quotes, making their liquidity risk a primary concern for investors. The earlier chapters of this book introduced various asset forms related to digital assets; apart from digital currencies, most assets are not listed on exchanges (such as assets from crowdfunding ICOs), meaning these assets cannot be sold at any time at the investor's discretion.

Regarding liquidity risk, the key message we want to share with investors is, "No risk, no reward." However, this does not mean that we should avoid assets with high liquidity risk. Investors should carefully consider the liquidity risks of their investments and not treat it as the sole consideration.

Risks of Crowdfunding Projects Absconding#

The term "crowdfunding absconding" refers to the situation where the initiator of a crowdfunding project absconds with the funds after the fundraising ends. Crowdfunding absconding is not unique to the digital currency industry; it is a common phenomenon in the internet finance sector, where crowdfunding absconding and P2P platform absconding occur frequently.

Currently, the domestic digital currency industry's crowdfunding ICO is booming, and understanding the strength, integrity, and social relationships of the project team may help reduce the risk of future investments going to waste. Additionally, the digital currency industry should establish norms to ensure that the crowdfunding process is transparent, subject to regulation, with multi-signature fund usage, or introduce third-party supervision to reduce reliance on core individuals.

Honestly, the risk of crowdfunding absconding is challenging to analyze and avoid in advance, unless you choose not to participate in crowdfunding. Below are two examples: the Kaomao absconding incident and the domestic GLB platform absconding incident, to help readers understand the uncertainties in crowdfunding projects and raise awareness of the risks of crowdfunding absconding.

Kaomao Absconding Incident#

In March 2015, Kaomao, the head of the well-known mining machine manufacturer ASICMINER, went missing, suspected of absconding, and has not been seen since. The stock of Kaomao's company, which once had a 50-fold increase, collapsed and became worthless.

Kaomao's real name is Jiang Xinyu, who attended the first high school in Shaoyang, Hunan Province. In 2001, he was admitted to the Youth Class of the University of Science and Technology of China with an excellent score, ranking 11th in the country, and obtained a master's degree in 2009. He was a PhD candidate at the Joint Research Center for High-Trust Software at the University of Science and Technology of China and Yale University. Because his official ID on the Bitcointalk forum was Friedcat, he is known as "Kaomao" in the Bitcoin community.

In July 2012, Kaomao founded the company and announced plans to manufacture ASIC mining machines. According to information, "Kaomao" registered the company name as "Shenzhen Bitquan Information Technology Co., Ltd.," with its registered address in the Nanshan Internet Industry Base in Shenzhen, and its business scope included online technical development and sales of computer software and hardware, e-commerce; the registered capital was 50,000 yuan, with two shareholders each holding half.

In August 2012, Kaomao published an IPO to establish ASICMINER on the Bitcointalk forum, issuing a total of 400,000 shares, of which the public held 163,962 shares, and Shenzhen Bitquan Company (Bitfountain) held 236,038 shares, with the original shares priced at 0.01 Bitcoin each, allowing shareholders to receive dividends. On August 7, 2012, ASICMINER successfully conducted a virtual IPO on the GLBSE exchange.

Kaomao used his developed mining machines to mine, creating the world's first mining farm composed of ASIC mining machines. From the end of February 2013, in just one month, Kaomao enabled shareholders to recoup their costs. By July 2013, this mining farm could mine nearly 40,000 Bitcoins per month, worth over 10 million yuan.

Stimulated by huge dividends, the virtual stock of Kaomao's company skyrocketed. Within just one year of establishment, Kaomao's company reached a market value of over $130 million.

However, on October 24, 2014, Kaomao announced the sale plan for Kaomao's computing power contracts on Bitcointalk.org: the computing power would be provided by Kaomao, while sales and management would be handled by RockMiner, with the sales website being Havelock Investments. Details can be found in the "Full Translation of Kaomao's First Batch of Bitcoin Computing Power Contract Announcement." AMHash is a project in cooperation between RockMiner and AsicMiner, where RM acts as the underwriter for AM, responsible for selling computing power and building and improving the AMHash platform, handling the collection of funds and dividends, and answering customer inquiries.

On February 28, 2015, the Kaomao Bitcoin cloud computing power platform AMHash posted an announcement on the Bitcointalk forum stating that due to not receiving BTC payments from ASICMINER (Kaomao's company), dividends had to be suspended. Some netizens posted dividend records on the forum, claiming that dividends had stopped since February 10, revealing that problems had already surfaced.

On March 2, 2015, AMHash continued to post on Bitcointalk.org, stating that Kaomao's 3.546P computing power farm had been seized since December 25, 2014, and Kaomao informed AMHash that a new farm would be redeployed to restore computing power, but no information regarding the new deployment had been received.

On March 3, 2015, RockMiner's head "Crazy Xiaoqiang" announced on Weibo that Kaomao had been missing since January 25, and his family had reported it to the police, with the specific reasons unknown. All issues needed to wait for Kaomao to appear, as others currently had no funds.

After Kaomao's disappearance on March 3, rumors circulated online that Kaomao's wallet had transferred 20,000 Bitcoins.

On March 4, 2015, it was discovered that Kaomao's office in Shenzhen was already empty.

On March 8, 2015, Crazy Xiaoqiang announced details related to AMHash, including negotiations with Kaomao at the project's start and payments made to Kaomao during the project's progress.

On March 12, 2015, the ASICMINER management team stated that due to Kaomao's disappearance, the company would be temporarily managed by David Fan, and due to unforeseen events, the AMHsh computing power managed by the RockMiner team could no longer be obtained. They expressed apologies for any losses caused by third parties and promised to do their utmost to minimize losses.

Since then, the legendary figure of Kaomao in the mining machine industry has seemingly evaporated. Kaomao's disappearance ultimately caused significant harm to investors, with countless Bitcoin investments turning to dust.

GLB Platform Absconding Incident#

On October 26, 2012, the head of the Bitcoin futures trading platform GLB absconded, and the website became inaccessible. The homepage displayed a message stating, "The website has been hacked; please remit the specified amount to this account, or we will delete all website data." This phenomenon, disguised as a hacker attack, was perceived by users as "self-directed." At the same time, users were kicked out of the official GLB QQ group—this was their only contact channel with the trading platform.

The GLB website was established on May 27, 2012, and was shut down in the early hours of October 26, claiming its headquarters was located in Hong Kong, with approximately 4,500 trading members. It was said to have a platform for betting against each other, with a leverage of 10 times, while another Bitcoin futures exchange, 796 Exchange, only offered 2 to 4 times leverage, making it a player-versus-player betting platform.

After the incident, users from Dongyang City, Zhejiang Province, reported the case to the local police, and the Dongyang Public Security Bureau subsequently launched an investigation. Meanwhile, platform users formed a rights protection QQ group. The number of people in the GLB incident rights protection QQ group reached 500, with losses exceeding 30 million RMB.

Through technical means, the GLB server was analyzed, and after formatting the server, data was recovered; administrator information was found in the database, which helped identify the real suspects; Bitcoin players even went to the GLB office address in Hong Kong to verify the company's legitimacy.

The customer service in the GLB website QQ group and the so-called chairman's QQ avatar were all stolen from others. Subsequently, the address left for their French branch was discovered to be a café.

This means that the company had a poor track record and numerous flaws from the very beginning, with various forms of forgery. As a result, under the temptation of making quick money with 10 times leverage, some people still took the risk.

The core of digital currency is blockchain, and blockchain technology underpins the security of the entire cryptocurrency. From the current market response, the attention attracted by blockchain technology is not insufficient, but somewhat excessive. The success stories of early Bitcoin holders resonate with the ambitions of other market entrants to "turn the tables." However, the gap between ideals and reality may exceed most people's imagination. Additionally, capital markets can be divided into primary and secondary markets. In the primary market, new securities are issued to meet the needs of institutional investors. In the secondary market, already issued securities are traded between the public and institutions. Typically, capital markets do not include commodity futures markets. Yet, we are surprised to find that exchanges worldwide, whether in primary or secondary markets, whether in commodity futures or financial futures, have invested heavily in researching blockchain technology. It is undeniable that the successful application of blockchain will significantly improve settlement efficiency.

1. Is the cost-effectiveness of application scenarios high?

2. Who will pay or share the costs of upgrading existing systems?

3. Unequal benefits;

4. Forming industry standards will take time;

5. Scalability/performance issues;

6. Government regulation;

7. Regulatory issues;

8. Legal risks;

9. Challenges to digital cryptography affecting its security;

10. Simplicity and cross-platform operability.

Since its establishment, Ethereum's vision has been evolving and expanding. Although blockchain remains an important component, in the broader vision of "Web 3.0" described by Ethereum CTO Gavin Wood—a more secure, trustworthy, and open internet born to replace inefficient solutions with decentralized technology for consensus, finance, auditing, tracking, and utilization—it is just one part of it. Alongside the Ethereum blockchain, we see a set of underlying and higher-level protocols developed both by the Ethereum team and third parties, including Solidity, Whisper, IPFS, zero-knowledge proof systems, account management systems, and dedicated browsers, all sharing a common goal: to restore the internet to its rightful state.

Even before Snowden's revelations, we recognized that entrusting our information to companies on the internet was akin to courting danger. However, in the post-Snowden era, we clearly understand that large organizations, interest groups, and even some government agencies are attempting to expand their power. Thus, we realize that entrusting our information to a single organization is fundamentally harmful. The revenue models of these organizations require them to know as much user information as possible, and realists will recognize that the potential for these trusted organizations to abuse power cannot be overstated.

The protocols and technologies of the network, and even the entire internet, are merely the beginning of great technology. They help create rich, cloud-based applications such as Google Drive, Facebook, Twitter, and countless other applications for gaming, online shopping, banking, and more. However, in the future, most of these core technologies will be reconstructed based on our new understanding of the interaction between society and technology.

Web 3.0, or what can be called the "post-Snowden era" internet, is our reimagining of existing web services, but with a fundamentally different multi-party interaction model. We will publish information we deem public; we will place information we believe should reach consensus on a consensus ledger; and we will keep private information confidential and never disclose it. Communication will always occur over encrypted channels, with endpoints having only anonymous identities and no traceable information (such as IP addresses). In short, we need to design such systems because, in an internet that has long surpassed traditional human social boundaries, trust-based behavior is fragile.

The post-Snowden era internet consists of four components: static content publishing, dynamic messaging, trustless transactions, and a complete user interface.

First, we already have many decentralized encrypted information publishing systems. Currently, two systems have implemented most of the necessary functions: Freenet and BitTorrent. Part of this system allows individuals to publish parts of their own websites (or DApps using new technologies) that are very large and immutable. Images, page templates, most text, and code belong to this part. These contents will have an address, and anyone else can download them.

Like BitTorrent, we can incentivize others to maintain and share information, and combined with other technologies of Web 3.0, we can make the incentive mechanisms more efficient and precise. Because the infrastructure of the incentive mechanism is built into the protocol, Web 3.0 will not suffer from distributed denial-of-service attacks.

The second part of Web 3.0 is an identity-based, anonymous underlying messaging system. It is used for communication, whether private communication between two individuals or broadcasting from one person to many.

As a communication system, it is fundamentally similar to the internet itself. However, it has two key differences from the internet. First, if a message is private, it will always be encrypted, so no eavesdropper can determine what is being communicated privately. Second, the physical location of the message endpoint is cleverly hidden, so eavesdroppers cannot even collect "metadata": this information, once considered useless by the information security industry and thus not classified as private information and not protected, is actually very useful, costing billions of dollars to collect on communication infrastructure.

In Web 3.0, this messaging system allows individuals to communicate securely and protect privacy, allowing everyone to receive real-time updates and publish information without needing to trust these messages: you cannot trust any message as "true" unless it comes from the identity it claims to represent.

The third part of Web 3.0 is the consensus engine. The consensus engine is a means of reaching agreement on certain interaction rules, and future interactions will be executed automatically and accurately according to pre-agreed terms. It is an efficient, all-encompassing social contract that derives power from the network effects of consensus.

The effects of breaches being visible to all others are key to creating a strong binding social contract and reducing breaches. A reputation system with Facebook or Twitter functionality is more effective than one without, as users care deeply about how their friends, partners, or colleagues evaluate them. An extreme example is whether and when to add one's boss or date as a friend on Facebook.

The consensus engine will be used for the credible publication and modification of all information. All of this will be achieved through a fully universal global transaction processing system, with the first instance being the Ethereum project.

Traditional web systems have not fundamentally solved the consensus problem but have relied on centralized trust institutions, such as ICANN (Internet Corporation for Assigned Names and Numbers), Verisign, and Facebook, leaving only private and government websites and the software built on them.

The fourth component of Web 3.0 is the technology that integrates the above three components—a "browser" and user interface. Interestingly, it will look very similar to the browser interfaces we are already familiar with and love. It will have an address bar (URI bar), a back button, and most of the interface space will be used to display DApps (decentralized applications).

The "browser" of Web 3.0 will have some apparent differences from current browsers. The traditional client-server URL looks like "https://address/path," while the Web 3.0 address looks like "goldcoin" or "uk.gov." Domain name resolution will be executed through a contract based on the consensus engine, allowing users to easily redirect or expand. The new domain name resolution method will allow multi-layer domain name resolution. Background DApps will play an important role in the user experience of Web 3.0.

After the initial synchronization process ends, the page loading time will drop to zero, as static data has been pre-downloaded and updated to the latest version, while dynamic data (transmitted through the consensus engine or peer-to-peer messaging engine) also remains current. When in synchronization, the user experience will be very reliable, although the information displayed may be outdated.

As a Web 3.0 user, all interactions will be conducted in an anonymous and secure manner, with many services still being trustless. For services requiring third parties, Ethereum's tools will provide users and DApp developers with the ability to decentralize trust among multiple entities, greatly reducing the necessity for users to trust any specific entity.

This transformation will occur gradually. In Web 2.0, we will see more and more websites using Web 3.0-like technologies on the backend, such as Bitcoin, BitTorrent, and Namecoin. This trend will continue, as the security of a system depends on its weakest link, so these websites will eventually transition to providing end-to-end security and trustless interactions through Web 3.0 browsers.

DAO#

In a general sense, the concept of "Decentralized Autonomous Organization (DAO)" refers to a virtual entity with a certain number of members or shareholders, relying on a majority (e.g., 67% or more) to decide on expenditures and code modifications. Members collectively decide how to allocate funds. The methods of allocating funds may include bounties, salaries, or more attractive mechanisms, such as rewarding work with internal currency. This fundamentally replicates the legal meaning of traditional companies or non-profit organizations for enforcement through blockchain technology.

A DAO can consist of one or more contracts, supported by a group of like-minded individuals who provide funding while holding "shares" in the DAO. The operation of a DAO is entirely transparent, requiring no human management and no longer subject to control by votes or founders and shareholders. As long as the DAO can provide valuable services to users and maintain a balanced budget, it will continue to exist on the network.

However, it is possible to move directly toward the DAO goal from day one, or it may evolve gradually. Similarly, integrating a part of a DAO into a traditional organization is also feasible.

If a DAO is the ultimate model of autonomous agents working through artificial intelligence or smart programs, we can imagine an evolutionary path for DAOs, with each stage building on the functions of the previous stage, as illustrated below:

• Participative—Users voluntarily and independently participate in a loose task.

• Collaborative—Users collaborate to add value to the target project.

• Cooperative—Users expect to receive shared benefits.

• Distributed—By adding value across a larger network, these functions begin to spread.

• Decentralized—By injecting more power into the edges, further scalability is achieved.

• Autonomous—Autonomous agents, smart programs, and continuously advancing artificial intelligence and algorithms will provide self-sustaining operations and value creation.

There are six interrelated components:

(1) Scope

(2) Stake

(3) Value

(4) Governance

(5) Gains

(6) Technology

Users are at the core of DAO evolution, so the infrastructure should support user actions. Note that participative/collaborative/cooperative functions are user-based, while distributed/decentralized/autonomous functions are architecture-based.

1. Types of Ownership Stake

There are three ways to participate in a DAO. You can purchase shares/digital currencies/tokens, or shares/digital currencies/tokens can be granted to you, or you can earn shares/digital currencies/tokens in other ways.

Earning shares is interesting because it includes both actively earning and passively earning. An example of actively earning shares is participating in a bounty program for a project, such as finding bugs, developing software, engaging in white hat activities, or any tasks required by the DAO.

A typical example of passively earning shares is sharing something, such as sharing your computer's computing power, hard drive, or even your data.

2. Units of Value

As a shareholder, there are various ways to receive benefits from the DAO. Of course, the most traditional way is to receive shares, but value can also be distributed to shareholders in the form of points, tokens, rewards, or cryptocurrencies. Note that tokens can serve multiple purposes; they can represent the right to use a product or ownership related to some intrinsic value.

3. Governance

Proper governance is not an easy task, but it is essential for success.

Autonomy does not mean lawlessness, so you need to consider the different components that make up governance, whether shareholders can participate actively (e.g., voting, managing, creating rules, checking rules, making decisions, reporting, managing) or passively (e.g., feeling valued and respected, being compensated fairly). In any case, governance is the way an organization operates.

4. Value Appreciation

Traditionally, we redistribute company profits in the form of profit sharing or dividends. However, in a DAO, these benefits can include voting rights or certain privileges, or being granted a special status. Ultimately, internal capital appreciates in the form of cryptocurrencies, achieving value growth.

5. Cryptographic Technology

Blockchain and protocols and platforms based on cryptocurrencies are what make consensus mechanisms possible. They are open-source decentralized consensus and decentralized trust protocols that enable the immutability, verifiability, and accuracy of all transactions and smart programs.

These protocols can be designed for general purposes (e.g., Ethereum, Bitcoin) or for specific purposes (e.g., Skuchain for decentralized supply chains, MaidSafe for decentralized storage). The technology platform includes three components:

(1) User data layer, assuming data is owned by users.

(2) Smart programs, which are essentially transaction engines.

(3) Application programming interfaces (APIs) that interact with various value-added services.

6. Innovation in Value Creation

A key goal of a DAO is value creation, and to achieve this, user behavior should be able to increase the value of the DAO, reflected in the appreciation of cryptocurrency value.

This is where the creative talents of entrepreneurs come into play, and it is where business models are formed. The use of value without purpose is wasteful and will lead to failure.

However, it should be noted that many DAOs will still be in the theoretical foundation stage, and thus the conceptual preview here is merely the first step toward the development of DAOs. A new DAO is like a startup; it needs to adapt to the market, require a business model, and attract many users. Before a DAO gains market recognition, it is like a science fiction story; its success depends on the market, not just on the conceptual preview.

We must believe that creating a DAO is a gradual and progressive process. I believe that in practical implementation, DAOs will have different purities, such as a company being 60% DAO model.

If you think establishing a DAO is very easy, you are mistaken. In the future, there will be different ways to establish DAOs and different operational methods.

Through the concepts of Web 3.0 and DAOs, it seems we can see that Ethereum and blockchain will bring a brand new social operating system.

In this era, there is no shortage of entrepreneurial crowds, but there are also poems and distant dreams.