The Digital Assets Newsletter

Welcome to the Digital Assets Society's newsletter! We send this out every Thursday in which we discuss a range of topics surrounding the space of digital assets such as blockchain technologies, NFTs and cryptocurrencies. Our primary goal with this is to learn and expand our knowledge of this space in conjunction with you (the readers). Thus we try our best to make it as interesting and informative for people of all knowledge levels regarding this space. In this page you can find all the previous news letters we've written.

If you find this enticing and would like to learn more about digital assets and our upcoming events, Subscribe below.

The Digital Assets Newsletter: Week 6

Too Long Didn’t Read Summary:

The Market Update:

• Recovering from the crash and entering a bull market? We are seeing some bullish trends in the market. This may be due to what is called market psychology.

• Also, breaking news as Russia is following suit after India's announcement to legalize and tax (rather than ban) cryptos, 300 millions dollar hacks and more. Read more below!

Concept of the Week: The Compelling Use-Cases of NFTs

• NFTs have been on the forefront of headlines in recent weeks as we’ve seen a surge in capital and investors entering the space. Currently a common misconception of NFTs is that they only use case revolves around digital art. This is of course a very exciting application, allowing greater for autonomy and income streams for artists. However, there are a variety of exciting use-cases of NFTs that outside of the digital art space. Read more below to find out more!

Investor Joe Updates:

• Joe dives into the inner workings of algorithmically backed decentralized stablecoins with Terra’s LUNA. Read below!

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The Market Update:

The Micro Perspective:

We are seeing some bullish trends in the market. BTC is now sitting around 44K, a 31% increase from the low we saw at the end of January. BTC prices aren’t the only thing that have pumped, market sentiment has changed drastically looking at the fear & greed index; it has nearly doubled from last week. This example of low market sentiment can be better understood by reading into Market Psychology which counters other more conventional financial theory where it is assumed that prices were always based on rational considerations and failed to account for the potentially irrational impact of market psychology.

The Fear and Greed Index Data:

The Macro Perspective:

[BREAKING] Russia is following India's lead on the path to regulating crypto assets rather than ban them. The tweet is from Russian news outlet Kommersant.

• India's journey thus far: Read Here

• Russia Story (can be translated): Read Here

Note: For those new to the space, twitter is often a source of alpha as it has become the industry standard for Companies and CEOs to make announcements from billion dollar hacks to new updates or partnerships.

It's not all good news however, this week has seen some of the largest hacks in crypto history. A 300 Million USD exploit on a wormhole network. To put this into perspective the wormhole exploit sits at #2 on the leader board for biggest hacks in defi.

• Deep Dive: The hack was reversed engineered on this twitter thread

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Concept of the Week: The Use-Cases of NFTs

NFTs have been on the forefront of headlines in recent weeks as we’ve seen a surge of capital and investors entering the space. Currently, a common misconception of NFTs is that their only use case revolves around digital art. This is of course a very exciting application, allowing greater autonomy and financial opportunities for artists. However, there are a variety of other exciting use-cases for NFTs in our increasingly digital world, including real estate and gaming.

First of all, an interesting perspective of NFTs surrounds it’s potential in solving problems that are inherent in today’s internet. Given the digitalisation of our world, there is an increasing need to assign properties of physical items to digital ones; namely scarcity, proof of ownership and uniqueness. This is where NFTs step in. NFTs would allow you to purchase and truly own various digital items, such as video game character skins and iTunes mp3 which you can then exchange and trade in online marketplaces. Giving you, as a consumer, significantly more utility.

The applications of NFTs in gaming is a great area to look at in order to show the potential scale of this. As of 2021 the gaming market was valued at $173.70 billion dollars and projected to almost double by 2027. In which approximately 69% of the 2.7 billion global players, have confirmed to have spent money on in-game cosmetics such as emotes, skins, etc.. Despite this, these cosmetic items are currently ‘stuck’ in the game it was purchased in and not resalable. However, in the near future these items can be minted into NFTs. This would make them transferable to various gaming ecosystems and foster a thriving economy within the gaming industry in which players can transact these in-game products for real-world money. In addition to this, the video game developers can also program in a fee structure within the smart contract behind the NFT minted item which allows them to take 5% (for example) of the selling price every time a transaction occurs between players. Creating a win-win situation where players gain greater utility from in-game purchases due to the inherent scarcity, uniqueness and transactability of these items whilst developers are able to generate new incomes.

Another exciting application surrounding NFTs can be found in the real-world; specifically, real estate. This is ultimately possible because NFTs allow for significantly greater efficiency within the property-buying process. Currently real estate is filled with seas of red tape involving various intermediaries such as solicitors, banks and real estate agents which simply add expenses and time to a transaction which should be relatively straightforward and between two parties. NFTs can cut this red tape significantly through essentially replacing these intermediaries with through smart contracts which enables an extremely safe, effortless transfer of ownership. In addition to this all ownership and rights history can be almost immediately verifiable as it is recorded onto the blockchain.

These are just some examples of the potential use cases of NFTs. I hope you’ve learned something interesting and come to find that this technology is more than a simple jpeg image of digital art with extra steps. See you next week!

/Alexander Ekberg

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Investor Joe Updates

Who is Joe? We explain everything here.

Previous positions remain unchanged. This week Joe continues his DCA strategy with 100$ split as:

50$ into BTC - why

40$ into ETH - why

10$ into LUNA - Read an in depth explanation to why here

A Quick Look at Terra (LUNA)

Terra is programmable money that rivals fiat backed stable coins (cryptocurrencies that are collateralized 1:1 with a specific fiat currency). With Terra’s algorithmically backed stable coins it has become a rival to leading fiat-backed stable coins due to its native transparency and decentralization. With the growing demand of Defi, the qualities of transparency and decentralization are likely to persist where stable coins are needed. Luna is Terra’s native token which is used to stabilize the pegged on the stable coins, a process of seigniorage (the video linked below explains this well).

Links to Learn More:

- Terra White paper

- Terra Website

- Terra (Luna) Price Chart

- Investor Thesis (dated but great overview):

- Easy to follow video

Here are Investor Joe’s Current Holdings:

REMEMBER this is not financial advice, and is purely for educational purposes only, always DYOR!

/Erik Gunnarsson

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DISCLOSURE: SOME DIGITAL ASSETS SOCIETY MEMBERS ARE INVESTED IN CERTAIN TOKENS AND COINS WHICH MAY HAVE BEEN SPOKEN ABOUT ABOVE. THESE STATEMENTS ARE INTENDED TO DISCLOSE ANY CONFLICT OF INTEREST AND SHOULD NOT BE MISCONSTRUED AS A RECOMMENDATION TO PURCHASE ANY COIN OR TOKEN. THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU SHOULD NOT MAKE DECISIONS BASED SOLELY ON IT. THIS IS NOT INVESTMENT ADVICE.

The Digital Assets Newsletter: Week 5

Too Long Didn't Read Summary

Market update: At the time of writing the crypto market has seen an uptrend this week with major players Ethereum rising 9.7% and Bitcoin 1.54%. This is possibly due to the lower market prices of recent weeks. The craziness of the NFT space has continued into this week, mainly involving LooksRare and Opensea. In which LooksRare having double the daily trading volume of Opensea despite having a fraction of users. Recent reports suggest this is due to wash traders. Read more Below to find out more about the LooksRare wash trading and the effects of the lower crypto prices. Concept of the week: Protocols and Layers - The Architecture of Crypto Assets When reading about cryptocurrencies you may have come across terms such as “layer one or layer two protocols.” These are foundational concepts for understanding the technical aspects of digital assets are protocols and layers, namely layers and protocols. Ultimately they facilitate data sharing and dictate processes such as transaction validation, system security, the interaction between participating nodes, etc.. Layers specify the set of protocols used in certain components of the blockchain architecture. Think of it as different layers to a cake with each layer serving a unique purpose. The layered architecture of blockchain technology can be split into six categories which then are grouped into three distinct layer protocols. Many different crypto assets (such as Ethereum) are essentially these layered protocols. Read more to find out and understand why! Investor Joe Updates: Joe looks into a new Altcoin; namely Helium and its fascinating approach to telecommunications. Read more below!

We are not advocators we are educators

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This Week's Market Update

This week has been a somewhat better one for the crypto asset market with major players Ethereum rising 9.7% and Bitcoin 1.54% (at the time of writing). This can possibly be attributed to one primary factor, lower prices in recent weeks which have led to new investors and investor sentiment regarding more bullish appetite for risky assets. In addition to this, Polkadot pushed dogecoin out of the top 10 crypto assets based on market cap. In the NFT space we’ve seen plenty of action within NFT exchanges. The new decentralized NFT marketplace LooksRare, which aims to be an alternative to Opensea, has seen a rapid rise to the forefront of news cycles as it reports daily trade volume (USD) that is more than double that of Opensea despite significantly lower users. However, this is not why it ended up in the spotlight, rather it is due to the traders taking advantage of its low fee structure to wash trade. Wash trading refers to the same trader buying and selling an instrument to create artificially high trading volume and manipulate the market price of the asset. This is thus what explains LooksRare's insane volume in recent weeks, suggesting that these volumes are not sustainable.

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Concept of the Week: Protocols and Layers - The Architecture Crypto Assets

When reading about cryptocurrencies you may have come across terms such as “layer one or layer two protocols.” These are foundational concepts for understanding the technical aspects of digital assets, namely layers and protocols. Let’s begin with explaining protocols. There are various types of protocols. Ultimately they serve as a set of rules which allow for the exchanging and processing of data between computers. Think of it as a language between humans; without a shared language (e.g. English) they wouldn't be able to engage and communicate. Blockchain protocols facilitate data sharing and dictate processes such as transaction validation, system security, the interaction between participating nodes, etc.. Ultimately, protocols are what facilitated the decentralization inherent within crypto by defining how information and data is distributed without the need for a centralized entity. Layers specify the set of protocols used in certain components of the blockchain architecture. Think of it as different layers to a cake with each layer serving a unique purpose. The layered architecture of blockchain technology can be split into six categories which then are grouped into three layers:

The Hardware/Infrastructure Layer, also known as Layer 0, can be seen as the baking sheet which makes the cake possible. It involves all components which allow for blockchain networks to function and be a reality, this includes the internet, hardware and connections.

The Implementation Layer, also known as Layer 1 protocols, is the system associated with the base architecture of a blockchain network. These protocols set the rules and parameters for the entire network such as the consensus processes, transaction throughput, dispute resolution, etc.. Bitcoin and the Ethereum Network are all layer 1 protocols. Meaning when you purchase these tokens you are investing into a layer 1 token.

Layer 2 protocols, also known as Layer 2 (L2) Solutions, are the protocols and overlapping networks which sit on top of the base layers and provide scalability. This is primarily to provide interoperability features and scalability for layer 1 networks by carrying some load. The primary difference from layer 1 protocols is that layer 2 is a third-party integration used in conjunction with layer one to enhance system efficiency and the number of nodes whilst layer 1 is the blockchain of the decentralized ecosystem. Thus layer two crypto are tokens and systems which are built on top layer 1 networks. An example is Polygon (Matic) which is a cryptocurrency built on top of the Ethereum network to address ETH’s scalability problems when facing mass adoption.

The application layer, also known as Layer 3 protocols, consists of protocols which all applications run on the blockchain. The applications are known as Decentralized Application (Dapps). Layer 3 is ultimately what gives blockchain real-world applications by allowing for the implementation and execution of use-cases.

Sources (Excellent further readings for learning):

• Guide To Understanding the Layers of Blockchain - Coin telegraph

• What is a Protocol - Cloudfare

• What are Application Layer Protocols - Coinmarketcap

Hope you learned something new or interesting. Feel free to email us with questions, suggestions or criticism and I'll see you next week!

/Alexander Ekberg

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Investor Joe Portfolio Updates

For this section we encourage you to click the links in order to learn and understand the investment reasoning and how Investor Joe works.

Who is Joe? We explain everything here.

Previous positions remain unchanged. This week Joe continues his DCA strategy with 100$ split as:

• 50$ into BTC - Read why

• 45$ into ETH - Read why

• 5$ into HNT - Read an in depth why here

Quick take on Helium (HNT)

Helium has the grandiose ambition to take over the telecommunications sector with its decentralized machine network. The network is built up of hotspots or ‘gateways’ that also act as miners (they look and act similar to a simple home wifi router). Based on the coverage that your miner/hotspot has as well as the traffic on it, Helium miners are rewarded with Heliums native token HNT. A few of many use cases include for these hotspots: IoT sensors, tile-like trackers, dog tag trackers

(Map Link) This map shows a map of all miners in the world. Here’s a screenshot of Stockholm (each hexagon has >1 miner in it)

Investor Joe's Current Portfolio:

⚠️ DISCLAIMER ⚠️ This is not financial advice, and is purely for educational purposes only, always DYOR!

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/Erik Gunnarsson

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Thank you for reading this far! We hope you discovered something new or interesting. We are constantly striving to improve and would thus appreciate your feedback. If you have any comments, ideas or thoughts you would like to express to us, please send us feedback through the form at the bottom of our website.

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DISCLOSURE: SOME DIGITAL ASSETS SOCIETY MEMBERS ARE INVESTED IN CERTAIN TOKENS AND COINS WHICH MAY HAVE BEEN SPOKEN ABOUT ABOVE. THESE STATEMENTS ARE INTENDED TO DISCLOSE ANY CONFLICT OF INTEREST AND SHOULD NOT BE MISCONSTRUED AS A RECOMMENDATION TO PURCHASE ANY COIN OR TOKEN. THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU SHOULD NOT MAKE DECISIONS BASED SOLELY ON IT. THIS IS NOT INVESTMENT ADVICE.