Metaplex

Arbitrum

Solana

April

Foundation

<p>We&#8217;re gradually navigating through the third year of the web3 bear market, a landscape that feels paradoxically bizarre yet thrilling.</p>



<p>This oxymoronic state of being towers almost proudly at the forefront of this fiery mix of revolutionary technology, reshaped social governance models and a bigger-than-ever ease to scam money away from overly excitable young visionaries.</p>



<p>In this mix, there is a recurring issue which arises that I find particularly interesting to try and understand.&nbsp;</p>



<p>Due to the space proudly asserting that trust and transparency are implicit in its technological backbone, this is probably the last problem that an untrained eye would expect. I am referring to the recurring problems of communication, trust and transparency. </p>



<p>With a mix of archetypical class divide.</p>



<p>Let me show you what I mean.</p>



<h2 class="wp-block-heading" id="the-metaplex-mess">The Metaplex Mess</h2>



<p>Just last week, Metaplex made what they believed would be a positive announcement on their Twitter feed.</p>



<p>Heralding their work with the Solana Foundation to bring token metadata to a terminal state of immutable completion, they released the following thread:</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">1/ Over the last several months, the Metaplex Foundation and the Solana Foundation have worked together and aligned on a framework to bring Token Metadata (TM) to its terminal state of completion and immutability <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f9f5.png" alt="🧵" class="wp-smiley" style="height: 1em; max-height: 1em;" /></p>&mdash; Metaplex <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f9be.png" alt="🦾" class="wp-smiley" style="height: 1em; max-height: 1em;" /> (@metaplex) <a href="https://twitter.com/metaplex/status/1660714910148337689?ref_src=twsrc%5Etfw">May 22, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>Almost hidden in it, there was a whispered mention of network fees that would be added to actions such as minting and updating NFTs.</p>



<p>The news sparked outrage in the community, from devs who had practical concerns to community members who were fundamentally against any form of taxation in the ecosystem.</p>



<p>And yet, this move made complete sense from the Foundation&#8217;s perspective. Development requires funding, after all.&nbsp;</p>



<p>Regardless,it did not sit well with the community. </p>



<p>With angry calls for forks, dev groups threatening to flock to Ethereum and thought leaders posing logical concerns over the future problems that would arise if SOL increased in value and fee structures were stuck in immutable contracts, there was an overwhelming negative perception of this move.</p>



<p>After all, Solana&#8217;s key selling point is ultra low-cost utility NFTs and very low entry barriers. The argument is that such fees would stifle revolutionary emerging use cases. </p>



<p>Given Metaplex&#8217;s positioning as a &#8216;public good&#8217;, this move contradicts the core values cherished by its users.</p>



<p><em>“But at the same time, public goods need funding too”</em></p>



<p>The situation exposes an evident contradiction between two vital stakeholders here – the Foundation and the Community.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">well, it&#39;s become pretty difficult to predict what y&#39;all are going to be mad about<img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f602.png" alt="😂" class="wp-smiley" style="height: 1em; max-height: 1em;" />.   FWIW for the people who worked on this (of which there were many, at a variety of organizations), consensus was that these fees are low and will have little impact on ecosystem activity.</p>&mdash; Prashant Rai (@CryptoStylesP) <a href="https://twitter.com/CryptoStylesP/status/1660772723117703172?ref_src=twsrc%5Etfw">May 22, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>And this isn&#8217;t an isolated incident..</p>



<h2 class="wp-block-heading" id="a-quick-glance-at-arb">A Quick Glance at ARB</h2>



<p>Following arguably the most anticipated airdrop of the year, the newly formed Arbitrum Foundation proposed transferring 750 million ARB tokens, worth about $1 billion then, to its own wallets. </p>



<p>This was intended to be a “special grants” program to promote growth on the Arbitrum chain.</p>



<p>Almost immediately, the situation turned messy. </p>



<p>Before the vote ended, the foundation was found to have prematurely moved some tokens to its own wallets.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">The Arbitrum Team released a statement on AIP-1.<br><br>Takeaways:<br><br>• It was a ratification of something already decided. Not a proposal.<br>• Other chains have Foundations. And they control a similar amount of tokens as the $1B ARB requested<br>• They acknowledge miscommunication<br><br><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f985.png" alt="🦅" class="wp-smiley" style="height: 1em; max-height: 1em;" /><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f535.png" alt="🔵" class="wp-smiley" style="height: 1em; max-height: 1em;" /><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f9f5.png" alt="🧵" class="wp-smiley" style="height: 1em; max-height: 1em;" /> <a href="https://t.co/3yUmC9TUsi">pic.twitter.com/3yUmC9TUsi</a></p>&mdash; olimpio (@OlimpioCrypto) <a href="https://twitter.com/OlimpioCrypto/status/1642535263552393217?ref_src=twsrc%5Etfw">April 2, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>Predictably, this sparked an uproar in the fledgling DAO. </p>



<p>The foundation&#8217;s explanation that the vote was merely to &#8216;ratify an already decided move&#8217;, not a genuine proposal, only added fuel to the fire.</p>



<p>In response to the substantial backlash, the foundation released <a href="https://t.co/qZA1gkUupb">AIP 1.1</a> and <a href="https://t.co/jFOi5It8Er">1.2</a>, aiming to rebuild trust with the community, and made other commitments for transparency in future proposals, smart contract-enforced 4-year lockup periods for the foundation&#8217;s tokens, and lower token threshold to make governance more accessible.</p>



<p>Although this matter seems largely rectified, it underscores the consistent communication failure, tinged with unprofessionalism, that is far too prevalent in web3.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Has the whole drama been miscommunication ???</p>&mdash; HEADBOY <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f987.png" alt="🦇" class="wp-smiley" style="height: 1em; max-height: 1em;" /><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f50a.png" alt="🔊" class="wp-smiley" style="height: 1em; max-height: 1em;" /> (<img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f499.png" alt="💙" class="wp-smiley" style="height: 1em; max-height: 1em;" />,<img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f9e1.png" alt="🧡" class="wp-smiley" style="height: 1em; max-height: 1em;" />) <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f6f8.png" alt="🛸" class="wp-smiley" style="height: 1em; max-height: 1em;" /> (@NDIDI_GRAM) <a href="https://twitter.com/NDIDI_GRAM/status/1642567750202654722?ref_src=twsrc%5Etfw">April 2, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>Promises of complete decentralization are undermined when a foundation disregards a community vote. </p>



<p>Leadership teams often underestimate community reactions, and idealistic pledges of decentralization, trust, and &#8216;power to the people&#8217; are marred by human flaws and misunderstanding.</p>



<h2 class="wp-block-heading" id="the-ledger-letdown">The Ledger Letdown</h2>



<p>On May 16th, Ledger announced a new feature called ‘Ledger Recovery’. For a monthly fee of $9.99, a user could retrieve their keys through the provider.</p>



<p>What was presented as a great beginner-friendly service used to improve user experience instead was perceived as a slap to the face from the community. There are a few reasons why:</p>



<p>Firstly, Ledger has a history of leaks- such as in 2020 where they <a href="https://cointelegraph.com/news/doxxed-ledger-users-in-danger-of-physical-harm">accidentally doxed their user base to the public.</a></p>



<p>Secondly, the announcement coincided with the European Union introducing a law mandating identification for all crypto transactions. </p>



<p>This timing led the community to suspect a premeditated, overly centralized move.</p>



<p>The CEO himself<a href="https://www.youtube.com/watch?v=zCEmBJtFPdE"> admitted on a podcast</a> that a government could theoretically subpoena them and gain access to your information</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Ledger is adding a feature called “ledger recover” which will backup your secret recovery phrase.. essentially creating a backdoor<br><br>same day the EU passes a law requiring identification for all crypto transactions<br><br>You need to kyc with your ID to use ledger recover <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f914.png" alt="🤔" class="wp-smiley" style="height: 1em; max-height: 1em;" /> planned?</p>&mdash; borovik.eth (@3orovik) <a href="https://twitter.com/3orovik/status/1658516119416602634?ref_src=twsrc%5Etfw">May 16, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>Ultimately, and perhaps most significantly, this move was in stark contrast to the community ethos. </p>



<p>Hardware wallets are typically used by those seeking complete control of their funds. The suggestion that Ledger, or any third party, might have backdoor access to seed phrases was outrageous, leading to a sense of betrayal.</p>



<p>Personally, I don&#8217;t believe the issue lies with the move itself, but rather its execution and the poor communication that surrounded it.</p>



<p>The service should have been provided for new devices only, not the existing ones &#8211; this would allow a genuine opt-in, opt-out choice.</p>



<p>More critically, the team should have been transparent with their communication about this update throughout its development, not after its launch. </p>



<p>The way it was unveiled simply underscored the feature&#8217;s contradiction with the fundamental value of cold wallets, causing significant frustration among their user base.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">I spent too much of my day talking about Ledger. Most of it was alarm at their firmware update and how the team refused to acknowledge this increases the attack surface area.<br><br>However I don&#39;t think all is lost for <a href="https://twitter.com/Ledger?ref_src=twsrc%5Etfw">@Ledger</a> &#8211; here&#39;s 5 things they can do to regain my trust.<br><br><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f9f5.png" alt="🧵" class="wp-smiley" style="height: 1em; max-height: 1em;" /></p>&mdash; Vanessa Harris (@technologypoet) <a href="https://twitter.com/technologypoet/status/1658589660069634048?ref_src=twsrc%5Etfw">May 16, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>Although Ledger has wisely retracted this feature for now and responded adequately to the backlash, this incident continues to underscore the industry-wide problem of communication, this chasm between organizations and their communities.</p>



<h2 class="wp-block-heading" id="the-overarching-problem">The Overarching Problem</h2>



<p>The overarching issue reveals itself to be quite straightforward: </p>



<p><strong><em>web3 has a messaging problem, a deep-rooted one. </em></strong></p>



<p>It isn’t isolated to a single organization but manifests itself as an industry-wide phenomenon, rooted in a disconnect between the different user archetypes that make up the space.</p>



<p>From Metaplex&#8217;s opaque changes to Ledger&#8217;s missteps, the web3 world currently seems to be struggling to keep its promise of transparency and trust.</p>



<p>There is a lack of effective communication with communities around products. Even more notably, leaders oftentimes feel disconnected to their community. </p>



<p>In both the metaplex and ledger situations, the reactions of the community should have been very predictable, and the lack of such was caused by a lack of understanding of their customers. </p>



<p>With values such as transparency, trust and community-lead inclusivity being core and necessary motivators for many in the space, it hurts even further when communities feel like they aren’t involved in the manifestation of big decisions. </p>



<p>It feels like announcements are made after, rather than before and during, big developments are unleashed, developments alter both the user experience and the overall perception of a brand and its services..</p>



<p>In all three cases, this is a stand-out and paramount mistake.The absence of dialogue was a failure to utilize the valuable insights the community might offer, leading to these avoidable PR nightmares.</p>



<p>The web3 world brings out the worst, but also the best of human nature. It will be interesting to see how such problems are tackled in the future. </p>



<p>Whether it is more diverse teams, better marketing or simply evolved communication standards between teams and their communities, the space has the potential to be the pinnacle of human cooperation and discourse.</p>



<p>We, the visionaries, must master the art of harnessing this potential, transmuting it into decisive, unwavering action.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">The most important thing I have learned in the Web3 and NFT spaces is:<br><br>&quot;Community is all.&quot;<br><br>Don’t fade, community. <a href="https://t.co/zkPvtr84Fu">pic.twitter.com/zkPvtr84Fu</a></p>&mdash; Kouk.eth <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f587.png" alt="🖇" class="wp-smiley" style="height: 1em; max-height: 1em;" /> (@kouk_web3) <a href="https://twitter.com/kouk_web3/status/1660039628903141378?ref_src=twsrc%5Etfw">May 20, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p><strong>Also Read: <a href="https://chaindebrief.com/we-are-in-a-crypto-liquidity-crisis-but-the-reason-is-not-what-you-think/">We Are in A Crypto Liquidity Crisis – But The Reason is Not What You Think</a></strong></p>



<p>[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]</p>



<p>Featured Image Credit: Chain Debrief</p>



<p>This article was written by Harry Vellios and edited by Yusoff Kim</p>

Web3 Has a Messaging Problem, and it Matters more than you think

Table of Contents

Chain Debrief

Other articles published on Jun 17, 2023

Crypto Analyst Warns of Impending Altcoin Crash

American Express-Backed Crypto Platform Slammed With Fraud Charges by Texas Regulator

Nike Teases Airphoria NFT Collab With Fortnite and Unreal Engine

Nike teases upcoming ‘Airphoria’ NFT sneaker hunt on Fortnite

Introduction of Soroosh Smart Ecosystem’s products and mobile applications

Massive Shido week is coming!

Join our free newsletter for daily crypto updates!