Deep Dive: Dune Analytics & Projects Spotlights

Welcome back everybody. It’s been another exciting week in crypto and we’re pleased to bring you the next edition of The Blockchain Review. Whilst Bitcoin and the rest of the crypto market show signs of settling, the focus returns to regulators and governments on their next moves. 

It’s clear existing regulators have so far failed to either protect or prevent the majority of any users’ losses and as a nascent innovative industry focused on financial self-responsibility we’ve rarely wanted them to do so. However in the public eye there may come an inflection point where in order to reach mass adoption the perception needs to be that assets are better protected. 

We often look to the US to lead with their policies but there are of course hundreds of different jurisdictions. Many blockchain projects already choose to register offshore in places that are easier to operate, so the door will always be open to less than genuine projects that operate somewhere with lack of oversight or ability to enforce regulations. Even with strict government regulations the collapse of projects won’t necessarily be prevented. 

What is needed is more self-regulation of the industry where genuine players are better placed to know what and how to avoid disasters. This, combined with a universal effort on educating users on the different levels of risk and assessment of grades of projects they are choosing to interact with, will still allow innovation to flourish. 

The result could be something similar to what is seen in Traditional Finance but without having to necessarily report to any government. FINRA-FInancial Industry Regulatory Authority in the US and FCA-Financial Conduct Authority in the UK are examples. These are funded by membership fees and/or fines levied on members. 

The benefit for members to join is they can then say to the public they are part of these schemes and to become well established players in global finance, they need to join. The public perception is also that anything not part of them isn’t to be trusted. 

In crypto we don’t yet have any agreed benchmarks for users to base their decisions on. But we also don’t want to create a monopolistic situation where only the large players thrive. If established crypto projects begin to voluntarily gather together to form a similar self-regulatory group then it will be a good start. 

Binance is taking steps to lead with a recovery fund, but proactive self-regulation where best practices are established is also needed. However the caveat in nascent industries is fierce competition and teams wanting to remain agile. They don’t want to reveal their operations and future plans to competitors too early, nor be policed by a larger player.

So the answer may be somewhere in the middle. Bluechip projects being able and positioned to join, but startups wanting to go to market quickly and without oversight are able to still do so without hindrance on their innovative potential. Maybe a monetary benchmark could then be set, for example a certain amount of trading volume, say $100M or a certain TVL, say $20M before the rest of the members want them to apply to join and commit to the best practices.

If the whole industry can rally to educate the public on the different types of project, different levels of regulation and different levels of risk exposure before they choose to participate it will benefit everybody who is genuinely in this for the improvement of humanity and not just monetary opportunism.

We’ll always provide you with our research to help with your education. We’ll keep close track of the main developments and evolution of the niches in blockchain so that you get the best of the new knowledge. When you’ve finished reading your report then please remember to fill out the feedback form, your research is valued and we’re always open to suggestions.