6 ms·

Postmortem: Co-founding a Web3 startup as a crypto skeptic young dev

70 points by AnicetN 3y ago

unwind 3y ago
Meta: typo in title, s/sckeptic/sceptic/ I guess. Thanks.
- AnicetN 3y ago
  Thanks ;)
- thaumasiotes 3y ago
  https://kol.coldfront.net/thekolwiki/index.php/Boock_of_darck_magicks https://kol.coldfront.net/thekolwiki/index.php/Boock_of_darc...
  - AnicetN 3y ago
    That's hilarious, tancks
  - asciimike 3y ago
    Man, I haven't played KoL in forever, thanks for the reference and reminder about a truly hilarious and amazing game.
JohnMakin 3y ago
> Basically we were planning to only make money on fees, which already seemed too much for us considering we'd rather have low fees and more user satisfaction. But what investors in the crypto world wanted was not only fees, but actually even more than that. They wanted us to create our own crypto (on top of the NEAR blockchain) and basically manage it like our own mini financial asset (of course not declared as such because that would be in a grey legal area). With staking, giveaways, and other mechanisms to create more and more of it, or to pump its value over time. I, for one, am shocked.
- yieldcrv 3y ago
  There is some merit to that Think about it: you have no-coiners running around like “why does that need a token!? there is no use case for anything, I looked at the top 100 things on Coinmarketcap…” Not noticing that they only found things with tokens because it advertised to them effectively, completely missing the products that do not have a token attached Splitting the protocol fees with a subset of token holders who choose to stake is an ok human coordination mechanism, even gets no-coiners to look and swayed too late by a grifting youtuber at the top of the next bull market
  - pavlov 3y ago
    > “Splitting the protocol fees with a subset of token holders who choose to stake” The problem is that this is the very definition of a security, and you will run afoul of powerful regulators in some important countries if you’re offering unregistered securities over the internet to all comers.
    - yieldcrv 3y ago
      right, the only reason people do it this way is that they only care if the token is a security, not whether some application only accessible by the token is nobody cares if some random unpausable smart contract that happens to use the token is creating securities transactions the only people getting targeted by those powerful regulators are the centralized custodians that resell access to those smart contracts. so the Coinbases and Binances and Geminis, not the AAVE’s and ETH2 contract deployers for example Its not even supposed to be a workaround, its just the consequences are completely fine. “hey your token is fine and can be traded everywhere, but the primary staking smart contract that happens to be linked to platform fees for the project of the same name is an unregistered securities vending machine! we’re sanctioning it and it will keep operating autonomously regardless! no, it has nothing to do with the token of the same name, why do you keep asking that” prior token project evolutions would extend dividends to all token holders, which would introduce liability to the status of the token certainly. exchanges wouldnt even list those tokens because there would be nothing to argue to securities regulators. now its rapidly iterated to something more inconsequential and ambiguous, or just inconsequential
traceddd 3y ago
Poor idea to found a startup in a field you don’t believe in. Waste of time from the start.
- AnicetN 3y ago
  Lesson learned
- srejk 3y ago
  Roll-friggin-eyes Scotsman. You think everyone that founds a startup for, say, B2B data integration Really Believes In It? Or just that there's money to be made?
  - KaoruAoiShiho 3y ago
    Usually you believe you can make money if you deliver value to the customer. In crypto people don't believe they deliver value, they scam or prey on fomo.
    - fsckboy 3y ago
      no true Scotsman delivers value to a customer! one of the problems with crypto as currency is that currency is not supposed to deliver value beyond medium of exchange and store of value at least long enough to do that.
  - bee_rider 3y ago
    What does it mean to Really Believe in B2B data integration?
    - intelVISA 3y ago
      my $green_line went up after tricking $big_corp into buying my SaaS
  - intelVISA 3y ago
    You should be passionate about delivering a viable competitor in that problem space, or why bother?
latenightcoding 3y ago
title could be: "nerd tunnel vision" lead me to work in a Ponzi scheme. Many many years ago Ethereum /smart contract hackathons way were more innocent, at least most participants acknowledged they were working on something useless but fun. A Ponzi scheme still a Ponzi scheme even if it's using Rust.
- _gmax0 3y ago
  Give the author a break, he/she is 21.
  - latenightcoding 3y ago
    I am giving them an out.
- jgilias 3y ago
  Not every bad person is a Nazi and not every scam is a Ponzi scheme. Most crypto scams are the equivalent of an old school pump and dump on a penny stock. That’s not a Ponzi scheme.
  - pavlov 3y ago
    It’s not so entirely different though. Early investors in a pump and dump can make a tidy profit, just like early investors in a Ponzi. The main difference is the lifecycle: the dump is fairly quick and sudden, as the name implies, while the Ponzi can keep digging a hole for decades if it can reach a sufficiently large or wealthy base of fresh investors.
  - xk_id 3y ago
    Wow I’m surprised someone else noticed the parallel between the overuse of these two terms. I feel their meaning became very diluted because of it. They’re good examples of semantic satiation [0]. [0] https://en.wikipedia.org/wiki/Semantic_satiation https://en.wikipedia.org/wiki/Semantic_satiation
arciini 3y ago
I think this is actually a pretty balanced and rational take on crypto. There's a lot to be jaded by in the industry, and I'm glad he got a lot out of the experience (attending the conference, meeting people, including other skeptics) despite not continuing on the startup. I think at the start of our careers, it's generally a good instinct to just try things and see if they're for you. > By the way, we didn't plan doing that at the end, after thinking about it a lot, but it meant we would need to gain many users by having a killer product and work for free for very long, like a regular startup I'd say. Real web3 startups are just like normal startups if you take out the token economics. There do exist use-cases and users, but I'm glad the author had a strong enough sense to do what he felt was right. It's definitely easier now that the bandwagon has mostly stopped, but I think his reaction is a good one to maintain throughout our careers.
- dumbfounder 3y ago
  I am a web3 startup founder, and we had to push back a lot on investors in the early days around the pressure to release a token. We raised money on a SAFE with warrants for a token should we decide to issue one. I think many others weren't experienced enough to know they could (and should) push back on investors for things they believe in. All that said, we still think issuing a token could be the right move for us, but we won't do it until we understand exactly what we are getting into, and believe that it is the right thing for the protocol we are building. Anything less is just a get-rich-quick scheme. Founders should focus way more on the value they want to create and not the way they create a return for investors. But it's doubly tough in this industry to do so with so many waving money in your face that only really care about the fact that crypto gives you an incredibly short path to liquidity.
vcryan 3y ago
Maybe the outcome would have been different had he founded a Web4 or Web5 company. Lacks vision.
- njovin 3y ago
  This is completely myopic. I'm already working on a project that's third wave post Web.
  - EGreg 3y ago
    You’re the man behind WebInfinity??
  - thatguymike 3y ago
    A neighborhood bakery?
- shapefrog 3y ago
  Weak grindset.
xupybd 3y ago
I worry that the author isn't seeing the possible impact they can have by doing work that is driven by making money. Yes, the work itself might not lead to the changes in society they want but climbing that ladder can give them the money, power and influence to really make an impact. Money is only a means to an end. That said the amount of dishonest scammy behavior around the crypto world is terrible. You don't want to be part of that. You still have to make an honest living to make the world a better place.
- michaelt 3y ago
  > climbing that ladder can give them the money, power and influence to really make an impact. Have you tried converting money into power and influence lately? The exchange rate is terrible. The bay area has hundreds of thousands of STEM millionaires. Does the politics look like they're having a lot of impact? Admittedly, engineers might not have any particular advantage when dealing with issues like drug addiction - but you'd expect things like water infrastructure, new homes and construction of high speed rail would be well in hand.
  - xupybd 3y ago
    > The bay area has hundreds of thousands of STEM millionaires. Does the politics look like they're having a lot of impact? No, I suspect most of these millionaires are not doing much to help their communities. This is my point, there are few people with power and influence that are working for good. It would be great if more people established themselves and then started working to better the world. Unfortunately it's like politics. The people you want in power don't want the power. The people you want to have money and influence tend to avoid it.
- kaoD 3y ago
  The chances of making enough money to be able to make an impact are much slimmer than actually making a direct impact even if it means a less lucrative career path.
troupo 3y ago
It's good that the person is young and rather clear-headed. Here's what the actual sceptic would immediately see and say "nah": Goal: "hackathon during which we had to develop an innovative app or web app using NEAR's blockchain" Result: "During the hackathon we made a decentralized exchange (DeX or "swap" in web3 jargon) named "Far Far Away Swap". This app's goal was to let our users exchange coins hosted on the NEAR blockchain using an automated market maker (AMM) algorithm" Yup. Yet another currency speculation exchange. As a more jaded person, I would stop there. However, I see it as a good learning experience for the author, and I wish them the best of luck on their path. ---- This also made me chuckle: "I met many skeptics there. Often they were on the older side of the attendees (most of them were looking like 40 years old)". Yup :)
al2o3cr 3y ago
Why did your team choose to use the same name as a different DEX that seems to have gone silent back in 2021?
riffic 3y ago
As an aside, wtf kind of date convention or formatting is 8/01/2023 and is it really August already? Is there some sort of an issue preventing people from wrapping their minds around ISO 8601? https://xkcd.com/1179/ https://xkcd.com/1179/
- mvdtnz 3y ago
  It's the normal format for the majority of the world.
  - riffic 3y ago
    Yo, what can be more normal than a deliberately designed and unambiguous international standard? Since we're "hackers" here we can also look at the relevant RFC (and please read the initials as "request for compliance"): https://datatracker.ietf.org/doc/html/rfc3339 https://datatracker.ietf.org/doc/html/rfc3339
- thatguymike 3y ago
  YYYYMMDD makes the most sense, but DDMMYYYY is second best because it arranges the parts in a logical order, least to most significant. The only nonsensical ordering is MMDDYYYY.
  - shapefrog 3y ago
    > MMDDYYYY People who use this notation (and its derivatives) are committing crimes against humanity.

70 points by AnicetN 3y ago

unwind 3y ago

Meta: typo in title, s/sckeptic/sceptic/ I guess. Thanks.

AnicetN 3y ago
Thanks ;)
thaumasiotes 3y ago
https://kol.coldfront.net/thekolwiki/index.php/Boock_of_darck_magicks https://kol.coldfront.net/thekolwiki/index.php/Boock_of_darc...
- AnicetN 3y ago
  That's hilarious, tancks
- asciimike 3y ago
  Man, I haven't played KoL in forever, thanks for the reference and reminder about a truly hilarious and amazing game.

JohnMakin 3y ago

> Basically we were planning to only make money on fees, which already seemed too much for us considering we'd rather have low fees and more user satisfaction. But what investors in the crypto world wanted was not only fees, but actually even more than that. They wanted us to create our own crypto (on top of the NEAR blockchain) and basically manage it like our own mini financial asset (of course not declared as such because that would be in a grey legal area). With staking, giveaways, and other mechanisms to create more and more of it, or to pump its value over time. I, for one, am shocked.

yieldcrv 3y ago
There is some merit to that Think about it: you have no-coiners running around like “why does that need a token!? there is no use case for anything, I looked at the top 100 things on Coinmarketcap…” Not noticing that they only found things with tokens because it advertised to them effectively, completely missing the products that do not have a token attached Splitting the protocol fees with a subset of token holders who choose to stake is an ok human coordination mechanism, even gets no-coiners to look and swayed too late by a grifting youtuber at the top of the next bull market
- pavlov 3y ago
  > “Splitting the protocol fees with a subset of token holders who choose to stake” The problem is that this is the very definition of a security, and you will run afoul of powerful regulators in some important countries if you’re offering unregistered securities over the internet to all comers.
  - yieldcrv 3y ago
    right, the only reason people do it this way is that they only care if the token is a security, not whether some application only accessible by the token is nobody cares if some random unpausable smart contract that happens to use the token is creating securities transactions the only people getting targeted by those powerful regulators are the centralized custodians that resell access to those smart contracts. so the Coinbases and Binances and Geminis, not the AAVE’s and ETH2 contract deployers for example Its not even supposed to be a workaround, its just the consequences are completely fine. “hey your token is fine and can be traded everywhere, but the primary staking smart contract that happens to be linked to platform fees for the project of the same name is an unregistered securities vending machine! we’re sanctioning it and it will keep operating autonomously regardless! no, it has nothing to do with the token of the same name, why do you keep asking that” prior token project evolutions would extend dividends to all token holders, which would introduce liability to the status of the token certainly. exchanges wouldnt even list those tokens because there would be nothing to argue to securities regulators. now its rapidly iterated to something more inconsequential and ambiguous, or just inconsequential

traceddd 3y ago

Poor idea to found a startup in a field you don’t believe in. Waste of time from the start.

AnicetN 3y ago
Lesson learned
srejk 3y ago
Roll-friggin-eyes Scotsman. You think everyone that founds a startup for, say, B2B data integration Really Believes In It? Or just that there's money to be made?
- KaoruAoiShiho 3y ago
  Usually you believe you can make money if you deliver value to the customer. In crypto people don't believe they deliver value, they scam or prey on fomo.
  - fsckboy 3y ago
    no true Scotsman delivers value to a customer! one of the problems with crypto as currency is that currency is not supposed to deliver value beyond medium of exchange and store of value at least long enough to do that.
- bee_rider 3y ago
  What does it mean to Really Believe in B2B data integration?
  - intelVISA 3y ago
    my $green_line went up after tricking $big_corp into buying my SaaS
- intelVISA 3y ago
  You should be passionate about delivering a viable competitor in that problem space, or why bother?

latenightcoding 3y ago

title could be: "nerd tunnel vision" lead me to work in a Ponzi scheme. Many many years ago Ethereum /smart contract hackathons way were more innocent, at least most participants acknowledged they were working on something useless but fun. A Ponzi scheme still a Ponzi scheme even if it's using Rust.

_gmax0 3y ago
Give the author a break, he/she is 21.
- latenightcoding 3y ago
  I am giving them an out.
jgilias 3y ago
Not every bad person is a Nazi and not every scam is a Ponzi scheme. Most crypto scams are the equivalent of an old school pump and dump on a penny stock. That’s not a Ponzi scheme.
- pavlov 3y ago
  It’s not so entirely different though. Early investors in a pump and dump can make a tidy profit, just like early investors in a Ponzi. The main difference is the lifecycle: the dump is fairly quick and sudden, as the name implies, while the Ponzi can keep digging a hole for decades if it can reach a sufficiently large or wealthy base of fresh investors.
- xk_id 3y ago
  Wow I’m surprised someone else noticed the parallel between the overuse of these two terms. I feel their meaning became very diluted because of it. They’re good examples of semantic satiation [0]. [0] https://en.wikipedia.org/wiki/Semantic_satiation https://en.wikipedia.org/wiki/Semantic_satiation

arciini 3y ago

I think this is actually a pretty balanced and rational take on crypto. There's a lot to be jaded by in the industry, and I'm glad he got a lot out of the experience (attending the conference, meeting people, including other skeptics) despite not continuing on the startup. I think at the start of our careers, it's generally a good instinct to just try things and see if they're for you. > By the way, we didn't plan doing that at the end, after thinking about it a lot, but it meant we would need to gain many users by having a killer product and work for free for very long, like a regular startup I'd say. Real web3 startups are just like normal startups if you take out the token economics. There do exist use-cases and users, but I'm glad the author had a strong enough sense to do what he felt was right. It's definitely easier now that the bandwagon has mostly stopped, but I think his reaction is a good one to maintain throughout our careers.

dumbfounder 3y ago
I am a web3 startup founder, and we had to push back a lot on investors in the early days around the pressure to release a token. We raised money on a SAFE with warrants for a token should we decide to issue one. I think many others weren't experienced enough to know they could (and should) push back on investors for things they believe in. All that said, we still think issuing a token could be the right move for us, but we won't do it until we understand exactly what we are getting into, and believe that it is the right thing for the protocol we are building. Anything less is just a get-rich-quick scheme. Founders should focus way more on the value they want to create and not the way they create a return for investors. But it's doubly tough in this industry to do so with so many waving money in your face that only really care about the fact that crypto gives you an incredibly short path to liquidity.

vcryan 3y ago

Maybe the outcome would have been different had he founded a Web4 or Web5 company. Lacks vision.

njovin 3y ago
This is completely myopic. I'm already working on a project that's third wave post Web.
- EGreg 3y ago
  You’re the man behind WebInfinity??
- thatguymike 3y ago
  A neighborhood bakery?
shapefrog 3y ago
Weak grindset.

xupybd 3y ago

I worry that the author isn't seeing the possible impact they can have by doing work that is driven by making money. Yes, the work itself might not lead to the changes in society they want but climbing that ladder can give them the money, power and influence to really make an impact. Money is only a means to an end. That said the amount of dishonest scammy behavior around the crypto world is terrible. You don't want to be part of that. You still have to make an honest living to make the world a better place.

michaelt 3y ago
> climbing that ladder can give them the money, power and influence to really make an impact. Have you tried converting money into power and influence lately? The exchange rate is terrible. The bay area has hundreds of thousands of STEM millionaires. Does the politics look like they're having a lot of impact? Admittedly, engineers might not have any particular advantage when dealing with issues like drug addiction - but you'd expect things like water infrastructure, new homes and construction of high speed rail would be well in hand.
- xupybd 3y ago
  > The bay area has hundreds of thousands of STEM millionaires. Does the politics look like they're having a lot of impact? No, I suspect most of these millionaires are not doing much to help their communities. This is my point, there are few people with power and influence that are working for good. It would be great if more people established themselves and then started working to better the world. Unfortunately it's like politics. The people you want in power don't want the power. The people you want to have money and influence tend to avoid it.
kaoD 3y ago
The chances of making enough money to be able to make an impact are much slimmer than actually making a direct impact even if it means a less lucrative career path.

troupo 3y ago

It's good that the person is young and rather clear-headed. Here's what the actual sceptic would immediately see and say "nah": Goal: "hackathon during which we had to develop an innovative app or web app using NEAR's blockchain" Result: "During the hackathon we made a decentralized exchange (DeX or "swap" in web3 jargon) named "Far Far Away Swap". This app's goal was to let our users exchange coins hosted on the NEAR blockchain using an automated market maker (AMM) algorithm" Yup. Yet another currency speculation exchange. As a more jaded person, I would stop there. However, I see it as a good learning experience for the author, and I wish them the best of luck on their path. ---- This also made me chuckle: "I met many skeptics there. Often they were on the older side of the attendees (most of them were looking like 40 years old)". Yup :)

al2o3cr 3y ago

Why did your team choose to use the same name as a different DEX that seems to have gone silent back in 2021?

riffic 3y ago

As an aside, wtf kind of date convention or formatting is 8/01/2023 and is it really August already? Is there some sort of an issue preventing people from wrapping their minds around ISO 8601? https://xkcd.com/1179/ https://xkcd.com/1179/

mvdtnz 3y ago
It's the normal format for the majority of the world.
- riffic 3y ago
  Yo, what can be more normal than a deliberately designed and unambiguous international standard? Since we're "hackers" here we can also look at the relevant RFC (and please read the initials as "request for compliance"): https://datatracker.ietf.org/doc/html/rfc3339 https://datatracker.ietf.org/doc/html/rfc3339
thatguymike 3y ago
YYYYMMDD makes the most sense, but DDMMYYYY is second best because it arranges the parts in a logical order, least to most significant. The only nonsensical ordering is MMDDYYYY.
- shapefrog 3y ago
  > MMDDYYYY People who use this notation (and its derivatives) are committing crimes against humanity.