Daily Trade Ideas & Trends
4 May 2020
Doc's Daily Commentary
4/29 ReadySetLive with Doc and Mav
Mind Of Mav
The Emergence Of New Economies
We all know that a smooth sea never made a skilled sailor.
This is not the first time we have seen a global crisis and will definitely not be the last. While the first two quarters of 2020 may have felt like a massive reset, many seasoned CEOs are doubling down on their R&D and tech investments as our global economy slumps into what is already being referred to as the mother of all financial crises.
History has taught us that recessions have a peculiar way of giving birth to innovation.
We’ll need to embrace that in the months and years to come.
Harvard economist Kenneth S. Rogoff warned that this is shaping up as “the deepest dive on record for the global economy for over 100 years”. The IMF is making comparisons to the 1930’s Great Depression and the UN chief calls the Covid-19 pandemic the worst crisis since the Second World War.
It is undeniable that our systems — political, economic, and social — were already in a vulnerable position. This disruption has exposed our weak spots and highlighted the need to redesign many of our existing systems: healthcare resilience, misinformation, digital bureaucracy, and augmented experiences, just to mention a few.
Furthermore, the nature of work and workplace is changing.
Businesses born today will be the success stories our future generations will study the same way we study innovation from past recessions.
This space is opportunities galore.
As an unwavering optimist, I see a huge testing ground as nearly half the world’s population is in quarantine, isolated from the physical world, exploring new ways to connect, communicate, express and create. While some behavior is frozen, new consumption habits are being formed. New business models are emerging and along with them, entire economies.
To that end, let’s explore some different economies with fundamentally new ways of doing business.
The Digital Economy
And just like that, things went online.
Schools, labor unions and public institutions, offline services that were once considered impossible to digitize and corporates that had been contemplating their online presence for years and years — things changed overnight.
Transforming traditional businesses into digital form isn’t just about the operations themselves. It opens up an entirely new territory where market domination is sourced by the crowd and governed by algorithms. From staff-on-demand to crowdfunding and leveraged assets to the sharing economy, we’ve seen this trend recently being embraced by yoga instructors to flower retailers and design coaches to gourmet chefs.
Once the genie is out of the bottle, it’s hard to lock the new digitized habits back in. By 2022, more than 60% of our global GDP will be digitized and 70% of all new economic value over the next decade will be based on digital platforms. Data innovation, evidence-based information, and governance, as well as self-sovereign identities, are all areas that deserve further exploration.
The Multiverse Economy
Our world is no longer tied to our physical identity. We live in multiple worlds simultaneously and juggle a number of personas in parallel. From work to social and family to entertainment, there are 3 billion social media users worldwide (yes, the same amount as under Covid-19 lock-down currently) with each of us walking around with an average of 7 social media accounts.
With virtual and augmented reality maturing, the extended reality (XR) is expanding from gaming to medical simulations and industrial design to esports joining the 2024 Olympics. Spaces that enable ‘virtual living’ (Second Life, Animal Crossing, etc.) shape social behavior as well as new consumption patterns inside the digital realm.
As an industry that is expected to see worldwide spending of nearly US$19 billion this year, AR/VR is forecasted to achieve a five-year annual growth rate of 77% by 2023. With this, each new industry, function, persona, and demand opens up countless opportunities for businesses that understand the multilayered nature of such an economy.
The Smart Economy
Smart cities, smart energy, smart production, and of course, Smart Companies. What all of these have in common is their ability to self-execute given tasks and workflows without any human input. Whereas smart contracts can self-govern and self-enforce a set of actions without third parties, AI and machine learning have the ability to monitor, optimize, and use cognitive/predictive analysis to go beyond historic data.
Computer scientist Andrew Ng compares adding AI to electricity:
“Just as electricity transformed almost everything in the 19th century, adding ‘smartness’ to existing products and services will transform today’s industries in the next several years.”
Being in the space we are today, it’s indeed hard to argue against this.
One of the more serious hits during this pandemic and border restrictions has been taken by our global supply chains. With 94% of Fortune 1000 companies experiencing disruptions on their supply chains due to Covid-19, this serves as a reminder of our interdependency, and vulnerability, in our globalized economy. While quarantines have slowed down the growth of coronavirus, market disruptions from agriculture to manufacturing have shocked our economies, leading to a humanitarian and societal emergency.
Frankly, I don’t see a world where there is enough cash flow to rehire everyone again and presume everything is ok, and that is what the market is trying to price in right now and I just think it is wrong. We need to figure out how many jobs are really lost – that’s the kind of understanding that’s going to help us to identify and adapt moving forward.
In times of crisis, resource distribution is rarely spread even. While many industries such as aviation and hospitality are completely frozen, others are experiencing such a surge in demand they’re struggling to meet the needs. Adding a smart layer on our existing infrastructure and workflows could ease unexpected disruptions in many ways. Continuous cycles of risk monitoring and sensing through AI/ML will build greater responsiveness and resilience into supply chains. End-to-end visibility along with traceability and trackability are additional value-adds along with real-time pricing, optimized inventories, and predictive distribution.
The Circular Economy
Challenging our current make-use-dispose linear economy is the circular economy. Mimicking biological ecosystems where waste doesn’t exist, all resources used are designed out of operations through reducing, reusing, recycling, and finally repurposing into new life. This is also known as the closed-loop economy, used by NASA astronauts in space stations as well as scientists studying future life on Mars.
In circularity, traditional ownership models will disappear as businesses will shift into new ways of creating value: from co-sharing to leasing and collecting to regenerating.
The Decentralized Economy
By 2022 the number of operational industrial robots worldwide is expected to surpass the population of Berlin. Nowadays in our factories, flexible robots work hand in hand with people and machine learning is helping them to become even more versatile.
Now, let’s extend that timeline out.
Imagine a world where businesses could operate 24h a day doing whatever their pre-programmed rules have determined — with no employees, no bosses, and no owners. A modern economy where each and every touchpoint of an item or workflow is recorded on a peer-to-peer ledger, removing the need for third parties or more fundamentally, trust.
Enabled by blockchain and automation, technological decentralization inevitably leads to a flatter society where tokens set the basis for a new kind of system: contribution economy.
In a complex world, this represents a more emergent strategy where collective decision making is based on testing numerous possibilities, even contradictory ones, and then adapting these into action towards shared goals.
This may sound like a utopian daydream, but a decentralized economy, in many ways, already exists today. For instance, the way open source developers community contributes, builds, and recognizes one another is very different compared to a centralized system, where it is up to the leader to decide the direction and therefore shoulder its consequences. Similar to the science community, quality is determined by the collective values (robustness, confidence, validity, replicability, etc.), not by a top-down hierarchy.
The Rise of Decentralized Autonomous Organizations (DAO)
It’s hard to talk about decentralization without touching DAOs. This is a type of organization that governs itself by code. Its rules and protocols are maintained on the blockchain. Because it can issue tokens, it can create a variety of incentive models from external funding to motivating its community to plant trees or spot transaction inefficiencies. This is DAO in theory.
In reality, DAOs have no legal personality. Not yet. Meaning, they are not legally recognized as compliant entities to do business today. I expect that to change soon as automation expands.
The Collaboration Economy
During the lockdown, we’ve seen creative collaboration shine from collective singing on balconies to viral initiatives such as #TogetherAtHome, and artists from Steve Aoki to John Legend have come together to lift up the spirit. In many ways, the distance between you sitting at home and your favorite musician performing in their own home suddenly disappears.
Singer-songwriter Jordan Rakei would live stream how he makes music from the scratch and call for collaboration with anyone willing to work on the tune. The New York Philharmonic would play an entire symphony online, entrepreneurs would offer their time to listen to pitches and award-winning actress Laura Benanti would invite performers whose concerts had been canceled to send their shows directly to her. Museums, street artists, photographers, and writers all weighed in collaborating with their own craft.
You get the point.
As the world is in crisis, the collaboration economy has just gained new meaning. In the vacuum of global leadership, people rely on each other to meet their needs from face masks to entertainment. Sharing, swapping, trading, and co-creating, everything is coordinated between networks.
This begs to ask what if we had a better system of rewarding one another?
The Tokenized Economy:
So, this leads me to the tokenized economy: a model where individuals can share their craft directly with their communities. Tokenizing assets is one thing but this would be tokenizing yourself, your talent, your concepts, anything value-based. Imagine a model where the previously mentioned New York Philharmonic would allow you to ‘own’ a slice of the symphony. Your contribution to them could be a small amount of money, or perhaps just attention (as the browser I’m using to write this already does). And your reward would manifest as your support, the music itself, or its future earning potential.
Regardless of what happens next, 2020 will be remembered as a turning point in the mass adoption of technology. From AI to automation and blockchain to virtual reality. While none of these technologies are necessarily new, locking down nearly 40% of our world population certainly accelerates the growth trajectories they were already on.
Technological advancement has never happened this fast before, and it will never be this slow again.
Almost every company and citizen are now given the opportunity to change, adapt, and create a virtual presence — and thrive in it. The growing importance of resilient systems, the ability to verify ‘truth’ from misinformation, and local self-sufficiency, as well as intergovernmental collaboration, have unquestionably left their mark on our global economy.
If this is not the time to rethink the way we live, work, and create, it never will be.
Our past has shown us that some of the greatest inventions emerge from times like these. And as we’re facing unprecedented challenges ahead with no ability to even calculate risk, this is the era for the agile, curious and open-minded.
Finally, if there’s something we’ve learned about change during this pandemic, it might just be that even with the hardest resistance, when the circumstances are urgent enough, people adapt. Even faster than we thought.
And I truly hope that it’s changing for the better — a future we all want to see.
What is the goal of this portfolio?
The “Three Token Pillars” portfolio is democratically proportioned between the Three Pillars of the Token Economy & Interchain:
CryptoCurrency – Security Tokens (STO) – Decentralized Finance (DeFi)
With this portfolio, we will identify and take advantage of the opportunities within the Three Pillars of ReadySetCrypto. We aim to capitalize on the collective knowledge and experience of the RSC community & build model portfolios containing the premier companies and projects in the industry and manage risk allocation suitable for as many people as possible.
The Second Phase of the RSC Community Portfolio V3 was to give us a general idea of the weightings people desire in each of the three pillars and also member’s risk tolerance. The Third Phase of the RSC Community Portfolio V3 has us closing in on a finalized portfolio allocation before we consolidated onto the highest quality projects.
Our Current Allocation As Of Phase Three:
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What is the goal of this portfolio?
Current Top 10 Rankings:
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