Bored Apes, nazis & copyright...
GM, we take the latest Web3 news and translate it into plain old English - so you can stay up to date, without your eyes glazing over.
In today’s edition:
Bored Apes, nazis, copyright law and conceptual art
Things are about to get weird (the universe, fractals and Web3)
RESOURCE: Why Celsius Fell Apart (in 25:30)
How criminals wash their stolen crypto
Terms used (click for translation):
NFTs, Web3, Blockchain.
Bored Apes, nazis, copyright law and conceptual art
Who wants to talk about copyright law?
No one?
...what if we told you the story involved allegations of nazi-sympathizing from the worlds most popular NFT collection?
And that accusation popularized a copycat NFT collection, allegedly aimed at devaluing the original?
Yeah, things are getting wild in the NFT world.
The popular NFT project in question is Bored Ape Yacht Club (BAYC) and their adversary is a conceptual artist, known as Ryder Ripps.
Here's a timeline of what's happened up till now:
Back in February, Ryder Ripps, accused Yuga Labs (creators of BAYC) of using imagery that has “Nazi ties.”
...nothing really happened.
On May 13th, Ryder Ripps launched a one-for-one copy of the BAYC NFT collection, called 'RR/BAYC,' in what he considered to be a work of satire.
Ryder's copy/satire collection picked up a bit of steam, selling ~$3.5 million dollars worth of NFTs, before being taken down.
Five days ago, Yuga Labs' co-founder, Gordon Goner, responded to the accusations in a blog post and stressed that the allegations are “insanely far-fetched.”
Now Yuga Labs are taking Ryder to court for copyright infringement.
'Ok, ok. But what's the deal with the allegations. How grounded are they?'
(We hear you)
And that's where everything gets a little grey.
It all requires an obscure understanding of symbolism, iconography and ciphers - to the point that it feels like neither side can be truly proven or disproven.
If we had to summarize the two sides of the argument, it might look like this:
BAYC: These accusations are SUCH A STRETCH, why would anyone believe this?
Ripps: Yeah, they're a stretch - and that's by design. You made sure the connections were vague enough that you'd have plausible deniability.
BAYC: Seems like you're trying to attach meaning to your scam, in order to sell more fake NFTs and have others in the community side with you.
Ripps: Nope. It's art. You're nazis.
BAYC: Ok, then - see you in court, I guess.
...copyright law doesn't seem so boring now, does it?
Things are about to get weird (the universe, fractals and Web3)
Fair warning: things are about to get weird
Like, ‘I stood next to uncle Steve, when he was smoking one of his funny smelling cigars’, kind of weird.
Ever heard of ‘fractals’?
It's a phenomenon where the same pattern recurs at both a very small, and very large scale.
Take broccoli, for example.
A full broccoli looks very similar to one of its florets. Which looks similar to a portion of its florets, and so on…
And the same thing may just be happening with the Web3 industry (the broccoli) and Axie Infinity (a floret).
You might recall way back in March, we wrote about the $625M Axie Infinity hack when the Ronin Network (which powers the play-to-earn game) was compromised.
Now, months after the hack, users are finally able transfer funds to and from the game again.
Here’s why that’s a big deal:
Sky Mavis, the team behind Axie Infinity and the Ronin blockchain, didn’t just let the hack happen, wait a few months for it all to pass over, and then start things up again.
Oh no, no, no.
Before opening transfers up again, they raised sufficient funds to compensate all players who were affected by the theft.
They also developed a new ‘circuit breaker system’ designed to stop suspicious users from making unusually large withdrawals.
And finally they had one internal security audit and two external audits by blockchain security firms.
So, while in the short term, the Axie Infinity hack tanked their token and created ripples through the industry - it’s resulted in the team setting the new standard for blockchain security.
Which has a flow on effect to the rest of the Web3 industry as a whole, and all the smaller players in it too.
Fractals, baby. Fractals!
Resource of the day
Why Celsius Fell Apart
(in 25:30)
How criminals wash their stolen crypto
Pop quiz - what's a 'crypto mixing service'? Is it:
A) a dating service, for singles with a shared passion for crypto.
or
B) a DJ service, for birthdays and mitzvahs, that accepts BTC.
If you answered A or B, you're wrong!
It's C: a service that allows users to conceal the origins of their cryptocurrencies (beloved by cyber criminals around the world).
Here's how it all works:
Hackers steal a bunch of crypto (let's use ETH for this example).
ETH tokens are all identifiable by code, just like cash is with serial numbers.
So if it's stolen, law enforcement can track the ETH, like they would marked bills.
...and seeings as all Ethereum transactions are publicly listed, if the wallet holding the stolen ETH tries to 'take it offline', by converting it into cash and depositing it into a named bank account - they're going to get caught.
To get around this, they put it into a crypto mixing service, like Tornado Cash.
These services take crypto from anyone and everyone looking to conceal the origins of their money.
Maybe they're a criminal? Maybe they're trying to hide cash in a divorce? Maybe they're just super conscious about their financial privacy?
Doesn't matter.
Services like Tornado Cash take this ETH and break it up thousands of times and convert it into thousands of different cryptocurrencies, using a 'secret hash' to make it private.
It's the crypto equivalent of taking $1M worth of hundred dollar bills (USD) and swapping them into pennies, then into Euros, then to Pounds and back again.
All through private, untraceable cash transactions, in a dark alleyway, while no one is watching.
Finally, they take all of this washed crypto and pay everyone back their original amounts in a lump sum.
A lump sum that's been created from a bunch of fractional crypto that, if it were ever traceable, would lead back to thousands of different origins (not just the original hack).
It's the old 'needle in a haystack of needles, in a private barn, that no one knows the location of' trick.
(You know the one. It's a classic).
Anyway, that's all to say:
If you were wondering how the Harmony hackers (from this story's linked article) are planning on washing the $100M worth of ETH they stole...
That's how
Your Daily Dose of Web3
KPMG enters the metaverse, invests $30M in Web3 employee training
Chinese messaging app WeChat set to ban all accounts associated with crypto and NFTs
Snoop Dogg: Crypto bear market ‘weeded out’ those ‘abusing the opportunities’
Crypto.com removes Dogecoin, Shiba Inu, others from earn program
Alright, that’s it for today!
Love to the family,