In his last founder‘s letter, Zuckenberg briefly mentions cryptocurrency and NFTs:
“Privacy and safety need to be built into the metaverse from day one. So do open standards and interoperability. This will require not just novel technical work — like supporting crypto and NFT projects in the community — but also new forms of governance. Most of all, we need to help build ecosystems so that more people have a stake in the future and can benefit not just as consumers but as creators.”
“New forms of governance” possibly describes decentralized finance projects. Most of these projects are backed by venture capital (VC) who thanks to private sales of governance tokens get in early into projects. Governance tokens are also called utility tokens. What they really are however is a new form of securities. Evidently VCs are not in it “for the technology” but for the returns. Most DeFi projects are not as decentralized as they claim, but are controlled by a founding team, sometimes using offshore foundations as a legal base. They are indeed a new form of governance, hybrid structures between offshore companies and grassroots projects like Bitcoin.
Could Facebook possibly be interested in this type of companies? Let’s look a the timeline as it easier to find a pattern:
June 18, 2019, Facebook announces a stablecoin project (Libra) and a wallet (Calibra) to be released in 2020. Libra is an association of companies based in Switzerland while Calibra is a Facebook project. FB intends to integrate Calibra into Messenger and WhatsApp. The stablecoin project immediately faces heavy criticism and scrutiny from US and EU regulators, politicians and central banks.
October 2019, PayPal, eBay, Mastercard, Stripe, Visa, Mercado Pago and Booking Holdings leave the Libra association
February 2020, Libra association has 20 members
April 16, 2020, Libra announces plans to support multiple cryptocurrencies not just one stablecoin. I also announces being in talks with Swiss regulators for a payment licence.
December 2020, Libra rebrands as Diem and launches as a slimmed down version of Libra, the Diem Association has then 27 members.
May 12, 2021, Diem announces withdrawing its application for a Swiss payment licence and that it will register as a money services business in the US instead.
October 19, 2021, Facebook launches cryptocurrency wallet Novi in the US and Guatemala. Novi Financials is a subsidiary of Facebook. Interestingly it is partnered with Paxful and uses Paxos Dollars (USDP) instead of Diem. It supports no cryptocurrencies, and Coinbase provides custody for the stablecoin.
October 19, 2021, a group of US senators attack Novi in a letter :
“Given the scope of the scandals surrounding your company, we write to voice our strongest opposition to Facebook’s revived effort to launch a cryptocurrency and digital wallet, now
branded “Diem” and “Novi,” respectively.”
October 28, 2021, Facebook announces company name change to Meta. Novi and Facebook will likely be presented as separate entities under the Meta umbrella, along with other FB companies such as WhatsApp, Oculus and Instagram.
From this timeline alone, it would seem that Zuckenberg is still entrenched in the centralized stablecoin idea, in opposition to his rivals Winklevoss who have been into Bitcoin and DeFi for a long time.
That’s why this recent comment about crypto, NFTs and new forms of governance seems like 180-degree compared to the past.
Consider the following hints:
- Diem (stablecoin) is probably going nowhere
- Novi has a soft launch with not many features
- Coinbase is providing custody (only for USDP? Paxful could have done that as the regulator of USDP)
- Recent comment about crypto
- Meta name change that allows Novi to separate its image from Facebook
- Andreessen-Horowitz is in the board of Facebook and also backed multiple DeFi or semi-DeFi organizations
I don’t know about you but to me it feels like a pivot towards crypto is likely.