Everywhere we turn, there's a new metaverse or Web3 debut. Microsoft recently announced a $68.7 BILLION cash purchase of Activision.

Like AI in 2013 and blockchain in 2014, NFT growth in 2021 feels like this year's metaverse and Web3 growth. We are all bombarded with information, conflicting signals, and a sensation of FOMO.

How can we evaluate the metaverse and Web3 in a noisy, new world? My framework for evaluating upcoming technologies and themes is shown below. I hope you will also find them helpful.

Understand the “pipes” in a new space. 

Whatever people say, Metaverse and Web3 will have to coexist with the current Internet. Companies who host, move, and store data over the Internet have a lot of intriguing use cases in Metaverse and Web3, whether in infrastructure, data analytics, or compliance. Hence the following point.

## Understand the apps layer and their infrastructure.

Gaming, crypto exchanges, and NFT marketplaces would not exist today if not for technology that enables rapid app creation. Yes, according to Chainalysis and other research, 30–40% of Ethereum is self-hosted, with the rest hosted by large cloud providers. For Microsoft to acquire Activision makes strategic sense. It's not only about the games, but also the infrastructure that supports them.

Follow the money

Understanding how money and wealth flow in a complex and dynamic environment helps build clarity. Unless you are exceedingly wealthy, you have limited ability to significantly engage in the Web3 economy today. Few can just buy 10 ETH and spend it in one day. You must comprehend who benefits from the process, and how that 10 ETH circulates now and possibly tomorrow. Major holders and players control supply and liquidity in any market. Today, most Web3 apps are designed to increase capital inflow so existing significant holders can utilize it to create a nascent Web3 economy. When you see a new Metaverse or Web3 application, remember how money flows.

What is the use case? 

What does the app do? If there is no clear use case with clear makers and consumers solving a real problem, then the euphoria soon fades, and the only stakeholders who remain enthused are those who have too much to lose.

Time is a major competition that is often overlooked.

We're only busier, but each day is still 24 hours. Using new apps may mean that time is lost doing other things. The user must be eager to learn. Metaverse and Web3 vs. our time?  I don't think we know the answer yet (at least for working adults whose cost of time is higher).
I don't think we know the answer yet (at least for working adults whose cost of time is higher).

People and organizations need security and transparency.

For new technologies or apps to be widely used, they must be safe, transparent, and trustworthy. What does secure Metaverse and Web3 mean? This is an intriguing subject for both the business and public sectors. Cloud adoption grew in part due to improved security and data protection regulations.

I write on VC, startups, and leadership.

More on https://www.linkedin.com/in/joycejshen/ and https://joyceshen.substack.com/

This writing is my own opinion and does not represent investment advice.

If tasked with the problem of coming up with a zk-SNARK protocol, many people would make their way to this point and then get stuck and give up. How can a verifier possibly check every single piece of the computation, without looking at each piece of the computation individually? But it turns out that there is a clever solution.

Polynomials

Polynomials are a special class of algebraic expressions of the form:

• x+5
• x^4
• x^3+3x^2+3x+1
• 628x^{271}+318x^{270}+530x^{269}+…+69x+381

i.e. they are a sum of any (finite!) number of terms of the form cx^k

There are many things that are fascinating about polynomials. But here we are going to zoom in on a particular one: polynomials are a single mathematical object that can contain an unbounded amount of information (think of them as a list of integers and this is obvious). The fourth example above contained 816 digits of tau, and one can easily imagine a polynomial that contains far more.

Furthermore, a single equation between polynomials can represent an unbounded number of equations between numbers. For example, consider the equation A(x)+ B(x) = C(x). If this equation is true, then it's also true that:

• A(0)+B(0)=C(0)
• A(1)+B(1)=C(1)
• A(2)+B(2)=C(2)
• A(3)+B(3)=C(3)

And so on for every possible coordinate. You can even construct polynomials to deliberately represent sets of numbers so you can check many equations all at once. For example, suppose that you wanted to check:

• 12+1=13
• 10+8=18
• 15+8=23
• 15+13=28

You can use a procedure called Lagrange interpolation to construct polynomials A(x) that give (12,10,15,15) as outputs at some specific set of coordinates (eg. (0,1,2,3)), B(x) the outputs (1,8,8,13) on thos same coordinates, and so forth. In fact, here are the polynomials:

• A(x)=-2x^3+\frac{19}{2}x^2-\frac{19}{2}x+12
• B(x)=2x^3-\frac{19}{2}x^2+\frac{29}{2}x+1
• C(x)=5x+13

Checking the equation A(x)+B(x)=C(x) with these polynomials checks all four above equations at the same time.

Comparing a polynomial to itself

You can even check relationships between a large number of adjacent evaluations of the same polynomial using a simple polynomial equation. This is slightly more advanced. Suppose that you want to check that, for a given polynomial F, F(x+2)=F(x)+F(x+1) with the integer range {0,1…89} (so if you also check F(0)=F(1)=1, then F(100) would be the 100th Fibonacci number)

As polynomials, F(x+2)-F(x+1)-F(x) would not be exactly zero, as it could give arbitrary answers outside the range x={0,1…98}. But we can do something clever. In general, there is a rule that if a polynomial P is zero across some set S=\{x_1,x_2…x_n\} then it can be expressed as P(x)=Z(x)*H(x), where Z(x)=(x-x_1)*(x-x_2)*…*(x-x_n) and H(x) is also a polynomial. In other words, any polynomial that equals zero across some set is a (polynomial) multiple of the simplest (lowest-degree) polynomial that equals zero across that same set.

Why is this the case? It is a nice corollary of polynomial long division: the factor theorem. We know that, when dividing P(x) by Z(x), we will get a quotient Q(x) and a remainder R(x) is strictly less than that of Z(x). Since we know that P is zero on all of S, it means that R has to be zero on all of S as well. So we can simply compute R(x) via polynomial interpolation, since it's a polynomial of degree at most n-1 and we know n values (the zeros at S). Interpolating a polynomial with all zeroes gives the zero polynomial, thus R(x)=0 and H(x)=Q(x).

Going back to our example, if we have a polynomial F that encodes Fibonacci numbers (so F(x+2)=F(x)+F(x+1) across x=\{0,1…98\}), then I can convince you that F actually satisfies this condition by proving that the polynomial P(x)=F(x+2)-F(x+1)-F(x) is zero over that range, by giving you the quotient:
H(x)=\frac{F(x+2)-F(x+1)-F(x)}{Z(x)}
Where Z(x) = (x-0)*(x-1)*…*(x-98).
You can calculate Z(x) yourself (ideally you would have it precomputed), check the equation, and if the check passes then F(x) satisfies the condition!

Now, step back and notice what we did here. We converted a 100-step-long computation into a single equation with polynomials. Of course, proving the N'th Fibonacci number is not an especially useful task, especially since Fibonacci numbers have a closed form. But you can use exactly the same basic technique, just with some extra polynomials and some more complicated equations, to encode arbitrary computations with an arbitrarily large number of steps.

The Bored Ape Yacht Club is one of the most prestigious NFT collections in the world. A collection of 10,000 NFTs, each depicting an ape with different traits and visual attributes, Jimmy Fallon, Steph Curry and Post Malone are among their star-studded owners. Right now the price of entry is 52 ether, or $210,000.

Which is why it's so painful to see that someone accidentally sold their Bored Ape NFT for $3,066.

Unusual trades are often a sign of funny business, as in the case of the person who spent $530 million to buy an NFT from themselves. In Saturday's case, the cause was a simple, devastating "fat-finger error." That's when people make a trade online for the wrong thing, or for the wrong amount. Here the owner, real name Max or username maxnaut, meant to list his Bored Ape for 75 ether, or around $300,000. Instead he accidentally listed it for 0.75. One hundredth the intended price.

It was bought instantaneously. The buyer paid an extra $34,000 to speed up the transaction, ensuring no one could snap it up before them. The Bored Ape was then promptly listed for $248,000. The transaction appears to have been done by a bot, which can be coded to immediately buy NFTs listed below a certain price on behalf of their owners in order to take advantage of these exact situations.

"How'd it happen? A lapse of concentration I guess," Max told me. "I list a lot of items every day and just wasn't paying attention properly. I instantly saw the error as my finger clicked the mouse but a bot sent a transaction with over 8 eth [$34,000] of gas fees so it was instantly sniped before I could click cancel, and just like that, $250k was gone."

"And here within the beauty of the Blockchain you can see that it is both honest and unforgiving," he added.

Fat finger trades happen sporadically in traditional finance -- like the Japanese trader who almost bought 57% of Toyota's stock in 2014 -- but most financial institutions will stop those transactions if alerted quickly enough. Since cryptocurrency and NFTs are designed to be decentralized, you essentially have to rely on the goodwill of the buyer to reverse the transaction.

Fat finger errors in cryptocurrency trades have made many a headline over the past few years. Back in 2019, the company behind Tether, a cryptocurrency pegged to the US dollar, nearly doubled its own coin supply when it accidentally created $5 billion-worth of new coins. In March, BlockFi meant to send 700 Gemini Dollars to a set of customers, worth roughly $1 each, but mistakenly sent out millions of dollars worth of bitcoin instead. Last month a company erroneously paid a $24 million fee on a $100,000 transaction.

Similar incidents are increasingly being seen in NFTs, now that many collections have accumulated in market value over the past year. Last month someone tried selling a CryptoPunk NFT for $19 million, but accidentally listed it for $19,000 instead. Back in August, someone fat finger listed their Bored Ape for $26,000, an error that someone else immediately capitalized on. The original owner offered $50,000 to the buyer to return the Bored Ape -- but instead the opportunistic buyer sold it for the then-market price of $150,000.

"The industry is so new, bad things are going to happen whether it's your fault or the tech," Max said. "Once you no longer have control of the outcome, forget and move on."

The Bored Ape Yacht Club launched back in April 2021, with 10,000 NFTs being sold for 0.08 ether each -- about $190 at the time. While NFTs are often associated with individual digital art pieces, collections like the Bored Ape Yacht Club, which allow owners to flaunt their NFTs by using them as profile pictures on social media, are becoming increasingly prevalent. The Bored Ape Yacht Club has since become the second biggest NFT collection in the world, second only to CryptoPunks, which launched in 2017 and is considered the "original" NFT collection.

Democracy's demise

Our Ukrainian brothers and sisters are being attacked by a far superior force.
It's the biggest invasion since WWII.

43.3 million peaceful Ukrainians awoke this morning to tanks, mortars, and missiles. Russia is already 15 miles away.

America and the West will not deploy troops.
They're sanctioning. Except railways. And luxuries. And energy. Diamonds. Their dependence on Russian energy exports means they won't even cut Russia off from SWIFT.

Ukraine is desperate enough to hand out guns on the street.

France, Austria, Turkey, and the EU are considering military aid, but Ukraine will fall without America or NATO.

The Russian goal is likely to encircle Kyiv and topple Zelenskyy's government. A proxy power will be reinstated once Russia has total control.

Also, Putin has never lost a war.

Why is Russia attacking Ukraine?

Putin, like a snowflake college student, “feels unsafe.”
Why?

Because Ukraine is full of “Nazi ideas.”

Putin claims he has felt threatened by Ukraine since the country's pro-Putin leader was ousted and replaced by a popular Jewish comedian.

Hee hee

He fears a full-scale enemy on his doorstep if Ukraine joins NATO. But he refuses to see it both ways. NATO has never invaded Russia, but Russia has always stolen land from its neighbors. Can you blame them for joining a mutual defense alliance when a real threat exists?
Nations that feel threatened can join NATO. That doesn't justify an attack by Russia. It allows them to defend themselves. But NATO isn't attacking Moscow. They aren't.
Russian President Putin's "special operation" aims to de-Nazify the Jewish-led nation.
To keep Crimea and the other two regions he has already stolen, he wants Ukraine undefended by NATO.

(Warlords have fought for control of the strategically important Crimea for over 2,000 years.)
Putin wants to own all of Ukraine.

Why?

The Black Sea is his goal.

Ports bring money and power, and Ukraine pipelines transport Russian energy products.
Putin wants their wheat, too — with 70% crop coverage, Ukraine would be their southern breadbasket, and Russia has no qualms about starving millions of Ukrainians to death to feed its people.

In the end, it's all about greed and power.
Putin wants to own everything Russia has ever owned. This year he turns 70, and he wants to be remembered like his hero Peter the Great.
In order to get it, he's willing to kill thousands of Ukrainians

Art imitates life

This story began when a Jewish TV comedian portrayed a teacher elected President after ranting about corruption.
Servant of the People, the hit sitcom, is now the leading centrist political party.
Right, President Zelenskyy won the hearts and minds of Ukrainians by imagining a fairer world.
A fair fight is something dictators, corporatists, monopolists, and warlords despise.
Now Zelenskyy and his people will die, allowing one of history's most corrupt leaders to amass even more power.

The poor always lose

Meanwhile, the West will impose economic sanctions on Russia.

China is likely to step in to help Russia — or at least the wealthy.

The poor and working class in Russia will suffer greatly if there is a hard crash or long-term depression.
Putin's friends will continue to drink champagne and eat caviar.

Russia cutting off oil, gas, and fertilizer could cause more inflation and possibly a recession if it cuts off supplies to the West. This causes more suffering and hardship for the Western poor and working class.

Why? a billionaire sociopath gets his dirt.

Yes, Russia is simply copying America. Some of us think all war is morally wrong, regardless of who does it.

But let's not kid ourselves right now.

The markets rallied after the biggest invasion in Europe since WWII.
Investors hope Ukraine collapses and Russian oil flows.
Unbridled capitalists value lifeless.

What we can do about Ukraine

When the Russian army invaded eastern Finland, my wife's grandmother fled as a child. 80 years later, Russia still has Karelia.
Russia invaded Ukraine today to retake two eastern provinces.
History has taught us nothing.
Past mistakes won't fix the future.

Instead, we should try:

• Pray and/or meditate on our actions with our families.
• Stop buying Russian products (vodka, obviously, but also pay more for hydro/solar/geothermal/etc.)
• Stop wasting money on frivolous items and donate it to Ukrainian charities.

Here are 35+ places to donate.

• To protest, gather a few friends, contact the media, and shake signs in front of the Russian embassy.
• Prepare to welcome refugees.

More war won't save the planet or change hearts.

Only love can work.