Also:

• 🏚 House flipping trouble

• 🏘 Norwegian mortgages

• 📜 Constitution DAO hangover

• 📦 Square becomes threedimensional

• 🤓 All the reports

🏚 House flipping trouble

Zillow is comparable to Finn here in Norway. 3 years ago, a part of the business started using algorithms to calculate the price of properties and then offering to buy the home. The company then made minor upgrades and sold it at a higher price, so-called "flipping." Now Zillow is looking to sell about 7,000 homes as it seeks to recover from a fumble in its home-flipping business. Multiple sellers have reported that Zillows algorithms were fooling themselves by competing with their competitor Opendoors algorithms: Opendoor matches Zillow who matches Opendoor, and that's how you get ever-increasing offers and a huge problem. But this wasn't just an algorithm problem, it was also an organizational issue:

🏘 Norwegian mortgages

The Financial Authority of Norway has released their annual mortgage survey: This year's survey shows that a large and increasing proportion of new mortgages in Norway are taken out by borrowers with a high debt ratio. Almost half of the loan volume in this year's survey is given to borrowers with debts over 4 times annual income. In this year's survey, the average loan-to-value ratio is 65 percent for new repayment loans. Read the whole survey here.

📜 Constitution DAO hangover

A couple of weeks ago, we wrote about Constitution DAO that in a couple of days collected over 40 million dollars to buy a copy of the constitution. In the end, they lost the auction, but that was not the end of the story. After the auction, the DAO had a $40 million mess on its hands, and entire refunds were being wiped out by high fees. The total cost in fees for donating to the project was nearly $1 million, with much of the cost coming from people donating relatively small amounts. Etherum fees are paid per transaction, meaning people who donated huge sums paid a lower amount percentage-wise when donating. This led to many users waiting for lower gas fees to reclaim their money:

Apparently, the market value of the $40 million donated suddenly was worth $1.5 billion. Why? Could it be that it turned into a meme token? Could it be because the token was proof for contributing to the first self-organized DAO charity in history? Or could it also be a case of bad UX? DeFi is undoubtedly full of surprises.

🧼 Sbanken soap opera

One thing that didn't surprise anyone is that DNB decided to appeal to the Competition Appeals Board against the decision to ban the merger between DNB and Sbanken. The soap opera continues until March. Apparently, DNB has entered into an agreement with a third party to transfer most of Sbanken's fund distribution activities, including a customer portfolio, rights to use technology, and certain other assets. I wonder who this third party is and why the competition authority doesn't accept the option. Has Nordnets suddenly new pricing structure something to do with this?

📦 Square becomes threedimensional

Square, which consists of Square, Square Crypto, Cash App, Tidal (?), and tbd54566975, follows in Facebook's footsteps from a few weeks ago and rebrands the holding company to... Block. As a result of the name change, Square Crypto, dedicated to advancing Bitcoin, will change its name to Spiral. The rebranding is relatively fresh and playful.

While we're onto the topic of Block, «Built for Mars» has written a thorough UX teardown on how the signup for Cash app could be better.

🤓 All the reports

The end of the year means lots of reports. No, I'm not talking about your Spotify Year in Review (though we were impressed by one teammate who had Sandstorm by Darude as the most listened to song this year)

• PA Consulting has written a report about the future of Nordic payments and four potential future scenarios. Link

• Itera has launched a report on how Nordic financial institutions can leverage technology, such as artificial intelligence, to prevent anti-money laundering. Link

• Vipps has released market trends from Q3: Some key numbers are that transactions have more than doubled from the beginning of the year to the end of Q3, and corporate payments now account for 40% of all transactions with Vipps! Link

• Design Tools Survey for 2021 is out, and once again, Figma is in its own league. Link

• Bitwise has written a primer into DeFi for professional investors. The intro: Over the last few decades, nearly every major industry has been reshaped by the digital revolution — except finance. […] All of this has set the stage for Decentralized Finance (DeFi), a growing movement that has the potential to completely change how we think about financial services. Link

That's it for this week 👋

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Marius Hauken, partner Stacc X