Author | Dr. Paul J. Dylan-Ennis
In a bear market, blockchain culture confronts its essence. The recent crash revealed that the decentralized finance (DeFi) market is actually a labyrinth of complex financial instruments with contagious properties.
Rather than bringing an open, permissionless alternative to the traditional financial system, DeFi has become an accelerationist mirror of it. is a casino capital extended through Metamask.
People naturally place the blame on hedge funds and lending platforms that leverage irresponsibly. The problem, they say, is that centralized finance, or CeFi, role-plays as DeFi, when in fact DeFi itself has no problems.
However, this belief that “this time will be different” and that financial actors will act rationally once DeFi “wins” is just a self-deceiving logic of addicts.
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The truth is that this problem of centralization will happen again, because the ultimate political picture of what happens on Ethereum (the birthplace of DeFi) is unclear. Ethereum also has a technical end-picture — an open-source, transparent world computer.
But no one understands what Ethereum is for. What’s the point, the rationale, and why we got into Ethereum? A big question.
In contrast, Bitcoin’s political final picture can be summed up in one word: hyperbitcoinization. Bitcoin is designed to transition from a fiat currency system to the Bitcoin standard.
See also: Ethereum Political Philosophy Explained | Paul Dylan-Ennis (https://www.coindesk.com/markets/2021/07/09/ethereums-political-philosophy-explained/)
What is the single term that is equivalent on Ethereum? In order to find it, it is important to first understand the current political picture of Ethereum.
Ethereum Political Spectrum
- Cypherpunks: Ethereum is rooted in an earlier tradition of privacy and technology advocacy, arguing that programmers should use encryption and computation to build a neutral infrastructure that others can give meaning to. The politics of Ethereum is its apolitical stance, sometimes referred to as “algorithmic authority,” whose sole focus is to create open-source tools that require little human intermediary. This has to do with Ethereum’s “core” developers.
- Experimental Liberalism: The combination of Ethereum governance experiments (eg, soul-bound tokens) and market-making models (eg, quadratic voting) can lead to new liberal democratic political innovations. This view is related to Vitalik Buterin, the founder of the Ethereum network, and Glen Weyl of Microsoft.
- Solarpunk: Social collaboration, empowered by Decentralized Autonomous Organizations (DAOs), can create positive externalities in the wider society, embedding a warm humanistic vibe into its aesthetics. Gitcoin founders Kevin Owocki and Scott Moore and DoinGud founder Manu Alzuru have related examples.
- Lunarpunk: Different implementations of zero-knowledge proofs happening on Ethereum-native technologies (DAOs, DeFi, NFTs) enhance privacy, which is necessary to protect crypto culture from modern surveillance capitalism Yes, usually taking an agorist or leftist/radical liberal position. This philosophical movement is associated with DarkFi’s Rachel-Rose O’Leary and Amir Taaki.
- Degens: Ethereum is a platform for building financial instruments with a highly speculative nature, where the only goal of its users is to accumulate wealth, even in an unethical way. Essentially a market nihilism.
Are there some common threads running through these views that correspond to Bitcoin’s tight hyperbitcoinization?
Let the market nihilists’ views be excluded first, because their views are for short-term interests and have no interest in the long-term interests of Ethereum.
Across the spectrum, Ethereum aims to transform from a degenerating legacy financial system based on unsustainable practices, but also from the different realizations of the degen culture and its promoters, VCs and hedge funds.
My thesis is that these scattered points on the Ethereum political spectrum can be incorporated into a general answer to the question “What the hell is Ethereum for?”
If there is no answer to this question, people always suspect that the answer is: to drive up the price of ether, generate income, and to sell NFTs quickly, etc.
See also: Cryptocurrencies: The Gift That Keeps (For Charity) | Viewpoint (https://www.coindesk.com/tech/2021/11/25/crypto-the-gift-that-keeps-on- giving-to-charity/)
This doesn’t mean we need to undermine the diversity of opinions under a high-level meta-opinion, just that it helps to have an answer we can all roughly agree on, a rough consensus, and running the code.
In search of consensus across the spectrum, Ethereum’s political picture can be summed up in one word: hyperregenization.
1. Regenerative economics instead of illusory infinite growth: Ethereum provides traceable and proactive public goods fundraising services through a quadratic fundraising mechanism.
It contains the potential to extend this cypherpunk mechanism of neutral public goods beyond Ethereum and web3 to the traditional political world, as Sunpunks advocate, they focus on positive externalities.
In this way, Ethereum can be a minimalist alternative to building a state supply based on liberal and humanistic principles.
2. Regenerating citizenship rather than soulless individualistic speculation: Ethereum can reward good citizens with retroactive airdrops such as participation in Gitcoin rounds, governance voting, testnets, and community channels.
These experimental libertarian civic activities can be captured into soulbound tokens that will continue to enrich over time, and we can guarantee that the privacy-oriented mindset of moonpunks allows citizens to “selectively” show” themselves (or not at all). Safe social and community recovery methods need to be established in order for it to thrive.
3. Regenerate the decline of decentralization instead of centralization: Ethereum is an information-sharing space or pool of shared knowledge. When centralized clusters emerge, although not without challenges, transparency allows us to identify them.
Recent efforts to re-decentralize client diversity and current efforts to re-decentralize staking reveal that Ethereum’s cultural instinct to prevent centralization remains intact. In order to do that, we’re going to need to have the “night watchman” mentality of the cypherpunk developer culture.
So what is the purpose of Ethereum? — Bringing us more hyper-regeneration.