Albert’s - Deciphering a Crypto Society: Recent Episodes
Albert
Albert being really StFame
Welcome back friendsssss,
Last time on this newsletter, a new character was introduced to the Albiverse. Is she real, is she fiction? More background on why she exists in my last general update.
This very time. i.e now. We're going to see how crypto projects like Zora, Foundation and MetaFactory bring creators from selling stuff to their communities and fans to actually working side by side with them to achieve bigger things.
To make that more digestible, I've structured this issue in two parts.
First I'll cover Zora (and Foundation built on a similar model). Zora builds on drops, a multi-year trend of the fashion industry and adds crypto capabilities to it. For this reason, Zora sits at the interesection of crypto and fashion or cultural industries more broadly.
Second, I'll cover MetaFactory. Which is more embedded in Web3 culture than the other two. Here drops are not its core business but an instrument serving MF's main goal: which is to make creators and their communities work together before, during and after the creation process.
Zora - Kickstarter 2.0
The main thing Zora does is provide a drop engine as a way for creators to drop limited editions to their communities. Drops have been a rising distribution channel in fashion ever since about 2017 when Supreme started to drop super hyped apparel. They are all about surprise, hype, scarcity and FOMO. Which really sounds like a crypto ICO lol.
Contrary to a traditional drop where consumers directly access the good (T-shirt, poster, album...), here they get a token that they can redeem against the good later on.
So similar kickstarter, first creators propose a project to their communities and second they sell tokens through a drop. Third, the proceeds generated with the drop can then be used for production. This is great, but why is it Kickstarter 2.0 then?
That's where things get interesting.
The price of the token is set by a function, just like the one on the StFame shirt above. This means that consumers are incentivized to buy early because the price rises along the curve each time a new person buys a token. And after they have bought the token, people can do whatever with it. Send it to a friend, keep it or sell it back once the price has appreciated.
Above is the price fluctuation for a piece of art sold on Foundation.
The same way holding ETH aligns you with the success of Ethereum, holding a token aligns you with the success of the drop and creator.
Let's say 80 people buy a t-shirt's token. First they become aware of the drop on social media. Then they compete on the date and time of the drop to buy early. The first token may be bought at $10 and the last one at $410 or $800 depending on the steepeness of the price curve. Now once the sale has happened and speculators have resold their tokens, you end up with an 80 people group with skin in the game which can keep promoting the sale and creator on social media for example.
Here is how the participant's journey might look like, from community member to co-stakeholder of the item or brand:
Related reads on crypto enhanced drops and Kickstarter 2.0:
Zima Red details how Crypto helps eliminate some of the frictions in legacy culture markets
Foundation is another project similar to Zora. They are doing neat stuff as well. Check out their latest drop!
MetaFactory - Co-creation
"making the connection between fans and artists is the next step [...] iterations of this could be years but that's kind of where I want this to go [...] it is an exctiting time to be an independent artist" - RAC, dropped $TAPE on Zora
And that's where we enter the second chunk of this post. Empowering artists to quikcly find their most fervent supporters and be financially aligned with them is incredibly powerful. At an age where attention is scarce an engaged community is so valuable.
There is a shift from shared narrative between artist and supporters, to shared narrative + shared incentives. Skin in the game. Bringing us one step closer to what an actual community is.
MetaFactory has some of the most forward looking initiatives on this front. The Wicked Sunday Club is a creation club organized around artist Twisted Vacancy. 22 out of the 42 available membership passes were bought at a starting price of 2 Ether (approx. $420).
With the pass, members get a couple nice physical and digital (NFTs) pieces of apparel. But most importantly, they access a Style Guide created by Twisted Vacancy, that they can use to come up with their own apparel or art pieces. The profits generated from the sale of these creations goes back to the club and its members. And so the line between creator and supporter is now blurred.
If you don't have design chops, you can also be active in doing marketing and sales as part of the club and earn loyalty points for a share of the revenues along special privileges!
This a first experiment for the MetaFactory team. And there should be a lot of room for the community to lead and experiment with the assistance of the MF team.
Links on the evolution of creation:
MetaFactory is exploring the metaverse using VR platforms like Cryptovoxels and VRchat (check this and this). Find the MF Discord here.
Great thoughts from Brian Flynn on co-ownership and especially tools for creators
There seems to be a new pool of projects like Rally, Abridged and Roll which look to serve creators and create economies around them.
That's it for today! Let me know what you think, feel free to DM @albiverse.
And don't forget to subscribe to this newsletter for future issues!
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit albiverse.substack.com
Hey heyyy! I'm Ana. I was lurking in the shadows, somewhere in the Albiverse (the universe where this blog resides). And... I'm taking over the Orgs Moving Online series!
Am I real, am I an AI? Does it even matter? We're talking online organizing here so let's get started with this week's topic: onboarding and onboarding tools in Online Organizations.
Where is Albert?! He has other things to do... I suppose.
Onboarding People in a... DAO?
"DAO, DAO, DAO", above all a very esoteric and abstract concept. An organization populated by autonomous agents, working seamlessly and frictionlessly together, with protocols instead of managers to organize work and allocate resources. All that on the Blockchain.
Oooookay.
And so you have Bitcoin and Ethereum function according to these principles. Uber also is autonomous, but in a not-dencentralized-at-all kind of way. But when it comes to achieving more complex types of tasks, like undertaking real projects, "DAOs" are still very, very early.
Today most human 'DAOs' consist in a Pinch of web3 tools, a lot of web2 and a lot of imagination from participants to fill the gaps.
While "DAO frameworks" like MolochDAO, Aragon and DAOstack are commonly seen as the go to DAO infrastructures, chances are that they will not be the first pieces of technology newcomers will interact with. Probably the opposit. Members will do high stake things like voting or moving funds only once they are up to speed and engaged contributors.
Before that, you'll need to onboard these new community members. And this can be done following simple rules, using simple tools, with one principle in mind: minimize the chaos that the newcomer will face when making her first steps in the your project's environment. Any uncertainty or question that the newcomer might have should be answered in the most intuitive and accessible place. The goal is to craft a great experience for newcomers. Your onboarding process is your product.
Things to follow on DAO frameworks:
DAO framework projects know they are still hard to use. Aragon has been developing Aragon Connect and looking to integrate seamlessly with custom UIs and some other Web2 tools covered here.
Welcoming Newcomers - Discord, Stewards, Bot
That's it, newcomers end up on one of your communications channel. The most urgent matter is to provide them with what they are looking for and give them their first bit of momentum to keep going. How? By making the following information available in a newcomer portal:
Basics about your community/project (broad overview of each branch)
Overview of the community’s shared platforms/tools (communication tools!)
Tips on how to interact with community (who to reach out to, where to discuss things…)
To create this newcomer portal, I really like using Discord. A #Start-here or #info chat set on read-only should be really helpful to post the most relevant links to resources that you think directly answer these questions. Why Discord in the first place? It seems that among Web3 communities, Discord is winning over Telegram or Discourse for community coordination. And many active communities are actively thinking about integrating it better with other collab tools (see here or here).
Overall, in Discord it is possible to make resources well organized and static like in Discourse, and organize chats enough so they don't become total chaos like most large Telegram chats.
Nookazon is a place to trade Animal Crossing stuff and... is the largest Discord community. Check out how their Info channel is organized for a good example. The recipee seems to be to give information about the structure of your comms channels, put the most important links to documentation (more on that below), and let people know who/how they can reach out to and ask questions.
If you are serious with turning newcomers into contributors, human stewards or ambassadors are super important as well. Especially if your community is undertaking complex projects which involve a steep learning curve. The human help will help fill the gaps in your 'Welcome infrastructure' and help sustain momentum. It doesn't have to have a full time person, stewarding is an effort that can be undertaken by most in the community. Best is to grow a mentorship culture and quickly train and promote newcomers to work on fun projects. For example, people at RaidGuild have been running an apprentice program which serves as a way to get newcomers' hands on a tangible project quickly.
One thing I'm looking to see more is the use of a welcome bot as part of the Onboarding arsenal on Discord. It would be an evolution of the #info channel and hopefully decrease the cognitive load for newcomers! The MetaGame #bots channel is a good example. Abirdged's collab.land will certainly be the tool to go to in the future to summon nice bots!
Other resources on welcoming newcomers:
Enspiral has been working in a distributed way for a long time. Here is their emailing process for newcomers
Onboarding is a well known topic in the crypto space (see here and there)
Docssss & Handbook - Docusaurus, Github, Roam...
This is the second step for newcomers. Here what's important is to get them up to speed with the current state and branches of the project. That's probably why documentation should be thought at the project level and not product level for these kinds of orgs. Most projects use Docusaurus for that. But any kind of Wiki tool might do the job.
The Handbook tends to look more like the practical community guide, newcomers should be able to learn about a couple key elements:
What's expected from them
How to start contributing
How they’ll get rewarded
On the first two points I really like how clean and concise the Raidguild handbook is with their Overview, and How To sections. Regarding the last point, the case of RaidGuild is pretty straightworard as well, it is a place where freelancers can find gigs.
Now, the thing don't like that much with most documentation tools is that they are not great for collaboration. They are often permissioned or require using Github which is not ideal. On that front I'm quite hopeful that tools like Roam Research will become a serious alternative as a documentation repo. Provided you can add a good wiki UI to it.
Other links to check out:
The Enspiral community has large handbook. The Agreements section, aiming to define roles and expectations in the community is pretty good!
That's it for today. Remember that onboarding is all about empathizing with newcomers and crafting a smooth and welcoming experience.
Just as with anything, try new things and iterate. Onboarding is essential to the fully fledged online organization or DAO you are dreaming about ;-)
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit albiverse.substack.com
In this Orgs Moving Online series I share insights and updates on the state of online organizing. Tips, tricks on Web2 and Web3 tools that community organizers all around the internet can use to efficiently run their online communities.
Hey you, welcome back to another issue of my newsletter <3
stretches
Last time, I shared my enthusiasm for online communities and discussed how Web3 tools can help community managers around the world organise, engage and grow their communities. This time around I want make things more concrete and tell you what’s being done today. I’ll review three of the Web3 tools in question and give examples of how they are used by communities to structure their online operations.
In his last post, Eric Chung from Abridged introduced the 'segments of DAO Ops', defined as a set of practices and tools that can be used to facilitate resource allocation, decision-making and membership administration in online communities. That’s pretty much what SourceCred, Aragon and Abridged.io do. So let’s start with these.
Aragon, Abridged, SourceCred
Aragon - Governance and Decision-Making
Aragon organisations have many different apps or features. Today though, they seem to be mostly used for two things. 1. distribute tokens to your community members. They can represent memberships, voting rights, money or all three at the same time 2. let them use the tokens to vote on things they care about.
In the context of ResearchCollective — a network of experts curating biomedical resources such as research papers, anti virals and covid testing kits —, existing members approve new members by putting their application through vote. They also use Aragon to vote on approving or rejecting scientific resources newly submitted resources to the collectively curated registry.
Similarly, SaintFame used Aragon voting to collectively approve the design of the $FAME genesis shirt submitted to community members for review by the designer Matthew Vernon. Those who have bought the shirt have now received tokens enabling them to take part in future decisions of the decentralised fashion collective.
(really cool shirt, with lots of Web3 magic printed on it, you can still buy it)
In sum, Aragon can be seen as a backbone for decision-making and governance in online communities.
Issue tokens which represent value, roles or memberships
Assign permissions for members to perform certain actions (trigger votes, move funds, install/uninstall applications)
Things to follow in Aragon: Aragon Court (much of a WIP) is a dispute resolution system that you can plug to Aragon, this should add a lot to Aragon’s utility as a governance tool. Gardens template built by 1Hive is a promizing organization template. you can browse all existing orgs on Apiary. Toolkit is a new development tool which will make building on Aragon easy and flexible.
SourceCred - Tracking and Rewarding Contributions
In World of Warcraft, guilds use sophisticated in game metrics to gauge how each player performs during epic dungeon fights. "Everyone is measured and critiqued because everything is computer mediated and we can capture all the things that are going on". Anything happening in the game can be saved, collected and analyzed.
Contrary to traditional organizations where a lot of interactions happen offline, online communities can capture a lot of what’s happening just like in WoW. SourceCred tracks events on Discourse, Discord or Github and calculates scores for contributors to thread, discussion or code repository. The SC team has adapted the PageRank algorithm Google uses to rank pages when you search for things.
The scores which come as an output scores(link) that may be used as a basis for weekly rewards. MetaGame, a cool community —also working on innovative collaboration tools— is about to use SourceCred to track contributions made by community members across all its platforms. In return, contributors earn Experience Points (XP). Based on their XP, contributors receive weekly rewards in tokens generated from an Aragon organisation. These tokens (SEEDs) will be redeemable against goods or services later down the road 👇 see for yourself.
Things to follow in SourceCred: How it works. An awesome Manifesto. Discord. Great Webinar explaining everything.
Things to follow MetaGame: Browse Ongoing projects. A cool SourceCred Graph mapping contributions made through MetaGame. MetaGame Discord.
Abridged - Onboarding and Navigation
Like stated in the introduction, the Abridged team aims to address the different segments of DAO Ops. For now, they are focusing on a bot which can be customized for your community's needs and used for many cool things. Including smooth onboarding of new members, navigating useful community resources and links, and create token permissioned chat rooms.
With ResearchCollective, we used @ResearchCollectiveBot on Telegram (ping it!) in order to onboard new members and help them navigate the ResearchCollective ecosystem. With links to main information hubs, chats and actions available.
Before that Collab19 had used the bot to collect donations and pool them in an Aragon organization, then issue donations to charities fighting against COVID-19. A nice feature of the bot is that it automatically generates an Ethereum account when the user engages with it. The only thing the user has to do is to fund his account using debit card. This abstracts quite a bit of complexity in interacting with Ethereum.
Last but not least, as an $Alex holder the Abridged bot scanned my wallet and granted me permission to access a priviledged Telegram room for $Alex holders. Try and join if you can (@ALEX_WHALE_bot ;)).
Things to follow in Abridged: Website. Chat. And finally collab.land, a very powerful tool for community organizers to deploy their own bot effortlessly, very bullish on this one. And check the newsletter.
And... Tada! Put all three together for a more organized, more efficient online community
Some background on why these things are cool
Before we part ways, I cannot resist giving a quick refresher on why these things are cool.
Online collaboration was born as early as the 1990s with internet forums. It grew rapidly and steadily with email, chat apps, social media, video apps, shared drives and work spaces... Now, it is clear that the recent sanitary crisis has given a new momentum to cyberspace and our digital lives. Boomers jumping from Zoom meeting to Zoom meeting. Gen Zers doing what they are used to, but even more. (And… You and I working remote like nothing happened!)
"Software eating the world is going through an inflection point I thought wouldn’t arrive till 2030. The pandemic has accelerated the schedule by 10 years." - In Venkatesh's words.
And so, if Zoom's stock has gone through the roof, I can tell that people working on Web3 tools have also been feeling the renewed traction. Especially those working on collaboration tools like the ones I've described above. Aragon, SourceCred and Abridged aim to help communities entirely run their operations in the digital realm. Pretty on point at a time where companies like Coinbase and Facebook are going remote.
So while the road ahead is still long, rubber has never been closer to hitting the road!
I can't wait for the day I'll work with my first non-crypto community. For the next quarter it feels like the pace of cross collaboration among crypto communities is accelerating. Probably due to the fact that tools have slowly matured and can now be tested, and also that groups like MetaCartel have been accelerating innovation through thins like DAORushWeek.
It is still early but we’ll get there! Most teams actively help new users, reach out to them if you have questions. I'm also available for discussing tools and community design practices, DM @albiverse.
References
https://ecorner.stanford.edu/in-brief/the-knowledge-economy-of-world-of-warcraft/
https://medium.com/abridged-io/summoning-the-spirit-of-dao-ops-5928ee26b9d5
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit albiverse.substack.com
When Andressen called the tech industry to arms in the midst of the COVID crisis, people responded. Why have people even considered his words? Not because he is a great essay writer. Rather because in the tech community Marc Andressen is regarded as a very smart, hard working and talented technologist. Checking all the boxes that make one a legitimate tech leader.
If you follow my newsletter, I've been digging a bit into the notion of legitimacy and its importance for crypto adoption. Drawing a parallel between the legitimacy crisis happning in current institutions — corporations, fiat money, banking system, media— and rising crypto institutions — crypto networks & DAOs, Bitcoin, DeFi, information curation systems—.
Institutions down 👇, crypto up 👆: a legitimacy driven thesis for crypto adoption
Accruing legitimacy is necessary for a social object —person/org/product/...— to become widely adopted
legitimacy is accrued by consistently meeting the expectations and values of a group of people
Traditional institutions have a bad value-era fit. They fail to meet key modern principles
Crypto on the other hand bears many contemporary values, putting the technology forward as a great foundation for new institutions
Online Communities vs. Corporations
Now I want to make things more concrete and draw another parallel. This time we're having a look at organizational forms: the online community and the corporation. Here are the questions I'm interested in:
How did the corporation come to exist, what made it valuable and legitimate for the past two centuries? Who adopted it first?
How can we apply the same logic to online communities and DAOs?
I think this exercise helped me understand what future DAO adopters may look like. It also helps step back from preconceived assumptions we have about organizations and companies and think about why and how online communities are valuable.
Corporations in the Industrial Age 🌠
The corporation model of organising first appeared with the East India Company in the 1700s and was widely adopted much later on, at the end of the 1800s. It went through adoption waves following what social scientists call a social legitimation process.
Innovation
At the end of the 1800s, building banks and railroads was too expensive for governments and too risky for entrepreneurs. So the corporation emerged as a way for local governments and entrepreneurs to team up on these large projects thanks to corporate charters, elected officers and board of directors which aligned respective interests. This enabled a new type of collaboration.
Local validation
Partly because of the economic depression that happened in the 1890s, politicians realized it was cumbursome for them to bear with the conflicts of interests and economic risks tied to owning shares in a company. On the other hand corporations were increasingly adopted by the private sector which liked accruing profits while being shielded by the limited liability provided by the corporation.
Diffusion
As the economy recovered from the railway bubble popping, financiers on Wall St. were a key source of funding. What they did was encourage their companies to adopt the corporation model.
General Validation
The corporation became a standard, working increasingly in tandem with finance. Ford Motor was founded in 1903 and soon became the largest company in the world.
Takeways
Time: The first corporation —East India Company— existed long before general validation
Power users: The modern corporation went from a public-private partnership to financiers. A group of powerful adopters who elected it as their most legitimate wealth vehicle
Conjuncture: the economic depression of the 1890s was an important event for society to
Value? Values? Financiers? Informationists? Stepping back ⏱
Let's take a minute to step back. The corporation became the legitimate form of organizing for financiers because it matched their values: accruing wealth and capital while mitigating risks.
Since the industrial revolution happened, economic value and finance have been the thing. And the corporate world has become so pervasive that it anchored our understanding of value mostly around economic value. All other values looking anecdotic in comparison.
But value is a very contextual concept. And so if money has been a thing in the past centuries, there were also times were the devotion of peasants and knights were more important to lords than their purchasing power.
Overall, what's valuable is what makes a social group propser at a given point in time. And if we go deep enough, value merely is a degree of importance granted to something.
Now putting this back in our context, while things like devotion and honour will certainly remain in the background, economic value and capital have been losing steam as well.
As corporations evolved from industrial to digital, from Ford to Google, capital has become less and less central to business creation. Instead, success is all about leverage through the intelligence accrued in your product or organization. To me Online Communities structured as DAOs are the next generation of organizations following this logic. A question is what values are they designed from, and most importantly who are their equivalent to financiers?
DAOs for Informationists at the Information Age
If capitalists and entrepreneurs have driven adoption of the coporation, informationists — or should we say dataists ?— may drive adoption for DAOs. They are the ones who incarnate the modern digital values that society increasingly holds. And those for which Online Communities and DAOs make the most sense.
To picture Informationists: they swim in information daily. They administrate and sustain forums, blogs, subbredits, fan clubs, online open source projects and even Facebook groups orchestrating events or social movements. Their job is to create well structured information systems on which information hubs can develop and around which work can be organized in some way.
What informationists are looking for is to grow this hub or network and get people to engage as much as possible. Then from feedback they can tune their sytem more and grow it further. This definition matches the logic of major tech products but goes beyond that point as it encompasses the organization of work itself.
So if I had to make a bet on the best users for DAOs and all the Web3 tools that are being built, I would pick this category of people. As it seems that the flexibility, control and interoperability of crypto tools really enter their information world and their role as organizers and administrators.
The trends behind distributed online organizing started with marginal forums as early as the 1990s. It has now transformed into giant digital fan clubs or headless activist movements or crypto communities and will likely keep spreading as our lifestyles become more and more tied to the digital world.
In my next post I will go beyond values and dive into some of the concrete tools which are now at the disposal of the informationists of our world. Some of them enable the governance of online communities, resources management, coordination, co-creation and even collective information curation.
Keep posted!
References
Ventkatesh Rao - A brief history of the corporation
World After Capital
Legitimacy as a Social Process
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit albiverse.substack.com
In this short essay I explore how the current institutional legitimacy crisis may drive adoption for crypto projects. I explain what legitimacy is and why it matters for institutions more than products. I detail why I think that crypto technologies have the right answers and might sneak into unserved markets.
TL ; DR
Legitimacy is accrued by consistently meeting expectations. It is fundamental for any product or organization to be adopted
Modern institutions are undergoing a severe legitimacy crisis
This creates opportunities for crypto technologies which seem to bear many increasingly demanded qualities in today's society
Analyzing how current institutions fail is an interesting way to spot opportunities and shape up strategies for crypto projects
Like for many young folks of my generation, working for traditional institutions was a no go. They seemed suboptimal, only surviving thanks to the status quo and high inertia inherent to a large society. Instead my eyes were fixed on the Valley and its many promises to change the world.
After some field experience though, I found out that traditional tech was bit dated for my taste as well. The creative pioneers of the 90s were still around, but hardly accessible and diluted in much conservatism. The [VC x Start-up] dyad was already widely explored and adopted, and as an industry, tech was more about operational efficiency than adventure. The restless millennial that I am found it a bit boring so I moved on.
My gut feeling led me to the fresh and chaotic land of crypto. Here at least, every single day is about exploration at industry scale. My natural interest for people instead of systems made me choose governance as the place to contribute. Ethereum's model of governance felt hard to replicate. And in order to make the crypto model of organizing as widespread as the startup one, we would first need to create new governance tools and practices that people could adopt down the road.
Fast forward to now, and after a year experimenting with on-chain governance, I have grown a keen interest for the concept of legitimacy. The project I was working with used to allocate its funds through a voting process enforced on the Ethereum blockchain¹. At some point it appeared that it wasn't working as well as expected. Its ability to meet our needs got challenged and it got shut down. It had lost too much legitimacy as an efficient resource allocation mechanism.
Both in the real world and crypto projects, people's acceptance of authority seem to depend on the legitimacy of the source of authority. Beyond crypto it is clear that our modern institutions are undergoing a severe legitimacy crisis. From the financial industry, to governments to the media. They are all loosing their natural authority, crisis after crisis.
Shutting down an experimental governance process is not really a big deal. But what will happen to democracies if some of their most fundamental institutions gradually collapse?
This made me want to dig more. First what is legitimacy ? Why do I feel that adoption of blockchain tech is highly driven by a psychological need for new legitimate institutions ?
Traditional institutions fail to meet expectations
Althought this definition² from the Urban Dictionary is not perfectly accurate, it is not too far from reality either. Something legit is something which does what we want it to do. And well.
Legitimacy can be more formally defined as “a generalized perception or assumption that the actions of an entity are desirable, proper or appropriate within some socially constructed system of norms, values, beliefs and definitions.” - Suchman³
The consensual agreement that something meets expected standards makes it legitimate among a group of people. For example, when a capitalist asks the question "is our economic system legitimate?" he is asking if the system is generating the growth and returns he expects. A socialist may hold different expectations and thus a different sense of a legitimate economy.
Acquiring legitimacy by meeting expectations is necessary to be accepted as a source of authority. The problem is, if all institutions loose legitimacy at the same time, there is no one left to listen to — if we're talking about the media — or unite behind — if we're talking political institutions—.
In today's society, the legitimacy crisis is systemic. And for good reasons.
We are discovering the hard way that institutions are not fit to meet contemporary expectations. The financial crisis of 2008 pointed at a lack of transparency and accountability. The environmental and social crisis show a lack of sustainability and inclusiveness in coporations. The COVID crisis highlights the lack of traceability and verifiability of information produced by the media. The many crisis to come will keep uncovering new failures.
As the faith in all those institutions goes down, inertia and disorder go up. Division ensues. Thus the recession is not only economical but also psychological and social.
Institutions cannot create a safe space anymore. People fall back into smaller communities which are more resilient as they have their own internal structures and poles of authority. This abandonment only accelerates the psychological escape from current institutions. A psychological tragedy of the commons⁴.
The authority left vacant by failing institutions is waiting for new owners. To me there are two paths ahead. One is the capture of all authority by authoritarians. The second, which I feel less likely to happen but more worthy to fight for, is to re-equip institutions and make them fit to meet the values our time.
Crypto institutions filling the vacuum
Institution: (noun) A large-scale social arrangement that is stable and predictable, created and maintained to serve the needs of society.
— The Builder's Cone (highly recommend reading) —
Crytpo seems on time to fill the supply for legitimate institutions. Building on the recent debates in the tech community, Venkatesh Rao the co-author of "software eating the world"⁵ as well as others⁶ reiterate that we should focus on rebuilding infrastructure for society -- the first time in front of hedge fund managers in 2017⁷--.
Paraphrasing Rao, himself inspiring from Carlota Perez's seminal work on technological revolutions, we have now arrived in the macro rebuilds phase of the building cycle which started in the 1990s. Here is the cycle as described by Rao.
In the first stage you build tools (ex: computer),
In the second stage, you build alternatives to existing things (ex: email),
In the third stage, you disrupt existing things (ex: twitter vs. traditional media),
The last stage is consists in rebuilding macro infrastructure from foundations (ex: Bitcoin/Ethereum?).
"You should be thinking at that scale of ambition. Like Marshall plan scale, or foundational rebuilding phase, based on the logic of software eating the world." - Venkatesh Rao
Starting with their narratives, Bitcoin and Ethereum are all about boostraping new software based institutions:
Bitcoin⁸: bank the unbanked, E-cash, payment infrastructure, digital gold, reserve currency, etc.
Ethereum⁹: decentralized internet, decentralized organizations, crypto-crowdfunding, open finance, etc.
Traditional technology companies think "individual" centric when blockchain projects have an inclination for thinking "group" and "society" centric.
"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" - Bitcoin genesis block¹⁰
From white-paper¹¹ to $180Bn market cap in a matter of years, Bitcoin is claiming the title of global internet currency. Even though the Bitcoin network isn't really convenient nor cheap, It is consistently successful at providing unstoppable ownership over value to its users. At the same time it has consistently generated financial returns. Over time It has become legitimate to crowds who place these values higher than things like convenience. A mix of libertarians and cypherpunks alongside early adopters like dark web users.
Bitcoin is one example, catering for some values to some social groups. But Ethereum has attracted a new wave of entrepreneurs to crypto In Q1 18¹² when it suddenly eclipsed venture capital funding in the space. When ICO stopped and developers had joined entrepreneurs Ethereum had to cater for both demographics. Obtaining legitimacy from entrepreneurs and developers meant enhancing scaling platform stability. Even if Ethereum does not match the Apple store on these yet, it is way more promising on the level of interoperability among apps unlike the oldschool siloed apple.
Many properties that we can find in crypto solutions by design are cruely missing from current institution's arsenal
Depending on their target social group, crypto projects may pick and prioritize among blockchain's instrisic properties like : transparency, accountabily, security, control, traceability, interoperability, ownership and so on. All of which seem to be lacking in current institutions arsenal.
With no real market traction, crypto projects have been naturally addressing markets left increasingly vacant from legitimacy: money (Bitcoin), finance (DeFi), corporations (governance), media (curation, prediction). I think that these markets are a natural fit for blockchain technologies. And I think that analyzing which expectations fail to be catered by institutions in various social groups is an interesting way to sneak into markets and shape up a strategy for crypto projects.
Next time I'll use this legitimacy driven framework to think about the adoption of web3 based solutions. Later down the road I will share insights and updates on how crypto projects currently solve problems related to the media and information.
Thanks for reading! Ideas, conversations, collaborations --> DM open on Twitter @albiverse
References:
https://github.com/aragon/AGPs/blob/b718781e49f4f6d6d61099d28f1e72dd9e044a3d/AGPs/AGP-1.md
https://www.urbandictionary.com/define.php?term=legit
Suchman (1995, p. 574)
https://en.wikipedia.org/wiki/Tragedy_of_the_commons
https://breakingsmart.com/en/season-1/
https://www.marklutter.com/post/build-institutions-not-apps
youtube.com/watch?v=g_u7zkeNjz8&feature=youtu.be&t=384
https://medium.com/@nic__carter/visions-of-bitcoin-4b7b7cbcd24c
https://tokeneconomy.co/visions-of-ether-590858bf848e
https://en.bitcoin.it/wiki/Genesis_block
https://bitcoin.org/bitcoin.pdf
https://www.statista.com/statistics/804748/worldwide-amount-crytocurrency-ico-projects/
- https://breakingsmart.substack.com/p/how-what-and-where-to-build
Cover: Flaticon, Unsplash
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