Minting Address (Base and Mainnet): eicdeployer.eth
Donations (Mainnet): eic.eth
Creative Commons: This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0). (https://creativecommons.org/licenses/by/4.0/)
Vivian Vecchiarelli Creative Director
Disclaimer:
This content is for informational purposes only and is not legal, tax, investment, financial, or other advice. You should not take, or refrain from taking, any action based on any information contained herein, or any other information that we make available at any time, including content such as blog posts, data, articles, links to third-party content, discord content, news feeds, tutorials, tweets, and videos. Before you make any financial, legal, technical, or other decisions, you should seek independent professional advice from a licensed and qualified individual or firm in the area for which such advice would be appropriate. This information is not intended to address or be comprehensive of all aspects of EIC or its products. There is additional documentation on the ETH Investors Club website about how EIC and its community function.
Contributors
Tim Beiko Protocol Support, Ethereum Foundation
Ais Connolly Head of Privacy, TACEO
Josh
Paul Dylan-Ennis Author, Ethereum Researcher, Professor
Beth Mccarthy Program Director, Funding The Commons
Naomi Oba Marketing, SQD
Kevin
Dávila Co-Founder, Breadchain
Robert Drost CEO, Eigen Foundation
Garm Lucassen CTO, Glodollar
Owocki Co-Founder, Gitcoin
Christine Urban Community Steward, Cabin
Franck Royer Core Contributor, Waku
María Paula Fernández Head of Growth, Avara
*Founders Club
Anthony Sassano sassal.eth
Cheryl Douglass cherdougie
Nikhil Raghuveera pumpernikhil
William Peaster wmpeaster
Ryan Rasmussen RasterlyRock
Maika Isogawa maikaisogawa
Evin McMullen provenauthority
& Others:
0x30...702cb
0x15...448ea
Réka Medvecz reka_eth
Logarithmic Rex LogarithmicRex
Benoit.Tokyo benoit_palop
HomeValidator.eth iDecentralized
Kim bennavkim
Nick Tomaino NTmoney
Marek Olszewski marek_
Trent Van Epps trent_vanepps
Vienna
Khushi Wadhwa khushii_w
Jane Khodarkovsky
What is Ethereum’s culture, anyway?
Paul Dylan-Ennis
The Concept of Nouns
Naomi Oba
Memecraft: Narrative Dynamics, Discursive Control and Capital in Crypto Culture
Josh Dávila & Beth Mccarthy
The Jungle Experiment: A Vision for Building Tomorrow’s Neighborhoods
Christine Urban
Verifiable Clouds and Crypto-Settlement: A Manifesto for Open-Source Builders
Robert Drost
Reclaiming our $8 Billion How Stablecoin Profits Can Fund Public Goods
Garm Lucassen
Cover Story: What’s Next for Ethereum?
Tim Beiko
Resilient Social Networks and Applied Resistance Strategies for Humans
María Paula Fernández
Post Surveillance Capitalism
Ais Connolly
Onchain Capital Allocation: A New Frontier in Ethereum
Kevin Owocki
Extending Decentralized Messaging: The Vision for Universal Connectivity
Franck Royer
Editor’s Letter
Navigating Ethereum’s Social Layer
Transitional periods breed chaos. When combined with a volatile, speculationdriven asset, they create perfect conditions for madness. As we head into 2025, this defines Ethereum’s social layer: caught between DevconSEA’s energy in Bangkok, the looming US election uncertainty and subsequent excitement, and an unexpected wake-up call from the Solana community.
In this issue of ETH Investors Club Quarterly Magazine, we investigate how this introspection and subsequent growing pains hope to bring Ethereum into a new era. This quarter, we asked ourselves several questions, including: how might we use capital and global compute more creatively? How robust can Ethereum truly become? Are privacy and openness still a priority, or have all the cypherpunks left the building?
See, the social layer itself is precisely why we’re in our current predicament. Not only is Ethereum reportedly in need of new leadership at the Ethereum Foundation geared for a new regulatory environment, but it is experiencing a 24/7 onslaught of users incapable of an ounce of patience for building. Meaning that, yes, the World Computer is back, but with new ethereal abilities every day. With targets set on increasing adoption and integration of ZK privacy tech into Ethereum while increasing resiliency, this new vision is one of transformation.
When the memecoin bubble inevitably bursts, what remains is community. As 2025 approaches, bringing waves of new technology from robotics to potential AGI, from quantum computing to countless new applications, we’re witnessing a pendulum swing toward meaning and purpose. This shift accelerates the development of more meaningful internet citizenship through identity, privacy, and ownership. Here, the human element becomes crucial - our ability to tell stories in niche interfaces, continuously working to better understand one another.
Back in August 2024, Stani Kulechov, Founder of Avara, wrote an essay on Resilient Social Networks. Now, in EIC04, we explore this concept with the Head of Growth at Avara, María Paula Fernández, to understand how larger geopolitical issues affect resistance strategies as well. Complimenting this analysis on resilient networks is an introductory essay on the Ethereum social layer from Paul Dylan-Ennis, also known as ‘polar’ online, which leads into an upcoming publishing of research funded by the Ethereum Foundation 2024 Academic Grants Round. For myself and much of Ethereum, understanding our foundation and history is deeply important to educating new entrants to a massively growing global onchain ecosystem.
Lorecraft is critical to telling the stories of builders, developers, founders, investors, artists, and all Ethereans. This year at EIC, we’re dedicating the future of niche media to experimentation. Our strength lies in our readers, the researchers who provide insights, and our supporters whose feedback we appreciate dearly. We hope you learn something from these pages about Ethereum you didn’t know before, and when you stumble on crypto in the future, you’ll be more informed, more curious, and more confident to continue building.
Ethereum is not designed for any specific purpose. Instead, Ethereum is designed to enable others to pursue their purposes. The consequence is Ethereum is a highly pluralist blockchain community. Pluralism is considered a good among Ethereans, but it has costs. In particular, it can be difficult for newcomers to understand what Ethereum is for and what it should be in the future. One shortcut to answering these questions is to show the kinds of people operating in Ethereum and what they believe. This we will do by uncovering Ethereum’s mainstream culture and its various subcultures.
What is Culture?
Culture is more nebulous, porous, and interesting than any categorisation can hope to capture, but there are theories of culture that can help us put some form on the different subsets of people you might encounter in Ethereum. The alternative is to be so cautious of cultural categorisation that you say nothing.
The most useful is the term imaginary. For Charles Taylor, imaginaries are how ‘ordinary people “imagine” their social surroundings, and this is often not expressed in theoretical terms but is carried in images, stories, and legends’ (2004, p. 23). That is, imaginaries are not theories about what Ethereum is. Instead, they concern the common cultural understanding about ‘how things usually go’ and how things ‘ought to go’ (p. 106). As the gap between these two indicates, there is also a futural dimension to imaginaries as well. The pragmatic accommodations in the here and now ultimately serve to bring about the coming ideal.
For Sheila Jasanoff, sociotechnical imaginaries, our kind, tend to involve:
collectively held, institutionally stabilised, and publicly performed visions of desirable futures, animated by shared understandings of forms of life and social order attainable through, and supportive of, advances in science and technology. (2015, p 4)
That’s us, right? Let me rewrite that in Etherean. Ethereum is a community-run project circling around stable institutions (AllCoreDevs, GitHub repo, Ethereum Foundation…) where we perform (run nodes, stake ETH, build dApps…) a desirable future animated by a shared understanding (decentralisation, censorship resistance…) and supportive of advances in science and technology (dApps, DAOs, DeFi, network states, DeSci…).
The Ethereum Imaginary
Let’s investigate Ethereum’s imaginary a little more. Based on Taylor and Jasonoff, we should expect to find in Ethereum (i) a map of one’s social surroundings carried in images, stories, and legends, (ii) a common understanding of how things should go, how things ought to go, and finally (iii) a shared sociotechnical vision of the future.
(i) The average Etherean carries in their mind a repertoire of images, stories and legends. Ethereans encounter the visual code of Ethereum through its octahedron logo, the world computer motif, or the softness or lightness of how it’s presented at conferences. We should include here their tactile relationship to Ethereum through browser wallets and dApp frontends and across metaphorical bridges into the Rollup ecosystem, which is indicative of a wider, living world. Stories are part of the induction: the founding story, the DAO hack, and, of course, The Merge, which is presented as a heroic feat of live engineering. The newcomer, who may know little, will soon also learn about the symbolic value of Vitalik Buterin. Vitalik is a walking mythos, a legend somewhere between techno-spiritual guru and benevolent dictator, but, crucially, not the leader, which brings us to how things go and ought to go.
(ii) You are supposed to be a home staker (how it should really go), but you’re actually a liquid staker (how things really are). You’re supposed to be selfcustodying ETH, but you are holding some on an exchange. You should probably use DAI, but you use USDC. Rollups should be at Stage 2 but they are at Stage 0 or 1. The Ethereum Foundation exists, but it should be subtracted (according to their own ethos). Ethereum, like any community, has its realities and what they fall short of. This dance is to communities as natural as the Sun and Moon swapping the limelight.
(iii) Now we get to the blurriest part of Ethereum, its future. You’ll notice in the section on sociotechnical imaginaries I said under desirable future, well, nothing. I skipped over it so lithely you didn’t even notice. This speaks to one of Ethereum’s more fascinating qualities qua social imaginaries, that the Cultural Endgame is unclear. We know in intimate detail what the Technical Roadmap is, but nobody is quite clear what an Ethereum-enabled society might look like, in the expansive sense, or what a world built around Ethereum as an infrastructure, similar to the Internet, might look like, in the more muted one. This question mark in our futural orientation is a question for another day.
There is, then, an Ethereum imaginary that we can use to anchor ourselves when discussing culture in the context of Ethereum. We might more informally call this Ethereum’s “mainstream” culture. Most everyone who attends Devcon or watches Bankless will be familiar with the contours of this mainstream Ethereum imaginary we have just described.
Ethereum Subcultures
Mainstream culture implies subcultures. Historically, a subculture was a subset of the mainstream that rejected it, like hippies, punks, or bikers. Today, a subculture means a group with shared interests, like Furries, stamp collectors or fans of Helldivers 2. In Ethereum, subcultures are best characterised by their practices and values and, to some extent, their attitude to the Ethereum mainstream. While imperfect, and you will likely complain I missed some, I would say we have Cypherpunks, Degens, Regens, Pragmatists, and Lunarpunks.
Cypherpunks
Ethereum is, in many ways, a breakaway faction of Bitcoin culture. Early Bitcoin culture combined two older Internet communities, the Cypherpunks and the CryptoAnarchists. The Cypherpunks, in the pre-Crypto sense, are a storied group. In brief, the Cypherpunks were digital privacy activists extending all the way back to the 1980s. They are notable for their critique of how the Internet was developing in terms of privacy, autonomy, open source, and censorship. In their reading, much of the Internet’s descent into a corporate malaise could be pinned on centralisation. The Crypto-Anarchists represent the side of Bitcoin interested in economic libertarianism, circling around topics like hard money, Austrian economics, and anti-statism (this part of the culture has been superseded to some extent by an Americanised populism, but that’s a different story).
Cypherpunk is often spoken of as an unbroken cultural lineage extending back to Tim May and Eric Hughes. But beginning with Bitcoin and certainly by the time we reach Ethereum, we begin to see a distinctly Crypto variation of Cypherpunk coalescing around a set of core values: decentralisation, permissionlessness, censorship resistance, and, notably, a new one introduced by Vitalik, credible neutrality. All of the Ethereum co-founders were active in the early Bitcoin community and, in their own manners, were disaffected Bitcoiners (Shin, 2022, p. xi). By their actions, we know that they were also disaffected or perhaps dissatisfied Bitcoiners. These founders were mostly collaborative hackers building a neutral infrastructure according to the four core values. This
cypherpunks degens regens pragmatists lunarpunk
spirit has remained most consistent among the Core Devs who prioritise the slow build of the protocol according to the Cypherpunk values over any demand to sacrifice them at the altar of the market. I would also include here media outlets such as The Daily Gwei or Bankless, which are not ordinarily considered Cypherpunk but are routinely discussed as they fell out of favour elsewhere.
In many ways, Cypherpunk has acted as the conscience of Ethereum, and just like our own conscience, it can sometimes get crowded out. For much of Ethereum’s history, it is arguable that Cypherpunk has been somewhat forgotten and memory-holed as the mainstream expanded. This is why it was necessary for Vitalik to call to “Make Ethereum Cypherpunk Again.” Since this call to arms, there has been something like a Cypherpunk Renaissance, carried through by organised groups like Web3 Privacy Now, but also in spirit in dApps like Radicle, Fileverse, Rotki, and, of course, the most Cypherpunk of them all, Tornado Cash. Thus, Cypherpunk is a resurgent subculture but not quite yet back to its original status as so dominant that it was more or less equivalent to the Mainstream.
Degens
Unlike Cypherpunk, which has a rich contextual prehistory, Degen culture is very much our own creation.
Short for degenerate, the Degen is someone who focuses on speculation. In practice, Degen is characterised by short-term thinking, trend-chasing, and the profit-motive. But Degen is not entirely superficial. It represents something like a populist strand within crypto that butts heads with OGs and perceived elites within Ethereum. It looks at these as groups that have already made it and can therefore afford, literally, to focus on high-minded, long-term thinking, while the Degen is just trying to make it out of “the trenches.”
Degens are sometimes called financial nihilists. I think this can be interpreted in a few ways. In the bluntest sense, Degens can be said to believe in nothing except the pursuit of gains, though paradoxically, that means they do believe in something! But most certainly, the pure focus on accumulation represents a rejection of the loftier ambitions of Cypherpunks and Regens. Another way to think about this is that the Degen believes that speculation is actually Ethereum’s use case. It’s not uncommon to see Degens argue that gambling will onboard people because that’s what normies really want to do. And so, according to this line of thinking, we shouldn’t think of Degen in purely negative terms but rather as the onramp.
While it is impossible with such a diffuse community to state this objectively, I am of the view that Degens are the most common culture or in the ascendant. By this, I mean the Average Joe or Jane on Ethereum today is probably a Degen of some kind, perhaps not
consciously so, but more someone who is primarily interested in finding some kind of opportunity on the markets that makes their life better financially.
Regens
Regen culture is a bit of a minority sport in Ethereum, but it has strong representatives that amplify its influence on the overall culture. Regens (aka Solarpunks) can be defined by the belief that Ethereum can produce positive externalities for society. The Regen is characterised by an interest in collaboration and coordination. This is why you are most likely to find Regens clustered around Decentralised Autonomous Organisations (DAOs). The Regen is a “governerd” and knows their way around a Snapshot vote. Regens are also notable for their interest in the work of Elinor Ostrom, in particular her work on the commons, public goods and polycentrism. Regens tend to be more liberal, progressive, and community-oriented. It is notable that a number of major projects are explicitly identified by a Regen aesthetic and culture, such as Gitcoin and Optimism.
Pragmatists
Of all the subcultures Pragmatism is arguably the most ambiguous to define because it is intended to more or less capture those involved in Ethereum who don’t have strong ideological views and can perhaps be defined by this very absence. Pragmatism tends to be found
“... in the absence of any central authority, it is ultimately culture that lends legitimacy to decisionmaking.”
among a wide array of stakeholders within Ethereum, from dApp builders to Venture Capitalists to Consumer Crypto advocates. In the eyes of Pragmatists, Ethereum is seen from the “other side” to the developers, as not a neutral infrastructure to be created but an infrastructure to be leveraged and used for their intended goals. To this group, Ethereum is what Ethereum does, not what
Ethereum will be, and they can often jar against the long-term timelines of the Core Devs. For example, it is a common complaint of Pragmatists, particularly those in DeFi, that the Ethereum Foundation (used loosely, perhaps incorrectly) does not support DeFi despite it representing the majority of activity on the protocol, with all the glamour instead going to the Roadmap.
Lunarpunk
Lunarpunk represents the privacy or anonymityfirst strand within Ethereum. It has its roots in the work of Rachel-Rose O’Leary and Amir Taaki, the developer-theorists of the DarkFi project. While DarkFi is an independent Layer 1, the memetic narrative of Lunarpunk has proven influential among Ethereum’s privacy advocates.
Lunarpunk sets itself strongly against Solarpunk (Regen) culture. Solarpunk is read as naively optimistic/utopic and misguided in its belief that the transparency enabled by Ethereum will prove a positive to society. To Lunarpunks, the Solarpunk/Regen interest in creating new blockchain-based institutions that leverage transparency to coordinate - such as DAOs - leaves them vulnerable to state regulation and pressure. In contrast, Lunarpunk operates in a more adversarial manner, baking anonymity into its protocols in order to better resist regulatory and state capture. Lunarpunk shadows Ethereum discussions around privacy and anonymity, ironically shining a light on how lacking it is within mainstream Ethereum discourse despite Ethereum’s Cypherpunk heritage.
Miscellaneous
There are large numbers of groups that don’t fit any particular mould. For instance, it is unclear to me where Decentralised Science (DeSci) or network states or d/acc fit into this picture at the current moment. This is a good problem because it suggests the culture is evolving, but for now, I am afraid you will have to reside in the folder labeled Misc.
Burying the Cultural Lede
As a cursed academic it is illegal for me not to introduce some new jargon. With my dear reader in mind, I have buried in deep: Legitimate Directionality. As Taylor points out, social imaginaries provide us with ‘a widely shared sense of legitimacy’ (p. 23). It lets us know the contours of acceptable and unacceptable behaviours. When I picture Ethereum’s social imaginary, I imagine a box
with bright red borders. Outside the box is to transgress the imaginary, to commit a faux pas, and thereby evoke the ire of the Social Layer, the material manifestation of the social imaginary. Importantly, the Social Layer is mostly asleep unless someone starts playing outside the box, in which case it stands up straight, ready for battle. Now, while Ethereum has many subcultures, each of these understands behaviours that violate the “social contract” writ large. There is a shared understanding of actions that are incontrovertibly illegitimate to everyone in the Social Layer. We all grok whether something is directionally legitimate or not.
Here’s an example: a new hard fork upgrade is about to go live. It includes a package of EIPs, and in particular, you are excited they are going to introduce Verkle Trees. But when you tune into the watch party, you discover the Core Devs decided at the last minute to instead implement something completely different, like Single Slot Finality. Now, you might want SSF and know it’s a good thing, but that’s not what had been discussed on all those ACD calls, on the podcasts, on CT and so on. The decision is illegitimate because the Core Devs promised to do something, but did something else (see Zamfir, 2018). And the reason the ‘something else’ matters is that decisions are only legitimate within the context of the shared understanding that in Ethereum, we do not make centralised, unilateral decisions without the input of the community. The direction of legitimacy has been violated.
And we know all this implicitly because in the absence of any central authority, it is ultimately culture that lends legitimacy to decision-making. But in particular, to the direction of that legitimacy, to where we are heading, because Ethereum has a social imaginary, and that means we’re going in that direction together or else we’re not a community at all.
References
Jasanoff, S. (2015) ‘Future Imperfect: Science, Technology, and the Imaginations of Modernity,’ in S. Jasanoff and S.-H. Kim (eds) Dreamscapes of Modernity: Sociotechnical Imaginaries and the Fabrication of Power. University of Chicago Press, pp. 1–33.
Taylor, C. (2004) Modern Social Imaginaries. Durham: Duke University Press.
Zamfir, V. (2018) Blockchain Governance 101, Medium. Available at: https://blog.goodaudience.com/ blockchain-governance-10
ETHEREUM CULTURE
ETHEREUM CULTURE ETHER
ETHEREUM CULTURE ET
THE CONCEPT
Naomi Oba Marketing Lead, SQD
OF NOUNS
I’ll be the first to admit that before the Kiwi writing contest, I’d always put off learning more about Nouns.
I was vaguely aware that they were an NFT DAO, that Nouns NFTs were too expensive for me, and that they went through a fork over naming an endangered frog species - which at the time seemed a bit of a stupid reason for a divorce, but then... who ever talks about endangered frogs?!
That was until a few days ago...
A small auditorium. You’re sitting on the top left on the stairs among a crowd of maybe 25 people. Looking around, you spot art students and culture aficionados. Two of your friends are still outside, chugging their glasses of Chardonnay, not two to pass by a bar without ordering.
Another one sits right next to you, studying the pamphlet.
On the first site, it reads that the play is centered around Nouns, written by a hobby linguist who got fascinated with this group and picked a grammatical concept to name their governance experiment.
As your friend notices that you forgot to prepare - as usual, you just walked into things without a clue - she reads the next part aloud.
“The linguist in me knew nouns as a syntactic class. They are one of the most time-stable concepts in any language, and let’s face it, we couldn’t get through our most basic conversations without them. There’s also a huge variety of them... which got me wondering: what does an organization that calls themselves that do?
At the same time, nouns encompass such a vast field that they can be difficult to lock down. I
wanted to explore whether the same can be said about this group. And to do that, what better way than imagining a dialogue between different parties at, where else would it be, the networking area of a crypto conference?”
That’s where your friend stops and adds.
Maybe I should have chugged one of those wines, too. I’m not sure I can face crypto networking without it.
Your bittersweet chuckle is drowned out by the gong. The two missing friends hurry in.
The lights go off.
Only one lone spotlight illuminates the stage, where a figure dressed from head to toe in crypto merch struts along. We all know them—one of those overenthusiastic BD guys.
He’s on his phone, frantically responding to telegram messages (you can see his phone screen on a screen hanging on the wall behind) - then opening Google and typing in: What’s Nouns DAO?
Talking to himself: Sooo... Nouns is a DAO where people buy a 32×32 pixel character NFT to get in. One NFT, one vote. That’s simple enough. Maybe I should buy one... Oh, wait, no. I need to make a lot of commission to pay 0.69 ETH... And then, will it be worth it? My team expects a lot of new partnership announcements and integrations...
What else does it say here? Ah, yes, so it’s CC0 licensed. That means I can print myself some cool T-shirts with these glasses. And it gets better; there’s
William Saville-Kent’s The Great Barrier Reef of Australia (1893)
a lot of funding in the treasury, and they don’t seem greedy with it. Maybe I should lobby someone to get a proposal for my merch through. Or a partnership... Behind him stealthily, the stage crew arranges a few tables, paper cups, and a coffee bar. They even include the obligatory stickers and a bunch of cheaply printed flyers promising a guaranteed 4000% yield.
The BD guy, let’s call him Steve, heads toward the coffee.
From the right enters someone else—a DAO enthusiast wearing a T-shirt making loose references to mushrooms and their decentralized properties.
Steve: Hey, want a coffee?
DAO enthusiast: Nah, a tea for me, please.
Steve: Sure, they got some here.
Beverages sorted, they both move toward one of those standing desks to study the agenda.
DAO enthusiast: I’m Mark, by the way. And you’re?
Steve: Steve. Nice to meet you. Did you see that someone from Nouns is speaking?
Mark: Nouns? I thought they were dead.
Steve: Nah, why would you say that?
Mark: Interesting. Well, you know, after this entire frog debacle and the fork, all I remember is that a handful of OGs quit, and people lost interest in it. It didn’t help that they moved all of their communications to Farcaster. I’m sorry, I have commitment issues with any social platform that isn’t X.
Steve: Out of sight, out of mind.
Mark: Attention is all you need and all that jazz.
Steve: I gotta say, though, they seem alive and well. At least, this is what their upcoming talk suggests. They even have tooling that allows anyone to set up their own Nounish-type DAO.
Mark: Yeah, whatever that means. Nounish. Any clue?
Steve: Honestly, my best guess is that it’s somewhat related to the NFT mechanism and the phrase on their website saying that it’s a community-
owned brand that makes a positive impact by funding ideas and fostering collaboration.
A green-haired girl enters from the side, nose deep into a book, the cover identifying it as The Starfish and the Spider.
Mark: Oh hey, there’s Isa. Let’s ask her what she thinks about this. Reading, as usual. I hear she loathes networking.
Isa, who overheard that last part: I don’t hate it. I just hate it when people can’t talk about anything but how amazing the y are. Or worse, stop talking to you the second they realize you’re not an angel investor or KOL. Anyway, what’s new?
Mark: We were just discussing Nouns DAO and what it could mean to be Nounish. Isa: Funny choice of name, isn’t it. There’s pronouns but no anti-nouns. So, one could assume you can’t be against them.
Mark : I’m not sure whether that’s really smart or dumb or something in between. Isa: If only I knew. From what I hear about Nouns, it’s a pretty exciting experiment in governance. You see, I’m reading this book that talks about the rise of leaderless organizations. For example, did you know that the Spanish Empire, with all its advanced weapons, lost to the Apache?
Frantically turning pages, Isa moves toward the counter to get some tea.
Steve: I mean, all these decentralized organizations sound great in theory, but I’m not so convinced they deliver more than their centralized counterparts. It just doesn’t make all that much sense to me. You grow infinitely by one person every day? How can you get stuff done?
Isa, who has found the page she was looking for: let me quote
If we’re used to seeing the world through a centralized lens, decentralized organizations don’t make much sense.
So maybe you just need to be more open to different ways of doing things.
Mark: What she says. DAOs are quite fascinating. Although I admit they’re far from perfect, the usual problem is that whales end up deciding. If you want to be cynical, you could say that’s just like politics.
Isa: Maybe the money is the problem. The author has some examples of organizations before DAOs existed. One of them is the anonymous alcoholics. It’s a decentralized organization where the steps and program are agreed upon, but you can implement it in your town.
At Alcoholics Anonymous, no one’s in charge. And yet, at the same time, everyone’s in charge.
Maybe it’s like that at Nouns too?
Mark: Could be. It would appear that some spirit of accountability for creating a positive vibe around the brand - for lack of a better word - is definitely there.
Steve: They’re funding e-sports team players and plenty of creative things like the recent movie fest. There’s also a Nouns cafe, a deli...
Isa: Yeah, that checks out. My only association with it had been the creative aspect.
Steve turning toward Isa: Any more smart things in that book that might help with our discussion here?
Isa: Hmmm, there was something about how for users, it doesn’t matter whether the entity is centralized or not as long as they can do what they want. I don’t think that’s as important here, people might encounter these nouns, the glasses, in any context. So they won’t necessarily ever figure out what they are about. But maybe this one:
It’s not just about community, not just about getting stuff for free, not just about freedom and trust. Ideology is the glue that holds decentralized organizations together.
Mark: Aaah, ideology. That’s become a bit of a dirty word, hasn’t it?
Isa: Ha, you don’t say. Isn’t the same true of the word DAO these days?
Mark, visibly annoyed, turns his attention toward the screen, which is now showing the agenda of the conference.
Steve: We got Napoleon to thank for that—the bad associations with the term ideology. We might be onto something. Isn’t it the thing you can’t clearly define, the fluffy stuff that holds all this together? Isa: I believe so. Like in a cult. But without being about a supreme leader who wants to have multiple wives.
Mark: You watch too many cult documentaries
on Netflix. Let’s go watch this talk, maybe we’ll be smarter for it—something about brand building.
Isa: Since when are you interested in brands?
Mark: Since I’ve been appointed as a council member to oversee the marketing working group.
On the screen for the audience, it reads: five weeks later, the DAO decided to fire the working group Mark was appointed to oversee.
All three walk out of the door.
The stage crew rearranges the scene. No more coffee. They hang up some prints on the wall and position a variety of liquors and wines on the right. There’s also an obligatory pizza and some snacks.
Next to it is a big banner advertising [generic crypto company]. They put some legos on the table, probably because modularity is hot these days.
Isa, Steve, and Mark enter the scene again, serving themselves drinks while another person walks in.
Isa: I don’t know about you guys, but I feel my head is gonna explode. So much information.
Steve: Ha, yeah, I saw you were even making notes.
Isa: Yeah, obviously. In German we say wer schreibt, der bleibt. If you write, you remain.
Mark: This branding talk was interesting. I, too, noticed that recently, stuff is so ephemeral that brands have become harder to define. Unless you’re so uber-successful that people will even see your red Coke can when zero red pixels are in an image.
This image is shown on screen, fooling the audience.
Isa: Yeah, that’s like brainwashing. But aesthetics is just one part of the equation. Outside of the Noggles and the PFPs, the styles that Nouns are expressed in are pretty diverse.
Steve: Isn’t that just the same as the headless brands they talked about in that panel? There’s no one committee doing all the branding, but there are the Noggles and some loose association of good vibes. The person who also entered the rooms walks up
to the trio. He is equipped with an ENS badge dangling around his neck and an Art Blocks earring in his left ear, clearly an NFT holder.
NFT Holder: Hey, y’all, I hear you’re talking about Noggles... May I butt in?
Agreeable nods all around.
NFT Holder: I’ve been following the Nouns thing for some time. There was a time it was considered cool and novel. They were this grassroots movement that wanted to fund public goods and have fun. I don’t quite feel they maintained that image. Maybe they have too many parasites in the community, or they just suffer a similar fate as other DAOs... apathy. Clearly, some proposals are just aimed at draining funds, and I don’t sense that cloud wisdom always prevails... Oh, also, what happened to my manners? I’m Jojo. Nice to meet you all.
Mark: Apathy, indifference... the enemy of all our noble communal aspirations.
Isa: You sound like a burned child, hun.
Jojo: Don’t get me wrong. I still think the intentions were good, and we all in crypto are constantly experimenting. This includes stuff going wrong at times. The question is whether you move on from it. During the latest fall-out, I reckon they cut off some of the idiots that didn’t align with the...
Steve: The ideology. The Nounish-ness. Honestly, they should have written a manifesto or something. That’s the new hot thing, isn’t it?
Isa: Manifestos are nice. The spirit of Nounishness is haunting the world haha. But who even reads them nowadays? In my view, what drives the people in these communities and their worldview matters more.
William Michael Harnett: The Bankers’ Table
Hokusai: Asakusa Hongan-ji
For example, the impression I get is that they aren’t mindless accelerationists or cynical postmodernists....
Mark: Hmmm...Being Nounish, we’re not much closer to a clue of this, are we?
Jojo: One minute. I met this lady who was part of Nouns in the other room. Let me find her and drag her into this. It’ll be worth it.
■ ■ ■
An elegant lady wearing a throw-over kimono covered in a Noggles pattern and a black onesie enters the room, led in by Jojo.
Noggles Lady: Hey, everyone. I’m Lisa. I hear you’re trying to understand Nouns.
All eyes on her expectantly, she continues.
Lisa: I got my first 2 years ago, and by now, I’m up to two. I went through the ups and downs, but what keeps
me around is that the overall goal hasn’t changed. It’s still about funding public goods, spreading the Nouns brand, and having fun. It’s cliche, but the people keep me around.
Isa: But how do you decide what spending is worth it or not? What’s the mindset like?
Lisa: We don’t all agree at all times, but that’s the beauty of having a diverse crowd. And, in a sense, what makes it worthwhile? How boring would it be if we all had the same opinion all the time? We also funded stupid stuff, and at the same time, many cool things got built that even found their use beyond the Nouns community, such as in OP governance.
The wrong way to approach it is by asking what’s in it for me. What I’d like to believe is part of the Nounish mind is to oppose zero-sum games and operate under an abundance mindset.
Steve: So, it’s a bit like being a hippie?
Lisa: Steve Jobs was a Hippie.
Jojo: A successful one at that. Everyone knows the Apple brand...
Lisa: Indeed, if there’s one thing we can agree on as Nouns, we want to grow the brand, and alongside that crypto as a whole. We all benefit from that, don’t we?
Mark: Yes, true. So, are you all crypto-optimistic humanists?
Lisa: You could say that. Yes, we believe in people and the positive impact we can make coming together. That includes making mistakes along the way... Isa: Honestly, that’s refreshing. There’s a type of DAO persona who ends up talking so much about quadratic voting and the abstract of political philosophy that you wonder who’s supposed to want to get in. Now, at least, this one is simple. I might not be able to afford the NFT, but hey, why don’t we run our own Nounish Collective?
Steve: As an experiment? And what’s our shared mission?
Isa: Hm, could we just become bored with the crypto events support group? Do stuff like a trip to the local museum instead of enjoying the view of the hotel carpet... simply be a bunch pondering the deep questions such as what does it mean to be nourished or the reasons for the loneliness epidemic?
Jojo: I’m in. There’s a manga exhibit around here I’ve been meaning to go to. Now we can do it as a group!
Steve: If we throw in some funds, we can even buy a ticket for a person who otherwise can’t join... In the long run, we could use some yield earned on stablecoins. Then it doesn’t feel like we’d be asking people for money upfront...
Isa: Yes, I like that. I have no clue how it could technically work, but I’d be happy to have some of my farmed tokens go toward a good cause, like getting someone new into an art exhibit. Who knows, it might grow into something beautiful...
Mark: Another governance experiment in small? Of course, I’ll have to join. Let’s make something fun of this and go beyond the usual hyperfocus on tech toward focus on what moves humans like us.
Lisa: That sounds like a Nounish thought to me.
■
In the back of the room, a guy in a suit enters... A lawyer or ex-wallstreet banker.
But before the third act begins, the gong goes off—break time.
You turn toward your friends. Everyone seems eager to get to the bar and start discussing the dialogue that just transpired.
A pamphlet falls to the floor. In passing, you read: The group pursues their experiment of launching a Nounish Collective. After an initial honeymoon phase, opinions on how the financial side should be handled converge, showing deep rifts. Things worsen when the friends learn they need a legal entity, and a lawyer suggests setting up a foundation, imbuing himself with veto powers in the process. Can the friends unite to overcome the power-hungry lawyer, or will their Collective fall apart?
You recall a quote from Mark Twain.
“If you want love and abundance in your life, give it away.”
You look forward to seeing how the drama resolves and whether the optimistic friends will win against the power-hungry Hobbesian lawyer. You’re hopeful despite so much evidence to the contrary.
Thanks for reading.
All the characters in this play are a figment of my imagination. The conversations I had in my mind trying to make sense of Nounish.
I figured I’d try something different than a usual stream of consciousness by one voice (me).
Big thanks to the crypto friends I pestered to provide me with their thoughts on Nouns; you might find your stance reflected in one of the figures :))
Credits to the Nouns for providing me with insights, Chris & Nounish Prof . Further credits to Mo from Animoca and Wai from the Galverse crew.
A bit of Dr. Nick’s thoughts also found their way into this, and nuance from a discussion in the FactoryDAO chat.
Highly recommend reading The Starfish and the Spider for a look at decentralized organizations before DAOs existed.
This piece was the winner of the Nouns x Kiwi writing contest and curated for EIC04 for re-release.
MEMECRAFT: NARRATIVE DYNAMICS, DISCURSIVE CONTROL AND CAPITAL IN CRYPTO CULTURE
Josh Dávila Co-Founder, Breadchain
Beth Mccarthy Program Director, Funding The Commons
culture, markets, funding, and job creation are driven and sustained by narratives and the individuals who craft and propagate them.
Anyone who has participated in crypto spaces on social media through the past bull and bear cycles is familiar with thought leaders and the stories they place themselves at the center of – stories that continuously build on each other across market cycles and constitute a shared intersubjectivity among crypto ecosystems. The phenomenon in which crypto media and culture exist within a distinct conceptual and ideological framework is exemplified by the language used for onboarding to the space: a crypto newcomer “goes down the rabbit hole.”
They pass from the “normie” world, unaware of the cultural signifiers, rituals, hierarchies, practices, and
communal trauma, into a shared state of mutual understanding. Once they absorb the characters and lore of the ecosystem – a newcomer gains the tacit understanding required to parse context in forums, seek out alpha, and avoid predatory elements. Memes are an essential pathway to identifying crypto’s shibboleths, unlocking participation in the discourse and investment trends that constitute the current movement of “the cycle.”
This shared perception that there is a continuously unfolding now, connected to a past full of regrets, lessons, relationships made along the way, and to a future being brought into being through tenuous “hopium” or tainted by FUD, is a critical element of the crypto collective intelligence. Like the common mythos of a past golden age, just out of reach yet nearly attainable again,
the ebb and flow of abundance and scarcity, hope and nihilism characterized by market cycles creates a temporal orbit circling on the axis of the present moment.
In his Theses on the Philosophy of History (1940), Walter Benjamin, a German philosopher detailing the zeitgeist of late 1930s Berlin, captured this collective state of intersubjectivity with his concept of jeztzeit: “Now-time, in which the past and present are drawn into messianic relation.” In Benjamin’s jeztzeit, the present Now, a singular point, is suspended between the sealed inevitabilities of the past and still-definable future, thrumming with “revolutionary possibility.”
Unsurprisingly, for a community unified by inscribing actions on an “immutable ledger,” crypto culture is obsessed with self-referentially placing itself in the Now. Our
history is delineated by the stark contrast of before and after: from forks of the blockchain itself to possibilities closed off by shifting regulatory environments, hacks, and “progressive decentralization” reshaping the ecosystem, mass aping and rejection of trends and asset classes by the order of billions of dollars. Our collective memory is shaped not only by the fluctuations in capital of market cycles but also by the narrative fluctuations that move together with them. Past narratives from “DeFi Summer” (2020), the NFT craze (2021), the rise and fall of ReFi (2022), and the recurrent but never fully realized DAO renaissance join unfolding ones like d/acc in the tacit experiences of the subcultures creating them. In writings much earlier in Benjamin’s life (Erfahrung, 1913-14), exploring the concept of a deep spiritual grounding expressed through one’s profession and community bonds in the chaotic time preceding WW1, he distilled the nature of knowledge and wisdom gained through such lived experiences as contrasted to other forms.
Now, as we navigate a similarly chaotic era through crypto culture’s porous boundaries between social, professional, and spiritual life, the concepts of Erfahrung and Erlebnis are relevant to our dominant form of cultural expression: memes.
Meme formats like “Virgin vs. Chad” and “Starter Packs” enable a rapid progression from Erlebnis to Erfahrung – from the feeling of being intellectually aware of a topic to deeply knowing its contours, context, and potential for humor. Accessing this knowledge takes one “down the rabbit hole,” the portal that transforms from observer to participant, consumer to cocreator, normie to degen. Memetic engagement activates Erfahrung, clocking into the Now-time to join in its worldbuilding and sensemaking.
One concrete example of the state change from Erlebnis to Erfahrung lies in the meme of “hodling.” The crypto meme “HODL” originated from a 2013 BitcoinTalk forum post titled “I AM HODLING,” where a user misspelled “hold” in a rant about resisting the urge to sell during a volatile Bitcoin market,
inadvertently creating a term that became a rallying cry for long-term crypto investors. Below, we can see a common series of events in which new cryptocurrency owners begin to identify with the culture.
1. You buy crypto and read about hodling on online forums
2. The market goes down because crypto markets are particularly volatile
3. You don’t sell your cryptocurrency in hopes that prices come back up 4. You’re reminded that you hodled whether the market goes back up or stays down
5. This short feedback loop reinforces the crypto meme quickly because of volatile markets, and you now identify with crypto culture
Memes are also intentionally deployed by stakeholders, whales, market movers, ecosystem shapers, and other stakeholders to scale collective sensemaking, drawing the anon masses into a certain
narrative’s gravitational pull. Examples range from “greenpilling” into ReFi/public goods to “Moloch” as a shorthand for coordination challenges and the “infinite garden” language currently popularized by the Ethereum Foundation to encourage inclusive, collaborative play in “infinite games.”
Whether calculated or emergent, the way the language of memes influenced flows of capital in the crypto space has evolved as the space matured. Early memes, including those like “hodl”, “diamond/paper hands”, “getting rekt”, “to the moon”, and many more, largely facilitated the movement of capital into cryptocurrency markets. They express the experience of getting your first coins and surviving the initial boom and bust cycle that most who make it to the other side get through, thus “joining crypto,” with varying results but often with profits, at least on paper.
Memes in crypto have not only become more complex as the technical affordances of the technology have advanced but have also effectively created a concentric circle to influence the movement of capital largely already within crypto markets as a way to distinguish various investment narratives from each other. Whereas memes around Bitcoin largely stayed closer to the kinds of memes stated previously, ones around Ethereum, including “web3”, “(3,3)”, “regen/degen”, “yield farming”, “WAGMI”, and many more contained far more layers of interaction to explain largely more complex ideas that matched with the actions associated with the narrative on a blockchain with smart contract capabilities.
Elon Musk’s likely appointment to the Trump administration and his push for a “Department of Government Efficiency” (DOGE) highlight how powerful figures
now exploit memes for political influence, masking agendas like austerity and welfare cuts that drive people toward unequal private markets. The notion of memes as grassroots expressions is undermined by Big Capital’s use of social media to control narratives for political power—a modern twist on the longstanding practice of elites shaping narratives through market dominance, now amplified by techno-capital’s rise over industrial and financial capital. Memes, therefore, are not neutral. They harness identity, intersubjectivity, and ideology to create, reinforce, and reproduce dynamics of power and control. Crypto culture exists in and perpetuates a system where beliefs convert directly into financial gains and losses, where information asymmetry is critical to individuals’ success yet transgresses collective values around transparency and decentralization. Where we “don’t trust, but verify” and powerful stakeholders ultimately exert discursive control. The system survives and extends itself through cycles of reinvention yet continually repeats patterns of exploitation, extraction, and oppression from which it has supposedly broken free.
Memeing safely requires turning a critical eye to one’s place in these dynamics. Navigate wisely by questioning who is benefitting and why. Define your role in market and narrative dynamics, observe contradictions, and focus on building a resilient web of trust rooted in integrity and collective well-being.
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FUTURE OF FINANCE
A Manifesto for Open-Source Builders
Robert Drost CEO, Eigen Foundation
Fight the Good Fights
Buddhism offers a lesson about two reeds: one rigid and inflexible and the other soft and pliable. The rigid reed may appear strong, but its inflexibility ultimately causes it to snap and break. In contrast, the pliable reed bends with time, demonstrating resilience and adaptability and avoiding the fate of fragility.
Existence and the overall human experience benefit from being able to bend with time, according to the teaching. But that breaking point–or tipping point—is a metaphor that extends
across the human experience and is apropos to the contemporary situation unfolding in the world of technology and open innovation. In one of the most recent episodes in the multi-decade crusade for opensource technology, a three-judge panel of the US Court of Appeals for the Fifth Circuit reversed a Texas District Court decision on November 26, 2024. The Fifth Circuit ruled that Tornado Cash’s immutable smart contracts do not qualify as “property” under US law because they operate autonomously without ownership or control.
The ruling, albeit provisional, upheld sanctions on the operating
protocol [in this case, Tornado Cash], and left the door open for other platforms or mutable contracts to face sanctions and further legal challenges. Despite this, the ruling was celebrated as a tipping point for privacy and DeFi.
The Fifth Circuit’s decision feels like a victory for open-source technology that grinds against proprietary control across opensource platforms. The story of modern technology is one of tension–a perpetual battle between openness and control.
Today, we stand on the shoulders of those who championed open-source
ecosystems, helping maintain a flexible technology that is unbreakable by proprietary controls. And now, blockchain has emerged as the next chapter in this struggle.
Today, blockchain represents the latest and most promising phase in the progression of opensource technology. It offers a decentralized infrastructure that could redefine how humans interact with technology. Among the most transformative concepts within blockchain is Crypto-settlement—a foundational layer that ensures openness, interoperability, and resistance to centralization. The ability of open technologies and the potential of blockchain to accelerate the latest evolution of openness is where the pivotal role of Crypto-settlement will shape a more equitable digital future. Crypto-settlement is here to help save us from the rapid convergence
of AI and all other technologies. Behind every computer is a human, someone who engineers its functions. What technology will protect us from is ourselves, and we must, in turn, protect it to do that. By keeping Crypto-settlement opensource and transparent, it will stand as a bulwark against autocracy in both software and hardware.
The Openness Mandate: Grinding Away the Mountain of Control
The history of technology is a testament to the continued power of openness. Over decades, open technologies have disrupted entrenched proprietary systems, democratized access to tools and knowledge, and enabled unprecedented innovation.
The transition from proprietary to open systems has been a
defining feature of technological progress. But what are some of the patterns we have seen with open technology? Proprietary models have historically enabled rapid growth but at significant later costs. As early as the 1800s, the U.S. Department of the Treasury determined and issued economic sanctions to pursue national and foreign policy. In the 20th century, proprietary networks dominated industries, with closed standards and restricted access limiting the scope of collaboration.
As technology advanced, centralization asserted itself in new forms. In technology, the early internet saw multiple competing standards, from proprietary networking protocols to closed ecosystems for software and hardware. Things as petty as character formats were being captured. But open innovation
found its way to bend with time. Open standards like TCP/IP and ASCII were originally seen as outsiders and rogue developments competing with the status quo. Other software that enabled abstraction led to the creation of Infrastructure as a Service, Platform as a Service, Software as a Service, etc. Progressively, these services unlocked some of the greatest software innovations ever seen.
Initially dismissed as inferior to proprietary standards, networking protocols such as TCP/IP are now ubiquitous. Their open nature ultimately enabled the global connectivity we take for granted today, illustrating the longterm advantages of openness
over short-term optimization. However, winning on one level doesn’t mean winning on all levels. Proprietary models continued to dominate in new forms as the internet evolved, including in social media platforms and then mobile and cloud services. By the mid-2000s, the open technology of reading and writing data had become entirely owned by monolithic companies, co-opting the value of open-source innovations.
Ultimately, in that decade, we watched as a group of dominant social platforms and advertising networks took decentralized technology and made it proprietary. The cloud itself was open, but cloud platforms quickly became
centralized with billing systems, hardware access, and, most importantly, revenue rights. Today, the top three entities control between 70% and 80% of the market.
The shift to cloud computing exemplifies a growing dilemma for the industry. While open-source software fueled the development of public clouds, companies like Amazon Web Services (AWS) captured value by wrapping proprietary services around community-driven projects.
The result?
Developers who contributed to open-source tools often saw their work exploited without receiving
Source: Statista
Despite this wrap-around centralization, open source continues to forge ahead and innovate into the 2020s. Throughout history, small and large victories were hard-won. Flexible like the Buddha’s reed, open source has continued to innovate. The rise of public cloud platforms introduced a paradox: while cloud computing abstracted complexities and democratized access to computing resources, it also led to the centralization of infrastructure, proprietary HW-as-a-Service and SW-as-a-Service APIs, and pricing strategies like free incoming data, but $40/TB outgoing data, effectively locking in developers at proprietary cloud vendors. A few dominant providers now
Beats Closed and Centralized
At first glance, open innovation might appear less likely to succeed compared to closed systems. Closed systems often scale rapidly in the short term, enabling quick development of new and enhanced features with minimal coordination challenges. Hence, closed systems efficiently generate revenue early on and can aggressively reinvest it to sustain exponential growth. However, this approach has a fundamental flaw: as closed systems dominate a market, their pace of innovation dramatically slows as goals shift primarily to value extraction.
Lacking the incentive to evolve and innovate, closed systems instead
and usage. This is the classic economic outcome of monopolistic control of a market. Furthermore, profits are funneled into the suppression of competition from a level playing field and acquisition of successful upstarts, not into technology and new features. This hinders technology development, and users are stuck with suboptimal features that fall out of date.
In the 90s, former Microsoft CEO Steve Ballmer and Co-Founder Bill Gates infamously likened opensource software to a “cancer.” The former also called Linux a communist creation. Communism famously kills innovation, as there’s no capitalist profit motivation to drive innovation and efficiency. Yet, open tech improves competition
and innovation. Open innovation thrives in the long term, fostering broader participation and continuous progress. This dynamic is evident across the blockchain space, where open systems have driven remarkable growth and collaboration.
Blockchain introduces a paradigm where developers can build and retain control of their innovations, free from the centralized gatekeeping that plagued previous eras of technology. But this freedom isn’t guaranteed. The challenge is to ensure that blockchain’s promise doesn’t fall victim to the same centralization pressures that foster closed systems. Blockchain itself faces a critical risk: the
centralization of higher-order services. This is where Cryptosettlement becomes critical.
What Is Crypto-Settlement?
While blockchain has addressed many challenges associated with trust and transparency, its longterm success hinges on the ability to maintain openness and resist centralization. This is where the concept of Crypto-settlement becomes crucial. Crypto-settlement can be understood as a higherorder layer of coordination that ensures the openness and integrity of decentralized systems.
To understand Crypto-settlement, we must first unpack its components.
1. Financial Settlement: Blockchain’s initial breakthrough was financial settlement. Bitcoin proved that trustless digital value transfer was possible. Ethereum extended this with programmable money, enabling decentralized finance (DeFi).
2. Tech Settlement: Building on financial settlement, blockchain introduced technology settlement—tools like rollups, bridges, and decentralized storage, computation, and communication systems. These innovations allow developers to create services with trustless guarantees for execution, identity, and data provenance.
3. Social Settlement: The Socialsettlement layer governs the frameworks that coordinate these lower layers. It encompasses governance, standards, and rule-setting mechanisms that ensure open innovation remains decentralized. Socialsettlement is the final frontier of openness, where decisions about infrastructure ownership, rules of engagement, and dispute resolution are made.
Builders experienced with blockchain and crypto will already recognize Financial and Tech Settlements. Social Settlement is less commonly thought about, though it’s more fundamental as it provides the critical foundation for Financial and Tech Settlement. Without an open and decentralized social settlement layer, even the most promising blockchain ecosystems risk falling into the same trap of centralized capture. In this scenario, a handful of entities could monopolize key coordination
functions, undermining the very ethos of blockchain. Hence, social settlement is the keystone of our Manifesto for Open-Source Builders.
Crypto-Settlement is paramount
Crypto-settlement is the key to preserving blockchain’s openness. Without it, even the most innovative ecosystems risk becoming centralized, with a few players controlling critical coordination functions. Crypto-settlement ensures that decisions about infrastructure, governance, and dispute resolution remain decentralized, fostering an environment where open innovation thrives.
And ultimately, when open tech meets crypto it means that essentially all software can run on blockchain. It doesn’t have to be fixed execution environments or the virtual machine layer, but it can penetrate all types of globally distributed software and
hardware applications and services. For instance, consider systems like Witness Chain, which leverage Crypto-settlement principles to validate proof-of-location or proofof-machinehood. Open VPN and TOR communication systems built leveraging crypto and blockchain enable better security and privacy. Decentralized storage and databases do the same for data. These technology applications extend blockchain’s utility beyond financial transactions and are decentralized solutions to real-world challenges. This capability underscores the importance of maintaining open, verifiable crypto-layers that allow such innovations to flourish without being co-opted by centralized forces.
In many ways, the path towards crypto is about decoupling applications and coding from proprietary models, one step at a time, from Microsoft to Google and Amazon to Ethereum, and now to blockchain systems like EigenLayer and rollups, where applications like AVSs, Appchains, and others
This evolution isn’t just about technology—it’s about reshaping how we collaborate, govern, and build.
enabling diverse operators to contribute to a decentralized infrastructure. This evolution isn’t just about technology— it’s about reshaping how we collaborate, govern, and build.
In this journey, the transition from closed to open systems mirrors the trajectory of technological progress itself. From the centralized networks of the past to today’s blockchain-powered platforms, the arc of innovation bends toward openness. Cryptosettlement is not just a technical milestone; it’s the framework that ensures this openness endures, empowering the next generation of decentralized applications to drive meaningful change. By committing to openness at every layer—from financial settlement to Crypto-settlement— we can build systems that empower individuals, foster innovation, and resist autocracy. This is not just a
Crypto-Settlement, meet AI and Web2 Apps
AI might well be humanity’s most transformative technology since the discovery of fire. We’ve finally created elastic, scalable intelligence. But in the Web2 paradigm, AI can turn out to be a disaster. AI takes existing flaws, like centralization and corporate capture, and amplifies them. This makes the need for open systems even more urgent. AI needs open technologies and non-captured users, data, and models. Crypto-settlement provides the needed frameworks. No single corporation owns or controls the infrastructure, but instead, governance and utility are determined by tokenized ecosystems and transparent rules. Under these conditions, we have a much better chance of building AI systems aligned with humanity’s best interests. The real problem isn’t AI itself—it’s humans with selfmotivated intent and the power to
control the use of AI in centralized, unchecked ways. By decentralizing the foundation of AI development and application, we can mitigate those risks. As open source builders, we have the opportunity to shape AI at the Cryptosettlement layer in ways that prioritize openness, fairness, and innovation.
A Call to Action for Builders
Building on open-source software was a great starting point in the 2000s, but now, with Verifiable Clouds and Crypto-Settlement, even more power for developers and users is possible. Building on Verifiable Clouds and Crypto-settlement is not just a concept—it is a responsibility.
Here’s how to make it a reality:
Embrace SaaS, Platform-as-aServive, and Infrastrucutureas-a-Service (or DePIN) you build on protocols that can be viably forked without compromising user assets or data. Viable forking means users can not only switch to a new fork of an open application or service but also retain access and ownership of the value and data they contribute. This type of forkability is the ultimate check on the power of the people or company(s) running and often monetizing the application.
2. Eliminate Platform risk: This is a corollary of embracing viably forkable frameworks. It means that the people or company(s) running applications or services can’t change their APIs to eliminate functions or add new and often high costs (think Twitter, now X, postElon). Why? Because a viably forkable framework means
users can fork and take their attention, efforts and value plus data to the new fork.
3. Design Transparent Governance: Social-settlement frameworks should prioritize transparent and participatory governance of builders, operators, and users of the applications and services, ensuring that all stakeholders have a voice.
4. Incentivize Contribution: Use tokenized rewards to fairly compensate contributors, from users to developers to operators. Align the incentives to sustain long-term innovation.
5. Focus on Interoperability: Build systems that integrate seamlessly with other protocols, reducing fragmentation and enabling collective progress.
6. Educate and Advocate: The battle for openness is not won through technology alone. Advocate for policies and practices that protect the decentralized ethos of blockchain.
Ultimately, the question remains: Who controls and profits from the higher levels of the systems we use and build? Network capture poses a significant challenge, as it creates entrenched systems that seize control of data, identity, and access, making it exceedingly difficult to break free from their grip. True openness has historically been elusive, and it remained unattainable until the advent of crypto, which enables openness across the full lifecycle of open-source development, operation, assets (value, identity, data), and value attribution.
Social settlement offers a solution to the ultimate control over open source because, without
it, tech platforms that leverage network effects like user and data capture inevitably become optin autocracies—you either accept their terms or abandon the system altogether (i.e., “Accept the terms – or get the hell out!”). Forkable tech platforms represent the final frontier of open technologies, enabled by blockchain, paving the way for a global internet with native, self-enforcing coordination.
The history of open technology demonstrates its resilience, eventually prevailing in all major technological battles, even if it takes many years or even a decade or two. Blockchain represents the next chapter in this journey. Our choices dictate whether blockchain remains open or succumbs to the centralization that has plagued past technologies. Blockchain and Crypto’s future hinges on the decisions we make today! Soon, we may hit the tectonic tipping point—one where Web3 and AI coalesce to redefine how intelligence and trust are governed in the digital age. Already, many smaller successive battles end with openness prevailing over closed tech. Like the recent Tornado Cash ruling, tides are noticeably turning as the flexibility of the open source reed did not break. When facing challenges or setbacks, it’s important to remember we’re on our way to winning the war. Openness eventually triumphs over closed. By prioritizing openness at every level—from financial to technical to the social settlement layer—we can build systems that empower individuals, encourage innovation, and resist the consolidation of power. While much work remains, we now possess the tools to shape this future. Our opportunity, and challenge, is to wield them wisely.
Let’s Talk About Reclaiming
$8 Billion to Fund Public
Goods with Stablecoin Profits.
Two stablecoins, USDT and USDC, are involved in 47% of all decentralized exchange (DEX) swaps. Because of their dominance, these stablecoins generated massive profits. Tether alone reported $7.7 billion in profits in just three quarters of earnings in 2024.
Here’s the thing: the Ethereum ecosystem is earning these profits. The ecosystem has embraced these stablecoins, but the value they generate isn’t being reinvested in the community—instead, it’s flowing to private entities.
Tether and Circle essentially have a duopoly over stablecoins. Together they control about $182 billion in marketcap — $107 billion of which is on Ethereum and earning an average 5% yield. This yields Billions in annual profits— an enormous amount of money.
Stablecoin Profits Flowing Away from the Ecosystem
Making a profit is not a problem. However, there are two big problems with this $8 billion:
First, this $8 billion is being extracted from the ecosystem instead of being used to support it.
Second, because of this duopoly, we’re compromising decentralization and censorship resistance.
Let’s unpack that by looking at the risks of a stablecoin duopoly, strategies for building resilience, ways the crypto ecosystem can reclaim these billions, and how those funds could be used.
The Risks of a Stablecoin Duopoly
Centralized stablecoins are critical crypto infrastructure. The Ethereum ecosystem depends on them as DEX liquidity hubs, on-chain reserve assets, and DeFi collateral. Yet 92% of centralized stables are managed by the two companies behind USDC and USDT. As a consequence,
Ethereum’s operations heavily depend on two companies, meaning if either one fails, it would significantly impact the network. This is risky for three reasons:
1. It creates single points of failure; 2. Incentivizes greed and risky behavior;
3. And it undermines censorship resistance.
The SVB Bank Run and USDC Depeg
We saw an example of the first issue during the SVB bank run when USDC de-pegged. Things got bad very fast. When this one token didn’t do its job, FRAX, DAI, and LUSD de-pegged, liquidity for many pairs on Uniswap and Curve evaporated, and the Aave DAO had to pass an emergency proposal.
This is an existential threat to the ecosystem. If a major stablecoin fails, the entire system could break down.
Consequences of Greed and Centralization
The second issue is greed. When the risk-free rate was around
5%, Tether was making 8%. This means they were taking on riskier investments with the assets backing your stablecoins.
This could lead to instability, and it’s all done to squeeze $79 on every $1,000 of USDT you hold.
Censorship Resistance: A Compromised Ecosystem
Finally, a duopoly undermines censorship resistance. If Ethereum needs a hard fork, the last line of defense against censorship, Circle and Tether can pick the winning fork together.
So we need more stablecoin diversity.
A DeFi ecosystem that depends on the decisions of two companies is decentralized in name only.
Building Resilience Through Stablecoin Diversity
The ideal stablecoin ecosystem features a diverse range of options with widespread adoption. This means stablecoins that are wellintegrated into DeFi protocols enjoy robust DEX liquidity and offer seamless on/off-ramp solutions. Such diversity ensures that users always have reliable alternatives to migrate to, reducing dependence on any single asset. A balanced stablecoin holding would mitigate risk and loss in a ‘too big to fail’ black swan event, as crypto has already experienced with UST (Terra Luna) and the USDC Depeg.
Diversification should be a gradual, strategic process. By collectively prioritizing and advancing minority stablecoins whenever the
opportunity arises, the ecosystem can steadily evolve toward resilience and decentralization. It’s particularly important to support stablecoins that bring unique value propositions—whether through innovative mechanisms, governance models, or alignment with public goods—rather than backing carbon copies of USDC or USDT, which face inherent competitive challenges. Differentiation is also key to creating a thriving and competitive stablecoin landscape that promotes innovation and positive outcomes for the entire ecosystem.
These can include:
Glo Dollar (USDGLO), a stablecoin that donates 100% of its profits to public goods
Mountain Protocol (USDM) a yieldbearing stablecoin
PayPal Stablecoin (PYUSD), a stablecoin integrated within PayPal and Venmo, allows easy transactions and conversions between cryptocurrencies and U.S. fiat dollars.
You can learn more about building a resilient ecosystem at Stablecoin Diversity.
Reclaiming Stablecoin’s $8 Billion in Profits for Public Goods
What can we do about this $8 billion being extracted from the ecosystem? Imagine if we could reclaim it. To put this scale in perspective, if we distributed those profits evenly among all 12,000 Devcon 2024 conference attendees this year, each person would get $666,666. Unfortunately, giving profits directly to individuals is currently illegal in most countries. Instead, we can do something far more impactful.
What $8 Billion Could Achieve
We could use that money to fund the ecosystem. With $8 billion, we could pay for 60 years of the Ethereum Foundation’s budget. We could fund Optimism’s retroactive public goods funding 75 times over. We could triple the income of all Ethereum validators or cover all the operating expenses of Layer 2 solutions. We could even outspend the world’s largest lobbying group, the Pharma Lobby, and still have $2 billion left.
And what could we do with that remaining $2 billion? We could direct it toward initiatives
that lift people out of extreme poverty, provide meals, or buy malaria nets. We could shift crypto’s image from being the “cockroach of the economy” to a flagship for social impact.
A New Approach to Stablecoins: Designed for Impact and Regeneration
As crypto evolves, we’re seeing creative uses of traditional and on-chain financial systems to sustainably fund charities, public goods, and more.
Examples include msfETH, which uses Ethereum staking to support Doctors Without Borders; GIV, Giveth’s native token that rewards donors to charitable projects; and ATH from AthenaDAO, enabling token holders to vote on and fund women’s health research. While these assets are often volatile, introducing stablecoins designed for social impact is creating a new level of positive impact potential.
Stablecoins For Social Impact
Azos (ZAI) is a stablecoin backed by tokenized green assets such as carbon credits and renewable energy certificates. It creates liquidity for impact makers while ensuring stability and transparency.
Breadchain Cooperative (BREAD) is building a post-capitalist future by creating tools that foster cooperation and solidarity. Their main initiative, the Bread Crowdstaking Application, allows users to stake DAI stablecoins and earn BREAD tokens at a 1:1 ratio. Interest from staked assets funds Breadchain’s projects, advancing its mission of economic democracy and mutual aid.
Glo Dollar (USDGLO) is a U.S.issued, fiat-backed stablecoin that takes a completely different approach from other US-regulated stablecoins. Instead of using profits to pay private equity shareholders, Glo Dollar redirects them to fund
public goods and charities. This has been coined Automatic Public Goods Funding or AutoPGF.
A Closer Look at Glo Dollar’s AutoPGF
Here’s how it works: when you hold Glo Dollar, the yield generated from its reserves is directed toward a curated list of recipients. This includes organizations like Gitcoin, Optimism Builders, Celo Public Goods, the Protocol Guild, and Giveth. Users can choose where the funds go through the Glo Dollar app. You connect your wallet, see the funding your holdings will generate annually, and allocate them to the causes you care about.
Impact in Numbers: From $150 to $4,000 Monthly Donations
Glo Dollar has already started doing this. A year ago, we made our first donation of $150. Today, we’re donating $4,000 a month—a significant increase in just one year. If we could capture 1% of the
"stablecoin market, which amounts to about $1.5 billion, we could donate $6 million monthly to ecosystem projects and global initiatives.
Join Us in Reclaiming Our $8 Billion and Breaking the Duopoly!!
The dominance of centralized stablecoins like USDT and USDC is both a risk to decentralization and a huge missed opportunity to fund the future we want to see. These entities are extracting billions in profits from the ecosystem without reinvesting it, leaving $8 billion annually flowing away from the community that built it.
Change starts with small actions. Begin by using a stablecoin other than USDC or USDT. A resilient ecosystem thrives on multiple stablecoins integrated into DeFi protocols, strong DEX liquidity, and easy on- and off-ramps.
We’d love for you to choose Glo Dollar, but any minority stablecoin
is a step toward decentralization. Encourage your employer, DAO, or organization to adopt Glo Dollar for payments, grants, or dApp integration. Propose it for your community treasury or use it on platforms like PWN for lending and borrowing.
This is an opportunity to regain control and invest in the future we want to see for Ethereum and beyond. Imagine a crypto ecosystem where stablecoin profits fund critical initiatives—climate action, public goods, education, and global aid. This is about more than reclaiming profits; it’s also about reclaiming the narrative. Crypto can be more than a tool for speculation; it can be a path for regeneration, innovation, and community building.
Every action helps redirect the $8 billion flowing out of the ecosystem toward building a decentralized and resilient future for crypto. By swapping out your stablecoins, you’re investing in a system where profits align with purpose.
A RESILIENT ECOSYSTEM THRIVES ON MULTIPLE
STABLECOINS INTEGRATED INTO DEFI PROTOCOLS
INFINITE GARDEN
What's Next for Ethereum
? A conversation with Tim Beiko, Ethereum protocol support.
After an action-packed quarter, from Devcon and memecoins to AI agents and the start of airdrop season, Ethereum, or at least the social layer, could use a bit of a zooming out. While narrative violations are being flung left and right, the protocol stays chugging along.
We sat down with Tim Beiko, Protocol Support at Ethereum Foundation, after Devcon SEA so he could fill us in on the protocol side of things and give us a look at what to look forward to in 2025.
So, Tim, how are you feeling about Ethereum as we round out 2024?
Pretty good!
Through 2024, all parts of the Ethereum stack, from the protocol itself to core infrastructure, dev tools, and applications, significantly improved. On the base layer, we shipped EIP-4844 (a.k.a. protodanksharding), reducing data costs for rollups by orders of
magnitude. This enabled the steady growth of L2 adoption over the year. On L1 & L2s, we see increasingly sophisticated onchain economies, serving the needs of both novice users through things like stablecoins or the most advanced practitioners, with bleeding edge DeFi primitives, novel social products, or even info finance .
And, what better way to start wrapping up the year than Devcon? This year’s was the best Ethereum conference I’ve ever been to! It created an opportunity for the community to come together and start addressing many of the challenges that arise from our fastgrowing and complex ecosystem. On the L1 side, we had our largest-ever pre-Devcon research workshop, with about 200 developers and researchers working through about 20 different topics over 2 days. For the first time, we released public notes from the event. Throughout the week, we saw tons of workshops and events tackling everything from privacy to UX, d/acc, and Ethereum’s real world impact around the world. The
week closed off with the first-ever Ethereum Interop Forum: focused on getting L2s to agree to shared standards for collaboration, with Vitalik even forcing them to stay locked in the room until they did!
Of course, Ethereum’s open and diverse community means there’s always something for people to debate. It’s easy to perceive that negatively — especially when you have a stake in what’s debated! — but, zooming out, this is a healthy phenomenon. It’s good for the Ethereum ecosystem to think critically, point out things that are broken, and rally to fix them. And, going into 2025, it looks like there are plenty of people eager to step up and collaborate on solutions!
At Devcon this year, there were many discussions of ETH 3.0. Why do you think this was, and what did all of this ultimately amount to?
Justin Drake announced “ Beam Chain ,” an ambitious effort to rethink Ethereum’s consensus layer from scratch, incorporating everything we’ve learned since the original Beacon
Chain design. It’s a great idea to formalize this into a specification!
When core developers plan network upgrades, they typically adopt the opposite mindset, proposing incremental changes to current network rules. While this pragmatic approach has sufficed to ship relatively ambitious features, from EIP-1559 to ephemeral data blobs, working with an existing system undoubtedly limits our design space. With Beam Chain, we get to explore a “clean slate” approach. That said, there’s a big difference between an initial specification and production-grade software that secures hundreds of billions in value.
Once we do have a full Beam Chain design, we’ll need to consider our deployment strategy. We could ship it all as a standalone component, similar to how we deployed the Beacon Chain. Alternatively, we could take a more gradual approach. This would be similar to how other parts of the original “Eth 2.0” roadmap evolved, like The Merge using existing execution
layer clients or the shift from inprotocol Execution Environments to the Rollup Centric roadmap
Regardless of what path we choose, though, it’s exciting to see the momentum around Beam Chain. Hundreds of people reached out to Justin in the week after the announcement to offer to work on the effort!
Your Devcon SEA talk was titled The Shape of Protocols to Come, where you discussed what a protocol is and where things might be going. Why is it so important for us to understand what a protocol is and does as we head into 2025?
As I shared in the talk, the motivation to study Protocols as a first-class topic came from a feeling of not knowing “how to think” about Ethereum. In many other contexts, from company building to software engineering, product development, etc., there are mental models you can use to approach your work or at least better understand what’s going on. But Ethereum doesn’t
quite fit into any of these existing buckets. It resembles many things, from web platforms to money, but those analogies fall apart when you dig beyond the surface.
To help me reason about this, in 2022, I reached out to Venkatesh Rao. Several years ago, he helped Marc Andresseen think through the implications of “Software Is Eating the World” and published a series of essays about it. Venkat seemed like one of the few people who could make sense of something as weird as Ethereum and help me think through how to steward it. As a bonus, I hoped the project would nerdsnipe him and bring him down the crypto rabbit hole!
After initially trying to zoom into what made Ethereum special, we quickly realized that was the wrong approach. Instead, it felt more productive to search for a broader class of which Ethereum was a single instance, a bit like how chaos theory allows you to model the evolution of both biological systems and financial markets. We landed on “Protocols” as our abstraction:
they exist all around us in many different fields, but there aren’t established models to study them or best practices and frameworks to work with them in the real world.
So, over the past two years, we funded researchers to study and improve various protocols, ranging from workplace safety to web encryption, wildfire management, built environments, and more. As we started to see parallels drawn between Ethereum and all these domains, we grew confident that this was the right path.
Fast forward to today. Not only did this research sharpen my thinking and give me a deeper understanding of how protocols work in different contexts, but it also proved to be a useful bridge to Ethereumpilling people from other domains.
Framing Ethereum’s core challenges as “protocol problems” allowed us to engage productively with experts in fields completely unrelated to crypto. Most of them would have no interest in “solving blockchain problems,” but being
You can think
of Ethereum as an ECONOMIC AND COORDINATION TESTNET FOR THE WORLD.
able to abstract Ethereum as “a protocol that happens to manage value in unique ways” was an excellent way to build bridges with many smart researchers and practitioners beyond crypto.
So, to get back to your original question: learning about protocols in the abstract can lead to better ways of thinking about Ethereum specifically, and broadly developing the “field” of
protocol research seems like a promising way to communicate Ethereum’s impact and challenges to a much larger share of the world.
That being said, can you explain in not-so-technical terms what Ethereum core devs are up to in Q4?
We were working on the next Ethereum network upgrade, Pectra. I just published an
explainer of what that is and how we got to it on my blog :-)
Can you give us an ELI5 version of the Ethereum roadmap so we can better understand what’s coming in the next 5 years or so?
Danny Ryan once distilled the Ethereum roadmap to “security, scalability, sustainability”. This still feels like a good guiding principle for the work.
On the security side, there are still a few things left to harden in the protocol: we need to balance maintaining a large validator set with the realities of centralizing forces and economies of scale or reduce the ways in which EVM contracts can have bugs causing chain splits, and, perhaps most importantly, ensure that rollups provide end users with a level of security that is as close to Ethereum L1 as possible.
Scalability is easily misunderstood. We want to improve Ethereum’s throughput given a fixed set of constraints. When, for example,
we raise the gas limit, we do not make Ethereum more scalable: We are simply using more resources to process more transactions. This is not to say we should never increase the gas limit or that doing so is useless. But, most of the scalability gains come from leveraging cryptography to probabilistically verify a larger and larger number of transactions.
L2s are extremely powerful in this respect because they exploit an asymmetry in the cost of resources on Ethereum, namely that storage is far cheaper than computation. By aggregating transactions and posting their (compressed) data, rather than running every transaction on L1 and relying on cryptographic proofs, they scale how many transactions can be verified by L1 without requiring more resources.
Prior to EIP-4844 (a.k.a. protodanksharding), the data that L2s posted to L1, called CALLDATA, had to be stored by nodes forever. This was inefficient because L2s only need the proof to be available on L1 for a short period. EIP-4844 introduced ephemeral storage to Ethereum, which is removed from the network after a few weeks but can always be cryptographically proven. Because the data doesn’t have to be stored for as long, the network can charge less gas for it, meaning we can fit more of it in a single block. Again, this scales the number of end-user transactions that can be executed on an L2 and have a proof of execution posted to L1.
The next step on the scaling roadmap is to shard this ephemeral data across the network. Today, every node keeps a full copy of the data. Teams are now working on PeerDAS , which distributes subsets of the data to specific nodes on the network. This allows the network as a whole to maintain several redundant copies of the full blob data without requiring each node to keep a full copy of everything. Once more, this allows us to increase how many L2 transactions are attested to by the Ethereum network as a whole while maintaining a relatively constant amount of resource usage by nodes.
Lastly, there are several changes we need to make to ensure Ethereum’s long-term sustainability. These range from deprecating certain features from the protocol, most notably the guarantee that each node has a full copy of the chain history, to ensuring that the incentives for the many actors involved in block production and verification neither lead to the degradation of the network topology nor the erosion of Ethereum’s credible neutrality, and future-proofing Ethereum with regards to technical risks, like quantum computing, and user affordances, with initiatives such as account abstraction.
There’s a lot to unpack across all of these. Still, hopefully, the “security, scalability, sustainability” framing helps readers better understand the overarching motivation around why we want to keep improving the protocol. For anyone wanting to dive deeper, I strongly recommend Vitalik’s recent “Possible futures of the Ethereum protocol” series.
When it comes to the shortterm and long-term real world benefits that Ethereum can offer, the discussion can sometimes become excessively theoretical. Can you help us grasp the benefits of a protocol like Ethereum, especially beyond simple market speculation?
Distilling it to a single sentence, you can think of Ethereum as an economic and coordination testnet for the world.
Ethereum is large enough to run significant new economic and coordination experiments at scale, but it is also isolated enough from the rest of the world for failed experiments to cause minimal harm. To be clear, I don’t mean to trivialize the risks of being reckless when building things on Ethereum. Nevertheless, there’s a qualitative difference between the worst-case scenarios onchain and those of, say, a country experimenting with a new scheme for resource allocation. No one depends on Ethereum for water, food, or shelter, which means we can be more willing to experiment.
For example, prediction markets and quadratic funding were both theoretical ideas that were quite hard to test in the wild prior to Ethereum. Now, we’ve seen the former play a major role in elections around the world and the latter having allocated huge amounts of funding in different contexts.
Ethereum was a critical component in derisking these ideas. More
broadly, it was the right platform to surface to the rest of the world that out of all of the fringe novel economic ideas, these were two that could actually work in production. This is a powerful service that Ethereum can offer to the world.
Beyond that, a big question on my mind this past year has been, “What is something that can only be built on Ethereum which would be hugely valuable for the world?” I don’t have an answer yet, but now that we’ve developed an exhaustive set of social and economic primitives onchain, I think we should be more ambitious in designing constructions that could not be possible outside of Ethereum. After all, Ethereum is game changing technology, literally.
As you can see, despite the challenges of the social layer this quarter, the protocol layer continues to progress. This year, Devcon took us to Southeast Asia to hear talks from Ethereum developers, builders, and researchers, giving us a glimpse into the protocol’s future. It seems that between Pectra and Beamchain, Ethereum developers have their hands full for the next 5 years. Thankfully, long-term thinking on the part of developers and Foundation leads gradually gives builders the tools to make new inventions possible.
We thank Tim for his contributions to Ethereum, the Ethereum Foundation, the Summer of Protocols, and much more.
The Jungle Experiment: A Vision for Building Tomorrow’s Neighborhoods
Christine Urban Community Steward, Cabin
As technology changes our world faster than ever, more and more people are electing to opt out of governance systems that no longer serve them. What was born at first as an idea online has taken up a physical residence in the foothills of Roatán, Honduras. Hundreds of foreigners from around the globe come together to innovate, collaborate, and take a communitydriven approach to everyday living.
The forefathers of Prospera chose Roatan for many reasons, like its central location between North and South America, glorious weather, and ease of access. While many hurricanes form in the warm waters off to the east, they rarely come in. This made it the perfect spot to plan an ambitious master plan that will take decades to realize.
One of the first installments of this future city has been built, tucked away on a hill in the jungle, yet a walkable distance to the beach. Here, hints of modern architecture peer from the green ferns and fronds, the Duna Tower, a 14-story structure that anchors a burgeoning neighborhood designed not just as a place to live but as a model for intentional community building. Duna lies within Prospera, a crypto-friendly startup charter city embroiled in political controversy in Honduras. Here, you can buy real world assets and property in Bitcoin or pay your rent in Ethereum. It has its own civil law code, that is interpreted by a council of nine elected members. Prospera has low business taxes, and one can set up an entity in minutes.
To ensure community-building success, Prospera took an even bolder approach, inviting Cabin. City to send a Community Steward to Prospera for six months in exchange for housing. The Steward’s sole purpose is to
set up communication channels, host events, and meals, and be the welcome wagon to ensure people find a home here. This epitomizes a growing movement: the rise of experimental neighborhoods and pop-up cities that challenge traditional notions of urban life.
But what makes this project—and others like it—so compelling? It’s not just the architecture or the location. It’s the people, the ethos, and the collective drive to reimagine what it means to live, work, and thrive together. An underlying theme is people are tired of trying to change the existing systems, choosing instead to exit them altogether and create new ones. For people who believe that we as humans can do so much better at taking care of each other, it is easier to come here than to continue to swim upstream.
The Jungle as a Canvas
Roatán offers a setting that is as idyllic as it is symbolic. The island’s untamed beauty stands in contrast to the structured governance of Próspera, the innovative legal framework under which this new community operates.
Here, residents and pioneers are creating something extraordinary: a neighborhood that harmonizes with its natural surroundings while leveraging cutting-edge technologies and forward-thinking policies to foster collaboration and growth.
Duna Tower serves as both a physical hub and a philosophical anchor. Designed for connection, it offers spaces for co-working, socializing, and hosting communal events. Yet, this is no bubble; the project actively engages with local Roatán residents, aiming to integrate rather than isolate. The community embodies a model of mutual enrichment by hosting shared experiences and supporting local initiatives. Within Duna, on any given night, you can find events like game nights, movie screenings, pizza parties, or community dinners. Crawfish Rock is a generations-old village that is a neighbor of Prospera’s border. Prospera sponsors the local village kids’ soccer team, while residents and visitors of Duna contribute to a foundation focused on uplifting Crawfish Rock. Businesses within Prospera foster engaging education experiences, like Rocket Day,
where the kids come together on the beach to launch rockets high into the sky. Recently, when a family’s house burned down in Crawfish, Duna residents donated emergency funds, and Prospera offered to build a home for them.
It is no surprise that when Prospera started getting international investment to the tune of $120 million, the current Honduran government decided to step in and make it retroactively illegal— threatening thousands of stable, well-paying jobs for the local Hondurans who work here. The first stable, well-paying jobs that have ever been available to them. People are quick to criticize. They can’t believe that there could be a whole group of humans that collectively want to rise all tides for everyone. There are people actively evolving humanity out of corruption and greed, for example, right now. They fall back on old colonial troupes instead of looking at the facts or the people who are living, working, and building there.
Popup Cities: Prototypes for a New Civilization
This vision of intentional living isn’t unique to Roatán. Initiatives like Zuzalu, Edge Esmeralda, and Ipe Village are testing similar ideas worldwide. These popup cities act as societal laboratories, bringing together diverse groups of people to explore innovative ways of organizing, collaborating, and creating.
Zuzalu, a brainchild of Ethereum co-founder Vitalik Buterin, was a two-month experiment in Montenegro. It assembled technologists, scientists, and futurists to explore themes such as crypto-native governance, longevity science, and AI ethics. With over 1,000 participants,
Zuzalu wasn’t just an event; it was a proof of concept for how ephemeral communities can inspire lasting change.
Similarly, Edge Esmeralda , a month-long village in Healdsburg,
California, blends family life with intellectual exploration. Focusing on hard technologies, real-world crypto applications, and health innovation, it aims to prototype a permanent community
where creativity flourishes alongside family and tradition.
Ipe Villiage’s first iteration will take place in Brazil this April 2025. For one month, 150 talented thinkers will prototype a new city with a new governance structure. The project aims to leverage digital and decentralized technologies to address longstanding societal challenges such as chronic poverty and the rise of human rights violations.
Meanwhile, Infinita is transforming the Próspera framework in Roatán into a biotech haven. By attracting scientists and entrepreneurs focused on longevity and health innovation, it’s laying the groundwork for a permanent district dedicated to advancing human longevity. This popup city can be paid for in ETH. Part of the programming is an entire week focusing on “Crypto Cities.” Diving deep into decentralized government.
The Network State: A New Way to Think About Community
The ideas fueling these initiatives aren’t random; they draw from a larger movement encapsulated in Balaji Srinivasan’s The Network State. The book posits that the future of governance and community lies not in geography but in shared values and technology-enabled organization. Network states transcend traditional borders, uniting people around common goals and allowing them to operate with agility and purpose.
In this context, projects like Duna Residence and Zuzalu are more than just experiments; they’re steps toward realizing a future where communities are defined by intention, not by chance. They demonstrate how shared
governance models, digital tools, and a commitment to collaboration can transform neighborhoods into incubators of innovation.
Building the Future Together
Back in the jungle of Roatán, the air buzzes with possibility. Duna community members are not just building homes; they’re creating a template for how humanity can live better, smarter, and more connected lives. Their work speaks to a broader narrative: the rise of pop-up cities and intentional communities as testbeds for a new civilization.
This is the promise of the jungle neighborhood, the popup village, the network state. They challenge us to think beyond the constraints of the present to imagine what’s possible when we design our communities with purpose. Whether nestled in the Honduran hills, perched in the Californian mountains, or momentarily flourishing in Montenegro, these projects remind us that the future of living is already here—we just need to build it. We can all collectively build a better world in which we want to live.
This is the promise of the jungle neighborhood, the popup village, the network state. They challenge us to think beyond the constraints of the present to imagine what’s possible when we design our communities with purpose. “
ETHEREUM ANALYTICS AT A GLANCE
FLIP TO PAGE 90
VALUE SYSTEMS
Resilient Social Networks and Applied Resistance Strategies for Humans
Maria Paula Director of Growth, Avara
Today is a happy day for crypto. An appeals court in the USA reversed a court ruling concerning the Tornado Cash smart contracts, stating they were not covered by existing law. For more than three years, the Tornado Cash developers, Alexey and Roman, have been persecuted and imprisoned, and the smart contracts have been barred from usage and added to the OFAC sanctions list. Now, the court ruled that the Tornado Cash contracts were not the property of a foreign national or entity. Still, the developers who wrote them are both undergoing legal processes, fighting for their freedom and innocence.
The outlook is increasingly positive for crypto at large. It wasn’t long ago that Stani Kulechov, founder of Lens, published a reflection on Resilient Social Networks and what they mean in practice. We are building Lens as resilient as possible, meaning, as onchain as possible, in order to protect the network and the humans using it from external actors that might try to take it down. In the same way that Alexey and Roman built Tornado Cash, Lens is and will continue to be unstoppable, thanks to the power of smart contracts and blockchain technology.
We build these technologies for humans. People are prone to deplatforming, debanking, and censorship. So, alongside building resilient social networks, we should be educating people on how to become more resilient themselves by choosing open source, privacy-preserving, and blockchain-based applications to build and thrive in the digital world.
Resilient Social Networks
Over the past 15+ years, our lives have become increasingly more digital. We joined Facebook,
WhatsApp, Telegram, X, formerly Twitter, Instagram, and TikTok, and we grew our connections and social capital dependent on these closed-source platforms. In the past 10+ years, legacy social media platforms have been increasingly enclosing users within their walled gardens. It all started during the early 2010s, when companies like Facebook and Twitter, despite originally presenting themselves as open and inviting, slammed their networks shut and revoked developers’ access. They acquired competitors and neutered them. Chris Dixon, the author of Read Write Own, forecasted that Twitter apps would end up going out of business as early as 2009 in his article “The Coming Showdown Between Twitter and Twitter Apps
On top of this matter, which continues to get worse, Governments and regulators have been regularly policing tech platforms in an exaggerated way. U.S. Presidents Trump and Biden have been trying to ban TikTok in their country since early 2020. In August 2020, President Trump issued an executive order for TikTok’s U.S. operations to be sold. During Biden’s presidency, these efforts continued, and in April 2024, he signed a law that would ban Chinese-owned TikTok unless it is sold within a year. In August 2024, the French government arrested Pavel Durov, Telegram’s Founder, on a warrant for offenses related to the popular messaging app.
Users are being held hostage in the showdown between Governments and Big Tech. However, those same users are getting smarter and choosing alternative technologies when things start looking dark. For instance, desktop usage decreased after Zoom announced plans to scan calls for AI. And when Brazil’s Supreme Federal Court judge
Alexandre de Moraes imposed a block of X, in the country, Bluesky, a decentralized social media platform originally founded by Jack Dorsey, experienced a spike in new sign-ups. These tensions and power plays often affect the users of such platforms more than they affect the companies and governments causing them. Their digital lives, those connections they have been building for so long, and the content they have been entrusting platforms with have become endangered. Resilient Social Networks that can both protect the platform and the user have, therefore, become an urgent necessity.
“We need a “resilient approach” to building social networks that can uphold a spectrum of rights, even when those rights, such as freedom of speech and content moderation, may pull in opposing directions.” wrote Stani Kulechov,
Lens’ Founder and CEO, the day the world learned that Pavel Durov had been arrested. Stani chose to highlight resiliency instead of decentralization because the latter “is a loaded term that is often misunderstood and rarely achieves consensus on its meaning.”
A Resilient Social Network minimizes single points of failure that endanger it. Blockchain technology ensures resiliency by enabling access control and security that extends to the storage of value, transparency, and community-driven frameworks
for governing and building such networks. This building approach also enables fact-checking and accountability, preventing the manipulation of feeds through algorithms and misinformation.
Applied Resistance Strategies for Humans
As aforementioned, we are tethered to systems that both define us and can erase us. This problem extends beyond our social capital. We save money in banks and use credit cards. We have our health insurance, rent, and other vital
services on direct debit. We e-mail through Gmail and iCloud and use Amazon and AWS. We buy our train tickets with PayPal, and we send our friends money through Venmo.
All the platforms and services mentioned above are bound by terms and conditions, sometimes applied arbitrarily. Added to that, the use of AI/ML to moderate and detect irregularities has proven to be, more often than not, prone to errors. Instagram might shut down your account for posting a photo of a nude painting you took at a museum. Your bank might flag a transaction to or from a crypto exchange as dubious and shut your account. There might even be Government policies behind these events, as shown in the stories on Operation Chokepoint 2.0.
All the platforms and services mentioned above are bound by terms and conditions, sometimes applied arbitrarily. Added to that, the use of AI/ML to moderate and detect irregularities has proven to be, more often than not, prone to errors. A joke, your job, or even an innocent photo of a nude painting you took at a museum might end up costing you a deplatforming episode. Your bank might flag a transaction to or from a crypto exchange as dubious and shut your accountthere might even be Governmental policies behind these events.
Banks not only shut down crypto people’s accounts, but we are all prone to unbanking. In 2019, I got my account blocked for four months by order of the Finance authorities in Berlin, Germany. This problem did not originate with me but with my former accountant, who was hired to make sure my finances were compliant with regulations, taxation, and beyond. His failure to inform me that something was wrong with my taxes ended with me
being locked out of my bank account, which in turn meant that I was out of the system since my bank account was tied to my health insurance, which is compulsory in Germany.
Luckily, I was already working in crypto and saving in stablecoins, so with the help of friends and colleagues, I was able to get my rent and insurance paid through others, which I repaid in crypto. Someone connected me to an OTC that allowed me to have cash for everyday activities, keeping my lights on for those months when I was unbanked.
When choosing to save in crypto or non-custodial wallets, you’re choosing to become more resilient on the financial side of your life. When choosing blockchain-based social media like Lens, you’re protecting your social capital. You might not be able to get approved for a loan from a bank, but if you have some collateral, you will
be able to access one on Aave or similar platforms without KYC or intermediaries. And the protection doesn’t stop there: when you’re choosing battle-tested, trusted protocols and platforms, your funds are protected by countless hours of security researchers, audit firms, and white hat hackers who work hard on ensuring those spaces are safeguarding your funds.
Censorship, deplatforming, and privacy breaches are everyday occurrences. However, by using Resilient Social Networks, crypto, and DeFi, we can build our resilient stacks and become anti-fragile.
When choosing to save in crypto or non-custodial wallets, you’re choosing to become more resilient on the financial side of your life.
When choosing blockchain-based social media like Lens, you’re protecting your social capital.
CAPITALISM POST SURVEILLANCE
Think of someone with whom you want to maintain your dignity.
Maybe it’s your mom, or a partner, or a neighbor, or your boss. Now, imagine waking up tomorrow and your digital life from the past decade suddenly becomes visible to them—your searches, messages, location history, transactions, bookings, AI prompts, everything. Would their opinion of you change? Would they grow concerned for you, or would they be proud? This violation of privacy by those we trust is frightening.
But what of those we don’t trust or those far removed from us? Suppose they could also see all your information. Would they use it to advise you on how to live a better life, or would they steer you in a direction that benefits them? However much we fear losing dignity in the face of those we interact with daily, it’s even more daunting to think we could be manipulated by random people sitting somewhere on the other side of the world.
Is this a weird thought experiment, or is it reminiscent of what happens in our digital lives? Every message we send, every page we browse, and every place we visit is collected, analyzed, and monetized by celebritized founders who have amassed record-breaking wealth and power. We have become serfs on digital estates, working the data fields of tech giants who have become the new feudal lords of our time.
Harvard professor Shoshana Zuboff referred to this system as ‘surveillance capitalism,’ but it has evolved into something even more concerning: what economist Yanis Varoufakis calls ‘techno-feudalism’ - a new economic order in which tech giants not only track our behavior but also own and control the digital territory we increasingly depend on. The urgency of understanding these models and knowing the tools to navigate our way out is crucial for anyone who cares about digital freedom and human autonomy. The time to act is now.
The Deal We Never Actually Made
How did we end up here? The story begins with what seemed like a fair trade: free services in exchange for some data about how we use them. Gmail would help organize our lives, Facebook would connect us with friends, and Instagram would help us share our memories. We click “Accept” on the terms and conditions, always without reading them, because you literally cannot wade through the pages of legal jargon. But anyway, what harm can come from sharing a few likes, a few searches, and a few photos?
Zuboff found a profound power grab in those T&Cs. These companies claim the right to analyze every aspect of our digital lives, to build detailed psychological profiles, and to use this knowledge to predict and modify our behavior. This is what she calls “behavioral surplus,” the extra value extracted from our data beyond what’s needed to provide the service.
Imagine what happens when you search for something like ‘How to feel less anxious about work’ late at night. Google doesn’t just return relevant results - it notes your emotional state, the time of your vulnerability, your location, your device type, and more. This data point joins countless others, such as your YouTube history showing self-help videos, your Maps timeline revealing reduced social activity, and your Gmail showing increased late-night email checking. Each interaction builds a more detailed profile of your mental state, your susceptibilities, and your pressure points. This intimate knowledge is packaged and sold to advertisers and other third parties who want to target you at your most persuadable moments. This level of targeted advertising is a fundamental reshaping of power relationships as we digitize humanity. Like medieval peasants who had to work the lord’s lands in exchange for protection and basic rights, we now labor in the data fields of tech companies in exchange for digital existence. But while medieval peasants knew they were working for the lord, we generate value for tech
The Discovery of Behavioral Surplus, Surveillance Capitalism, Shoshana Zuboff
companies with every click, every search, every hesitation over a purchase - often without realizing we’re working at all. It’s time to understand these power dynamics and demand change.
Meet Your New Digital Lords
This is not just about you and your data. This is systemic. Varoufakis argues that we’ve moved beyond traditional capitalism into a new form of feudalism. In traditional capitalism, companies compete in markets to sell products. But tech giants have created digital territories they fully control, where they set all the rules and extract continuous rent from both users and businesses. Look at how this plays out in practice: Amazon isn’t just a store anymore, nor is it even a marketplace. Buyers are segregated from each other, customers are segregated from them, and everyone relies on Amazon to match buyers to sellers. It’s an entire economic infrastructure. Want to sell products online? You must pay tribute to Amazon to be visible on its platform. Want to build an iPhone app? You must follow Apple’s rules and pay their fees. Want to reach an audience as a content creator? You must accept YouTube’s algorithm and revenue splits. There’s no opting out - these platforms have become the essential infrastructure of digital life. And just as medieval peasants couldn’t simply choose to farm different land, we can’t simply choose to use different digital services when all our social and economic connections are tied to these platforms. Or is it?
The Internet We Were Promised
Pause. Wait a sec. Aren’t we in internet land? Didn’t the early internet pioneers and cypherpunks imagine a decentralized network that would break down power structures, not create new ones? How did we get to weird forms of capitalism and, worse, a techno-feudalist structure? Wasn’t this supposed to be a space where privacy was protected by default, where users controlled their data, and where things could be built or broken without asking permission? In the early days, anyone could start a website, protocols were open, and you could actually own your digital presence. The cypherpunks saw the potential for technology to protect individual liberty through encryption and p2p networks. But somewhere along the way, we lost that vision. We traded convenience for control and ended up with digital feudalism instead of digital freedom. Lately, it’s increasingly
clear to see that those early ideals haven’t died. They’ve just evolved. The same cypherpunk spirit that gave us public-key cryptography and the early internet is very much alive, and now it has the tools to tend to the infinite garden.
This table shows the key differences between the surveillance economy and decentralized alternatives, underscoring the potential of Web3 systems to guide the industry away from techno-feudalist tendencies.
The Web3 Alternative
When you use a decentralized application, you’re not subject to the whims of a corporate algorithm or grossly invasive data collection. Your interactions are governed by transparent smart contracts that execute as they are written and are visible to anyone who wants to verify them. Your digital identity and data belong to you; they are not confined to a particular website or platform but secured by the cryptography you control. Want to build something new? You shouldn’t need to ask for API access or comply with arbitrary platform
rules. The network is open, and anyone who wants to contribute can—this radical transparency and user control contrast with trad-tech platforms’ black-box algorithms and hidden data collection. Web3 distributes power back to users and builders, creating digital commons rather than digital estates.
So is that it? Are we done? Is it that we just need to watch it play out? Can we go and ape into meme coins? While Eth’s transparency is great for the accountability of tools and services, it comes at the cost of user privacy. Without that, we risk replacing surveillance capitalism with something worse. For the most part, Ethereum and web3 computation currently operate as a public panopticon. True digital freedom requires both transparency and privacy.
Hidden in Plain Sight
To get out of the dystopian surveillance future, we’re already seeing increased use of privacyenhancing technologies (PETs) in the ETH space. They compute on ‘encrypted’ data, allowing them to maintain the decentralized nature of Ethereum without requiring all data to remain transparent. With PETs, we can have transparency and accountability where
Homomorphic Encryption (FHE) promised to be the holy grail, enabling general-purpose computation on encrypted data without ever decrypting it. Imagine running analytics on outsourced sensitive data while keeping it completely private. However, patent restrictions and massive computational overhead have deemed it unusable for realistic scenarios for now.
More practical solutions are emerging through Multi-Party Computation (MPC). By splitting sensitive data across multiple parties, MPC allows private computation without any single party seeing the complete picture. Specialized tools like coSNARKs are making this even more efficient for zero-knowledge applications. The key consideration here is the strong trust assumptions in the networks running the computations. TEEs recently gained a lot of attention. While their security guarantees aren’t bulletproof on their own, when combined with MPC or other tools, they provide a pragmatic approach to private computation. These are the building blocks of a new Ethereum stack that gives us both privacy and proof, the freedom to choose what is revealed, and the power to prove what is claimed.
New Economic Models
It would be naive to think that technology alone could overcome systemic problems. Incentives and new economics play a huge role. While surveillance capitalism turned user data into corporate profit and techno-feudalism turned digital platforms into private fiefdoms, Ethereum and Web3 more generally enable fundamentally different economic relationships.
This is where Vitalik’s ideas about cryptoeconomic systems come in. Instead of treating users as data sources to be mined, what if we could design systems where users are actual stakeholders? Where does community contribution create value for everyone, not just platform owners?
Take public goods funding, the stuff we all need but traditional markets struggle to provide. In the surveillance economy, we get “free” services in exchange for our data. But Ethereum enables new models like quadratic funding, where small individual contributions can be matched and amplified by a shared pool. Suddenly, communities can fund their infrastructure, support
creators directly, and maintain shared resources without relying on surveillance or control.
Or think about how organizations work. Instead of corporate platforms extracting value from users, DAOs let communities collectively own and govern their platforms. Want to change how a platform works? You don’t have to beg a tech lord - you can have a say in the decision.
Vitalik and others have designed token economics that isn’t just about speculation but about aligning incentives between users, developers, and platforms. When you contribute value to a network, you can capture some of that value directly instead of generating profit for distant shareholders.
These new models work in defi, creator communities, and digital goods markets. Sure, they’re still early and sometimes messy, but they show that surveillance isn’t the only way to make digital services sustainable.
Building the Post-Surveillance Future
The transition from techno-feudalism to digital democracy is a shift that requires deliberate action across multiple fronts.
First, we need continued technical development. The privacy-preserving technologies mentioned are powerful but young. They need refinement, optimization, and integration into everyday applications. We need to make encrypted computation not just possible but as practical, and more general than trad-tech. We need to make private transactions not just available but affordable and seamless.
Second, we need to focus on user experience. Even the most elegant technical solution is useless if it’s too complex for most people to use. Decentralized applications need to be as intuitive as their centralized counterparts without compromising on their core principles of user sovereignty and privacy.
Third, we need education. Not everyone needs to understand how zero-knowledge proofs work, but everyone should understand what’s at stake in our digital lives. People need to know not just that alternatives to surveillance capitalism exist but why they matter.
Finally, we need community. Technology and
economic models provide tools and incentives, but it’s communities that encourage each other, driving adoption and evolution. We need to build and support digital spaces that demonstrate how technology can empower or protect rather than exploit.
Watching the tech industry and its branches is one of the most interesting times. One path leads deeper into techno-feudalism, where a few digital lords control more of our lives through surveillance and AI. The other path leads to digital democracy, where technology serves the many rather than the few, where privacy and transparency coexist, and where economic value flows to those who create it.
The tools for digital democracy exist. Every deployed privacy-preserving application, every contribution to open infrastructure, every user who chooses sovereign alternatives, every community that builds on decentralized systems–-these are the acts of resistance that will shape our digital future.
Onchain Capital Allocation:
A New Frontier in Ethereum
Kevin Owocki Co-Founder Gitcoin + Allo.Capital
TLDR
Ethereum enables programmable money and new allocation mechanisms that let communities collectively decide how resources flow, increasing transparency, accountability, and efficiency.
Onchain capital allocation goes beyond just finance—it can integrate social, cultural, intellectual, and other forms of capital, reducing middlemen while empowering creators and contributors directly.
A suite of innovative tools (e.g., Quadratic Funding, Retroactive Rewards, Allo Protocol) now offers diverse, composable ways to fund projects, address coordination failures, and build a fairer, more collaborative future.
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Imagine a world where every dollar spent at organizations is accountable to results, and every resource allocation decision can be powered by collective will. So much of what you know about money – how it works and interacts with the world – would be different and more empowering. This is the promise of Ethereum.
Ethereum, with its capability for smart contracts and decentralized applications, enables us to program our values into our money. This is something that paper money and traditional finance do not allow. Since Ethereum is computer code, you can program what you value right into the code (right into the blockchain).
One frontier this opens up is for the creation of more transparent and collaborative ways for people to allocate money, or “capital,” amongst themselves, from small groups all the way up to large organizations, governments, and nation-states. Capital allocation is the act of deciding how to distribute funding or resources. It sounds like a high concept, but everyone alive within the market economy allocates capital regularly, if not every day. If you’ve ever paid bills, taxes, or Venmo’d friends for a meal, you’ve allocated capital.
Allocating funds is a task for most individuals but a full-time job for many: governments and grant-making organizations spend vast amounts of time and money figuring out the process, logistics, and decision-making involved in allocating capital. At scale, capital allocation inevitably becomes mired in gatekeeping (lots of ivory tower, closed-door decision-makers), rivalrous decisionmaking (competing interests), and a lack of transparency and accountability (who is making the decisions and why?).
These scaling problems hamper human coordination. They get in the way of our ability to innovate and address collective challenges - where if we could only coordinate effectively, we could solve them. I often call these collective challenges “coordination failures” – areas where humans could achieve a desirable outcome by working together to solve large problems such as climate change or ransomware. However, fully solving those problems has eluded us because of the challenges of coordinating decision-making.
We are in an era of transformation. With the tokenization of everything, we will have a giant pool of capital to tap. And in doing so, we have an opportunity to upgrade collective action for the 21st century. Along the way, we will address coordination failures, foster growth in pluralistic ecosystems, and, if we are lucky and good, profit handsomely from our efforts. Mechanisms such as quadratic funding, retroactive funding, decentralized venture funds, deep funding, and other capital allocation mechanisms are reimagining how institutions and people can fund what matters to their communities.
As a co-founder of Gitcoin, I have had the pleasure of having a front-row seat to the expanding horizon of capital allocation. During its seven years in operation, we’ve distributed $66m worth of funding via 5.3m unique transactions. We have funded many future unicorns (Uniswap and 1inch, to name a few), many public goods (Prysmatic Labs, Lighthouse, geth), and partnered with the top innovators in the space to study and tell their stories. In this essay, I’d like to take you through this journey and cartography of the movement of onchain capital allocation.
I believe that we will see these onchain capital allocation networks increase in usefulness and become a competitive advantage to the ecosystems that use them. Because of that, they will proliferate into many places in the web3 ecosystem (and eventually in the real world) in the coming years.
Not Just Financial Capital
When I talk about capital allocation, I am not just talking about financial capital. There are actually many forms of capital. Here are the eight forms of capital outlined by Gregory Landua Regenerative Enterprise framework:
1. Financial Capital - Represents money, investments, and monetary assets used for transactions and value storage.
2. Material Capital - Includes physical objects like buildings, tools, and natural resources essential for
3. Living Capital - Systems such as plants, animals, soil health, and ecosystems that sustain life.
4. Social Capital - Refers to relationships, networks, and community connections that build trust and cooperation.
5. Cultural Capital - The shared knowledge, values, traditions, and art that give communities identity and cohesion.
6. Experiential Capital- Comprises individual and collective skills, wisdom, and practical knowledge gained from experience.
7. Intellectual Capital- Consists of ideas, innovations, knowledge, and intellectual property that drive learning and problem-solving.
8. Spiritual Capital- Relates to shared beliefs, values, and the deeper sense of purpose or connection to a greater whole.
These forms highlight diverse assets beyond just monetary wealth, emphasizing a holistic approach to value and well-being.
The power of onchain allocation networks is that they align resource systems so that you can make financial capital synergistic with other types of capital. For
The financial stack in the 21st century now that we have Ethereum. This capital allocation layer is critical for connecting the powers of smart contracts and tokenization to empowering impact online and IRL.
example, an NFT artist can get financial capital in return for their creative capital. An engineer can get financial capital for their intellectual capital, and so on.
In the old world, these exchanges were mediated by middlemen who could capture and extract from the participants, thereby warping the creative or intellectual expression with their monopoly power and profit motive.
In the new world of AlloNets (onchain capital allocation networks), we can disintermediate, remove the middlemen, increase the scale and precision of our funding decisions, and make the individual contributors, artists, and engineers the principal sovereigns of the exchange. This will create a more true expression of our shared civilizational interconnectedness across all different types of capital.
Why Onchain Capital Allocation Matters
At its essence, efficient capital allocation can help solve problems by funding the best tools, people, or solutions. Studying and understanding
capital allocation is paramount if we want to solve more and more important problems. By solving for capital allocation, we solve for:
Collective action - how do groups of humans (especially large groups of humans) work together to solve problems?
Human coordination - how do we coordinate to meet our shared needs?
We are building this coordination infrastructure on top of a new financial stack that is fundamentally more fair, free, corruption-resistant, and efficient than the old system. This presents a generational opportunity to coordinate more scalably, democratically, simply, precisely, and effectively. Traditional allocation mechanisms and/or grant-giving organizations can be mired in bureaucracy. If anyone’s ever gone through a grant application process in an NGO, you know how painful the process can be. Pages and pages of paperwork that don’t actually match what is really going on in the ecosystem create a lot of administrative overhead, and, at worst, some of these NGOs and grantgiving organizations become the mission themselves instead of the mission being the mission. This is a really ineffective way to create solutions to our problems. Effective capital allocation systems address these gaps by aligning incentives, reducing inefficiencies, and ensuring that resources flow toward impactful initiatives. Blockchains and the trustless coordination they create are genuinely useful in this context.
Resource Allocation Has Been Evolving as Humanity Has Evolved
Capital allocation mechanisms have evolved from huntergatherer beginnings to the present. Millennia ago, humans allocated resources such as harvest surpluses, water rights, and other resources through mechanisms such as mutual aid networks and crop rotation agreements.
As humanity entered the Industrial Era, guild systems, lotteries, fraternal societies, and requests for proposals became allocation mechanisms for knowledge and resources. Workers’ unions organized for mutual aid and bargaining for more equitable capital distribution, and certain communities developed their own currencies to foster local economic resilience.
With the advent of the internet at the end of the last century, we entered into the Information era, where online crowdfunding, bounties, and
hackathons became prevalent. These were all new ways for the 8 Forms of Capital to be distributed and set us up for the era that we are now in.
Now, in the onchain era, and now that we have Ethereum and blockchains, more funding mechanisms are available and being developed to solve coordination failures. Some of these mechanisms help allocate funding in ways that favor the choices of the many over the few – and some favor projects that can demonstrate verifiable impact.
As we enter our second decade of public blockchain networks, this cycle of innovation continues, and new allocation mechanisms are being developed every day.
A Cartography of Capital Allocation Mechanisms
In the past year, I have written two books to map out the onchain capital allocation landscape. The Innovators Edition and the Explorers Edition of the Onchain Capital Allocation Handbook are meant to be approachable guides for people in the Ethereum ecosystem who are building the next batch of funding infrastructure. Both are available for free download at all.expert , where you can dive deep into the two books’ worth of funding mechanisms.
Since I do not have 400 pages here for that deep dive into all those mechanisms, I’ll do a run-through of the current notables:
Quadratic Funding
Quadratic funding, developed by Vitalik Buterin, Glen Weyl, and Zoë Hitzig, is a cornerstone of democratic resource allocation. It amplifies the impact of small contributions, prioritizing projects with broad-based community support. This mechanism has been central to Gitcoin’s success, facilitating $66M and counting in funding for public goods. By matching contributions based on the number of donors rather than the amount donated, quadratic funding shifts power from wealthy backers to the collective will of the community.
The “Resource Allocation Through History” poster Gitcoin released at Funding the Commons Bangkok this
Retroactive Rewards
Retroactive funding, pioneered by Optimism, allocates resources based on demonstrated impact rather than speculative potential. This approach addresses the uncertainty of traditional funding models. By rewarding initiatives that have proven their value, retroactive rewards create a culture of accountability and long-term commitment to building.
The Protocol Guild
The Protocol Guild exemplifies collective action in funding critical infrastructure. By curating a registry of developers who maintain Ethereum’s foundational layers, it enables decentralized systems to sustain the resources they rely on. In 2023, the Guild raised $100 million to support protocol development—a testament to the power of aggregation and shared responsibility.
Hypercerts and Impact Certificates
Hypercerts is a use case that ensures the onchain recording of contributions to facilitate transparent verification and auditing of impact-driven projects. This enhances efficiency in funding and evaluation processes. Protocol Labs and the Hypercerts Foundation created Hypercerts, an innovative implementation of Impact Certificates, in December 2022. These Ethereum-based smart contracts are semifungible tokens representing impactful work and its outcomes. They use NFTs to encode information about
contributors, work performed, and the resulting impact. Participatory Budgeting in Porto Alegre
This process was pioneered in 1989, when Porto Alegre’s Workers’ Party introduced a democratic process that empowered residents to actively participate in allocating public funds, particularly focusing on supporting disadvantaged neighborhoods.
Participatory Budgeting serves as a capital allocation funding mechanism by enabling community members to directly decide how a portion of public funds is distributed. By directly involving residents, the process aligns spending with local priorities, fostering trust and accountability.
Harberger Taxes and Dynamic Resource Allocation
Harberger Taxes function as a funding mechanism by taxing assets based on self-assessed values, encouraging efficient use, and benefiting societal welfare.
Harberger Taxes, introduced by economist Arnold Harberger in the 1960s, are typically applied to land and real estate but can also be used for intellectual property and digital assets, including NFT marketplaces. The idea has gained traction through the works of economists Glen Weyl and Eric Posner. By allowing users to set self-assessed valuations on assets, Harberger Taxes introduce a continuous funding model that balances resource utilization with community needs.
Futarchy
Popularized by Robin Hanson, futarchy is a form of governance where policies are chosen based on prediction markets. In a futarchy, elected representatives define and measure the metrics that reflect the wellbeing of the population. Then, prediction markets are used to forecast the impact of proposed policies on these metrics. The policies predicted to have the best outcomes are implemented. This system aims to combine democratic values with the informational efficiency of markets to make better-informed decisions.
Revnets
Revnets function as a governance mechanism by using an onchain cap table to enable transparent, decentralized participation and revenue generation without governance or management overhead.
Invented by Jango and other Juicebox contributors (Robert Leonhard, JohnnyD, Wraith, Nowonder), revnets are built on the Juicebox v4 protocol—a crypto fundraising and DAO management platform. Structured as a Delaware-based LLC that invests in $REV tokens, this open-source mechanism focuses on providing a transparent and cost-efficient funding model that enables broad participation and revenue generation that can be used to address monetization, competitive advantage, and dependency dilemmas.
Automated Public Goods Funding (AutoPGF)
Automated Public Goods Funding (AutoPGF) comprises a series of mechanisms designed to provide automatic funding for public goods, utilizing yields generated from protocol or token interactions.
Coined by Marek Olszewski in 2024, AutoPGF simply means automatic public goods funding. AutoPGF utilizes revenue from network activities to support ecosystem development. The idea gained traction as projects like Glo Dollar (a stablecoin that uses its yield to fund public goods) or Octant (a group of ETH stakers that distribute their funding to public goods) began to appear and grow.
AutoPGF creates a funding flywheel in which protocol usage directly supports public goods. It aims to address sustainable funding challenges in blockchain ecosystems by enabling users to contribute indirectly to ecosystem growth through their regular onchain activities.
Investment DAOs
Investment DAOs function as a funding mechanism by decentralizing venture capital, allowing community members to collectively make investment decisions. They were popularized by Metacartel Ventures, Seed Club, and Orange DAO, which adopted a community-centric approach. This model democratizes venture capital by spreading decisionmaking power across a larger group and shifting power away from traditional centralized investors.
At Gitcoin, we have been on a journey of progressive decentralization over the last few years. We are not only decentralizing power, but we are also decentralizing the types of capital allocation we do. While we are known for Quadratic Funding, we are moving to a multi-mechanism future.
As part of this journey, we built Allo Protocol (short for Capital Alloation Protocol). We hope that Allo represents a leap toward modular, customizable funding systems. By offering a suite of tools for registry management, strategy design, and allocation interfaces, it empowers ecosystems to experiment and iterate. Whether deploying quadratic funding, retroactive rewards, or novel mechanisms, the Allo Protocol facilitates rapid innovation in capital allocation.
Design Principles:
Plurality
A recurring theme in the design of on-chain systems is plurality—the coexistence of diverse mechanisms and approaches. In the context of capital allocation, plurality ensures resilience, inclusivity, and adaptability. No single mechanism can address all challenges or meet the needs of all stakeholders. Instead, ecosystems thrive when multiple systems operate in parallel, complementing each other. For example, the Ethereum network’s commitment
to client diversity at its base layer ensures robustness. If one execution client fails, others can maintain the network. This philosophy extends to funding mechanisms, where tools like quadratic funding, retroactive rewards, and the Protocol Guild each address specific needs within the ecosystem.
Composability
Ethereum is designed with composability at its core, allowing developers to build interoperable applications and smart contracts. Its modularity and standardized protocols, like ERC-20 and ERC-721, enable seamless interaction between dApps, creating a “money Lego” ecosystem where different components can stack together flexibly. Composability = Stacking Modules + Mechanisms.
Iterative design
These mechanisms are iterative, meaning that they are designed and set up to be improved so that they can become more efficient each time they are used. Teams and communities that use these tools can learn from a past funding campaign and adjust them to broaden their impact and efficiency.
Resilience
Multi-mechanism infrastructures create a buffer against uncertainty by diversifying funding approaches. They enable organizations and societies to adapt and thrive in changing circumstances. Diverse funding models can cushion the impact of economic downturns by ensuring that resources are distributed equitably and transparently, helping communities navigate economic crises. Mechanisms like AutoPGF and Investment DAOs leverage technological innovation to automate and decentralize funding processes, reducing overhead and increasing efficiency. Inclusive models, such as Social Impact Bonds and Cooperative Approaches, ensure that marginalized communities have a voice in resource allocation.
Challenges and Opportunities
While the promise of on-chain capital allocation is immense, challenges remain. Managing a funding campaign requires robust governance structures capable of ensuring fairness and accountability. While decentralized systems reduce the risks of centralization, they can introduce coordination challenges, particularly when multiple
Allo
stakeholders with differing priorities are involved. Technology also plays a critical role. Deploying blockchainbased mechanisms demands sophisticated infrastructure, including secure smart contracts and scalable networks. Furthermore, these systems must navigate regulatory uncertainties, particularly in jurisdictions with evolving stances on blockchain and cryptocurrency. There are various strategies for overcoming these challenges. For instance, DAOs provide a governance framework that aligns incentives among stakeholders while maintaining transparency. Multi-signature wallets and escrow mechanisms ensure the secure management of funds, while clear metrics for evaluating contributions foster trust and accountability. Innovations such as Gitcoin Passport and advanced clustering algorithms guard against sybil attacks. Ultimately, adoption depends on education, infrastructure, and trust. Open-source development, community engagement, and transparent governance will be key to overcoming these barriers. By fostering collaboration across ecosystems, the Ethereum community can build robust, inclusive, and widely accessible systems.
The Future of Capital Allocation
As tokenization eats the world, blockchain technology will enable the fractionalization of ownership, allowing more people to participate in funding mechanisms, align incentives with social outcomes, and foster sustainable development. AI will help drive some decisions, too, as artificial intelligence can enhance the efficiency of resource allocation by analyzing data and predicting outcomes. Better human coordination and collaboration can flourish as decentralized systems break down geographical barriers, enabling global participation in funding decisions.
It is a future worth building for.
Toward a 21st-Century Financial Stack
Onchain capital allocation represents a foundational layer in the emerging stack of 21st-century financial systems. Combining decentralized technology with pluralistic design principles creates resilient systems that serve humanity’s shared needs. Whether funding public goods, fostering innovation, or addressing systemic challenges, these mechanisms offer a path toward a more equitable and sustainable future. By embracing plurality, transparency, and collaboration, we can build a world where resources flow freely, equitably, and in service of the common good.
Get involved
Do not mistake yourself as a passive observer of this movement. We are not only mapping this design space; we are manifesting it. We are in a strange loop of discovering & creating this beautiful design space. We are memeing it into existence.
If you’d like to learn more, I invite you to check out the Onchain Capital Allocation Handbooks at https://allo.expert or Allo protocol at allo.gitcoin.co
Extending Decentralized Messaging:
The Vision
Franck Royer Core Contributor, Waku
Ethereum inventors Vitalik Buterin and Gavin Wood originally conceived a transformative internet infrastructure that went far beyond traditional blockchain technology. At the core of their vision were three interconnected technologies designed to fundamentally reshape online interaction.
Ethereum would serve as the computational backbone, providing a platform for decentralized applications and smart contracts that could execute complex transactions without centralized intermediaries. Whisper would handle secure, private messaging, enabling communication that couldn’t be easily surveilled or censored. Complementing these would be Swarm, a distributed storage platform that would allow users to host and share data in a truly decentralized manner.
This holistic approach represented a radical reimagining of digital interaction. By creating tools that could operate independently yet seamlessly work together, Buterin and Wood proposed an alternative to the centralized internet— one where users could communicate, transact, and store information without relying on corporate gatekeepers.
The Challenge of True P2P Communication
and computational power. This exclusion results in a two-tier system where only users with robust hardware can fully engage with decentralized applications (dApps), undermining the inclusive ethos of Ethereum.
Users of Whisper and Status App found fundamental limitations in Whisper, which later led to the development of Waku, a public network for peer-to-peer messaging.
Waku’s Innovative Approach
Waku offers a comprehensive approach to enhancing accessibility and reliability for all users . Its primary routing protocol, Waku Relay, is libp2p-gossipsub, which powers the messaging capabilities of the Status Desktop application.
These gateways create vulnerabilities that undermine
the essence
of decentralization;
users should have full control over their data and interactions.
Decentralized messaging systems aim to eliminate intermediaries, allowing users to communicate directly and securely. However, many existing P2P networks still rely on centralized gateways, which compromise user privacy and sovereignty. These gateways create vulnerabilities that undermine the essence of decentralization; users should have full control over their data and interactions.
The challenge is particularly acute for “resourceconstrained devices” like smartphones, laptops, and browsers, which are integral to our daily lives. These devices often face significant barriers when attempting to engage with decentralized networks due to network instability, bandwidth constraints,
At its core, Waku integrates libp2p-gossipsub with discv5, the same discovery mechanism used by Ethereum, to locate nodes and facilitate message exchange. Building on this foundation enables Waku to make peer discovery and message routing available to limited devices. This integration allows users to query peers, push messages, filter incoming data, and retrieve historical communications without overwhelming their hardware.
Recognizing the limitations of traditional relay protocols in resource-constrained digital environments, Waku has developed a sophisticated suite of specialized libp2p request-response protocols that address the fundamental connectivity challenges faced by mobile devices and web browsers. While core protocols like Waku Relay and discv5 excel at robust message routing, they inherently require persistent network connections and substantial bandwidth — characteristics that can overwhelm devices with limited computational and network resources. By developing these custom protocols, Waku has created a flexible communication framework that ensures efficient message routing and retrieval while optimizing performance for devices with limited resources.
The protocols:
• Store Protocol: Allows nodes to retrieve historical messages from peers, ensuring no communication is lost or missed messages during offline periods.
• Light Push: Enables targeted message transmission for nodes to a single peer, which then propagates it across the relay network
• Filter Protocol: Supports selective message retrieval by allowing nodes to subscribe to specific subsets of messages, optimizing bandwidth usage.
• Peer Exchange: Facilitates peer discovery with a lightweight approach suitable for short-duration connections. Although less Sybil-resistant than discv5, it is ideal for devices with short-lived sessions, such as mobile and browser-based clients.
These custom protocols represent a nuanced solution to the fundamental challenge of maintaining efficient, flexible communication across a diverse ecosystem of computational devices. They also help to enhance Waku’s adaptability, ensuring seamless message delivery across a wide range of device capabilities and network conditions.
These custom protocols were initially designed for mobile and browser environments, but they also play a vital role in desktop applications. They enhance the functionality of desktop clients by retrieving messages missed during offline periods and establishing peer connections to ensure rapid message delivery. Concurrently, discv5 continues to operate in the background, progressively expanding the peer network to enable a broader range of potential network peers. This allows broader connectivity and more robust message routing.
This approach provides desktop users with enhanced flexibility and efficiency in message routing and network participation, ensuring a seamless user experience across diverse device types and usage scenarios by bridging the gap between resource-constrained and full-capacity devices.
One of Waku’s key innovations is the implementation of RLNv2, a privacy-preserving rate-limiting mechanism that protects the network from spam while maintaining user anonymity. Using zeroknowledge proofs, RLNv2 enables users to send a limited number of messages per epoch without exposing their activity patterns. This approach enhances security and ensures fair usage of network resources.
The latest upgrade limits to N, instead of 1, messages per epoch. It reduces friction for edge nodes by allowing the generation of proofs without syncing the tree locally.
The Merkle tree is now built onchain, which greatly improves the UX. Users can now start generating proof with a few contract calls instead of gathering all previously emitted events from the contract to build a Merkle tree locally.
Waku’s architecture emphasizes reliability through redundancy. Messages are pushed to multiple nodes and independently verified to ensure their presence within the network. This approach significantly enhances communications resilience against censorship and data loss. For offline synchronization, Waku employs a Range-Based Set Reconciliation protocol, allowing devices to seamlessly retrieve missed messages when they come back online.
To address scalability, Waku employs sharding techniques, dividing the network into distinct segments to prevent congestion while maintaining performance. This approach allows the network to grow without compromising functionality or inclusivity.
Reimagining Decentralized Communication
By removing centralized intermediaries and restoring privacy, Waku empowers users to engage freely without fear of surveillance or censorship. This technology could
serve as a foundation for various applications. For example, it could enable decentralized social media platforms that prioritize user privacy while resisting censorship.
Furthermore, Waku opens possibilities for AI applications, such as creating an open marketplace for AI providers where users can privately interact with AI services by sending prompts securely over Waku. This means individuals and organizations can engage with AI services without intermediaries monitoring or potentially misusing their sensitive interactions.
Resource-constrained Internet of Things (IoT) devices could also leverage Waku’s infrastructure for secure communication without relying on centralized cloud services. In emergency scenarios where traditional communication networks fail, Waku-based systems could provide robust channels for information dissemination.
The Road Ahead: Challenges and Opportunities
While Waku holds significant promise for decentralized communication, a key challenge lies in developing a robust incentivization mechanism for the Waku service network.
In the decentralized network ecosystem, resource-constrained devices like mobile phones fundamentally depend on service nodes to maintain connectivity and effectively route messages. However, running these service nodes requires
significant computational resources, bandwidth, and operational costs, which creates a fundamental economic barrier to widespread network participation.
The Waku research team is actively addressing this challenge by developing a novel protocol designed to create a sustainable economic model. Their approach aims to enable node operators to receive direct compensation for providing essential network services. This economic layer is crucial because it transforms the network infrastructure from a communitydriven project to a self-sustaining ecosystem where individual participants are economically motivated to contribute to the network’s resilience and performance.
By aligning individual economic interests with collective network health, Waku can foster a robust network and advance the broader vision of decentralized, private, and censorship-resistant communication.
Shaping the Future of Digital Communication
True decentralization is not merely about redistributing power within financial systems or governance models; it is about creating a digital world where every individual can participate fully in shaping their own narrative in an increasingly complex online environment.
By championing technologies that empower users rather than control them, we can pave the way for a future in which privacy and freedom are not just ideals but realities in our daily communications. Waku offers a glimpse into a world where decentralized messaging is not just possible but preferable—a world in which the promise of Web3 can finally be fully realized.
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This quarterly data report, curated by hildobby, presents a comprehensive analysis of the Ethereum ecosystem. All counters and charts are sourced from Dune, growthepie, DefiLlama, stablepulse, L2Beat, The Block, rated and Allium. The report encompasses a wide range of metrics, including scaling solutions, usage statistics, and financial analytics, offering a holistic view of Ethereum’s current landscape.
