We’ve all heard about it, how infrastructure is way overvalued in crypto, while applications are criminally undervalued. There’s a common critique that “there’s nothing to do in crypto”. Meanwhile, on the opposite end, there’s a lot of hopium, excuses and entitlement like “we’re so early”, “build and they’ll come”.

In crypto, the concepts of “welfare” and “neutrality” are often muddled together, but in reality, in most crypto contexts, they are contradictory ideals.

Crypto is all about cults and profit, which often leads to a distorted view of the industry. My personal belief is application-centrism, and by extension, user-centrism. I believe applications should be built to offer the best experience for the user, and nothing else should matter.

Earlier this year, I listed the various demand drivers of ETH, and opined on how important each were. For me, the most significant demand driver for crypto asset is what “long-term reserve-asset”. Basically, belief in an asset as an alternative store-of-value. Combined with economic collateral and related “money” aspects, which may be collectively categorised as “monetary premium”, I believe this is at least 90% of the value of a crypto asset. Conversely, in the post above, I had rated L1 transaction fee burns, which is responsible for all of the ultrasoundmoney and deflation type memes as a 3 - effectively being very unimportant and overrated. We can look at three of the top 10 cryptoassets to see why this is true.

DAOs are meant to be an abbreviation for Decentralized Autonomous Organization. Such an entity would actually necessarily require no governance. Adding in governance makes it definitely not autonomous and arguably not decentralized. Largely because crypto is all about tokens and speculation, DAOs have thus headed down the public companies model, with tokenholders as shareholders. The only real innovation here has been skirting securities laws and thus increasing accessibility to tokenholders. Following the ICO mania, “STOs” were a brief fad - basically public companies adhering to securities laws on blockchain. Needless to say, these went nowhere as they missed the key selling point of DAOs as we know them - evading securities laws. Meanwhile, accessibility for registered securities have improved significantly by Fintech, though still have further room for improvement. It’s certainly possible and likely that some registered securities are floated on public blockchains alongside their traditional rails in the future, but it’s a marginal gain at best.

A key requirement for a well-functioning DAO is user rights. Irrespective of what the tokenholders, delegates, or other governance decision makers do, users must always retain rights.

The title is a bit of a misnomer, because decentralization is merely a means to an end. Here are the actual goals of public blockchains, as I see it:

In 2021, my expectation was for rollups to mature around late 2023 / early 2024. I was wrong, and I’ve acknowledged this many times before. I knew the crypto industry - and really, most emerging sectors - have a tendency for planning fallacy, and I was a lot less optimistic than most at the time (remember #L222?). But I was still too optimistic.

Markets are boring as sin and covered to the death, so I don’t really talk about it publicly. I’m intrigued by one thing though - when crypto goes through a secular bear market. Before we begin, let me just say that markets are dynamic, and anything can happen and probably will. I have less than 10% confidence in anything I say here, so please just see it as pure speculation and conjecture. None of this is meant to be prediction.