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Nathaniel Whittemore @nlw
, 21 tweets, 10 min read Read on Twitter
NARRATIVE WATCH: "OPEN FINANCE." If you’ve opened CryptoTwitter in the last few days, you likely seen the phrase “Open Finance,” and based on who you follow, it might be extremely positive or extraordinarily negative. So, what’s going on? Thread 👇/1
2/ As public perception of tokenized projects, ICOs, and Dapps languishes, so too does the base protocol underlying them struggle. Ethereum skepticism has been a narrative on the rise -really all year but especially this summer.…
3/ Hold aside Dapp usage numbers; hold aside critiques of ICOs; hold aside issues of scalability: at core, the skepticism has to do with questions of Ethereum’s properties of money-ness and the ability for its token ETH to ultimately accrue value.
4/ The crypto conversation is today dominated by debates about what @kylesamani called “The Path To Tens Of Trillions.” In other words - what path will a cryptocurrency take to become the digital reserve currency of the world - and will there be just one?…
5/ The hypothesis which dominates among Bitcoiners - and which has, in this bear market, inarguably picked up more adherents - is the Hodler/Store of Value-first thesis. @MustStopMurad conveniently mapped the entire trajectory out in this graphic:
6/ On the one hand, part of the “Open Finance” narrative is a re-imagining of a “utility hypothesis” - arguing that holding digital gold is insufficient, and that people need a slate of different services to believe in a new decentralized financial system
7/ Shockingly for our usually agreeable little crypto family, some critiques have surfaced: 1) belief in Open Finance, but skepticism about Ethereum’s claim to it; 2) a sense that the community is searching for narratives to combat a broader critique.
8/ There is no doubt that, across the crypto sphere, there is broad-based excitement for a new era of cross-cutting decentralized finance. Felix from @TuringCapital visualizes the ecosystem here.
9/ @Balance_io head @ricburton has been particularly vocal and articulate about the emergence of an open source banking ecosystem
10/ Just this past week @DharmaProtocol @0xProject @WalletConnect and others announced De.Fi - an alliance of decentralized financial platforms - re-affirming that there is energy and passion around a decentralized, open financial system.
11/ The question is how much that is Ethereum’s narrative vs a larger industry narrative. This thread with @max_bronstein @paul_btc @Obstropolos exemplifies that conversation.
12/ All of this conversation has been heightened by a couple factors.
13/ First was the approval of EIP 1234 which lowers ETH block reward from 3 to 2. This was viewed positively by the Ethereum community but as an example of un-credible monetary policy/process by skeptics. More from @econar @pierrerochard @spencernoon:
14/ The second was a piece in TechCrunch by @JeremyRubin “The collapse of ETH is inevitable” that was articulate enough to get a direct response from Vitalik.
15/ So, what to make of all of this? A few thoughts.
16/ First, holding aside any questions of narrative, I am a pretty big proponent of pushing ourselves on our assumptions about what makes for a store of value in this new tokenized world. @QWQiao and @robustus have written thoughtfully about this.
17/ Second, it’s inevitable that, as the leading smart contract protocol, Ethereum is going to face the biggest narrative hit in a down market where we’re re-calibrating expectations about a huge array of projects whose capitalization was enabled directly by their innovations.
18/ Third, navigating technical challenges = more important than narrative, with the exception that it *is* essential that the ETH community have confidence in their ability to shape the direction. I.e. internal community/political process matters more than external marketing.
18/ Fourth, to reiterate: we’re not just in early innings - we’re still figuring out which game to play. We’ve barely scratched the surface on how decentralized systems could re-organize human networks and I’m rooting for anyone who pushes those experiments forward.
19/ Fifth, if we *are* grading narratives, while “Open Finance” doesn’t quite capture some possibilities around network organization, it’s a hell of a lot better than “World Computer” - which doesn’t tell people anything about why they’re supposed to care. So, there’s that.
20/ One thing is for sure: @ETHBerlin is going to see some *very* interesting and intense conversations. Looking forward to all the reports!
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