Thread by @nlw

1/ A couple weeks ago, I spoke at @EtherealSummit about

1) what crypto narratives are
2) why we fight about them
3) which narrative battles are the most poignant today.

Here’s the thread version.

2/ Put simply, narratives are simple stories we use to make sense of complex phenomena. They are a part of every industry, but particularly relevant in emergent industries where ideas and interpretation outweigh historical data

3/ Another way to think about it: narratives are the memes that compete not only to grab our attention but to satisfactorily sum things up in a way we can wrap our heads around.

4/ So, why ‘battle lines’? Simply put: every narrative in crypto is competing for scarce resources: scarce talent; scarce capital; scarce attention. Those who push a certain narrative are effectively trying to win those resources to their cause.

5/ In other words: market narratives are marketing.

6/ Crypto markets are shaped by a reflexive narrative cycle. Narratives push people into certain projects and communities; investors invest against narratives; prices follow and either the cycle is repeated or rejected in favor of a new narrative.

7/ Looking at this cycle differently, each narrative is effectively competing to become self-fulfilling prophecy. The more resources investors, devs and communities pour into marketing their narrative, the more likely it wills itself into reality.

8/ The cycles of narrative competition and evolution have characterized this industry since its very beginning. @nic__carter and @hasufl tracked the evolution of narratives across Bitcoin’s history, for example.

See: medium.com/@nic__carter/v…

9/ This work inspired @Felipether to take a similar look across the narrative history of Ethereum, from world computer to DeFi and beyond.

See: tokeneconomy.co/visions-of-eth…

10/ The point? 10 years in and the fundamental “why’s” of this industry remain in flux and in many ways still contentious.

11/ But of course, not every narrative battle is as epochal as “what Bitcoin means.” Here are 5 narrative battle lines shaping today’s crypto markets.

12/ Narrative Battle #1: Governance - Are today’s governance experiments (particularly on-chain) a tool for empowering communities and distributing leadership, or simply an enshrining of plutocracy/cartelization?

13/ Narrative Battle #2: Smart Contract Wars - Will developers align around protocol community with values alignment, or will opportunistic platform agnosticism rule the day?

14/ Narrative Battle #3: Tokenization - Tokenization is back on the menu, but which narrative will win? IEOs as the next big thing or forking out friction-creating native tokens? Can it be both, simultaneously?

15/ Narrative Battle #4: Fair Launch or Aligned Sustainability? On the one hand, the crypto industry rails against pre-mines and dev taxes. On the other, it wants protocols built. What is the long term path for sustainability in OSS development?

16/ Narrative Battle #5: Dubious DeFi - Permissionless Finance has been the insurgent force in the Ethereum community for the past 6+ months, but the more it grows, the louder the critical concern becomes.

17/ So, what’s the point of all this? It’s something of a paradox. On the one hand, narratives are incredibly powerful. On the other, they have exactly the power we give them, and we should give them less.