Something that comes up fairly regularly in the Synthetix discord is the concept of efficiency + openness vs fairness. If a system is designed such that it is totally open, then players (e.g. liquidation bots) with a preexisting advantage will dominate, is that fair?
The writers of these bots have a skill set and access to capital that allows them to perform a service efficiently, this is GOOD for the protocol but bad for the inefficient players. You could make it more fair by introducing some handicap, but that would reduce efficiency.
The disconnect arises because there is conflict with the fairness of a system when integrated into an “unfair" world. Many people associate fairness with equal outcomes, but efficient systems actually have a tendency to increase inequality. They favour the dominant players.
Contrast this with an unfair closed system which is also inefficient, ie a corrupt system where poor players having seized power can somehow shift the equilibrium to maintain their power.
The irony here is that if you are a poor player, you actually want the latter system, as a totally open and fair system will be dominated by more efficient players. In a corrupt system at least you have a chance of being corrupt!
Personally I am a Rawlsian when it comes to ethics, but I also accept there is a harsh trade-off when trying to achieve fairness, it comes at the expense of efficiency. This is the challenge, tempering efficient markets to achieve fairness, where do we even start?
Smart contracts are hyper-efficient but that does not make them fair.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
