Recently, I’ve felt disillusioned with crypto.
I’m grateful to be spending my professional time working with great people on a project that is building towards a better, Ethereum-enabled digital future.
But the never-ending assault of scammers, spammers, spewers and grifters in crypto is frankly just exhausting. This piece is about reminding myself what it is that I love about crypto, by exploring some of the projects that inspire me today.
0xSplits is a project developing true hyperstructures – protocols that run for free, forever, without maintenance, interruption, or intermediaries.
If that sounds like crypto marketing babble, look at what they’ve built so far:
Splits – a smart contract that splits all incoming ETH & ERC20 tokens among recipients, according to predefined ownership shares;
Swapper – a smart contract that swaps all incoming tokens into a predefined output token, so the recipient can control which tokens to receive, regardless of what tokens are sent (e.g., someone can send PEPE but the sender will just receive it as ETH);
Waterfall – a smart contract that pays out a specific amount of either ETH or ERC20 tokens, according to a predefined order of recipients based on certain tranches.
These are all already deployed to Ethereum – 0xSplits calls them ‘public goods’. They’re immutable, fee-less, onchain, and composable. They’re programmable, censorship-resistant money legos, uncontrollable by an early incumbent or an overenthusiastic regulator. 0xSplits is building onchain financial instruments to power a non-custodial financial future.
In a vacuum, each 0xSplits product looks like a cool little tool with some primitive functionality. But with just a tiny bit of imagination, the 0xSplits suite of public goods starts to look like some foundational building blocks of traditional finance (but onchain, composable, censorship-resistant, etc.).
Waterfall? Sounds a lot like distributions for liquidity events in venture capital, or liquidation preferences in a bankruptcy.
Splits? Could replace some of the (absurd) administrative functions that happen in TradFi today, like when a back-office employee manually types in the different recipients of some funds distribution into an Excel sheet labelled FundsFlow_v94_FINAL.csv (yes, this still happens today, in the year of our lord, 2023).
Swapper? Those pesky foreign exchange fees that your credit card charges for international transactions could be resolved with near-zero overhead on their part. (Unfortunately, this might eat into the $4B+ in “Card Fees” that Wells Fargo earned last year, so it’s unlikely to get adopted by TradFi any time soon).
When these little money legos get stacked on top of each other, useful onchain financial tools emerge. Combine a Splits with a Swapper and out comes Diversifier, automatic tax withholding for crypto income. Put a Waterfall on top of a couple of Splits and get Recoup, an onchain venture fund. At some point, a completely non-custodial ‘banking, reimagined’ consumer product will appear out of 0xSplits, and everyone will wonder why we didn’t see it coming.
And 0xSplits is doing it without shoving a governance token down your throat and calling it product-market-fit.
They also happen to be powering some of the other projects in crypto that inspire me…
... like Protocol Guild!
Protocol Guild is a collective of Ethereum contributors, made up of individuals from the various client teams that get lumped together under the “All Core Devs” moniker. Protocol Guild uses a 0xSplits contract to distribute incoming public goods funding that supports their ongoing development of the various clients that make up Ethereum’s decentralized consensus and execution layers.
What I admire about this group is the thoughtful, tactical consideration of how to fight off Moloch.
“Moloch refers to a situation where individual rational actors, competing for resources or status, end up in a collectively suboptimal outcome due to their self-interested behavior.” (link)
Basically, Moloch is the danger of ineffective incentive design, slowly creeping in to destroy whatever system you *thought* was built to be everlasting. The Ethereum core devs are arguably the most thoughtful collective in the world as it relates to mechanism design and designing Moloch-resistant systems.
Protocol Guild is an experiment to align the incentives of these core developers pushing forward the base Ethereum protocol with the incentives of thousands of distributed developers across the world that build applications on top of Ethereum. The question of “How can we give core protocol contributors exposure to the broader success of projects built on top of Ethereum without letting Moloch into the house?” is an incredibly difficult one, and to be frank, the jury is still out on whether Protocol Guild is the right approach. But with a dose of cautious optimism, Protocol Guild seems to be working, and it’s powered by a 0xSplits contract.
Something about the combination of crypto and game theory really inspires me. Ideas like the ‘infinite garden’ and the ‘Dark Forest’, derived by taking the (figurative) limit of a situation and analyzing what the incentives look like at the limit, is true long-term thinking.
And the longest-term thinkers are the teams that make up Protocol Guild.
The Nouns project is awesome. They’re dealing with their own set of problems right now (is that Moloch rearing his ugly head again?), but Nouns as an experimental project, iterating onchain at the forefront of art, community, and distribution, is a glimmer of hope in an unfortunate sea of broken projects.
For Nouns, everything happens onchain. The auction mechanism happens every 24 hours, forever (or for as long as the Ethereum blockchain continues to run, which hopefully is a very very very very long time), and the art for each new Noun is generated randomly based on Ethereum block hashes. Nouns are even stored onchain, a rarity amongst thousands of IPFS pointers for other NFT pfp projects.
Nouns also does everything in public, including open funding rounds supporting ecosystem-wide projects. They fund some stupid stuff (Nouns Condoms? A giant pizza?), but they do so while fully embracing the silly absurdity of this whole dang life thing that we’re all doing together.
Matthew Chaim is the artist leading Songcamp. I don’t personally know Matthew, but his music is criminally underrated, and the Songcamp model Matthew is experimenting with is captivating. For more on Songcamp, check out this podcast Matthew did.
TL;DR on Songcamp’s most interesting project, Camp Chaos – an 8-week experiment where 77 creatives (musicians, producers, visual artists, etc.) came together in what Matthew describes as ‘a songwriting camp smushed together with a web3 hackathon’.
The output of Camp Chaos was 45 brand new songs, along with generative cover artwork for the accompanying NFT ‘packs’ and a bunch of content to supplement the Camp lore. The basic idea is to re-think how music gets created, and to re-imagine how the value generated by music can be distributed across a wide set of participating individuals.
(As you can imagine, Camp Chaos uses 0xSplits to help power the value transfer flowing through the whole thing)
The Songcamp team talks about “economics as a canvas”, which I think speaks for itself as a captivating approach to trying new things.
One year later, the headless beast that is Camp Chaos performed live in concert at NFT NYC, and followed that show up with live shows in Toronto and Detroit. Within 10 minutes of the NFT ‘packs’ initial launch, $400,000 worth had been sold.
Ultimately, only about half of the total packs up for sale were sold, and difficulties releasing the music to traditional music distributors showcases how far we have left to go before we see the fall of the Imperial Music Regime. But the ingenuity of the Camp Chaos approach is itself worth applauding and admiring.
I guess what I’m trying to say is that I’m still here in crypto because I admire experimentation and long-term thinking.
By default, people just do things the way they have always been done, either because there has never been a different way to do them, or because that’s just the way those that came before them had been taught.
But crypto opened the door for an entirely new space for experimentation, an opportunity to rebuild the antiquated legacy systems. Everything from finance to art, from gaming to music – in some corner of the cryptosphere, someone is experimenting with a new approach to a legacy system, powered by the credibly-neutral, censorship-resistant Ethereum that inspired us to try.
With so many opportunities to do a quick scammy cash grab in crypto, those among us that live out the ideals of Ethereum in the best way possible should be celebrated. I admire those that continue to drive us forward to re-imagine what finance or art or governance can look like with the help of global coordination technology.
It’s the people at 0xSplits and Songcamp and Nouns, the better angels of our nature, that keep me hopeful about crypto.
Thank you to Sina Habibian, David Banks, Lisa Cuesta-Bunin, Abram Dawson, and Will Minshew for your feedback on this post.