It is stability which gives a thing its essential character. The strength of an arch, the even burning of a flame, the growth of an animal, the balance of a forest ecology, the steady flow of a river, the economic security of a nation, the sanity of a human individual, the health of a society: these are all, in one way or another, concerned with stability.

— Christopher Alexander; Systems Generating Systems

I would really prefer that we don’t muck-up crypto. I do not want the Web3 haters to be right.

Sure, we can come up with excuses and call the haters luddites, or say that they refuse to accept innovation because they have too much banking on the status quo.

I think taking this approach is shortsighted and dangerous. There has to be some truth to what the haters are seeing —they’re smart people — so we need to open our eyes.

Stability is a holistic systems property

An incredible amount of innovation happens in crypto every single day.

Composability — colloquially known as money legos — has become a household term in the world of DeFi.

Composability allows developers to do more with less. It enables projects to be more efficient and it increases the speed of innovation.

Excellent! Innovation is super important, but there’s something else that is even more important: the systems property of stability.

Systems theorist, Christopher Alexander, writes that stability is a holistic property. This means that stability is the result of the interaction of a systems’ many parts. For example:

• A healthy economy is not any one thing — it is the interplay of consumption, spending, and inflation rates (amongst other parts).

• A healthy person is not any one thing — it is a combination of the mind, the body, and the spirit.

A system is stable when all of its parts are aligned; when there is balance and harmony in how all of the parts relate to one another.

Pre-empting another financial collapse

This is the crux of my point of view: decentralized finance systems need to be stable. Else, they will crumble and wreck havoc — like what happened during the 2008 financial crisis.

Obviously, I really hope that this terrible future doesn’t happen.

Fortunately, there are actions we can take to pre-empt failure. It starts with always keeping stability top-of-mind when building and using DeFi applications and protocols.

Looking ahead

My intention is to use my writing to explore the systems property of stability, as applied to decentralized finance.

I do not have the answers, but I do want to start peeling back layers of the onion to eventually arrive at the truth. It could be ugly, like maybe DeFi projects are not implementing enough safety measures to prevent another financial crash.

Either way, we should not avoid the truth. Decentralized finance has immense potential, so let’s not muck it up by avoiding reality.

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