How to NOT budget your Web3 project: Lessons from the law of exponential growth

Imagine that you are the owner of a bank. You provide state of the art banking services to your customers and claim to have one of the best technologies on the planet. But regarding the budget of your entire bank, you have allotted just 2 percent of your entire budget for the security of the bank.

This security is so weak that even if the largest customer of your bank to whom you lent money can come, easily compromise your security and loot you- all by using just a fraction of money that you lent him!

Now let’s say you have allotted about 50 percent of you bank's budget for marketing. This means that the more you advertise about your bank, the more you are reaching out to the bad actors who can compromise your security.

In such scenarios, the risk of your project getting hacked and compromised is proportional to the magnitude of marketing that you do of the project. The slope of the curve tends to the slope of exponential if you keep decreasing the percentage of budget allotted to the security of your project.

For example, for the graph of “The risk of the project getting hacked“ vs “The magnitude of marketing done“ - the slope of the curve is:

Exponential when the budget for project’s security is 1-10%

Cubical for 11-20%

Parabolic for 21-50%

And linear for 50% and above

Image src- https://en.wikipedia.org/wiki/Exponential_growth
Image src- https://en.wikipedia.org/wiki/Exponential_growth

Traditionally, the banks have gone out of business once they have bank run or get busted. A crypto and web3 project is very much like a trustless bank. One great hack and your project is as good as busted! Thus good budget for the security of your project is thus very very very very vital. As vital as Vitalik.

Trust yourself. And trust the code (only if it is audited).

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