Game theory often arrives at an ironic crossroad: the very rationality that, in theory, informs decision-making can, under certain conditions, drive a collective towards suboptimal outcomes. This irony lies at the heart of many of our social and economic puzzles, challenging the notion that individual utility maximization naturally results in the best overall results.

Kantian ethics, a philosophical doctrine rooted in the pursuit of actions that can be universally willed, offers a striking counterpoint to the self-serving strategies typically favored in classical game-theoretic scenarios. Here, the Kantian agent is envisioned as one whose conduct is not solely dictated by the pursuit of personal advantage but by the aspiration for a collective optimum—where the strategy chosen is as beneficial for the individual as it would be if adopted by all. This strategy often requires trust as participants must “synchronize” their choices to get the best outcomes.

This interplay beckons us to consider not just the outcome of individual choices, but also the architecture of the systems within which these choices are made. It invites a deeper inquiry into how incentive structures, societal norms, and governance models might be reimagined to harmonize personal incentives with the common weal.

Nash equilibrium becomes great again with Kant

A major factor that leads individual behavior towards negative equilibria is the lack of trust in others to also aim for collective maximization. In the intricate web of game-theoretic interactions, where every player calculates moves based on the anticipated decisions of others, this mistrust fosters a defensive strategy. It propels individuals to prioritize self-preservation over potentially more rewarding collective outcomes, anchoring the group in a less optimal state known as the Nash Equilibrium.

The landscape of human interaction, overflowed with uncertainty and strategic ambiguity, often nudges individuals towards conservative, self-protective actions. These choices, while rational in isolation, can cumulatively lead to a societal deadlock where mutual benefit remains just out of reach. This phenomenon is stongly evident in the classic Prisoner's Dilemma, where the fear of betrayal leads rational actors to choices that ensure a suboptimal result for all parties involved.

Kantian ethics, with its emphasis on universal maxims and the categorical imperative, has inspired a radical shift in this dynamic. It posits that if each individual were to act in a manner that they wish could be universalized—that is, adopted by everyone—then collective action would naturally gravitate towards the greater good. This philosophy has prompted some game theorists to propose a framework where trust and mutual benefit are not just idealistic aspirations but rational choices. This approach not only mitigates the risk of falling into negative equilibria but also paves the way for a more harmonious, elegant, and sustainable collective existence.

To bridge the gap between the idealistic underpinnings of Kantian ethics and the pragmatic calculations of game theory, we must nurture a culture of trust and transparency. This entails designing systems and institutions that promote cooperative behaviors and make collective welfare a tangible, achievable goal. It also involves educating individuals about the long-term benefits of mutual cooperation and creating mechanisms that facilitate and reward collective-oriented actions.

Alignment is now doable in the digital realm

However, the digital landscape presents similar challenges to those encountered in other spheres. Despite the inherent inclination of internet protocol suites towards promoting freedom, negative Nash equilibria can still emerge. We find ourselves in an era dominated by internet silos, where major platforms prioritize proprietary and closed standards over open ones. This strategic choice allows platforms to assert ownership over their user base and network effects, rather than cultivating competition based on service quality.

Even if a project aims to establish alignment and achieves it upon launch, systems must remain flexible and adaptable over time. Bitcoin serves as an illustrative example in this regard. Its pioneering communication protocols and novel consensus mechanism have not only enhanced its robustness but also facilitated widespread adoption and immutability. Often likened to a living organism, Bitcoin thrives on collective interest, with users autonomously making choices that collectively enhance its stature. The mining controversy from 2014 to 2017 underscores the balance of power within the Bitcoin ecosystem and the protective role of social consensus. Bitcoin's well-crafted rules establish a fully autonomous system, addressing not only the double spend problem but also fostering cooperation among its user base, ensuring its enduring existence. Its transparency and alignment capacity instill trust in this trustless protocol.

Despite Bitcoin's significant contribution to fostering decentralization, it has faced challenges in keeping pace with rapid innovation. The emergence of numerous alternative cryptocurrency protocols, driven by personal interests and customization difficulties, has inadvertently created centralization points. While essential for adoption, these innovations have led to misalignments, discouraging users from self-custody and breeding conflicting interests between users and operators. This raises the question: Is Bitcoin inadvertently fostering misalignment?

While the diversification of the cryptocurrency landscape has brought enrichment, it has unfolded alongside Bitcoin's continued potential to serve as the ecosystem’s backbone. Ethereum, as the pioneer of smart contract technology, encountered similar challenges of misalignment. However, it responded with innovation through initiatives like EIP1559 and EIP4844, resulting in positive changes. Additionally, emerging Layer 2 solutions like Starknet aim to address remaining alignment issues. Bitcoin is now following the same path with ongoing debates surrounding covenants and the pursuit of unlocking the full potential of its highly secure network.

The social layer is crucial, yet it introduces a trust factor. We require a robust community to uphold its values, which appears contradictory to a trust-minimized system. This presents a paradox, albeit one we can address. The technology is still in its infancy, and protocols cannot entirely supplant the social layer yet.

The future trajectory involves minimizing the social layer's influence through:

1. Automated governance mechanisms that safeguard core values.

2. Decentralized identity systems to diminish dependence on social validation.

3. Protocol safeguards to mitigate undue influence.

In essence, while the social layer currently represents a necessary compromise, our focus should pivot towards reducing its significance in the future.

The complexity of alignment extends beyond binary perspectives; rather, it manifests within an infinitely intricate matrix along a radial continuum. Our opportunity lies in our capacity to encourage alignment through increasingly accessible, adaptable, and predictive tokenomics frameworks.

We can achieve it

In contrast to traditional financial systems, where aligning individual and collective interests often encounters systemic barriers, opacity, and centralized control, cryptocurrencies offer a potential for transparency, decentralization, and autonomy. This enables the creation of incentive structures that are inherently more flexible and adaptive to communal and enduring needs. The programmability of tokenomics allows for a dynamic and responsive approach to aligning economic behaviors for mutual and collective gains. Therefore, all crypto projects should consistently strive to maximize value by designing tokenomics that guide all participants toward beneficial outcomes for both the protocol and themselves.

This influence is now evident in hyper-growth protocols such as Curve, Olympus, and Luna. Although not all of them achieve sustainability, they have demonstrated the effectiveness of well-designed tokenomics in attracting value creation on their platforms. For instance, Olympus initially had impressive "bootstrap" tokenomics but later redesigned them to prioritize project sustainability over rapid growth. Similarly, Luna implemented a symmetric Nash equilibrium, incentivizing everyone to contribute to the protocol's success when conditions are favorable but also potentially leading to its destruction if circumstances change. These instances of misalignment stem not from technical issues but rather from shortcomings in tokenomics design. Recognizing this, there is a need for comprehensive exploration and refinement of tokenomics through in-depth analysis and design.

Ensuring alignment remains paramount in developing future infrastructures to mitigate the risks linked to a centralized, censorable internet controlled by a handful of dominant entities. In this new era, armed with a plethora of crypto technologies, strength derives from unity, underscoring the importance of directing collective efforts towards shared objectives to bolster freedom of expression and innovation. This imperative extends beyond the realm of cryptocurrencies, encompassing the potential for widespread adoption of this digital financial system on a global scale. As understanding of tokenomics matures and the modularity of protocols and chains continues to evolve, new opportunities for alignment strategies emerge.

It is time to pursue optimal alignment, prioritizing collective utility maximization over fostering competition among network participants.

For projects like Usual and Starknet, focusing on alignment is paramount to establish a robust foundation for both short and long-term viability and resilience. These ecosystems are dedicated to inclusivity, ensuring that no user or community member is left behind. This commitment stems not only from ethical considerations but also from the recognition that well-designed infrastructures and mechanisms create more value by aligning a broader array of participants. It requires harmonizing all components and stakeholders towards shared objectives, minimizing potential conflicts, and maximizing adaptability to evolving circumstances.

Imagine Ethereum with enhanced resilience; that's precisely what Starknet offers. We're not afraid to be different, unlike other Layer 2 solutions primarily focused on EVM compatibility, we perceive that as a risk. Our vision is for an Ethereum that is future-proof, unchained by its past. Within the Layer 2 ecosystem, innovation is our forte, and Starknet pledges to remain at the forefront, continually pushing boundaries. Our differences serves as a source of strength, as a unified Ethereum requires diverse approaches for success. We may be different, but our goal is the same: a thriving Ethereum! Our divergences represent the finest form of alignement. What we aim for is to restore sovereignty to users, enabling them to own their actions, which is why Starknet is crafted to be the Web of Integrity.

Usual remains firmly in its commitment to cultivating a sustainable ecosystem for long-term prosperity. This commitment entails nurturing the protocol's growth by incentivizing early adopters, all while maintaining its enduring economic integrity. At the core of this initiative lies the equitable distribution of value among venture capitalists, the project team, and the wider community. Consequently, our protocol is built upon a transparent and evolving value distribution system. Moreover, the ecosystem is thoughtfully designed to provide value to all participants, guaranteeing that each stakeholder enjoys the rewards of their engagement.

By delving into our narrative and understanding our vision, you will gain a comprehensive overview of our alternative.

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