A Deep Protocolization of Mutual Credit
Also: Onchain Art Directories, Vibecession, and Nu-Metal's Comeback
Deep Protocolization is the world-transforming process that follows on the heels of Industrialization and Globalization.
We are as yet at very early stages of this process, fiddling around with prompt languages, data tagging, configuration files, and private keys.
It talks about how protocols are still unfolding. Protocols as in:
True protocolization is when you get unexpected frictionlessness in an open technological context when dealing with unrelated but entangled entities in concert, without ceding rarely needed but critical political agency elsewhere.
An example of this is Ethereum sign-ons.
My first startling experience of true protocolization was in my initial experiences with Ethereum wallet sign on. Thanks to global onchain data, my interactions with one dApp were modifying my experience on other dApps. I buy an NFT here, it shows up there. It felt weird in the way experiencing Facebook and Google working seamlessly together would.
Once you’ve experienced wallet sign-on (or more generally, any kind of private-key-based authentication), tolerating traditional password management workflows involving sketchy servers run by incompetents seems absurd.
I loved the sketching out of this process of protocolization from a language perspective. Venkatesh summarises how this change occurs. I added “token” as my own example.
From:
first, the noun, an isolated environment → the internet, web, AI, blockchain, the token
then, broader usage in more isolated containers → eg, adding the ‘e’ or ‘i’ to words or tacking on ‘digital’, ‘virtual’, ‘token’.
then, turning into a verb → to digitize or to tokenize.
then, becomes more universal as general purpose adjectives → digitization, tokenization, etc.
and then, quoting directly: “In the final stages, we start to think of the abstract global process as driving a new historical epoch spanning a century or more, with a clear beginning and end on historical time-scales.”
This process is older than the computer age. Taxi was once taximeter cabriolet. We worked our way through iron horse and horseless carriage. It was all part of industrialization.
This trend was similarly corroborated by reading
’s “Zero is The Future of Money” article, a take on seeing the ability for crypto to be used for credit systems.
He points out (and I emphasise in bold):
Crucially, credit thinking leads to a vision of money as being a kind of nervous system, rather than a circulatory system, and the key primordial nervous impulse being sent along that system - to create its grooves - is the act of ‘paying by promise’. In our modern system, the issuance of these impulses is completely dominated by mega institutions, but there’s nothing to say that alternative versions of the same principle can’t be achieved, especially with the advent of new distributed technology architectures.
Mutual credit systems sometimes feels like it has, as Brett, says, “small-scale backwater feeling”.
With the substrate of a programmable ledger, it could turn the scale of mutual credit systems into a larger protocol and thus as Venkatesh notes, it hopefully becomes mundane and invisible.
As Brett said:
if done right, we might end up with more dynamic forms of liquid decentralization, with local systems riding on global architectures, using combinations of different governance systems for different scales of decisions.
With a nice cherry on top from Venkatesh:
The potential impact of protocolization on the economy is already well-theorized. If things like non-central-bank cryptocurrencies and smart contracts start to cohere into a new infrastructure for global commerce, the world will start to look very different from today. Perhaps a great deal of the transactional friction of everyday life will sink into the economic unconscious of a truly globalized world where national boundaries are irrelevant.
It is still a dream that is alive for me. 10 years ago, with a bit more naivety about the world, I wrote that “Everyone in the next 10 - 20 years will have their own altcoin (or derivative of it). I’ll have a simoncoin.” While I have cooled off substantially on wanting to insert a market into anything that breathes, there’s still a need find a middle ground where tokenization presents an increase in agency from the status quo without us losing certain parts of our relationships to prices. Mutual credit is one of those potential systems.
It’s why I co-designed the ERC20 token standard and why I invented bonding curves. If we have larger-scale mutual credit systems, how will this interact with each other?
At the end of Venkatesh’s article, he mentions that:
Deep protocolization of the economy, I think, will demand entirely new theories of economics. I am partial to Donald Mackenzie’s notion of the economy as an engine, not a camera, and I think deep protocolization will create a condition that forces us to perform a new engine into existence, adapted to the magical-mundane technological substrate.
It’s already heading in that direction. Token Engineering groups see programmable economic processes as an engineering practice: one that requires rigour, standards, and research. Born from that, for example, came a Commons (Token Engineering Commons). This week, having been funded from its own discipline, The Bonding Curve Research Group published new and in-depth research on bonding curves.
Reiterating what Brett said:
if done right, we might end up with more dynamic forms of liquid decentralization, with local systems riding on global architectures, using combinations of different governance systems for different scales of decisions.
That’s what groups like BCRG and TEC hope to see, wanting more systems of dynamic issuance:
PAMM (Primary Automated Market Maker) bonding curves exist in the middle ground between these two extremes, leveraging the benefits of both sides by giving the flexibility of supply expansion through dynamic issuance, yet constraining that supply expansion to correlate with deposits of reserve assets. This allows PAMMs to provide projects with a flexible token supply that can meet the needs of growing (or shrinking) demand while maintaining token value.
Slowly, but surely, we’re getting there. Deep protocolization continues. Where the road leads is still unknown. As always, a dystopia is also possible.
In the dystopian vision, protocolization will run aground in a kafkaesque nightmare world, where most of us spend half our time messing around with a horrifying mess of private keys, configuration files, and unreliable connections to a primordial soup of decentralized “nodes” for various needs that never work right. An internet of crap turning into a decentralized world of crap.
Still, as always, it’s undeniably interesting.
Blade Runner Turns 41
Really interesting thread detailing more about Blade Runner and its production.
EVE Online + Excel
It was inevitable. An official Eve Online plugin for Excel.
Tether vs Blackrock
It’s wild. It’s still crazy to me that one of the safest assets in the world, a short-term US Treasury Bill is currently getting 5% per annum. And that in most basic deposit accounts at banks in the USA, you’re only getting 0.01% per annum still. It’s frustrating because with current inflation, the only way the average person can beat or stay close to inflation is to actually have to take their cash and buy T-Bills with it. For many, this isn’t straight-forward and so they continue to lose real value of their cash. :(
Tears of The Kingdom Wants You To Cheat
I loved this video essay about how the new Zelda game affords the player with the ability to circumvent puzzles and how it makes them feel.
There’s so much detail in design put into Zelda to set the player up for various tasks and puzzles. As a storyteller, I couldn’t help but notice it. The constant set ups and payoffs are really well designed as to not feel obvious and thus remains rewarding. I’m still playing it, 70+ hours in. A huge joy. Speaking of Zelda… If you are into people trying to figure out how to make logic gates in the game, enjoy. :)
Onchain Art Directories
There’s an increasing desire to catalogue onchain NFTs. One such source comes from Emre, who recently open sourced his catalogue.
PLUG: Speaking of onchain NFTs, my recent project, Daisychains is about 24 hours away (Monday 14:00 GMT) from closing out. If you want to support short sci-fi through collecting onchain generative art, please support!
Real Wages & The Vibecession
Why, when the US economy is actually doing quite well (booming stock market, manufacturing sky-rocketing, record low unemployment, etc), do people feel like it’s doing poorly?
has a deep dive and finds the answer to be that real wages has not kept pace. Makes sense to me.
The Background Hum of the Universe
Astronomers discovered the hypothesized existence of large gravitational waves.
By turning networks of dead stars into galaxy-size gravitational wave detectors, radio astronomers have tuned into the slowly undulating swells in spacetime thought to arise from pairs of supermassive black holes (SMBHs) that are about to collide.
Just, how unbelievably mind-blowing is that? One thing that’s great about discoveries like this, is that it feels like it makes our unfathomable universe a bit smaller. If we can use the galaxy as a form of telescope, to see the hidden waves among us, then the cosmic horror of space feels a bit more pliable.
Nu-Metal Comeback + Rina Sawayama
Nu-metal is making a comeback. There’s interesting speculation as to why. From the TikTok aesthetic sound of it (Deftones), to new anxieties and tensions.
Matlock speculates that nu-metal’s first wave broke the mainstream due to a darkening socio-political climate. The US was reeling from the 1999 Columbine High School massacre, and in 2001 it would endure George W. Bush’s presidency as well as the 9/11 terrorist attacks. Is there a comparison to be drawn with the 2020s?
“It does feel like everything is fucked at the moment. The anxiety levels around the world are so weird right now,” says Matlock. “It’s no wonder that people want aggressive, angry music.”
Another reason is that while 90/00s nu-metal was mostly dudes, it’s more women getting into a harder sound. Just listen to this excellent song from Rina Sawayama that speaks to her frustrations around her culture being objectified.
And so… I leave you this week with STFU! from Rina. Rock it out.
See you next week!
Simon