The (Paradigm) Shift Heard ‘Round the World
This keynote at Devcon will have a different tone given the recent political shift in the United States, than if it was written a month ago.
Though I have lived in the US for years, I am a proud Canadian. I would describe myself as politically centrist and neutral. If there was a Progressive Rigorous Open Decentralization (PROD) party, I would be an NFT-carrying member.
For years in the US, companies in our industry have been living in fear, feeling unable to engage in certain activities that should be natural for a web3 company, like issuing utility tokens. We were operating in a climate characterized by regulatory uncertainty. Gaslighting and carpet bombing of our industry with inquiries that felt like inquisitions, wells notices, and lawsuits from the SEC.
The industry asked for rule-making and engaged in good faith. But a strategy of regulation by enforcement action replaced the approach any lawful or constructive regulator would take, because the goal was to slow kill or co-opt our industry in the USA.
This was the case for three reasons:
The progressive wing of the Democratic party believes a large, strong central government should have granular control over the population.
Certain large financial institutions preferred to keep winning a rigged game rather than compete on the level playing field of decentralized finance.
The US controls as much of the world as possible via intermediaries – especially financial intermediaries, and Ethereum represents the most powerful, unstoppable disintermediation technology on the planet.
There’s been concern about a second American Revolution. There is indeed going to be another revolution. It will be a bloodless and probably bi-partisan revolution that sheds the regulatory cruft, and reformats America according to the principles under which she was founded: liberty and justice for all, distrust for overreaching centralized authority, and a healthy reverence for self-determination and decentralization.
Paraphrasing William Gibson: “The world of decentralization is already here. It is just unevenly distributed.” While it is finally looking like America is getting on track, decentralization has already been blossoming in many places where it is needed or where opportunity presents.
Decentralized protocols flourish in places like Argentina, where industrious people need ways to route around the damage wrought by centralized government, or in Asia and the Middle East, where the population is hungry for opportunity and agile in how it responds.
We have an opening now to reformat the world bottom up, the whole world. The massive shift that America is about to drive, including an embrace of our technology, will become an imperative for all the world’s countries to follow. Something like the American Experiment or the American Project, which began with the American Revolution and was soon followed by the French Revolution in the late 18th Century, will soon take hold in various parts of the world.
This Age of Enlightenment led to the development of the Western Liberal Democratic philosophy in many nations. This philosophy is characterized by many ideals that have been corrupted over the past few decades:
Rationality, Reason, and Progress
Individual Liberty and Rights
Empiricism and Scientific Method
Limited and Democratic Governance
Pluralism and Tolerance
Genuinely Free Markets
Our global Decentralization Project – the natural evolution of the American Project – will bring new kinds of sovereignty to the people and communities of this planet. And it will grow viral, crossing different kinds of borders, because once you see decentralization at work, you can’t unsee it.
Incessant Progression to Rigorous Decentralization, Always and Everywhere
Our tech, ecosystem, and sociopolitical movement must always be about a progression towards rigorous decentralization in the deep foundational infrastructure of our world.
With rigorous decentralization, we get all of the characteristics of Western Liberal Democratic philosophy. And more specifically:
We get open source, transparency, and credible neutrality.
We get permissionless participation and innovation.
We get a world computer with a verifiable computation stack and software supply chain. Web3 will be the world computer on which all of the world’s systems will eventually be re-architected from the bottom up, on the sound foundations of decentralized trust and decentralized finance.
With rigorous decentralization, we get censorship resistance and non-repudiable transactions and attestations.
With censorship resistance we get instant on-chain news alerts, disclosures of political, business and social events, and unfettered journalism.
Shoutout to Multiple Concurrent Proposers distributed globally. With robust, real-time information dissemination and journalism we get an informed public. And an informed public is an engaged public. With an informed and engaged public we get healthy local, regional, and global participation in governance. Broad participation in open governance at all levels makes it hard for exploiters to capture and control the important systems of the world. With good governance globally we get a healthy rapidly evolving society.
Progressive Decentralization is a Secular Trend with Strong Cyclicality
Waves of decentralization are cyclical – see the Ancient Greeks, then the Romans, and the recent American elections. But the secular decentralization trend has been underway for centuries as monarchies have ceded power to nation states, which have ceded power to joint stock corporations, first national then multinational. And technology has increasingly empowered communities and individuals. The trend is to make sovereignty more and more granular.
A Simple Definition of Network State
A Network State is an online, digital-first collective of independent actors (they can be humans, groups, or AIs), who are aligned with respect to exploring and addressing one or more issues.
Network States can be realized as DAOs, social graphs, online discussion forums, or a combination of tools. Network States benefit from new web3 primitives, like decentralized ID constructs, verifiable credentials, attestations, governance tools, etc.
Network States have the ability to create their own magic internet tokens for different purposes: utility, loyalty, governance, money, equity, memes, etc. People who are aligned with the mission of the Network State might be inclined to do work in exchange for compensation in the form of some of these tokens. Others might also value the tokens for different reasons. Network States that choose to work together may swap tokens to establish greater alignment.
A Network State can bootstrap itself following various strategies. Bitcoin, Ethereum, and Solana can be considered a certain class of Network State. Layer 2 networks can also be considered a class of Network State.
To Protect Decentralization, We Need Rigorous, Incessant, Ritualized Vigilance
Thomas Jefferson wrote: “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”
We too will have to tend to the long-term health of the Tree of Decentralized Liberty. Not with blood, but with attention paid and shrill commentary on crypto twitter, and other discourse platforms. And with attention and gas paid to systems that are constantly monitoring threats to decentralization.
Defining New Modes of Sovereignty
Sovereignty refers to the supreme authority or ultimate power that a state, institution, or individual holds over a specific territory or group of people.
Sovereignty has several dimensions:
Domestic Sovereignty: The state’s control over its population and territory.
International Legal Sovereignty: International recognition of all state’s independence and authority, and no interference into the internal affairs of a sovereign.
“Sovereignty can be limited by constitutions, international agreements, or internal divisions of power.”
One can imagine, as web3 and AI enable new modes of living in overlapping Network States, we have the opportunity to define new kinds of sovereignty. And just as nation states defined their forms of sovereignty, we have started to define new forms, online and onchain:
One, for individuals
Online self-sovereignty in various forms, via DIDs and other identity constructs, combined with reputation primitives like attestations, verifiable credentials, webs of trust, and rating systems in which the raters have skin in the game when they vouch for something.
Two, for communities
Online sovereignty embodied in DAOs, social graphs, and other mechanisms. These are Networks States that will take very diverse forms. They will operate as sovereigns in online domains, setting rules for their participants that are of, by, and for their people.
Sovereign Individuals, Sovereign Communities, Network States, and Nation States
Sovereign individuals are already becoming members or netizens of network states.
Some of these network states will eventually have arrangements with one or more nation states, enabling temporary or permanent rights to be resident there. The state of Wyoming, for instance, allows DAOs to register as Limited Liability Companies. This is a small step, but we can think of it as cracking open a door that will lead to establishing relationships between network states and more traditional polities.
Many nation states are facing catastrophic demographic challenges. They need more people to take care of the boomers, and keep the economies from collapsing. Some nation states provide passports to citizens of other nations in exchange for investments in the country, and some nation states actively recruit for talented emigrants. Canada has targeted recruiting 485,000 emigrants to become permanent residents in 2024.
We will soon live in a world in which legislators and regulators consider themselves in the service of the citizenry, as they do in Switzerland, and compete for companies and people to choose residence there.
Internet → Web 1 → Web 2 → Web 3, the Re-decentralized Web
The internet started out decentralized. It was a bunch of protocols running on nodes distributed around the U.S., and then the world, on wires provided by the telecom companies. The internet was loosely governed by the Internet Engineering Task Force (IETF), a decentralized organization.
Web1 also started out decentralized. It was a bunch of open protocols and specifications running on top of the internet protocols.
Web2 picked up steam in the late '90s and early '00s, as it became clear that there were billions of dollars to be made as some sectors of the economy were moving online, and brand new sectors were being invented. Web2 companies had exciting new primitives at their disposal in the form of protocols and open specifications, and some new ones were created.
But the dominant mode of operation for web2 companies was closed source systems. If you were fortunate enough to grow your product into a platform, the standard strategy was to invite companies and users on to your platform so they can get a leg-up in offering their products. But when the platform felt it necessary to grow revenues further, it became opportune to rug pull those projects to capture their revenues.
The web2 platform strategy was to build as broad and deep a moat as possible to stifle competition. Moats not bridges.
Web2 represents the centralization of the web. Eventually web2 on steroids became BigTech. BigTech built itself into a weapon of mass manipulation available to any actor that would pay.
BigTech learned how to use AI and behavioral psychological techniques to addict its users to its product. One result is that discourse on the planet is now hopelessly polarized and dysfunctional. BigTech has fomented, as a negative externality of their business practices, the shredding of the social fabric of much of the world.
Now BigTech on stronger steroids is poised to convert its control of AI talent, plus vast amounts of data and computation, into building the most powerful tool in history for the centralized control of humanity.
Fortunately the pendulum is swinging hard now back towards decentralization and web3 – the re-decentralization of the World Wide Web.
Progressively Decentralizing Consensys
Consensys was formed to continue the vision and mission of the Ethereum Project.
And just like Ethereum, we are dedicated to progressive prudent decentralization of everything we do. Prudent because it must be done with care to ensure that we always focused first on the safety of, and benefits to, our users. And also that we never destroy value in evolving a project towards rigorous decentralization. We decentralize to build better, more valuable systems.
MetaMask is Progressively Decentralizing Itself
The MetaMask Snaps plugin architecture allows users to add functionality to their MetaMask. Individual snaps are features created by third-party developers that MetaMask users can install directly into their MetaMask.
And the MetaMask team has been leaning into Account Abstraction for a while. When the Account Abstraction dust settles somewhat, we expect to expand MetaMask's scope and capabilities with components embedded in applications, and enable you to add superpowers to your MetaMask or to any project via Dan Finlay’s Delegation Toolkit and Framework.
Linea – The Layer 2 ZKEVM Rollup Technology
Continuing the pattern of progressing the vision and mission of the Ethereum project, yesterday Consensys Software announced that we are externalizing our Linea Layer 2 ZKEVM Rollup technology and network into its own ecosystem. Linea is accelerating on the progressive path to rigorous decentralization, and token-based community governance. Linea’s evolution will be maximally Ethereum aligned.
DIN – The Decentralized Infrastructure Network
Blockchains are complicated databases. Infura enables developer’s products to read from, and write to, various blockchains with ease. But, in a web3 world of potentially millions of blockchains, Infura can’t integrate them all on its own. So Infura has been progressively decentralizing itself into DIN, the Decentralized Infrastructure Network, a robust multichain RPC provider. DIN is already operational with 50+ partner providers, offering connectivity to various networks and is already handling 100 million requests daily. DIN is about to evolve into an EigenLayer AVS, and Infura will become a premiere specialized provider on the DIN network.
Infura is openly sharing its optimizations, distribution to customers, and revenue opportunities with other providers in order to evolve with the ecosystem.
Bridges Not Moats. Can’t be Evil.
DIN, Linea, and MetaMask Snaps enable permissionless innovation and onboarding to our infrastructure. We will not be the gatekeepers, and as our systems become more rigorously decentralized, it will not be possible for us to deplatform projects. Bridges not moats. Can’t be evil.
Other Projects in the Pipeline
There are many other projects that are in our product development pipeline that run from ideation, through development, through product-market fit, and into protocolization, externalization, and tokenization. We expect many of these to have powerful synergies in both functionality and benefits to the user.
Standing up a Proto-Network State
The initial Consensys company – Consensys Mesh – began as a tiny multinational startup, because we had to look globally to find people who had a clue about what we were doing.
Becoming a large multinational corporation is not cool. Becoming a global Network State is cool.
In order to operate most effectively in web3, we build bridges not silos. So, we are working towards making Consensys Software Inc. more permeable or porous. For example, we’ve had policies for a while that enable our members to spend some of their work time on projects outside of Consensys, like DAOs.
Consensys is embarking on a new phase in its evolution. Consensys Software Inc., several of its projects, other projects in the extended Consensys ecosystem, and beyond will soon set up shop on what we are calling the Consensys Network State. Network States are about alignment, transparency, broad governance, and collective benefit. We will progressively iterate in those directions.
The “capital city or DAO” of the Consensys network state will be resident on Linea Mainnet, the first island composed of Linea digital real-estate. While Consensys will operate throughout web3, we will consider Linea MainNet our home network on which we build cores of our critical infrastructure.
We will continuously look to build synergies among our products via explicit on-chain agreements.
Our friends at Sobol.io are in the early stages of building an on-chain agreements framework that we will use to form agreements between projects that specify, in explicit and measurable terms, what should be done by each party and what compensation – yes, token compensation – is due based on levels of performance. Performance can be measured in usage of our products and protocols, or in providing liquidity, or in bringing your project onto Linea, or attaining levels of performance in your project, in terms of users, transaction volume, TVL, etc.
We will be employing a new, yet ancient meta: work-to-earn. If a person or project adds value to the Linea ecosystem and/or the Consensys Network State they will be compensated in tokens based on explicit on-chain agreements.
Little Sovereigns, aka Lil Sovs
Many of you out there are already self sovereign on-chain. But we are all in the early stages of discovering what self sovereignty means.
We’ll be living more of our lives onchain, as our finances, identities, communications, art, and entertainment are increasingly mediated by open networks and decentralized protocols.
The new relationships and communities that form will be the basis of new overlapping Network States, in which we will all participate.
Today, we’re launching SOVS.XYZ, a project inviting everyone to declare their personal sovereignty, as another small step toward the decentralized future.
You can go to sovs.xyz now to attest to the kinds of sovereignty that matter most to you, and write your support for the emerging world of network states, and our liberation through them, permanently on Linea.
We have bigger plans coming soon: this is the beginning of a partnership with the community to build a network we all want to be a part of.
The Next Generation Decentralized WWW – Win Win Win
When we hear WWW in the decentralized future, we should think about a Win Win Win world computer.
Humanity has flourished via communication and coordination capabilities that give us massive advantages over other species. Coordination requires trust.
Satoshi invented decentralized trust, possibly the most profound invention in human history.
Decentralized trust platforms are now broadly available to builders and users, based on blockchain and smart contract-based credible commitments. Web3 primitives plus AI automation are about to enable humanity to distrust each other much less, and collaboratively build towards a post-scarcity abundance mindset that will enable us to evolve a massively positive sum world.
What Does Leadership Look Like in the Decentralized Future?
Self sovereigns in the decentralized future will be the CEOs of themselves. And they will collaborate with other CEOs using credible commitments on Ethereum. They will have clouds of AI allies amplifying their capabilities. And they will create complex delegations of on-chain powers with those AIs and with other collaborator CEOs.
So what will leadership look like in a web3 world?
That’s up to you.