Crypto regulation by a centralized entity is about the dumbest thing I've ever heard.
An excerpt from a February 7th article, written by yours truly. :)
The title of said article is “You can't regulate what you have nothing to lose and gain from” and the reason I am bringing it up is because some points made there apply to what I want to explore today.
The central point of the linked article is that crypto's design makes it a perfect self-regulating ecosystem that doesn't need external voices otherwise the very values it was built upon becomes shit.
Usually, this is the point where I tell you how I was wrong about something in the linked article but not today, all that was said remains the sentiments I hold towards regulations in this space, however, I have come to realize a rather disturbing flaw of decentralized systems.
Team sport is hard, when we can't get past personal gains
Crypto investors are quite a pathetic bunch come every bear market. It's truly embarrassing to watch and to think that every single one of these folks are always fully aware of these market circles.
I've long seen people talk about how bearish September always is historically but guess what the reaction to the dump was despite everyone having known?
I don't even want to say it. It's insane. But enough about market sentiments, what's wrong with decentralized systems? What's wrong with the team?
The shocking truth about decentralized systems that I've come to discover is that the incentives are not as great as we made them look , whereas the “risks” are just so great that it's hard to have anyone in the team “step up” to build something that drives revenue.
Most crypto projects lack “revenue incentives,” it's all just inflation and speculation and when the hype is dead and price retracement kicks in, we start seeing heated debates on numbers going down, with insanely stupid proposals to curb it.
Why don't we ever learn?
Recall the post: You can't regulate what you have nothing to lose and gain from, what this article really was about was that having a great deal to gain and lose is the needed balance for operating/regulating a sustainable monetary protocol.
But we've gotten incentives wrong for so long because they've all always focused on inflation tokens. So much that even protocols with deadass low inflation rates are panicking and throwing tantrums because their couple million new tokens hitting supply will have a significant impact on their collapsing market valuation.
The problem here is obviously not the inflation assets. The protocol has managed to keep the minting rates reasonable and thus, achieved some form of decentralization as the risk and reward ratio is aligned by this design, on the blockchain level.
But, the broader market doesn't care about our shiny low inflation rate, we are not the federal reserve. What makes us valuable to the external market is the products and services for problem solving that we can offer in exchange for their money or time(to which we have to monetize).
The absence of this layer of incentives is what is damaging decentralized systems. We are so focused on inflation tokens and getting it right that we don't even realize that the ability for those tokens to mean shit moving forward leans heavily on external factors.
Why did I say team sport is hard when we can't get past personal gains? Well, we may have decentralized systems, but we lack the consensus to shift our focus to things that will bring revenue as that would mean letting go of today's incentives that's filling our pockets and taking on risks that may hurt us significantly, individually but reward a vast number of people that lost nothing in the journey.
Being decentralized is one thing, having that DAO making valuable decisions is another.
Very few blockchain projects have the latter, if any and it's saddening.
Wen revenue? Inflation tokens are not revenue, so devs, wen revenue? Can someone do something?