@rikasukenik

Stability Gives DeFi its Essential Character

It is stability which gives a thing its essential character. The strength of an arch, the even burning of a flame, the growth of an animal, the balance of a forest ecology, the steady flow of a river, the economic security of a nation, the sanity of a human individual, the health of a society: these are all, in one way or another, concerned with stability.

— Christopher Alexander; Systems Generating Systems

I would really prefer that we don’t muck up crypto. I do not want the Web3 haters to be right.

Sure, we can come up with excuses and call the haters luddites, or say that they refuse to accept innovation because they have too much banking on the status quo.

I think taking this approach is shortsighted and dangerous. There has to be some truth to what the haters are seeing — they’re smart people — so we need to open our eyes.

Stability is a holistic systems property

An incredible amount of innovation happens in crypto every single day.

Composability — colloquially known as money legos — has become a household term in the world of DeFi.

Composability allows developers to do more with less. It enables projects to be more efficient and it increases the speed of innovation.

Excellent! Innovation is super important, but there’s something else that is even more important: the systems property of stability.

Systems theorist, Christopher Alexander, writes that stability is a holistic property. This means that stability is the result of the interaction of a systems’ many parts. For example:

A system is stable when all of its parts are aligned; when there is balance and harmony in how all of the parts relate to one another.

Pre-empting another financial collapse

This is the crux of my point of view: decentralized finance systems need to be stable. Else, they will crumble and wreak havoc — like what happened during the 2008 financial crisis.

Fortunately, there are actions we can take to pre-empt failure. It starts with always keeping stability top-of-mind when building and using DeFi applications and protocols.

Looking ahead

My intention is to use my writing to explore the systems property of stability, as applied to decentralized finance.

I do not have the answers, but I do want to start peeling back layers of the onion to eventually arrive at the truth. It could be ugly, like maybe DeFi projects are not implementing enough safety measures to prevent another financial crash.

Either way, we should not avoid the truth. Decentralized finance has immense potential, so let’s not muck it up by avoiding reality.

A human way to bridge the Web2/Web3 divide

My Web2 friends, overwhelmed by Discord servers, bots, and flashiness, have become cynical about Web3.

I don’t blame them. It’s not entirely their fault, but it’s a shame.

Let me demonstrate what I think is the root cause of the problem.

Let’s say you throw a party in the real world. You invite a bunch of your friends and you’re all having a great time. Then, you start looking around the room, taking stock of who all is there. You realize that everyone in the room is more or less, the same - everyone works in a similar job, in a similar industry, and is of a similar socio-economic level.

You become suspect.

The party ends, but you keep thinking about the lack of diversity.

You decide to throw another party a few weeks later except now you invite some new friends, who you met more recently, while you were out and about living your life - you invite one person who you met at the gym, another person at the coffee shop, a third at the bookstore, and a fourth from a local art exhibit.

The day of the party arrives. Your four new friends show up.

You excitedly greet them, introduce them to a few people, and then mosey away. But, as the night goes on, you realize that you didn’t check in on your new friends. And you couldn’t find any gaps in conversations to loop them into. You’re not feeling great about this.

Finding a solution to humanity’s biggest problems starts with checking in with another human being, listening to their needs, and then helping to raise them up by making them believe they can do something that they think they can’t.

YODA Story #1: MetaCartel DAO

The book is for you if you have started to peek inside the DAO rabbit hole. Perhaps DAOs are still a black hole for you, or maybe you have started to see the light but feel overwhelmed. Either way, you are curious and want to explore.

The book is an offer.

I am asking that you allow me to take you on a journey through DAOs, as we uncover the mystery together.

Choosing which DAOs to write about was a matter of following the rabbit hole.

With all that said, I’m really excited to share with you the story of MetaCartel. As you learn about MetaCartel, you will also learn about my story, one that I have written in piecemeal before, but never in entirety and never from the lens of community.

Introduction

What the heck does Decentralized Autonomous Organization even mean? It sounds like some sentient being that may or may not run away with your money; and it sounds like it might be some corporate jargon.

Neither of these things are true.

DAOs are, generally, made up of well-intentioned people who do not want to steal your money.

DAOs are also not corporate. Many people who join DAOs have previously worked for a corporation and are frustrated with the inequities of the corporate system. They then discover DAOs and experience a sort of spiritual awakening.

With that said, how about changing the name to YODA?

Imagine this:

You’re at a bar and you get to talking to a cool person sitting next to you.

As you take a sip of your drink, you say:

“Hey, are you interested in learning more about this dope YODA community?”

You then pull out your phone and show them this photo:

Both of you have a good laugh, and you begin to tell your new friend what DAOs actually are: a community of like-minded, good-hearted people who work on impactful projects together and also have fun.

You then say:

“Heeyyy, let me tell you about MetaCartel!”

MetaCartel

MetaCartel has set the precedent for DAO culture, memeing its way into existence.

ChiliMan also loves people. He believes that if you bring a bunch of great people together who want to change the world for the better, and give them tools and resources, you can solve big problems.

Today, we also have DAOs to do this. Society relies on DAOs to coordinate groups of people and give them money and resources so they can solve problems. DAOs enable a fairer system by aligning incentives better than corporations, resulting in more people acquiring wealth while working on problems that they care about with people whom they care about.

MetaCartel’s mission is to:

Accelerate the creation of Web3 with the belief that it will make the world a richer, fairer place.

MetaCartel’s values:

DAOHaus

DAOHaus is building the infrastructure for DAOs. It is a no-code open source platform for launching and running DAOs.

Zapper Finance

Zapper Finance is one of the earliest, and most successful, MetaCartel grantees. Zapper is a DeFi project that allows users to lend, pool, stake, and access leveraged liquidity pooling. Education is at the core of the product.

How to get involved with MetaCartel?

That would be stupendous!

You can submit a membership proposal. Please make a note that you read this story!

Acknowledgements

It takes a village to write a book. And I am very thankful to my village of editors.

Thank you for sticking around. I am grateful for you 🙏