Optimizing something that should not exist in the first place, is a sin. - xh3b4sd

Overfishing regulations and game engines have some things in common. Those things are fundamental principles in mechanism design. And with that we have once again pretty universal patterns in our toolbox in order to understand any complex system. In one form or another, the source of truth should never be provided by the players of the game. And why is that? Because players are incentivized to win the game, not to report the truth. Collusion of players on reported data may lead to the entire game being exploited. No matter if we talk about men who work the sea or children playing candy crush. Complex systems pose complex problems. And with any problem, the question becomes how to frame it? How to look at a problem, and how to think about it in its own context? Understanding how many fish are in the ocean, and understanding how much candy somebody crushed requires the reporting of data. The data that we need in order to understand the state of a system must come from somewhere. And in mechanism design the question is always who should be allowed to report which data, because the ability to define what is true and what is real can be an extremely powerful weapon. And as with any weapon, you can use it to do harm, or to do good. So, who should report fishing data for us to know what is happening in the ocean? Humans know almost nothing about the ocean. We know more about the surface of the moon than we know about the surface of the sea. We can look up through air and space. But we cannot simply look down through the gushing water. It only takes 1000 meters into the ocean and all sunlight is completely gone. The distance between the earth and the moon is almost 385 million meters, and on a clear night we can see all the way through, with our own eyes. Those kinds of context specific circumstances have to be considered when we want to figure out how much Salmon somebody is allowed to catch. We should consider what the fishermen have to say, but we should not just take their word for it. What we can do is to look at the amount of fish that they actually bring home. In addition to that, we should also consider other environmental factors that for instance change temperatures and acidity levels of the water. The ocean is a complex system in and of itself. All the data that we gather, and all the models that we employ in order to understand what is actually happening in the sea, may or may not be relevant, right and independent. The reader may notice that we have opened up a whole can of worms, and there is no one right approach to solve the problem at hand. In fact, all we can do is to implement a solution that provides a desirable set of tradeoffs, given the best of our abilities. For our intents and purposes here, the bottom line is, don't just ask the fishermen, because players may collude. The same applies to game engines. You don't just ask the Tetris player how many points they got. If you are the game engine, then you tell the player what's what. That is particularly relevant if the game at hand has a time component or schedule to it. Imagine a game in which everyone is speeding through a maze. We cannot simply rely on the players to tell us where they are at any given moment in time. In order to make the game fair and eventually fun, we have to tell every player where they start and where they are based on their desired input of movement. The trick here is to only allow the player to define their own delta of a navigational choice. Meaning, given a player's current position, and given their instruction to move north, the game engine can calculate the new position without allowing players to cheat and jump ahead illegally. This approach is specifically important in classes of games in which players are forced to move through the game at a certain speed. Here every player is pushed along the map, and the only player input may be what turn to take next. The interesting dynamic here is that the game engine cannot differentiate whether players get disconnected or simply do not wish to change direction. The takeaway here is this. The more well defined the rules of the game, the more efficient the implementation, because a well defined mechanism allows for beautiful code to be written.

Over the past days and weeks there have been huge wildfires around Los Angeles, devastating many homes and claiming too many lives. Not to mention how we even got here, the response and incident management of the highest ranks in the State government of California has been just as shocking to me. There are many things to be done for people and State after a disaster like those wildfires took place. Things of constructive nature. Things that directly help to be better tomorrow. And the leadership in the sunny state of California chose now to make it easier to snitch on people for increasing prices of goods and services, instead of making it easier to build new homes. The cardinal sin of mechanism design is to think that you are the better resource allocator than the market itself. And instead of directly helping to increase supply, the governments choice was now to promote the idea of an enemy within its own system, which is but a mere distraction from what actually matters during these trying times. The idea that any form of price controls via social infighting would be useful to anyone who lost what was near and dear, is absolutely backwards. The history of the 21st century will be written by mechanism designers. And I think everyone has the responsibility to make sure that we are getting better at this together.

In the world of Ethereum, we have heard that L2s are apparently about to hit a "brick wall". Over half of all blobspace is already consumed by only 2 chains. The concern being trolled at us is now that the current growth rate implies the total breakdown of Ethereum's scaling roadmap within a matter of months. Ok then, let's take a step back for a moment. At first, "rollups would never scale", they said. Then it was, "nobody wants to trust rollups". And now that rollups scaled so much because everyone wanted to trust them, we hear that rollups can't scale no more. In other words, rollups couldn't scale and they did not have any demand, but then rollups did in fact scale because of all the demand for them, which leads us to a usage problem, which we were told would not exist in the first place. Well, that is all very confusing and quite convoluted. To make things easy again, we can simply say this. We are getting concern trolled all the time by people with ulterior motives. Fun fact, the word "ulterior" means "lying beyond what is evident". And isn't that a beautiful way to come to a conclusion. In any event, let us address two relevant points about Ethereum's roadmap regarding scaling via L2 rollups. For one, we are operating precisely at blob target for more than two months now. The dynamic here, and what that effectively means is this. Blobspace is free to use up until the blob target. Once we operate above the blob target, L2 rollups go into price discovery for blobspace in an open market, which increases congestion fees. The interesting fact about the blobspace usage in the wild has been that L2 rollups managed to prevent paying higher amounts of congestion fees due to all kinds of tricks in data submission management. We could say that the blob target saturation is by no means exhausted at this point, which renders certain concern trolling arguments mute in my mind. And the second point that we have to mention here is simply that more blobspace capacity will be rolled out the coming months and years. And if blobs where the only thing that allowed us to scale Ethereum, then yes, we probably would have a problem. And as already mentioned in the first point, many different initiatives to scale Ethereum are certainly underway, rest assured.

1% ETH is our number of the week this time around, because that is the allocation reported for a wealth management firm in New York. Now, 1% is not much. Why do we even talk about this? This news is interesting because this 1% is the only allocation of digital assets that said wealth management firm made across its clients. No other crypto exposure. No BTC. No SOL. Just ETH. And one other data point I found fascinating the past couple of days. Between 2020 and 2025, 36 different blockchains have been in the top 10 by DeFi TVL. That means over a 5 year period, which is frankly almost all of DeFi's existence, 36 different contenders have been going into and coming out of this particular top 10 leaderboard. Here is the kicker. Over all of that time, Ethereum has been number 1 in that leaderboard. All of that is to say that Ethereum is where it's at. Always has been.