Jurisdictions with reasonable rule of law do not "need" crypto, and jurisdictions without the rule of law do not "allow" crypto. - xh3b4sd

The purpose of a system is what it does. That is a complicated way of saying that we are not mere prisoners of the games we play. We are not supposed to be held hostage by the rules that try to confine us. The games we play, the tools we use, were all made by us. They were made by us in order to serve a purpose that benefits us in one way or another. We are not here to spend a lifetime bending to some obscure rules just because. No. The systems we create are supposed to serve us, and not the other way around. Think of it as traffic lights. They are, say, suggestions. I am writing all of this down because it's crucial to understand the games we play. And one game we are playing in crypto became just so much more relatable and comprehensible to me this past week when some Solana VC type figures appeared on various well known crypto podcasts. The two main concepts that I want to highlight here are decentralization and MEV. Everyone in this industry tries to figure out what truly matters for returns on investments and the future at large. Those kinds of outcomes though are path dependent, which means that your own goals and values play a role in determining which strategies we need to support in order to achieve our goals. On that line of thinking we could say that the required inputs and the resulting outputs must change with your own shift of perspective. So before we talk about my own conclusions, let's shed some light again on the core concepts that we are interested in here. What is MEV and what does decentralization even mean? As a reminder, MEV stands for Maximum Extractable Value. It is a whole scientific field that developed out of blockchain network research and its surrounding game theory. We do all fondly recall the memes of MEV searchers like "LowCarbCrusader" and "JaredFromSubway", running MEV bots to exploit transactions onchain while normal people try to do business. Oh the memories. MEV as a theory is extremely interesting and relevant in pretty much everything we do as human beings. One way to think about it is to watch any sport, only to see how certain rules are bent in order to gain some advantage. Take for instance soccer. You have no clear rule that you cannot pull a little bit on a player's shirt or shorts. But it is a well known technique to slow down your opponent, especially in situations where it is most critical to be faster. There is an amount of value that you as a soccer player can extract from the game, without being penalized by the referee. And then, decentralization. That obscure term that doesn't really mean anything as long as society functions properly on your behalf. Until you run shit out of luck when the entire system turns against you for seemingly arbitrary power structure reasons. That is how people get cancelled by minority mobs. That is how people lose their jobs for overly exaggerated accusations nobody can prove anyway. That is how you lose your bank account and with it all of your civilized livelihood, stuck in an automated support line at the telephone. And all you can hear is an artificially calm voice telling you to press 5. Decentralization does not matter at all, until it fucking does. And at this point it is too late. Apart from those horror scenarios, which arguably are rather rare in the western world, the concept of decentralization is fundamental to survival on a systemic level. Almost everything is compartmentalized in our human bodies. Cut off a limb and chances are you are not going to die. An infection may take on parts of the system, but that doesn't necessarily cause critical failure nor the loss of life. Decentralization plays a crucial role in the military. You chop off one head and two more heads will grow in its place. Decentralization is an integral part of life and it is on us to build systems which are able to resist corruption from without and from within. This is all on us. This is all about perspective. Now back to the pods. Based on what I heard our VC type figures saying is this. They want to live in a world in which users get exploited by MEV, because that is apparently what makes a successful business. The argument was that MEV is unavoidable. And that is absolutely right. MEV is unavoidable, but you still have a choice and can decide who benefits from that MEV. The users, from which that extracted value is taken from, want that value to keep for themselves. And rightly so. Users will always prefer chains and apps over the long run that don't exploit them maliciously. It is further correct that there are different kinds of MEV, of which some are more toxic than others. So instead of being so happy about Solana's revenue because of all the MEV that searchers can extract, we should define classes of MEV that are more or less desirable. Ethereum "gives up" on MEV because it is starting to give it back to the users, which is the only sensible thing to do in my opinion. If Solana banks on MEV as revenue stream, and if those revenue streams are made on the back of its users, then Solana will subside eventually. Every network out there will have to address MEV. If this issue is not addressed by those networks, then MEV will address it for them. There is a lot more to say about MEV, how it is perceived by some very loud people, and how it should be dealt with. For now let's move on to the even more critical concept of decentralization. With the advent of blockchain networks we have the chance to imagine a world that is in fact more equitible without just virtue signalling about it. Decentralization is such a hard concept to grasp because of the blockchain adoption dilemma, which goes as follows. Jurisdictions with reasonable rule of law do not "need" crypto, and jurisdictions without the rule of law do not "allow" crypto. So all you are left with is the attempt of a bottom up generational effort in order to make it a thing. Nobody in the western world really cares about self custody, because people have bank accounts. Humans living in authoritarian countries would love self custody to defend themselves against financial repression and other means of political violence. There is a saying that goes like this. It is better to be a warrior in the garden than to be a gardener in war. Certain things in life do not matter, until they do. And that is why decentralization matters. To guarantee free and fair access to systems. To guarantee the right to own any kind of property. To guarantee consensus about what truly matters for society. To show us who is right and who is honest. Now you can say your system is decentralized because the nodes of your network run in different geographies. Fair enough. This is just not what matters for the future that I prefer to live in. Because those nodes might be operated by the same entity, and do all but bend to the same jurisdiction after all. So saying that some number in some database that is operated by the government is a good enough assurance for anything is not good enough for me. Because humans are fallible. And if you chose to optimize your returns based on that notion of "good enough" then you, your children, or your children's children will one day have a very rude awakening. Because "good enough" is simply not good enough. The purpose of a system is what it does. And if the systems you rely upon allow to destroy your livelihood, then one day that very power will become the purpose of those systems. The point of it all, the reason why we are here, is that we can change that. And blockchains are the gwei out.

My number this week is zero. There was a day now when there was no flow at all in the ETH ETFs. For the time being all the naysayers have been right. There is not much interest in ETH as an asset. It remains a herculean task to push that boulder up the hill and make the world realize what we are dealing with. Meanwhile, from the looks of it the SOL tailwinds may start to subside a little in terms of unnatural outperformance. And my call for the ETH/BTC bottom on the monthly chart may even materialize. 0.04 shall hold. In any event. It's all noise out there anyway. To understand what to pay attention to, that makes all the difference.