July 8, 2023
Here is the thinking related to our ETH Barcelona presentation — why we think the inevitable future of blockchain space is an inter-blockchain economic grammar as “Layer 1”.
To create a diverse, mutually reinforcing economic network, we need a new economic networking primitive: reciprocal stake holding. This becomes the financial link connecting blockchains, and economic agents. Reciprocal staking relationships involve simultaneous (1) equity exchange, (2) bilateral credit, and (3) co-performance agreements. It is a new kind of economic transaction. Economic agents are taking a risk together on a shared economic goal to increase their value, aligning their performances, while simultaneously creating endogenous network liquidity to sustain their economic activities. We have described this logic in detail in the ECSA economic paper Protocols for Postcapitalist Expression (Minor Compositions, 2023). This model reduces the need for external liquidity, and with that, the power of a capitalist economic logic, allowing the blockchain space to explore new value forms and measurements. Importantly, it creates and amplifies trust to collaborate in a fully distributed way. Even though we need our infrastructure to be trustworthy, the desire for true decentralization and the need for safety must be grounded on acknowledging, understanding and nurturing trust.