The last few days have been interesting to say the least. What started with a Coindesk article and CZ tweet, ended with the collapse of one of the biggest and most "respected" centralised trading platforms in the world. FTX’s downfall was accelerated by the Crypto Twitter rumour mill and nervous depositors with fresh memories of the collapse of LUNA.
I have been in crypto since 2012. When I started my adventure (and let's be honest, it's an adventure and not simply a job), I was blown away by the power of cryptocurrency and, most importantly, by the open minded, brilliant, and genuine people that were part of the community.
I remember using an old dirty GPU to mine Bitcoin back in the day and sending newly minted bitcoins to Bitmain to buy bigger and better miners in the hope of getting more and more Bitcoin. I did it not to get rich, but to experience something new and so addictive that it consumed those years of my life (I do wish that I had kept all those Bitcoin from back in the day).
I remember conversations with cypherpunks in the Bitcointalk forum who didn’t care who I was or what I looked like. They pushed me to discover my own answers to questions and did so in transparent, honest, and direct ways. I quickly learned to “Do my own research” and to “trust no one”.
During the years since then, I’ve learned a lot: macroeconomics, finance, trading, coding, managing, game theory, sociology, psychology, and more. I learned all of that not from behind a desk listening to a teacher, but from the community. This school was free (well almost free since you could get rug-pulled, but still) and the classrooms were Twitter, Discord, Telegram, Matrix, Hexchat, forum, Medium then Mirror, and so on.
I’ve learned so many beautiful things but also learned about a lot of ugly realities that plague our society. Humans by definition are lazy and greedy. This is not always a bad thing since a lot of crucial and significant improvements in our society were built from the pursuit of efficiency and greed . However, the endless chase to significantly grow one’s wealth can ultimately bring out the worst in human beings. They will attack, lie, and manipulate to get more just to feel something and use this new wealth to try to elevate themselves to a rank that they think is valuable.
But behind each bad behaviour lies something to learn from. A lot of important lessons were forged out of these experiences and here is my own little list:
There are people who are able to describe things in a way that will convince you that their ideas will fulfil your hopes and dreams. But dreams have a way of turning into nightmares. One tenet to remember is that if it seems too good to be true, it probably is. Make sure to always seek the other side of the story. Just because the vocal majority all agree with something doesn’t mean it is true. This brings us the second lesson:
This is a key lesson that I have followed in my daily life, and the events of this week are a good example of why it is so important. DeFi provides a template for us to follow this lesson by removing trusted intermediaries and replacing them with trusted code. When this code is freely available to be audited and reviewed, everyone has the opportunity to verify it. This makes it impossible for someone to abuse the system in the way that we have seen this week. When DeFi started, I was immediately absorbed and impressed by how it worked but also by the benefits it could bring to humanity. By doing so, it is impossible for anyone to abuse the system in a way to maximise their own benefit at the expense of everyone else.
I know DeFi isn’t perfect and has also had multiple hacks and exploits, but they are often a consequence of different problems. Some, like in CeFi, arise from users placing too much trust in 3rd parties and not in code (multisig bad behaviour, rugpulls, etc). In others, the code or design has flaws that are exploited (oracle manipulations, bridge hacks). More transparency and the ability for anyone to verify code and best practices makes the latter less likely over time and will make users more confident in trusting code instead of individuals.
This brings me to my next point: education.
One place where the crypto community failed is in the education of newcomers. Back in 2012, when you asked a question in the bitcointalk forum, you often got an answer that did not directly answer your question but instead led you to find the answer yourself. The reason for that is that the early community focused on making sure that newcomers built the skills and tools they needed to protect themselves and find their own answers. “Do your own research, don’t trust but verify and then, only then, come back with your question.” This process may change your question and help you find a better way to ask it. Or maybe no longer need to ask it at all.
In the last 2-3 years, I’ve seen so many projects born and die in the blink of an eye. Many projects didn’t move the needle toward decentralisation. Their focus was the desire to make massive profits instead of trying to build sustainable and trustless projects.
I often speak with my friend Toast about this problem and we both agree on this:
“The greed created so many projects that we got distracted and failed to teach newcomers how to build the guards needed to invest safely in the crypto economy.”
We need to get back to basics. My last and most important value is:
The last bull cycle brought a lot of bad actors into the ecosystem. Sadly, they were not “In it for the tech” and only joined to get rich quick. A lot of these bad actors were elevated by our community to a level that should not exist. DeFi is intended to remove this human element and no one should be seen as a saviour or even worse, a messiah. We, as a community, must speak out against these fake messiahs to protect the newcomers. While SBF is the most recent one he is most likely not the last.
The last few days' events are literally good enough to create a movie. Like my friend Block Enthusiast told me yesterday:
“It’s one of those rare based-on-a-true-story scripts that needs to scale everything down to make it believable.”
I personally think that the events of the last few days will set us back a few years in terms of credibility as a community. We’ve already seen the US government say that they want more regulation for cryptocurrency. This regulation arises from the need to protect against malicious 3rd parties and intermediaries. It would not be needed if people had been using decentralised finance instead of centralised finance from the start. Since DeFi removes trusted intermediaries and is 100% transparent, if done right, it would greatly reduce the risk to investors and users.
It is important that we all learn from what has happened and work to fix the problems that we identify. I will commit to being a part of that solution and propose the following 4 actions to do so.
I will work harder to educate newcomers to the space, as well as anyone else that would like to learn how DeFi can make our world better.
I will build tools to bring clarity and transparency to the ecosystem. Last year, I started Octav.fi to bring more clarity to DeFi users who are trying to track and understand their positions in the ecosystem.
I will give more of my time to projects that are educational, including projects like Gitcoin and local non profit organisations like web3mtl.
I will take a stand against fake saviours and messiahs to try to bring awareness about their behaviour.
I’m finishing this letter with a quote that I often remind myself of
“The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence.” Charles Bukowski
When we feel very confident about something, we should probably consider whether we’re being stupid.
Mathieu