Every Singaporean would know this story.

According to the Sejarah Melayu (The Malay Annals), in 1299, Prince Sang Nila Utama, a restless royal from Palembang in present-day Indonesia, was hunting on the island of Bintan when he saw a beach of white sand across the water. He was informed by his chief minister that the island was called Temasek.

He decided to cross the channel to claim it, but halfway there, the sky turned black. A sudden massive storm hit his fleet, and the ship began to take on water. His crew threw the cargo overboard, including their rice, water jars, and even their weapons, but the ship was still too heavy. It started sinking.

The captain then told the prince, "The sea demands your most precious possession."

Sang Nila Utama took off his heavy golden crown, which was the symbol of his power, wealth, and his identity, and cast it into the dark waves below.

Instantly, the storm ceased. The sea became calm. The ship glided safely to the shores of Temasek, where he would spot the legendary Lion (Singa) and eventually rename the island as Singapura.

For over 700 years, we read this as a story about magic. But in the era of Web3, we now realise it can also be about consensus mechanisms. Specifically, it is the perfect explanation of Proof of Stake (PoS).

In the early days of crypto, we learned about Bitcoin and how it secured the network using Proof of Work (PoW). This mechanism is equivalent to fighting a storm with oars and muscle, as it uses massive amounts of electricity and hardware to 'mine' the blocks. But while it is effective, it's also slow and burns a lot of energy.

However, as technology progressed over time, blockchain has moved to newer models that use up less power and hardware resources, going from mining blocks to validating through staking. As a result, modern blockchains are faster, cheaper, and more environmentally friendly, like Ethereum 2.0 and Solana, which use Proof of Stake (PoS).

The logic of PoS is identical to the logic of Sang Nila Utama: security comes from sacrifice.

In a PoS system, the 'validators' are the people who run the network/the ship, and they are not necessarily the ones with the biggest computers. They are chosen because they have staked their own money into the network.

To become a validator, you must stake your own 'golden crown,' which could be 32 ETH, for example, and lock it into the protocol. You throw it into the sea of the network.

Why did the sea calm down after the prince threw his crown? In this metaphor, the sea is the network, and the storm is the chaos of bad actors, hackers, and volatility.

If the prince (the validator) has nothing to lose, he might act recklessly, like steering the ship into the rocks. But since his crown is at the bottom of the sea, he is financially committed to the safety of the ship.

• If he steers the ship safely (validates transactions correctly), he gets rewards (yield).

• If he tries to sink the ship (validate fake transactions), the protocol destroys his crown. This is called slashing.

The stability of Singapura was built on the fact that its founder had 'skin in the game.' He left his wealth in the waters.

There is a famous footnote to the legend: There were no lions in Singapore.

Zoologists tell us that Sang Nila Utama probably saw a Malayan tiger. But the Prince didn't say "Harimaupura" (Tiger City). He said "Singapura" (Lion City). Some say he was mistaken, while others say he was hallucinating.

But in the context of a startup or a new protocol, this declaration wasn't a mistake. It was a vision.

Founders often see things that aren't there yet. They look at a swamp (Temasek) and see a global metropolis. They look at a tiger and see a lion.

In Web3, we call this the Genesis Block. The founder defines the reality. Even if the lion was a glitch or a projection of their own ambition. If they can convince enough people to believe in it, the swamp becomes a lion city.

The lesson of Sang Nila Utama is not just for kings; it's for anyone building in the digital economy.

You cannot build a new world without risk, and you cannot reach the white sands of Temasek if you are clinging to your safe, heavy treasures.

Sometimes, the market will turn against you. The storms will suddenly appear and wash everything away, and in those moments, you have to decide: Are you a tourist, or are you a founder?

A tourist keeps their crown and lets the ship sink. A founder throws the crown in to stabilize the vessel and builds a city where they land.