1. Token holders and DeFi users largely fund the entire system. Their participation is necessary to refine complex technologies such as consensus algorithms and ZK-proofs.

2. Intellectuals offer ideas to make the crypto space do something meaningful.

3. Developers build bridges where they are needed. They create applications for user needs and bring ideas to life.

4. Pragmatic users - people whom we ultimately serve.

Each of the four groups has complex motivations that intersect with each other in various ways.

There are also breakdowns in operation:

• Applications may exploit users. DeFi users may entrench the network effect of such applications.

• Pragmatic users may support centralization because it is more convenient for them.

• Intellectuals may become excessively engrossed in theory, accusing users of having "wrong values" and forgetting about the financial side of their motivation.

Moreover, all these groups regularly mock each other. Some projects openly reject idealism, which they consider naive and utopian.

Some developers belittle their holders and their desire to earn. Other developers dislike pragmatic users and their inclination towards centralized solutions.

But I believe that all sides can listen to each other. Each group needs to understand that it ultimately depends on the other three.

Three years ago, I wrote (https://vitalik.eth.limo/general/2020/12/28/endnotes.html) about the changing nature of motivation. Many reduce the theory of motivation to money. Or that financial motives can be understood and analyzed, while everything else is in a black box called "culture."

But then they are puzzled by the fact that people often behave contrary to their financial motives.

"Users don't care about decentralization" — yet many projects are striving with all their might to decentralize.

"Consensus is built on game theory" — yet Bitcoin and Ethereum have successfully undergone social campaigns aimed at redistributing power from dominant mining or staking pools.

Recently, I realized that I hadn't seen an attempt to create a map of how a healthy crypto space should work anywhere. So I'll try to create it myself:

Previously, I wrote about the changing role of the economy (https://vitalik.eth.limo/general/2020/12/28/endnotes.html) in the world, and the idea that the world is becoming "dense jungles": Big Government, Big Business, Big Mafia, and Big X for any X. All of them will continue to grow into each other and have increasingly close interactions. One thing I haven't talked about yet is how this will affect crypto.

Crypto was born in 2008 amid the aftermath of the global financial crisis. The Bitcoin genesis block contained a reference to a well-known article from The Times, which discussed the repeated financial assistance to banks.

Early Bitcoin culture was permeated with this: we are here to destroy banks, these unstable megaliths spawning financial crises. Bitcoin is here to destroy the fiat system, continuously printing money.

But it's been 15 years since the crisis, and the broad public discourse no longer worries about money and banks. If you ask AI what the most important political issues of the last 3 years were, money and banks won't make the top 10.

Trade wars and inequality are on the list, but these problems are proposed to be solved more in the physical world than in the digital one. So, does the original narrative of cryptocurrencies remain in the past?

To this question, I have two answers, and I believe our ecosystem will benefit from both.

1. Remind people that money and finance still matter. Provide services to those parts of the world that are underserved.

2. Expand beyond finance. Build a holistic, alternative, more free, and open technological stack. And use it to improve society.

When I was their age, many praised me as one of those colorful "wunderkinds," changing the world like Zuckerberg or something of the sort. I cringed, as I didn't like such attention. Also, because "wunderkind" was inexplicably translated into German, although it worked just fine in English.

Now I see people who have gone further than I have, and earlier than I did. I now have a different role, and it's time for a new generation to wear the cloak that I once wore. ———————————-

1. As a proponent of life extension (to thousands and millions of years), I'm often asked: "Isn't the meaning of life tied to the fact that life is finite? You only have a moment, enjoy it!" I used to dismiss this idea. From a psychological standpoint, we tend to value things more when they're finite and scarce; but it would be absurd to assume that eternal life would be so boring that it's better not to live at all.

After all, I thought, if we get really bored, we can add some "fun" and shorten life by starting wars. But something told me that we would gladly rid ourselves of biological death and suffering if given the opportunity.

2. Nevertheless, as I grew older, I realized there was no point in arguing. Regardless of whether life is finite or infinite, every beautiful thing in our lives is finite.

Friendships that seemed eternal dissolve into the mists of time. Your personality can completely change (https://www.npr.org/sections/health-shots/2013/01/03/168567019/you-cant-see-it-but-youll-be-a-different-person-in-10-years) in 10 years. Cities can transform for better or worse, or you may move and reintroduce yourself to a new physical environment.

Political ideologies are also finite: you may identify with your views on healthcare and progressive taxation, and in 10 years find that people around you have lost interest in them. Instead, they talk about "awakening," "Bronze Age mindset," and "unlimited technological progress."

A person's identity is always tied to the roles they play in their surrounding world. And in 10 years, not only does the personality change, but the world around it changes too.

The SEC's new rule aims to require additional firms, such as hedge funds and market makers, which regularly engage with securities, to register as dealers and adhere to stricter oversight. Originally proposed by the U.S. Treasury Department to address liquidity issues in the Treasury bond market, the rule seeks to bridge the regulatory gap created by the proliferation of electronic trading.

Traditionally, brokers were distinguished from investors by their role in providing liquidity to the market through activities like market making. The expanded definition now encompasses institutions that profit from bid-ask spreads, including quant funds and high-frequency traders.

The crypto community is particularly concerned because the SEC's classification considers most cryptocurrencies and tokens as securities. Moreover, decentralized protocols like Uniswap and automated market makers (AMMs) may fall within the expanded definition of broker-dealers without clear exemptions.

Various crypto advocates, including the Blockchain Association and DeFi Education Fund, have raised jurisdictional concerns, akin to those brought forth by Coinbase and Binance, arguing against regulatory overreach without explicit congressional approval.

While some SEC Commissioners, such as Hester Peirce and Mark Uyeda, opposed the decision due to its potential impact on crypto and the blurring of lines between investors and brokers, the SEC remains firm on its stance. The agency acknowledges the challenges posed by regulating automated software and suggests evaluating each case based on its specific circumstances.

Although the explicit mention of crypto in the SEC's communications raises alarm, the intent behind the rule is not to disrupt the industry. However, including crypto within the regulatory framework ensures consistency, albeit with concerns about competitive fairness.

The question arises as to whether decentralized applications, designed to operate without human intermediaries, can feasibly comply with traditional regulatory requirements. While some argue that DeFi protocols like AMMs are merely software facilitating trades, others contend that they may still meet the SEC's definition of a broker.

Ultimately, if DeFi applications remain truly decentralized, compliance with traditional regulatory measures may prove impractical, leading to a need for the SEC to reconsider its approach and provide clear guidelines for DeFi market participants.