It’s never as good as it seems, it’s never as bad as it seems.

When I was at Coinbase they would do quarterly surveys of employee morale. The score is always directly correlated with the price of bitcoin. Bitcoin was up, and employees felt good. Bitcoin was down, and employees felt bad. I think the fact we all rode these wild waves was one thing that caused higher than normal turnover. People had crazy high, low, and anxious emotions because their financial future was tied to a speculative asset.

Brian Armstrong always brought a tempered perspective to this. When Bitcoin was up and we were winning he would always warn that it’s never as good as it seems. When Bitcoin was down and we all felt bad, he would comfort that it’s never as bad as it seems. In an industry like web3, you can’t ride the waves. It will only drive you crazy. Instead, you need to be rationally optimistic and lead with confidence.

As a leader in a startup, I’m seeing the same thing. Every day we will have incredible success with customers, lows by finding new competitors, technical challenges etc. We’re also in crypto so we’re riding the highs and lows of the market. If you ride these waves you miss the point that the general trend is upward. If you can focus on the broader perspective, you can have a much clearer vision of what you’re building and feel much better day-to-day. It’s a long game, and it pays off to just be optimistic.

At Coinbase one of our core values was “positive energy.“ We lived this and I think it was one of the things that made us successful. It’s important to remember that it’s never as good as it seems and it’s never as bad as it seems. For entrepreneurs and builders staying optimistic is probably the healthiest thing we can do.

Things won’t work on the first try. At Coinbase I was on so many projects that were reorged, deprioritized, or killed for a variety of reasons. I would say for every successful product there are probably 10 dead ones that don’t even make it to the finish line. Engineers would always get mad at leadership for killing a project, but in reality that was just always part of the process of shipping good product.

Some code, for no particular reason, will be 10x more valuable than other code. At Coinbase the monorail was not my favorite service, but it also made the company the most money. As engineers we need to maintain the same level of quality, but on average have the expectation that what we build won’t be used much. It’s our job as a team to discover the right things to build and build in that direction, but if something doesn’t work, we should be hopeful and optimistic instead of discouraged. One of our shots will work. That’s part of being on a strong team.

Right now we know the products we support have massive potential, but we still have a lot to learn. We need to approach this process with an open mind and know that a lot of what we’re going to try won’t work. We should know it won’t work, but we should expect that something will work really well. Our goal is to build fast with quality and learn as much from our customers as we can. We have a lot of runway for many shots. That’s how we win: quality and quantity of shots on goal.

Credit is what makes the modern economy run. The idea is simple: people can borrow money to do things with that money, returning that money with a return to the investor plus a fee. Ex a baker needs money to buy a store. She doesn’t have the money so she goes to the bank to take out a loan. She buys the store and bakes bread and with her profit returns the money to the bank including an interest rate.

In 2021 the amount of debt in the world totaled $225 trillion. The problem is some of these loans are more efficient than others. In some countries loans are being quoted at a rate of 20% per month where in other countries those same loans would be 7% per year. The problem is access to efficient capital in varying financial systems.

This is where web3 comes in: web3 provides a fairer and more transparent financial system that is global. The rate of borrowing money is the same everywhere, and price discovery is more transparent. Those same people who were borrowing money for 20% per month can now get rates that are closer to 7% per year, making the economy more efficient.

In addition to providing better rates for borrowers, crypto can also provide liquidity for lenders, allowing for even more efficiency.

Take the example of a solar farm in the United States. They need to take out a $50m dollar loan to pay for the solar farm. Investors in return with earn 8% APY once the project goes live. In the traditional financial system the investor’s investment is illiquid. They cannot sell the asset until the loan reaches maturity. In web3 the investors can receive tokens that can be redeemed at the maturity of the loan. These tokens can be freely bought and sold, creating a secondary market of liquidity for the project. This can allow an investor to cash out prematurely as long as there are other buyers in the market.

The components of a public immutable ledger make this possible. In the traditional financial system there are intermediaries and regulations that block much of this liquidity, but in a transparent programable financial system this just isn’t the case. It’s one of the core use cases that has me excited about the potential for web3.

Web3 identities (ie wallets) will enable a new layer of social status that will allow us to express ourselves and form new types of online communities

Crypto wallets enable ownership of assets and actions which will form a new type of online identity. What you do and what you own are completely public, and this enables social hierarchies. We already see this with NFTs, there’s a certain social status associated with owning different collections. It enables you to unlock access to a sought-after community and signal wealth and status.

As blockchain communities mature, these onchain signals with proliferate to other types of both onchain and offchain media. Our wallets will own our social media posts (farcaster), our thoughts on our blogs (mirror), and the content we create (zora). Who we are will be represented by the content we sign. Our wallets will become both our public profiles as well as our universal authentication mechanism for the internet, enabling social applications with greater network effects and richer content.

The change here will be slow and then fast. Already millions of people have an Ethereum wallet, and it’s this technology that’s interoperable across many blockchains and content mediums that I’m most excited about. Strong network effects are developing around communities that are forming, all centered around the status that these wallets create. Once this flywheel is started it can’t be stopped, and it’s key to more mainstream adoption.

In a world where we increasingly are representing ourselves online, wallets and blockchains enable a more transparent and verifiable medium of expression. Already on blockchains we’ve enable many different “verbs” that wallets can do: swap, create, publish, lend, borrow, mint etc. What becomes powerful is when all of these actions come together to create an identity and reputation for an individual that is portable across the entire internet. It fundamentally unlocks new applications that have their own network effects drawing more users in. User’s are incentivized to build their reputation and share with others, further drawing more users and applications into the network.

We’re deep in a bear market, and there’s not many sources of optimism. It’s ideas like this that keep me excited to build, because it’s exciting to believe in the better future these ideas can enable.