The State of Coordination, Community, and Future Impact

TL;DR - Pretty simple, we have come a long way, and we're having a bunch of fun in thousands ofsimilar directions, but there comes a time to reflect on what we have, what the incumbents want to keep, and why it's so important for us to coordinate on ecosystem-wide frameworks.

Firstly, I'm warning you that I'm going to shill some amazing things in the Ethereum ecosystem. I would even go so far to say as some of these things are so positive sum and self-evidently public goods that shilling them in the ethereum subreddit should be considered neutral. For example, GitcoinDAO is a place where we all have the permissionless ability to coordinate in building tools and services, like dapptools, for all open-source software, full stop. There's ways to fundraise in public besides joining Discord or sliding into Twitter DM's, like Juicebox. There is a plethora of industry leaders exploring decentralized hosting for bluechip-scale applications, such as Skynet.

But why in the hell am I starting off with shilling a bunch of things? Well, two recent publications started to make me think about the gravity of our success. Firstly, as many of you are aware, Visa is testing out a stablecoin/CBDC payment channel, similar to L2. OTOH, u/vbuterin has proposed (and there is a team implementing upon) an account abstraction framework. There is a paymaster-mediated, sponsored transaction concept in this post that, imho, changes everything:

1. Allowing application developers to pay fees on behalf of their users
2. Allowing users to pay fees in ERC20 tokens, with a contract serving as an intermediary to collect the ERC20s and pay in ETH

Now, the disclaimer is that there is higher gas overhead for this framework (and we still need to scale Ethereum via sharding/rollups/PoS), but we're talking about atomically spending in a potentially more stable denomination (much like what happens on xDai). The other implication (and please correct me if I'm wrong) is that protocols that offer fixed-rate appreciation of stable value also offer, depending on the transaction cost basis of which layer/chain they're situated, virtually limitless access to Ethereum. In other words, we may see an imminent future where institutions and newcomers with a predictable rate of usage can optimize the amount of upfront capital required to use Ethereum for free. (if anyone is more familiar with gasless transactions/zksnark cost basis, please correct my assumptions in the comments)

Okay, that's all well and good, but what are the implications of Ethereum's presence from the perspective of incumbents? We've all heard the regulatory FUD revolving around DeFi, and that anticompetitive pressure is simple to understand when one considers that permissionless protocols do not bleed their potential profit margin into middlemen by default. Ethereum, as an ecosystem, is better than any financial monolith, and it has more capability to be transparently self-regulated than any government with central banking. From the present onwards, we're going to see more banks and corporations opt for using Ethereum because the social/financial benefits outweigh all risks (be they capital or regulatory). However, there will be experimentation in reserve currencies/treasuries that will naturally outcompete such ventures. This is the future of France.

Here's really where things get tricky. Because the current bull season is focused on DAO formation and development (building on NFT summer), my guess is that we're going to see a lot of competitive pressure get exerted on SMBs. Sure, it may not look like this at the moment because the missions of a majority of DAOs do not extend past the ecosystem (I'm referring, of course, to many missions that relate directly to NFT releases and DeFi protocols). However, there are DAOs that are acquiring properties & others that are forming subsidiary structures (like LLCs and C-Corps to begin with). Take the operating system that is Ethereum, the fiscal advantage of DeFi rails, and the social playbooks that are DAOs and it is only a matter of time until all common goods and services are produced by networks that can outperform monolithic structures. In an academic sense, I am confident we are demonstrating the merits of Elinor Ostrom's work_institution), as well as addressing the theory of transaction cost economic in the process. We should celebrate the accomplishments of community leaders and contributors as we stand on their shoulders to continue building the digital "Eighth Wonder of the World".

But what do all of these trends mean for the larger picture? Well, for one, I think most people on this subreddit would agree that we should move past zero-sum activities like copying NFT drops (and generally saturating social media with exit liquidity marketing) ad nauseaum. The other priority should be to "defeat Moloch", in other words taking note of what's already out there so we don't split our capital and incur more costs than necessary. Are there security concerns in siloing parts of Ethereum or introducing single points of failure? Are concepts like upgradeable proxy contracts potentially catastrophic to the ecosystem? Yes, we need to have these discussions, but additionally, we should battle-test these. It shouldn't be prohibitive to make a redundant protocol, but this sort of trend can also be complemented by coordination protocols for the public good. Let's not facilitate the process of Ethereum being a victim of its own success by accelerating the formation of incompatible social/capital siloes.

Disclaimer: I realize that I may be drawing assumptions that are inherently flawed, and I may volunteering opinions that many do not agree with. Please comment on why you think I'm wrong; I want to hear what you think.