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https://thenetworkstate.com

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balajis pfp

The right way of doing this is to build Internet First global private regulatory systems. The key concept is to treat regulation as a binary classifier. To minimize false positive AND false negative rates. To quickly approve good projects AND correctly flag bad projects. To disclose all financial interests of regulators and put decisions onchain. To allow for appeal, by multiple independent regulators, in the advent of an incorrect project classification. And, finally, to allow users to ignore those reviews if they so choose. That is, the right answer isn’t either (a) to just be randomly hostile towards projects or (b) to just tolerate everything or (c) to rely on the SEC and similar nation state regulators but rather (d) to build our own Internet First parallel regulatory systems that live on the Internet and aggregate signals *across* borders. We know this works because it works for Amazon (book reviews), Uber (star ratings), Apple (app Reviews), and many others. It will work for us.

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My guess is that because you've been laser focused on the network school for the past 6 to 12 months, you’ve missed the recent cultural shift. The reality is that your proposed solution would be ineffective against the current crypto economy and the behaviors it incentivizes The easiest way to make money quickly today isn’t launching or investing in a serious project with a clear long term roadmap to create value. It’s joining a group chat and pumping and dumping memecoins, which I’d define as tokens with zero intent to create long term positive sum value. The game is to get in early, make quick money, and avoid holding it to zero. This is glorified as the trenches, a high stakes casino where anyone, not just VCs, can strike it rich overnight

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As more people piled in, liquidity has increased, attracting even more people and fueling a cycle that has always existed in the industry, however now, it’s bigger than ever, to the point where it dominates everything else. In response founders, who just want their businesses to survive, have been pivoting to memecoin token launchers or building games around this economy, making the number of positive sum builders smaller and negative sum builders larger. They’re considered the "cool kids of crypto", and if you say you’re not interested in gambling, you’re seen as a loser who just doesn’t get it In an ecosystem where the largest and most profitable segment thrives on collective grifting, a review based regulatory model would be useless. When the prevailing culture treats the casino as the main attraction, how do you propose to shift incentives away from it?

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I assume the answer will involve regulation of blockchain by nation state/legacy financial system players. Behavior is guided by incentives right? So unwanted behaviors will be shifted by disincentivizing predatory actions and incentivizing other ones.

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