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Token retreat

Let's talk when the metaverse can directly feed the hungry, house people, or remove carbon from the atmosphere.

Published onSep 05, 2021
Token retreat

Disclaimer: As of writing, I own about $4,950 in BTC and ETH, which I bought (and converted from Keybase’s Stellar Lumens drop) in February, 2021, when it was worth about $2,800. I did this mainly so I could write about it intelligently. I have not touched it since. I have considered using it to buy a token or NFT, again to be able to write intelligently about it.


I have a hammer, a concept called HyperNormalisation, the gist of which is that large swathes of society have given up on the complexity of the real world and instead retreated into a simpler and more stable, but manufactured, reality propped up by neoliberal financial and governmental institutions. I’ve applied it to several concepts recently, so, you’ll have to forgive me if, in a couple of months, it turns out I was just seeing nails everywhere.

Reading some of the crypto and metaverse posts making the rounds, however, I’ve begun to wonder if “web3,” as the decentralized web is becoming known, is a technology stack for democratizing access to neoliberal HyperNormalisation. A decade ago, only the most powerful elites could create unregulated private value built on bad economics and environmentally catastrophic practices. Today, anyone can convert fossil fuels into unregulated, sketchy-at-best value via a token sale.

On a very literal level, the comparison rings true. At its core, web3 is concerned with creating autonomous digital socioeconomic communities with their own organizational structures, governance mechanisms, goods, and currencies that can function more or less independently from the rest of society. Diving deeper into the philosophy of web3, you start to see the psychological dimensions of HyperNormalisation emerge as well.

One of the main value propositions of the current wave of web3 activity is that it makes reality easier to understand by reducing complex, abstract human relationships and social structures down to literally tradable “social tokens.” For example, here’s Gaby Goldberg writing about a core problem with social tokens, that their exclusivity tends to drive up their prices and quickly make them inaccessible to those without significant amounts of capital (emphasis hers):

So how do we solve the Social Token Paradox? As an ecosystem, we need to rethink the value of a token from the ground up. The decentralized communities of tomorrow will be centered around what we do, instead of what we have. This will be accomplished through both pre-existing on-chain data, as well as through a more robust DAO onboarding process that enables communities to better understand prospective members, their values, and their goals. This will come as a tectonic shift to decentralized organizations and communities over the next few months.

I guess it’s nice, on some level, to be arguing for more inclusive social tokens? But her proposed solution, making actions as visible on the blockchain as purchases, only works for actions that can be easily tracked and represented as bits of code. For her, this limitation is actually a benefit of retreating from the “real world” (her term), because it flattens the complexity of a human being’s social life into their browsing history:

Once we solve the Social Token Paradox, capital will no longer be the primary status symbol in web3. Instead, status will be composed of how many communities you are a part of, or how many things you’ve done online. The more online history you have, the richer your own story is, and the more things you can be a part of in the future.

In the real world, when we look in the mirror, we can only see a small fraction of who we are. In the metaverse, we’ll be able to go a whole lot deeper. And it’s going to start with social tokens.

The underlying piece she references, written by John Palmer, similarly hand-waves over the central question that has plagued crypto since its arrival a decade ago: what is it actually good for? (emphasis mine)

It’s true that many digital objects will be purely cosmetic, like a rare avatar or piece of art you can display within different applications. But if digital objects are as versatile as physical objects (how many different things can “objects” do?), many NFTs will provide functional benefits to their owners. Digital items will move with their owners across the Internet and allow them to perform special actions across independent pieces of software.

Digital objects approaching parity with physical objects feels like a pretty big if! But it’s not even a question in Palmer’s world, because, I would argue, the point of web3 isn’t to interact or reach parity with the physical world, it’s to create a new one where only actions and items that can exist on the blockchain are valuable.

It can be tempting, at this point, to say, “so what? Let these people have their fun. They’ll run into Dunning-Kruger eventually and that’ll be that.” I have that instinct, too, except that I worry that the societal effects of web3 will be just as damaging as the social web has been.

On its present course, even with the corrective proposed by Goldberg, I think web3 is a nightmare. At best, it gives more people the ability to build their own neoliberal bubbles where they can get rich without solving any real problems like hunger or inequality or climate change. Yay, democratization? At worst, it helps accelerate us towards a very dark, fascist future.

One of the only interesting philosophical ideas hanging out on the liberal margins of the metaverse is the idea that web3 could be about creating abundance economies where the main currency is reputation, which is kinda-sorta Star Trek-y. Golberg gestures at this with her point about status vs. capital, and a lot of the apologia written by crypto-leftists focuses on the idea that crypto mechanisms could ultimately be used to replace capitalism.

Of course, there are two major flaws with the web3-as-abundance-economy idea. The first is that abundance economies and crypto economies would seem to be fundamentally incompatible because the former relies almost entirely on trust, whereas the latter is, infamously, a failed attempt to completely eliminate trust. Ironically, I think that failure is one of the only reasons why web3 remains interesting at all. As Goldberg mentions, one way to make DAOs better is to enable “communities to better understand prospective members, their values, and their goals,” which, uh, sounds a lot like building a trust-based community to me.

The second, and more pressing, flaw, is that web3 seems to have nothing to say about creating the baseline material abundance that would be required to create a true, worldwide reputation economy. At best, I’ve read a few posts about using crypto to fundraise for mutual aid.

This is where I worry most about web3’s ability to HyperNormalize. For all the talk of its ability to democratize and level the socioeconomic playing field, for the most part that democratization seems to be limited to the buying and selling of digital goods. That’s all great if your basic needs are already easily met, like the majority of web3’s well-to-do techno-utopian proselytizers. But if you’re hungry, or unhoused, or worried about the climate crisis? What then?

I can already hear the crypto-optimists yelling, as they have for the last decade, “just wait, it’s early, soon you’ll be able to do real things with crypto.” Well, you can stop yelling, you were right. You can do real things with crypto, because you've invented realities where that’s true.

The problem is that, so far anyway, it’s not really possible to do anything with crypto in the realities that need help the most. So, here’s my challenge to web3: come talk to me when your DAO is distributing food, or housing people, or scrubbing carbon. Seriously, I’m interested in what happens when web3 collides with reality. Until then, though, I would be wary about getting too caught up in your own invented worlds. It can be hard to find your way back.


Thanks to Dan Hunt, Joel Christiansen, Rob Hardy, and Foster for feedback on an early idea for this post.

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