by Zero Hedge

4/13/21

This week, we look at:

  • The crypto asset class breaking $2 trillion in market capitalization
  • The practice of token economics and token engineering, and how incentive design can create vary different operating outcomes (e.g., Fei protocol vs. The Graph)
  • How incentive design is already encoded into social norms at companies like Amazon, which can scale to a million employees and retain an identity

Crypto isn’t magic. It’s math. Two trillion dollars worth of math.

We are still, often, asked incorrect questions about the crypto currency markets. Questions like — “but what is the fundamental value?”

You have to unpack the word “fundamental”. That word signals a Warren Buffet view of the world: there are companies out there, they have equity shares well specified by corporate law in a particular jurisdiction, some are expensive while some are cheap, and that bargain shopping can be determined by a spreadsheet analysis of their cashflows relative to others. It’s so fundamental!

The story of such fundamental truth is anchored in our cultural and social history. We can point to the intellectual tradition of rationalism and classical economics, and talk about the theory of the firm, and its production function. We can point to how these things grew out of governance by religion, and natural rights as granted by a deity, and all sorts of other non-empirical hand waving.

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