one of Jordan Peterson’s most famous arguments is his lobster metaphor.
evidently we (scientists) know a lot about this large crustacean, from how it manages predators to mating rituals, and most importantly the societal hierarchies it forms with other lobsters.
a first impression of Peterson’s analysis suggests men vs women, rich vs poor, tall vs short, and good-looking vs ugly people similarly conform to a natural order. a second impression of this primal order begets the perception of unfairness, thus the modernist approach to abolishing hierarchies as a means to achieving equity. but according to Peterson this doesn’t work; the progressives’ outcome will be to replace something natural (tried, tested) with something artificial and arguably worse.
so what does that have to do with decentralized finance? isn’t DeFi just the recreation of scalable wealth building instruments like debt, equity, interest rates, and risk, leveraging the transparent (public), immutable (smart contract), and efficient (no middleman) features inherent to blockchains?
try reading that again, this time between the lines.
venus fly trap
DeFi’s promise is simple: remove the gatekeepers from traditional finance. you know, the ones “making the rich richer, and the poor poorer.” after all, why should you have to attend Harvard and pass Series 7/63 exams for the privilege to invest in an IPO before the opening bell?
with a solid elevator pitch, millions jumped in. but what actually changed?
- IPOs were replaced by ICOs
- Ivy League degrees, Wall Street, and Series exams were replaced by whitelists
- hedge funds and insider tips were replaced by influencers and alpha
- barriers to entry like accreditation were replaced by gas wars
- complex accounting ledgers with sworn testimony were replaced by public transactions between anon accounts
- even con artists themselves, the Madoffs, were replaced by Ponzinomics
DeFi is revolutionary, but only for a moment. sooner or later you realize: we can’t escape the lobster.
here are a few more things that don’t change.
wealth mindset
wealth is not only the aggregation, but more importantly the preservation of capital. as many broke, formerly multi-million lottery winners have regretfully learned the hard way, the presence of money does not make you good at stewarding it.
the allure of double, triple, quadruple+ digit passive income in DeFi has yielded one of the most incredible transfers of wealth between Metamask’s scratch-off ticket type speculators and wealth minded individuals we’ve seen in years. and it’s all publicly verifiable on the blockchain. #equity
long-term games
my Coinbase.com dashboard provides analytics on the average hold time of every token: 8-50 days. but long term thinkers play long term games.
the notion that the average person — whose brain is occupied 50% of the time with concerns about next month’s rent payment — will temporarily suspend Maslow’s hierarchy to pontificate whether insurance companies in the year 2087 will leverage smart contracts to increase claim efficiency, is zero.
greed
all of us suffer from the same deadly sins. but rich people can afford to be greedy. if highly speculative investing is a game of Russian roulette, rich people have 9 lives. regular people have 1.
was it Nassim Taleb who said that humans are wired to avoid ruin? whoever it was, they’re wrong. only the elites can crash an entire economy and get promoted on the same day. regular people lose their house.
wisdom
this is not FUD, i love DeFi. and frankly i need more low-IQ participants engaging in it for my returns to continue. but don’t mistake it for a revolution. not yet.
squeezed tightly between the lobster’s pincers, DeFi still looks a lot like Wall Street.
“The reason they’re without money has absolutely nothing whatsoever to do with your existence, what you sell or fail to sell, nor does it have to do with the way money works in the real world. It has to do with them. And whether you take it, somebody else takes it, the liquor store takes it, the church takes it, whoever takes it, I promise you somebody’s getting it. Because if they’re without money now, they’re going to be without money again. And most of them are going to be without money permanently, because they never gain or act on an understanding of how money works. I know that sounds harsh. And you may not be a face-to-face salesperson and never need to sit across a desk or table from someone you think “can’t afford it” and sell to them anyway. But the truth about this particular situation is the bigger truth about the entire world of money and wealth. That truth is, whatever amount you get has nothing to do with how much or how little anyone else has. Ever.”
Kennedy, Dan S.. No B.S. Wealth Attraction In The New Economy . Entrepreneur Press. Kindle Edition.