Crypto is Not Just Money, it’s Power

In bull markets, investors both retail and institutional flood in seeking life-changing wealth. But as the numbers go up and down, and each day grabs us in new twists and flashes of red and green, it bears reminding that the intangible value of crypto can be equally or sometimes even more rewarding than tangible wealth.

Let’s talk about how crypto gives you power.

Knowledge as power

When you use products or services familiar to you today, you rely on the platform to tell you whether your instruction went through, whether your goods have arrived, and even whether you truly own them in your account.

In crypto, the ethos is to not trust, but verify. When every interaction is signed by your crypto key, every asset movement is tracked on-chain, and ownership is reflected on an immutable ledger, you no longer need to rely on the platform to tell you so — you know it. That knowledge is power. All you need is Metamask to sign, and links to Etherscan to check.

Beyond that, how is your data sold? Are the shareholders cashing out ahead of an announcement? What are the company’s earnings this quarter? In a postmodern world where truth can be bent, objectivity is ever more scarce. Imagine if you could see every single shareholder’s holdings and trades, the company’s users and revenue, the product’s full functionality inside-out — in real-time, 24/7, and no way to hide. Today, these metrics are easily obtained on DeFi Pulse, Nansen, Dune Analytics, or Token Terminal, and verified on Etherscan.

Control as power

When you sign up as a user on any platform today, the first thing we do (or implicitly do) as part of the terms and conditions is sign away our rights to our data. Then, we proceed to create value on the platform, be it as a ride-sharing driver/ rider, Airbnb host/ guest, or social media creator/ consumer. As part of the value creation process, should we not be rewarded?

In crypto, the current common practice is to reward contributors with tokens, just for using the platform like on Compound, to liquidity provision like on Curve, where users get the platform’s tokens. These tokens are then charged with voting power, when the founders decide to put governance decisions up for voting. Proposals could include anything from hiring core team members, deciding their compensation, to new products and token economics, which we see on Sushiswap.

When voting power is in the hands of the users, it creates a community where politics is possible, and even necessary to meet the quorum to enact changes, as we can see with the multiple tries on Uniswap. Your voice can be amplified in discussions and forums, usually on Discord, again determining outcomes of the project. As users and token holders, you have the power to decide its future.

Walking away as power

When you decide to create an account on any platform today, you inadvertently lock yourself into a walled garden which becomes its moat. Over time, because your profile preferences, credit card details, friends and family are already on the social media/ e-commerce/ messaging platform, it becomes so easy and so sticky. But if you ever wish to migrate, the same stickiness holds you back.

In crypto, you can build up the same network effects in users and assets, but because the records are on the underlying blockchain, if a platform ever becomes exploitative or dysfunctional, users can walk away.

On one day, I could be using Metamask to access all my assets and history, and on the next I could decide to completely switch to Trust Wallet on mobile, for example, just by importing my private key. Or I could be using Zerion to keep track of my assets, and just as easily switch over to Zapper within a few clicks. Users always have the option to walk away, and that keeps platforms honest and competitive.

On a deeper level, open-source smart contracts mean developers could simply fork the code and create a new version of any platform. Users’ token holdings, interactions, and reputation could all be replicated on a fresh version. This is indispensable, if say a protocol is controlled by malicious actors, as seen in Cover Protocol’s remedial steps after being hacked. It could also be the result of a heated split on a political issue, like the birth of Bitcoin Cash for scalability. More controversially, it could also just mark a fresh start with a different approach, like Sushiswap forking Uniswap as a “fair launch” without ownership by venture capitalists.

Are you wielding your powers?

For many first-timers in crypto, the entry point may be purchasing Bitcoin on an exchange, and subsequently trading some of the so-called “altcoins” on the same exchange. Because the tokens are actually custodied by the exchange, you are not the true owner of those tokens, and hence unable to exert any of these powers. In fact, the exchanges become behemoths wielding incredible powers, as seen in Binance’s involvement in Steem’s fork.

It is only when you withdraw the tokens to a wallet you control, that these abilities are unlocked. So try it out, set up a wallet on Metamask, withdraw your funds, see it get validated on-chain via Etherscan, use your voting power on Aave, support fancy forks like Cream.

It may be a lot to take in, all this freedom and power, but at last, it is your turn to take control.

We are a Web 3 investment fund and accelerator actively collaborating with founders to navigate the crypto landscape in Asia and build their Web 3 model.