Where is technological narrative going?

Author: Zuo Ye; Source: Zuo Ye Wai Bo Shan

Alternate between fat and thin, Mai Shiranui, a gluttonous feast, where is it now?

Bitcoin is Time, ETH is Money, so What is Crypto?

Many years ago, I read an article, "Bitcoin is Time". The value of Bitcoin will be expressed through time. Whenever the industry and individuals are confused, I will read it repeatedly. I believe that the power of time will change people's existing cognition. If people do not change, then eliminate them, just like any technological progress in history requires the sacrifice of "old aerospace".

Crypto technology has long existed, and decentralized currency has been reflected in shells. The denationalization of currency is also the spiritual document of anarchism. What we see today is the weakness of technical narratives. Decentralization has become less important, and nationalization is popular in the name of compliance. Cooperation with the government and traditional financial institutions sounds more presentable than cooperation with the underground world.

BTCFi may be the most important consensus intersection between Wall Street and Crypto OG, but this will fundamentally change the denationalization orientation of Crypto. If using cryptocurrency to fight Russia and North Korea is liberalism, then is it also to comply with the United States?

At least CZ and SBF think so, and perhaps Vitalik.

With the influence of Bankless, the attribute judgment of ETH is Money has become a hot topic in the industry. Although it is not as popular as before due to the violent performance of Big A, at least it is fortunate that there are still people who are thinking about the present and future of cryptocurrency, and Solana Firedancer's fire dance is indeed not cared about by many people, and the performance battle is no longer in the spotlight.

After thinking about it carefully, the last time people argued about the underlying public chain technology was Ethereum's The Merge. After that, people got used to accepting it, because the Core Memeber under the decentralized governance structure still effectively controls the overall direction of the public chain ecosystem. This was the case during TheDAO and TheMerge. There is no need to argue, just accept it.

The weakness of technology is reflected in the market’s rejection of VC coins. The main theme of 2024 is the resistance to the pace of coin listing on exchanges. This violent resistance has brought Meme Coin to the fore on TON and Solana, but unlike the playful spirit of the first generation of Dogecoin, the biggest beneficiary of this round of Meme craze is the Meme Coin launch platform, while the market value of Memecoin itself is getting smaller and smaller, with each generation being worse than the previous one.

To this day, the first generation of Meme still ranks highest in market capitalization, just as the public chain track can only accommodate BTC and ETH, and the remaining chains can only compete for the status of "third chain". The last cycle was Avalance/Near and Solana, and this round is Solana and TON. Solana and TON also focus on Meme, mini-games and other online gambling games with a high degree of PVP.

In the past six months, I have been following the development history of encryption technology to deduce the future, from elliptic curve algorithms to Schnorr signatures, and then from ZK to the vision of FHE ciphertext computability, but unfortunately, the technical narrative seems to have come to an end. Why?

Looking back, Satoshi Nakamoto created Bitcoin using only encryption technology and only wanted to do one thing: payment. Later, Ethereum proposed the grand vision of a world computer with the help of smart contracts. After sharding could not be implemented in the short term, it turned to PoS and Rollup-centered expansion routes, thus creating an L2/Rollup system that seamlessly transitions from prosperity to chaos. Until now, high-performance L2s such as MegaETH and RISE Chain that make the most of hardware optimization experience have become Vitalik’s new favorite.

Coincidentally, hardware, optimized Gas Fee and high performance are basically the whole essence of Solana 1.0 and Solana Firedancer (2.0). If it develops in this direction, then Crypto is TPS.

If this path is feasible, then Solana is the third chain. If this path is not feasible, then Crypto’s technical narrative needs to give new answers. What kind of capabilities are really needed by users, not what Buidlers and VCs need.

Fast Food Protocol in an Age of Application Scarcity

The 2016 "Fat Protocol" predicted the growth path of Ethereum's protocol value:

1. ETH will become an incentive for early participants to build the first super economy in human history in a decentralized way, which does not belong to the country or individuals;

2. Ethereum will change the dilemma that the Internet protocol layer cannot capture value. People who create the bottom layer of a new generation of human communications deserve the richest rewards, and this reward will passively increase in value;

If you want to truly understand the current weakness of Ethereum and ETH, you have to go back to this article. In a sense, this is more interesting than the Ethereum Yellow Paper and IXO. All events are important. Before this, the Internet was a three-layer structure of "protocol -> application -> user", and these applications later became the large public chains we are familiar with. With the blessing of network effects, they eat the free creativity of genius programmers on the left and endlessly devour users' privacy on the right.

Another answer given by blockchain/Web 3.0/Ethereum is to remove the application layer and let the protocol and users interact directly. In this system, all economic activities are calculated based on ETH, so ETH is Money.

In fact, we can make a comparison. Compared with Web2, the core of Web3 lies in the difference in the way of value capture, rather than removing the application layer itself. Giants such as Microsoft need to make users pay for it, while Ethereum needs to build or give birth to a rich on-chain ecosystem to attract users, even if they are all speculative users in the early days.

In an ideal situation, blockchain systems such as Ethereum will gradually replace traditional Web2 giants and transform into a new generation of Internet infrastructure, providing decentralized on-chain versions of various applications for our online life, because in this narrative, the technology of the protocol layer is the most important, and the needs of users are of secondary importance. The only unimportant thing is the application layer in the middle. A variety of extremely rich dApps will replace super platforms, and people's on-chain data and value can flow freely.

First of all, it must be admitted that the narrative logic of Fat Protocol is completely technology-centric. User needs and experience will not be recognized until 2023, and concepts such as chain abstraction and intent will be accepted by Crypto Native users.

Secondly, we must admit that the application layer in the middle is not worthless. Pure token incentives will not allow developers to create protocols and ecosystems that better meet user needs. In other words, we must stop the trend of abuse of the term protocol. Ethereum is a protocol, and Uniswap cannot be a protocol strictly speaking. Referring to the basic nature of SMTP, Outlook can only be an application.

Finally, we must admit that in the past few years, what Web3 lacked was not the polishing of the underlying technology, but the indifference to the application layer. People mistakenly believe that only the protocol needs to be paid attention to, and the application layer only needs to provide transaction services. However, based on observed facts, the giants of Web2 do not ignore the underlying protocol. On the contrary, it can be said that they are now the cornerstone of Internet protocols.

Being misunderstood is the fate of giants

I must declare that I have no intention of defending giants. Each of us is a digital laborer on the Internet. Every day we go online, we are exploited by giants. It is also a fact that user privacy is violated and excess profits are squeezed, both in China and abroad.

But this does not mean that removing the application layer is correct, because a world driven only by tokens cannot obtain real users. If we define real users, then they are non-trading users. We can imagine a scenario. If a crypto user does not use Binance or Uniswap, then is he a high-quality user? I think most project parties will think he is not.

The abuse of the Token mechanism at least retains the seed users of the blockchain, but the current status of Web3 is simply speechless. Meme Coin has not occupied the mainstream of the market, but it has overwhelmed everything in terms of volume.

In a word, what I want is a trip to Mars, but what you give me is $Terminus and capitalization disputes. If this is the great voyage of Web3 technology, it is too sad.

In the commercial competition of Web2, the application layer close to users makes the most profit because they donate to open source projects while exploiting. For example, the platinum members of the Rust Foundation are AWS, Google, Huawei, Meta and Microsoft, and even the main source of profit for the Firefox browser is advertising fees from competing Google.

Secondly, the entire process of using Ethereum relies on smart contracts, and it is normal to pay for this, including Blob or Calldata, which are essentially designed to store user data. The magic of the entire chain is here, and the price is also here. The traditional Internet is more about setting up a rule, and strictly speaking, it does not deal with user needs.

You can give a simple example. The operation of the traditional network is like the relationship between the law and the judicial system. Legislation is a power owned by the whole people. The law is open to the public. Legislators are only responsible for making rules. Daily legal practice needs to be handled by complex legal departments, so people only need to pay for the expenses incurred in the process of legal practice. The prices vary from person to person and from case to case, depending on the different content handled by the judicial system.

However, in the on-chain world of Code is Law, the judicial process and legislation are two sides of the same coin, so efficiency cannot be improved, and people are trapped in various technical terms. The increasingly off-chain and centralized practices are actually a kind of convergence like traditional giants and judicial practices. The chain only does evidence storage, and the calculation and storage are transferred to the off-chain.

Starting from this perspective, we can decode the different paths of MegaETH and Firedancer. Strictly speaking, there is no difference between the before and the after. If the blockchain is to continue to move forward, squeezing hardware is the only solution.

Conclusion

If we simply summarize, the collapse of ZK and cross-chain bridge projects in 2024 is a preview of the end of the technical narrative. The number of users and transaction data of LayerZero and StarkNet have already told everything.

In the just-passed Token2049, consumer-grade applications were the only redeeming feature. Although user experience is not as popular as customer acquisition, business development, and ground promotion, at least it does not play abstract art such as chain abstraction and intention.

However, the pursuit of technological superiority and communities close to Discord and Twitter still lack the actual performance of real users. If one day, B2B companies and African people use Web3 applications on a daily basis, that is the correct posture for the implementation of technology.

The fat protocol has been around for 8 years. It is too heartbreaking to complain too much. I hope the era of fat applications will truly arrive.