If Rene Girard were alive today, he would smile upon crypto fondly. Not because of our technological progress or our mission to bank the unbanked and free the internet from the shackles of big corporations, but rather because participants in this great online game have publicly proven his theories better than any other industry. Girard coined the term “memetic desire,” and that desire has spread through our industry like a virus.
Narrative uniformity plagues crypto.
Brands and social media followings are built by telling people what they want to hear. Bags bias every bagholder. A simple “ETH to $10k” tweet or LIWIFHAT will get more engagement from the Ethereum community than any new EIP. “DAOs are the future of work,” “Music NFTs are the death of labels,” “go bankless” – it’s not that we don’t believe what we’re saying, it’s that it’s easier to say it than it is to think critically about the implications and flaws of the statement. Once the crowd gets wind of a new narrative – “consumer crypto,” “web3 social,” “onchain media” – intentionality goes out the window.
Much of this is due to the nature of social media, but that’s not the only factor, nor is it the most important. Competition validates theses, but in an ecosystem of public, 24/7 markets, controversy drives us forward.
I’d argue that the antidote to narrative uniformity and the key to breakthrough innovation is not just competition, but controversy.
Crypto needs more controversy.
What differentiates competition from controversy is not just the battle, but the public nature of the battle, in most cases driven by conflicting community sentiment. Controversy doesn’t need to be mean-spirited, but it needs to be loud. Controversy means there’s skin in the game, social or financial. Convictions are high. You can be publicly proven wrong, and people will go out of their way to do so.
Historically, crypto lore is full of controversy: BTC vs BCH, ETH vs ETC, Punks vs Apes, Uniswap vs Sushiswap… the list goes on.
Let’s use the UNI/SUSHI example. Sushiswap began as a fork of Uniswap, and vampire attacked the protocol by incentivizing LPs through SUSHI token rewards (via a unique fair launch, remember?). For a bit, Sushiswap had more daily volume than Uniswap. This ultimately led to the UNI airdrop, which helped Uniswap very quickly reclaim the throne as a top DEX and led to significant innovations in DEXs, which I would argue was a major catalyst in fueling traction in dethroning centralized exchange dominance. The vampire attack led to very heated public battles between and within the individual communities (e.g. Sushiswap’s founder token dump), but hindsight shows that the ecosystem is much more helpful and mature as a result.
As such, one could say that a “recipe for crypto controversy” includes:
Progressive community action
The right timing
Main character(s)
Strong narrative and counter-narrative
Financial incentives
More recently, Solana’s meteoric rise from the ashes has led to some heated battles between the ETH and SOL communities. Obviously, different L1s will naturally be in competition, but the controversy didn’t arise until Solana started “winning” across various metrics. Ansem became key figure in this controversy, leading some Ethereum influencers to disengage and jokes being made about the duo coming to Farcaster, “Ethereum’s safe space.” However, the controversy led Ethereum builders and users to seriously reconsider their priors and push for an acceleration of UX improvements at the chain and app levels.
More Exhibits
OpenSea and Blur is another great example. Blur launched a token that encouraged farming on the platform, but paired with a great UX led to a weathering down of OpenSea’s NFT trading dominance on Ethereum. The battle also led to widespread discussions around the importance and enforceability of NFT royalties. While Blur wasn’t the first to halt creator royalties, they were certainly the loudest and most successful, which led to widespread debates and community action.
Finally, Nouns saw controversy with the Nouns Fork, which forced the community to re-evaluate how they should be spending treasury funds and what the broader purpose of Nouns was. The community has come out stronger as a result, but not without public and heated debates around the nature of “proliferation” and significant piles of ETH leaving the DAO treasury.
It’s not a controversy without two sides and a public battle. Rainbow, for example, began using points as a way to onboard and retain folks from Metamask once their browser wallet was live, but Metamask doesn’t have much of a community to fight the narrative battle.
I am eagerly anticipating the unfolding of certain controversial narratives and topics within the crypto space, though I'll refrain from specifying names as the implications are quite apparent if one reads between the lines:
The narrative surrounding the on-chain economy, particularly on Layer 2.
The development of a social feed within Web3.
The process of onboarding users through wallets.
The integration and evolution of music feeds.
The dynamics of web3 publication.
Last
Crypto is a public arena, and while it is true in some ways that “we’re still early,” we’re not early enough to be shunning competition and ducking controversy. The public arena can be a space for poisonous memetic desire or beneficial controversy, and we should continue to choose the latter.
“We’re all gonna make it” doesn’t mean “we all have to agree.” We make it if we choose the best paths forward.
May the best memes win.