Experimental Isotopes

bDAO Writers Cohort

There's an old children's book series called *[The Great Brain](https://www.goodreads.com/book/show/119247.The_Great_Brain)* that chronicles the escapades of John Dennis Fitzgerald and his older brother Tom Dennis (AKA the Great Brain) in a small Utah town circa 1896. The plot of the first book is centered around the Fitzgerald family being the first in town to install a water closet (flush toilet) in their home. The townsfolk were skeptical and mocked the stupidity of bringing the smell of an “indoor outhouse” into their home. Tom Dennis hatched a scheme to charge the curious townsfolk admission to watch the toilet being installed and later to flush it for themselves.

Of course, it didn’t take long for indoor toilets to become so accepted and ubiquitous that it’s a given in most of the world. But there was a time when the idea of doing your business inside the home was ludicrous and FUD-worthy.

Crypto and web3 have many skeptics, critics, and attackers who, at best, view it as silly and at worst, as “[disgusting and contrary to the interest of civilization](https://www.cnbc.com/2021/05/01/charlie-munger-calls-bitcoin-disgusting-and-contrary-to-the-interests-of-civilization.html).”

From flush toilets to automobiles to the internet, we’ve seen this cycle play out again and again. A new innovation is created. A small number of people see its potential. Most don’t understand it. Many reflexively distrust it. Over time, however, truly disruptive technologies always become inevitable.

### Catching Waves

First, theorized in the 1950s by Everett Rodgers, adoption lifecycles for new disruptive innovations tend to follow a predictable bell curve.

 ![Source: Wikipedia. CC BY 2.5, https://commons.wikimedia.org/w/index.php?curid=113543416](https://storage.googleapis.com/papyrus_images/ed362a1b726a28e6435cccbba2bcad1d)Rodgers defines the qualities of these adopter categories in his [Diffusion of Innovation](https://en.wikipedia.org/wiki/Diffusion_of_innovations) theory:

* **Innovators**: Willing to experiment and take risks on technologies that may fail; high social status and financial liquidity; close to scientific sources and other innovators.
* **Early Adopters**: More discerning in tech choices than innovators; influential with other adopter categories; higher social status, education, and financial liquidity than later adopters.
* **Early Majority**: Above average social and financial status; adopt new innovations after watching early adopters work out the kinks.
* **Late Majority:** Highly skeptical; only adopt new technology after most everyone else has; lower financial and social status; risk averse.
* **Laggards:** Traditional and averse to change; older; last to adopt if they ever do.

Not every innovation captures the momentum and proves its use cases well enough to ride the wave through to mainstream adoption. History is replete with examples of breakthroughs that couldn’t break through to rise beyond the realm of innovators and some early adopters (Segway PT, 3DTVs). Others were overtaken on the upslope by superior innovations (e.g. iPhone making Blackberry obsolete). And some were maybe just before their time (Apple Newton, Google Glass, [jetpacks](https://www.007.com/thunderball/)).

### We’re So Early

Just because the phrase has reached the cliche stage in its adoption curve doesn’t mean it’s not true. Web3 is very, very early.

DeFi and NFTs are the two current marquee use cases of web3. While the number of DeFi users is on a strong growth trajectory, at fewer than 5 million today, the DeFi user base is less than .06% of the global population.

 ![Total DeFi Users Over Time (source: Dune)](https://storage.googleapis.com/papyrus_images/534ffe28bb4b4c7e75491201e7bcfef2)The growth of NFT trading on the leading marketplace OpenSea has been even more parabolic. Still, at around 2 million purchasing users, only .025% of humans on Earth have exchanged cryptocurrency for an NFT on OpenSea. We’re clearly still on the far left side of the Rodg curve.

 ![OpenSea Traders (source: Dune)](https://storage.googleapis.com/papyrus_images/eddcb9f8a8f316bb27d346947ad4f2bd)As for other web3 use cases, there are likely even fewer people participating in DAOs than in DeFI. Plus, I’d argue that trading crypto on centralized platforms isn’t exactly a web3 activity. So yes, we are indeed early—which also means that there’s still unlimited headroom for growth!

### Rhymes with Internet

As the saying goes, history doesn’t repeat, it rhymes. In the mid-1990s, I attended a conference on *The World Wide Web*. The presenters spoke in hyperbolic terms about how the *Information Superhighway* was going to revolutionize everything. Yet, at the time, all they could demonstrate was how to build a basic “Hello World!” Web page with HTML that anyone in the world could view! Provided, of course, they had:

* The IP address of your page. Domain registration was cumbersome and search was lousy until Google arrived years later.
* A PC. Pre-internet, a lot fewer people owned PCs as the main use cases for a home computer were word processing, “desktop publishing,” and playing rudimentary games.
* A modem. Likely a laboriously slow 14.4 baud dial-up modem connected to a landline phone connection.
* Internet access. ISPs were a new business and AOL had not yet started carpet-bombing mailboxes with signup discs.
* Knowledge of how to use all of the above.

 ![The seeds of revolution](https://storage.googleapis.com/papyrus_images/c63523b4e13c83ab9ae757ac36ea1700)In 1994, the internet had what we’d now call serious UX and product-market fit issues. It had opened up a wide-open frontier of possibilities, but we’d only started to imagine what possibilities could be out there. I left that conference with two thick manuals and the sense that the internet might be an interesting hobby. Like ham radio without as much equipment. At the time, I didn’t have the vision to imagine what it could become.

It would take another 25 years, billions of dollars, multiple market cycles, and the collective genius of countless visionaries to get to the point where we can stream 4k movies on a pocket-sized computer while waiting at the DMV.

Today, we don’t think of the amazing things we do with our connected devices as doing internet things. It’s just how we live. The same will happen with blockchain-powered innovations. Web3 has opened another frontier of possibilities, and we’ve only begun to explore it. Sooner than the Early and Late Majority realize what’s happened, they’ll be tapping into cryptocurrency, NFTs, and other blockchain innovations to do incredible new things. They won’t call it crypto or web3, it will just be how we live. But for now, we are early. Enjoy it.

\


Inevitable Progress and the Curved Arc of History

Why do views and opinions become so polarized? Where do maximalism and dogmatism arise from? Why do otherwise reasonable people cling to outlandish and provably false ideas? And why, when challenged, do we so vehemently defend such beliefs?

The answers may be in our genes.

No doubt, life was hard for our ancient ancestors. They never knew when food might get scarce or a lion might come prowling. They didn’t have the luxury to waste precious food energy on activities that didn’t contribute to survival. Those who developed adaptations and genetic programming that optimize for conserving energy were the ones with fuel left in the tank when it mattered. They’re the ones who survived and pass those traits down to us.

###  ![Photo by Alina Grubnyak on Unsplash  ](https://storage.googleapis.com/papyrus_images/3e10d720ce489d930188f9e3ae0e5db4)System Design

In his book, *Thinking Fast and Slow,* Nobel Prize-winning psychologist Daniel Kahneman describes two systems of the human brain. System 1 is the fast, primitive brain that is wired for survival and pattern recognition. It rapidly processes sensory data and initiates instant responses. System 2 is the reasoning and critical thinking brain. It analyzes and processes information and ideas, applies logic, learns, and handles higher-order brain work. System 2 is slower and consumes a lot more calories to do its work than System 1 does.

System 1 is like a fast, low-power device that’s great for simple, recognizing, and filtering tasks. It does the majority of sensory and low-level processing and makes quick decisions about simple, low-priority things and vital fight-or-flight reactions. It relies on its database of patterns, ques, and shortcuts to handle basic activities and reflexive responses. System 2 is like a powerful supercomputer. Since its capabilities aren’t needed all the time, it conserves energy by resting in standby mode. When System 1 encounters something novel or complex that requires more brainpower, it wakes up System 2 to take a look.

This is why hard, sustained thinking can feel so draining. You’ve been operating the big computer, and it is a power-hog. Over the millennia, this default, low-power setting became encoded in our DNA. We tend to rely on System 1 to handle as much of the work as possible.

### Prepackaged Thoughts

In our modern context, many of the new ideas and information we come across are delivered in easy-to-process packages: tweets, memes, listicles, newsfeed headlines, and television news bites. Designed for humor, outrage, or bite-sized consumption, much of this content is simple enough for System 1 to processes at face value. The notions they represent get stored in memory without challenge or consideration by System 2. We can sometimes adopt ideas into our belief sets literally unwittingly. When these concepts are referenced later, they bear the stamp of approval by System 1, signaling that they must be true. Critically reconsidering them would require us to fire up System 2 and burn precious calories, which our genes warn us against in case there’s a lion prowling nearby.

### Doubling Down

This may be why cognitive dissonance is such a strong psychological response. We reflexively reject ideas that challenge those beliefs that previously received the brain’s seal of approval. Examining settled truths burns fuel. The natural, power-efficient, evolutionary-programmed response is to reject contradictory information, and not bother System 2 with such nonsense. Cognitive dissonance is like an immune response to troublesome information.

Similarly, we historically didn’t have the excess energy to spend a lot of brainpower on processing nuance. It’s far more energy efficient to look at concepts in binary terms that are easy for System 1 to sort through. Predator/prey. Friend/foe. Red state/blue state. Coke/Pepsi. Good/evil. Web2/Web3. Decentralized/corporate. Bitcoin/Ethereum. 

Details are hard. The middle ground is confusing. Our instinct tells us it’s best to avoid them if we want to have the energy to make it to our next meal or mating opportunity. 

### Playing Defense

Next, confirmation bias joins the party. To avoid the discomfort of cognitive dissonance, we instinctively seek out and store only the data that reinforces what we already believe to be true. We put System 1 on the task of collecting information that builds fortifications around the accepted beliefs, concepts, and notions we have filed away. Occasionally we boot up System 2 to help craft some arguments. That way, we have a fortress stocked with tidbits of information for taking potshots at any pesky thoughts that try to breach the wall—and the stupid/deluded/brainwashed/corrupt/evil people who wield them.

With their default power-saving mode, our slightly upgraded monkey brains are fertile environments for binary thinking and absolute positions to take root. Maximalism, dogmatism, and other absolutes are cheat codes that let grey matter stay lazy while System 1 processes things on autopilot. Does the data fit the accepted model? If yes, accept. Else, reject and attack.

So what can we do about it? It turns out that we are smarter than our brains. We control System 2, and most of us should have no reason to fear lions. 

### **Question Everything**

A few years ago, I worked with a coach to learn advanced real estate investing techniques and deal structures. On my first day of coaching, he had me write the words “Question Everything” on a notecard to post it near my desk. In his thirty years of teaching, he found that the most important thing he does is to help his students unlearn many of the preexisting ideas and beliefs they hold about money, people, and what’s possible. We unconsciously pick up so many notions and beliefs throughout our lives—from our parents, teachers, peers, the media—that we never examine or realize how they hold us back. He found that once self-limiting code is removed from a person’s operating system, it can be truly astounding what they achieve.

 ![Allow me to play Devil's Advocate for a moment](https://storage.googleapis.com/papyrus_images/7243cb5a136a30fd78249c5cbb434edf)For me now, questioning everything is a regular practice. I’ve put my System 2 brain to the task of investigating many things I thought to be true about the world and myself. This doesn’t mean rejecting everything or being contrarian. It’s asking why. It’s challenging assumptions. It’s examining things from fresh perspectives. I follow my curiosity. I think about why I believe something to be, and whether the belief stands up to scrutiny. 

My curiosity and exploration have led me away from real estate investing and onto this fascinating frontier of blockchains and DAOs. I believe the advances and innovations we’re creating in Web3 will fundamentally transform the world—if we can outsmart our lazy meat computers and the legacy software that came preinstalled. 

Of course, I could be wrong. I’ll give that some more thought.

\
\


The Meat Computer and the Devil's Advocate

With NFT sales and floor prices declining in recent months, many are declaring that the NFT craze is over. While the hype for collecting and flipping is cooling, we’ve merely scratched the surface of what’s possible with non-fungible tokens. I’m interested in finding out what NFTs can do beyond collectible digital art, profile pictures, or access gating. Today, we’ll explore the possibilities of Charged Particles nested NFTs.

**What are Charged Particles?**

[Charged Particles](https://www.charged.fi/) is a protocol for Ethereum and Polygon that enables you to deposit NFTs and cryptocurrency tokens inside of an NFT. It lets you mint a “particle” NFT that acts sort of like a backpack for ERC-20, ERC-721, and ERC-1155 tokens inside your digital wallet. You can sell, transfer, airdrop, or burn the particle NFT the same as with any other NFT—and the NFTs and crypto contained inside of it will go along for the ride.

This introduces the ability to organize multiple digital assets inside a particle NFT and enables you to transfer them to another wallet with a single transaction. For example, you could deposit several NFTs into a particle and transfer them for safekeeping in your hardware wallet all at once. You could also create collections of NFTs to sell as a package, or you could make a gift basket NFT containing a curated selection of digital art and tokens for the perfect Web3 gift.

If that was all Charged Particles could do, it would already be super useful. but there’s much more. The protocol has additional capabilities that bring some novel DeFi features and benefits to NFTs. The first is the ability to deposit interest-bearing tokens—such as aDAI or another aToken from Aave—into the particle. The interest accrued will “charge” the particle until its owner discharges it to collect the interest. The Charged Particles app is integrated with Aave, providing a simple way to deposit aTokens.

There’s also the option to time-lock nested assets, keeping them from being removed from the particle for some period. This creates some amazing new composability, staking, vesting, and investing possibilities for NFTs.

 ![](https://storage.googleapis.com/papyrus_images/db4ee94a952c6467e44ca60715e010b6)

### Supercharging NFT art

Let’s look at some opportunities for digital PFP and collectible NFT projects. Nesting allows creators to add new dimensions to their NFT drops. For example, you could create nested NFTs that include multiple unrevealed NFTs within them. They are revealed and unlocked over time—extending and repeating the excitement people feel *wen reveal* happens. Plus, a project could create a special NFT container that lets people store and easily transfer all the NFTs they’ve collected from a project or artist in one place.

In addition, NFTs with locked crypto tokens can build both a currency-backed floor value and crypto-investment upside into a project. For instance, say a DeFi protocol launched a collection of NFTs that had 100 of their governance tokens locked within each. In this example, let’s assume the mint price is .25 ETH and the governance token is trading at around 1 USD. Those who mint the NFT should feel confident that it’s worth at least 100 USD on mint day. Later, in addition to the aesthetic/rarity/utility value the market determines for the NFT, its built-in investment value can soar along with the performance of the tokens if the protocol takes off.

Another intriguing twist on art NFT projects is to nest interest-accruing tokens within them. Anons’ PFPs could be earning yield as they flex with them on their Twitter and Discord profiles.

### Empowering DAOs and communities

For DAOs and Web3 communities, Charged Particles also usher in a wide range of opportunities for improving member engagement, tokenomics, and governance. Imagine membership NFTs that unlock access to exclusive benefits based on the number of DAO governance tokens time-locked within them. For instance, a DAO could require that people lock 25,000 governance tokens into a membership NFT for a year in order to become a full member of the DAO and gain access to all the privileges, perks, rights, and opportunities that members enjoy.

Not only does this demonstrate that members have “skin in the game” with the DAO, but the timelock can also reduce volatility of the token price by keeping a large number of tokens out of circulation. DAOs can reward contributors with nested tokens that vest over a period of time, which could encourage longer-term participation while also smoothing out sell pressure on the token.

Members benefit in that if they decide to leave the DAO, they could sell their membership NFT with the locked tokens inside on an NFT marketplace or wait until the timelock expires to release the tokens. With those options, they could get back some, all, or possibly even more than the cost of joining, depending on the token price or what the NFT commands on OpenSea when they sell. While the DAO might be sad to see some members decide to sell their membership NFTs, the secondary sales commission built into the NFT’s smart contract the DAO would receive could help lessen the blow.

### Electrifying reputations

Beyond enhancing the utility and value of NFTs, Charged Particles NFTs also have the potential to help improve what is possible in the area of on-chain reputation. Particle NFTs could be used as a sort of Web3 resume that contains NFTs that document an individual’s credentials, achievements, PoAPs, and other aspects of their pseudonymous/anonymous identity. I’d like to explore how soulbound NFTs could work with particles to create on-chain resumes with these types of NFTs that can’t be transferred to another wallet. But that will need to wait for another article.

To learn more about Charged Particles and access their NFT minting app, visit [charged.fi](https://www.charged.fi/)

*Of course, it’s crucial to consult an expert in securities law before attempting to launch a crypto-enhanced NFT-DeFi hybrid project. I’m just a guy who geeks out on new tech models and possibilities. This is very much not financial, investment, or securities advice.*

Inevitable Progress and the Curved Arc of History

The Meat Computer and the Devil's Advocate

Exploring Nested NFTs with Charged Particles