Insights and Opinions

Three Predictions for 2023: Decentralization Now, Post-Speculation, and Surviving Irrational Markets

  • The death of decentralization-washing is key to the great decoupling
  • Net cash inflows into the market shift from speculation to revenue – and determine winners
  • Markets continue to stay irrational longer than you can stay solvent – so everyone needs help

Death of Decentralization-Washing

For years, crypto has claimed to do business differently – to propose a reserve currency that’s truly countercyclical, to create trust in a trustless environment, to decentralize decision making and governance. In practice, bitcoin was a crappy tech stock, investors entrusted billions to centralized exchanges, and the crypto world continues to idolize charismatic founders, not communities - despite the hundreds of rug-pulls and ongoing toppling of former idols like SBF. And in these centralized models, the blockchain is little more than a very slow and expensive database.

Next year, the industry lives by its decentralization ideals, or it fails to differentiate from competing models that are better regulated, more efficient, and not filled with scammers and Ponzi schemes. We need a much sharper focus on three questions:

  • Are we decentralization-washing the same old centralized models just like polluters try to greenwash their environmental sins?
  • If so, what’s the value add of the blockchain besides evading regulation that (as it turns out) isn’t always just a useless drag?
  • And if not, how can we prove it and stand out – whether DAO governance, new business models that only work in DeFi or other?

    From Speculation to Revenue

    Web3 and crypto companies keep thinking that conventional VC and angel investors are interested in pouring more money in on the downturn. By and large they’re not. Beyond the individual scams and collapses from Terra to FTX, there are very real questions about whether it’s all a Ponzi scheme propped up by Tether printing digital money. The crypto OGs might not believe it, but the new blood the industry kept drawing in through a FOMO message in years past does – and that means that getting non-crypto investors to put in more money will only be harder and harder.

    The failed projects won’t return any of the money they blew through – that’s all gone to the big parties in Cabo, naming rights to sports arenas, celebrity endorsements, and burned up on private jets and yachts. There’s no value left behind except crumbs to be picked through in bankruptcy. And that means that to grow, the industry will have to earn revenue – and not just in play money shuffled between each other, but from real enterprise and consumer customers. It happened in the dot com world. It needs to happen in the blockchain.

    Markets Stay Irrational Longer than You Stay Solvent

    The projects that we’re investing in and partnering with are built from the ground up to adapt to these realities. From the DAO-builder Menagerie to promoting tribal voices at Kene Life, we are prioritizing decentralized community-based governance as the key to living the ideals that made this industry different. We’re helping Syntropy drive enterprise revenue even as it also becomes the backbone for crypto; and companies like SocialStack to generate community action through funding from big brands. We’re working with Vatom, who’s expertly merged the worlds of NFTs, metaverse, and corporate marketing to millions.

    But no matter how many boxes you check, at times like these, it’s possible that doing things right isn’t enough – that the honest lose due to the social capital lost by past fraudsters; that enterprises and investors alike opt to wait and see on anything crypto-funded or blockchain-based; that your DAO will spend more time finding and expelling bad actors than fulfilling its mission. Our goal as a company is to stabilize that journey and kick down the trust barriers erected by the sins of the past. And for those that survive, we still see major transformational potential as we did many years ago.

    Tony Greenberg is founder of RampRate (www.ramprate.com), which brought transparency to the opaque and often corrupt technology sales process, and Syzygy Impact (syzygyimpact.com>, a growth strategy firm advising impact-focused startups on how to synchronize profit, people, and environment in things like governance in decentralized organizations and bitcoin mining in inner cities.

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