As a seasoned crypto investor and a passionate advocate for web3, I find myself at a crossroads as we emerge from the crypto winter. While the influx of institutional money into the space through Bitcoin ETFs is undeniably beneficial for adoption, I can’t help but feel a sense of unease. The vision of web3 is not just about numbers; it’s about power, control, and freedom.
As we transition out of a prolonged cryptocurrency downturn, web3 finds itself in a tricky situation. On one side, it’s essential to finance this sector to make our vision a reality and ensure widespread adoption. So, the arrival of Bitcoin ETFs injecting billions of dollars into crypto is beneficial. Similarly, we appreciate remarks from prominent traditional finance figures like Blackrock CEO Larry Fink, who said, “The future for markets, the future for securities, will be tokenization of securities.”
In a recent post, although I don’t always concur with Fink, I find myself in agreement that tokenizing Realized & Unrealized Assets (RWAs) presents a massive crypto opportunity worth multiple trillions of dollars. This transformation is expected to serve as the foundation for the next significant bull market and facilitate the transfer of vast sums of value into the cryptocurrency sphere.
Resist the Faustian pact
The agreement stops here. We mustn’t let the statistics overshadow our principles. It’s crucial to remember what we represent. The inscription of Satoshi, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”, serves as a reminder that cryptocurrency was invented to challenge and supplant the conventional financial system. Bitcoin (BTC) and blockchains were developed to construct an alternative financial structure, empowering the masses and allowing us all to benefit from the worth we generate.
On the other hand, traditional finance (tradfi) essentially functions as a mechanism for controlling and extracting wealth, established, developed, and managed by financial leaders. Its design allows for continuous wealth extraction from the general population by controlling resources and infrastructures.
Are we sleepwalking into a cefi horror movie?
It’s not accidental that a large portion of what’s being developed during this latest wave of adoption, particularly in RWA tokenization, is essentially traditional finance redesigned for blockchains. This on-chain centralized finance (CEFI) is part of a deliberate strategy by Blackrock and leading financial institutions to digitize all global assets onto a unified, centralized database—one that they manage. For more information, check out the details here.
Picture a future where even tangible possessions, currently out of reach for centralized systems, are managed by an elite group, intensifying their control and profits at the public’s expense. This scenario paints a chilling picture of a dystopia, mirroring the one hinted in the World Economic Forum’s article titled “2030: I own nothing, I have no privacy, and life has never been better.” (Disclosure: As a founder, I was granted WEF Technology Pioneer status for Boson Protocol, which provided me with exclusive insights into the globalization agenda.)
It’s time to make a stand
From a crypto investor’s perspective, if we aim to transform all global assets into a unified, digital marketplace, it’s crucial that we establish stronger guarantees than the “Don’t be evil” mantra of web2. In a truly decentralized system, the users themselves own and manage it, making it inherently incapable of acting maliciously. As I argue in this piece, Web3 represents the strongest bulwark for public freedom, as its decentralized framework shields against domination and exploitation.
To maintain freedom from a single authority governing all our tangible possessions, it’s essential to establish an open, distributed network for converting and exchanging real-world assets through tokens.
How to make the future computable
As I recently argued in an academic paper with the blockchain economist Prof. Jason Potts:
“Web3 has the potential to enable a new computable economy and unlock exponential wealth.”
If Alice turns her car into a token and Bob buys it, how can we ensure Bob will get the actual car?
Advancing significantly towards a digital economy is essential because it enables us to smoothly incorporate all types of capital within the economic system, sharing common trust principles.
Enter the physical RWA supersystem
My goal, personally, is to foster the development of an online economy that can process data (Web 3.0) by constructing a decentralized system. This system aims to digitize all Real World Assets (RWAs), making them accessible and tradeable on the blockchain.
In simple terms, the challenge of dividing up tangible goods like commerce assets has been addressed through Boson Protocol. By mid-2024, we plan to introduce Fermion Protocol (our whitepaper), designed to offer enhanced authentication for Real World Assets (RWAs) in the vast $1 trillion collectibles and art market. This new system could potentially expand into real estate, luxury items such as wine and whisky, commodities, carbon credits, and even the digital representation of natural resources themselves.
In a collaborative manner, Boson and Fermion facilitate the decentralized tokenization and trading of various types of real-world assets (RWAs), maximizing efficiency for commercial assets and ensuring verification for high-value items. Essentially, Boson offers an efficient and trust-minimized method for tokenizing and exchanging any RWA, while Fermion enables fractional ownership and exchange of verified RWAs.
Constructing the base layer
The comprehensive RWA system built on physical principles serves as a fundamental building block, much like DeFi, in reshaping the management and trading landscape of RWAs. It provides a decentralized infrastructure upon which individuals can tokenize and market RWAs, or construct applications, thus bypassing the intricate process of creating a unique protocol.
The enhanced system upholds Satoshi’s initial idea of a decentralized financial platform, managed and controlled by its very users who reap the rewards of its success. Furthermore, it safeguards cryptocurrency from manipulation by financial aristocrats and on-chain centralized finance, promoting a more balanced distribution of authority and wealth.
As we stand here, the boundaries between possibilities and realities are clearly defined. The destiny of web3 hangs in the balance, and I can’t help but wonder, what more could we have done? Let us seize this moment, pool our efforts, and strive to make a difference.
As someone who has been closely following the rapidly evolving world of web3 technology, I am constantly impressed by the innovative minds driving its development and shaping its future. One such individual is Justin Banon, co-founder of Boson Protocol, whose impressive background and dedication to advancing the field make him a true thought leader in the space.
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2024-08-11 14:22