Web3 And DeFi Are Two Complementary Sides Of A Value Network

Web3 is all about a distributed and decentralized internet at the very basic, but to attain decentralization would imply the introduction of a token economy to the mix which Isn't something many believe in.

You see, this is something not a lot of people pay attention to.

Money is such a powerful tool in maintaining order in the world, it won't be any different with Web3. While numerous entrepreneurs may engineer ideas to build "governance sound" platforms on Web3 without token economies, the reality is that the furthest this can be is attaining a DLT status but not a "Decentralized Status" as it lacks the incentive protocol for that.

For example, Mastodon is a distributed network, Nostr is a distributed network, but what they aren't are decentralized networks because of the absence of a token economy.

Sure, you could say there's bitcoin on Nostr but what good is a currency on a platform it cannot directly influence on a protocol level?

Exactly!

The Connection Between Web3 and DeFi

Though we sometimes call them different - which they are in the sense of their value roles, however, at the fundamental level, Web3 and DeFi are largely connected whereas one cannot do without the other.

Without a distributed network, a decentralized financial network(DeFi) cannot be built to be functional. Likewise, without a decentralized financial network, a distributed network cannot attain decentralization in protocol governance. So if both are so intrinsically connected, why then do we attempt to take one apart from the other?

It begs the question of what are the chances Web3 and DeFi sticks to the basics for long? Will we slowly break into two opposite worlds where one seeks to leverage value flow(money) at first hand and the other leverages data as a tool to drive value flow?

The crypto world is expected to move in various parts, greed will only grow stronger as network value builds up. The proper resistance will come within and that would be the combination of data nodes and economic high holders that can significantly influence network governance. But whereas a system lacks one, greed is expected to conquer as there isn't enough resistance to either break the influence of nodes via token governance or vice versa.

My thoughts? My best guess is that many networks will choose to let greed win for the bountiful few pockets of benefits that come with it. Look at the biggest companies of today, Google, Tesla and Facebook to name a few. All would fall if it chose to adjust its business model to a more "distributed and decentralized" building environment.

Now some people may be asking why, well, for starters, this gives competitors leverage to continue on their former path and market their services with the guise of offering something better while at the same time throwing some shades at the remodelled businesses on how this drastic change can lead to shits like open hosting of consumer data, a direct monetization of said data(surely tokenization could be bent to mean just this) and a lot more.

Plus, the volatility in crypto is a completely new business environment that centralized companies would take a lot of time to study to understand that there are no fixes, at the time, just piffle paffle away as the wave rides us.

The intrinsic connection between Web3 and Defi is truly amazing as neither can function as envisioned without the other and in this process create a side-by-side security layer for themselves.

It's not rocket science, it's like merging value flow(money) with power(physical strength or energy), and the result is simply a powerful network or warrior.

Posted Using InLeo Alpha