Smashing the Echo Chamber TVL TVC TVD and TVM
Even though he has blocked me on Twitter, I love this blog post by Stephen Diehl and encourage you to read it.
https://www.stephendiehl.com/blog/web3-bullshit.html
As a non-technical person (professional background as a teacher), my understanding of Blockchain 8 years ago contained more holes than a wheel of Swiss cheese. And yet, since leaving teaching I have worked with developers to produce an iOS App, migrated content from one cloud provider to another and am currently consulting on AI/ML solutions. The capacity to move from one field to another absolutely is not unique to me. You can do this too. It comes down to recognising which of the skills you possess are transferable and what knowledge you have that can act as a hook, or foundation for new understanding.
In my case, teaching skills enabled me to structure research and experiments to close knowledge gaps with a decent enough degree of understanding to engage in high level discussions with more knowledgeable people. Sure, one has to remember that a reduced gap is still a gap. Therefore, revisiting and challenging is a prerequisite of the learning process.
As such, Stephen’s blog is a welcome challenge.
He is right. It does often feel like Blockchain has yet to find the problem/s it can solve.
He is right. It does look like blockchain based financial solutions (DeFi) are simply trying to evade regulation.
He is right. There is a profusion of misunderstanding amongst the general public producing fertile ground for malicious activity and hollow promises which syphon wealth from the unwary.
It brings to mind a character played by Daniel Day-Lewis in the 2007 movie “There will be Blood.” Set during the early 1900s, the character brutally explains to someone how he used his own oil rigs to suck the oil from a field that extended underneath another’s land. It is a brilliant portrayal of unbridled greed. Quite disturbing. .
Stephen’s blog prompted reflection, which gave rise to the following question:
Is Total Value Locked (TVL) as a metric for gauging the success of DeFi solutions dangerously misleading?
Emphasising TVL encourages people to deposit their value in a solution. As more people make deposits the TVL increases, which looks like growth, which in turn looks like adoption. This is frustrating. We need the DeFi infrastructure to enable transactions, but right now everyone is simply chasing the promise of profits. DeFi is feeding DeFi.
What if, instead of locking up imported value, we sought a new metric for measuring the value each new solution creates, or Total Value Created (TVC)? This could apply to NFT collections, but I don’t mean the rolling market cap, or volume of sales, I mean the amount that went to the NFT producer, ie the initial sale plus royalties from resales.
Also, many of the solutions being deployed are Community and Socially orientated. Underpinning these are DAOs, membership of which is achieved through asset ownership. Could the total cost of assets for DAO membership be used to calculate the value of a DAO, or Total Value DAO, TVD? Certainly, a high cost of membership would drive the expectation for utility. Perhaps even challenging one of my pet hates, which is that members of communities have to earn their crust by jumping through hoops on social media. If I’m paying $50 to join a community I want something in return for my dollars!
Additionally, though some feel moderation is antithetical to Web 3 - a view I do not understand - the earnings of moderation services such as ModClub could help us understand the value of communities too; Total Value Moderation, or TVM.
There are plenty of brighter and more intelligent people out there who will no doubt poor scorn on some of these suggestions, but perhaps there will also be those who can abstract the positives and help us move away from the echo-chamber of DeFi TVL, which so far seems to have created more problems than solutions.