The collective aim of cryptocurrency began as a decentralised global currency. But on the road to becoming a multi-trillion dollar sector, what was once a small subculture has become a highly diverse ecosystem. Paul Dylan-Ennis explores the core principles that govern how change happens in web3.
As a subculture, web3 has never been something that people have admired from the outside. But it wasn’t long ago that, for those on the inside, cryptoculture represented something to be respected. The story goes like this: cryptoculture began as something special, bound by non-egotistical values and a shared love for what, originally, Satoshi Nakamoto had built. But as it became ‘cooler’, wealthier, and larger, it attracted those with no ambitions for the community — but plenty for themselves.
Over repeated market cycles, cryptoculture has become the realm of those who want to take, whilst offering nothing. Not only has this diluted the voices of those making genuine contributions, but it has replaced them with influencer-culture, status-seeking, and pump-and-dumps. This descent of cryptoculture is no accident. It is part of a more generalised amnesia about what crypto is supposed to be for.
Bitcoiners, the original subculture, have come to re-learn what they truly want: a decentralised global money. But they also tend to imagine that most web3 cultures have this exact same aim, which both instantly embeds animosity between Bitcoin and the rest of crypto, and casts widely divergent technologies like NFTs or DAOs into the same bucket.
The reality is that most web3 cultures, including Ethereum, are better understood as experimentations in organisation, often with smaller or different aims: rather than making a new type of money, they innovate new modes of organisation, finance, and culture. Re-discovering these core values is key to the survival of crypto as a culture.
Culture is what a community assumes to be self-evident at 'a slice of time.' It is not meant as a cultural essence that people are naturally imbued with. Instead, culture is what its members assume to be self-evident right now, but is also always evolving, little by little.
A typical web3 culture consists of an imaginary (or imaginaries) and a commons. Let’s start with the first: imaginaries are how we see ourselves and others within a community. The celebrated philosopher Charles Taylor provides a broad summary:
In web3, we might say that a commitment to decentralisation is 'part of the imaginary'. We aim to live according to this ideal and expect others to at least try. The decentralisation concept forms the bedrock that allows us to collectively work together because we are all, in theory, striving to bring it about. Imaginaries are often imperfectly formed, even ambiguous, and we fall short of them all the time and ignore the contradictions, but they are what bind us in the last instance.
More specifically, an imaginary should include a set of goals: behavioural norms about how we should conduct ourselves, an agreed history (or lore), and a set of things to which we are opposed.
Bitcoin’s current purpose is to be a form of digital gold, and it is expected that this should be achieved in a decentralised matter. Bound up in the works of the pseudonymous Satoshi Nakamoto, it possesses a distinctive history and an unmatched opposition to our existing fiat monetary system. Interestingly, the purpose has evolved over time. Originally Bitcoin was presented as an electronic cash with gold-like features, but this conception of Bitcoin has changed over time, now leaning more towards the gold motif than the cash.
Bitcoin’s current purpose is to be a form of digital gold.
Ethereum’s most commonly-stated purpose is similar but different: to be a neutral world computer. It is similar to Bitcoin in the expectation that this should be achieved in a decentralised way, but different in that it opposes the centralisation of web2, rather than the centralisation of the modern monetary system. And rather than having a history focused around Satoshi, Ethereum’s history begins with its co-founder Vitalik Buterin, as well as the contributions of many other leading figures, like Tim Beiko or Danny Ryan.
We can see these same features of aims, norms, history, and opposition in the small components of web3 culture. Aimed at empowering distributed online communities, DAOs are proposed as an alternative to hierarchical forms of organisations, which they oppose, and the accepted route to achieving this has evolved from methods that were purely algorithmic, before 'The DAO Hack', to one that accepts more social involvement and individual discretion.
Similarly, the focus of decentralised finance is on a distributed financial system accessible for all, set out in opposition to traditional finance, whilst NFT culture is built around enabling creative ownership, originally in opposition to the traditional art world. The lore of these ‘sub-subcultures’ is rooted in their exploding popularity during the pandemic-prompted DeFi summer of 2020 and NFT autumn of 2021, respectively.
Cryptocultures can be mapped by their imaginaries, but they can also be usefully mapped by their shared commons: the places where they exist. When a web3 project needs to enact change, this change must flow through its technical (hash), social (bash), and financial (cash) spaces. These three spaces constitute the commons. We can see how they manifest in practice by examining the Ethereum subculture.
Hash refers to the technical dimension of a web3 project. It usually involves core infrastructure, such as a blockchain, smart contracts, and voting tools (like Snapshot). Web3 communities imbue onchain decisions with a true decisiveness because what happens onchain is as close to the truth as one can get: any verdict is cryptographically verifiable in virtue of its unique hash. In Ethereum’s case, the technical dimension is the Ethereum blockchain, which records the canonical state of the 'world computer.'
Bash refers to the social dimension of a web3 project. It usually involves a set of community discussions outlets, such as Reddit, a Discord server, Twitter, or governance forums. The social space is the town hall where the community generates chatter about the latest drama, but also where the community ‘bashes’ out a consensus view. Functioning as an 'eyes test', where individual convictions spark debates ad hoc, people slowly begin to gain a sense of the popularity of certain ideas. When these ideas gain a backing — qualitatively sensed, not quantitatively measured — they will often be formalised and put into proposals, such as Ethereum’s Ethereum Improvement Proposal (EIP) system.
Ethereum’s most commonly-stated purpose is similar but different: to be a neutral world computer.
Cash refers to the financial dimension of a web3 project. It typically concerns the relevant micro-economy impacting community members. It can be a native blockchain token (like Ether), a token built on another blockchain (like Uniswap is on Ethereum), or it might be the community treasury overseen by a DAO. As in the real world, economic concerns diminish during the good times, before becoming contentious in the bad times. In the case of Ethereum, the cash dimension relates to the management of the native currency Ether, but the Ether price also acts as a barometer for the overall financial health of the web3 ecosystem.
Internal and external shocks to the system are routine in web3 cultures. Change, volatility, and chaos are the norm. One of the biggest shocks came in 2020, courtesy of SushiSwap, the Ethereum-based token-swapping protocol. Originating in 2020 from an infamous 'vampire attack,' where SushiSwap forked the codebase of its established competitor UniSwap, but established an extra token to incentivise users to migrate their liquidity over to SushiSwap’s liquidity pools.
In terms of its imaginary, SushiSwap contains all the traits of a pure DeFi project: it allows for permissionless finance, its community believe that this is to be achieved in a decentralised manner, its lore is deeply rooted in the original 2020 DeFi summer, and it takes a populist stance against traditional financial institutions.
In terms of its commons, SushiSwap is a smart contract protocol for exchanging tokens. It is run as a DAO through blockchain governance (hash), a community that organises itself on a dedicated Discord and Telegram with a governance forum (bash), and, finally, a community treasury (cash). It also provides a vivid case study of the importance of cryptocultural imaginaries and a shared commons at work.
Yet, SushiSwap almost collapsed before it even got going. Back in September 2020, its leader, known only by the pseudonym Chef Nomi, transferred $14 million worth of Ether from the SushiSwap 'developer fund' to a personal wallet. In this early era of DeFi culture, it was not uncommon for a founder to have unilateral power to do this. This is about as internal a shock as it gets: the founder has stolen the community treasury!
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How to enact the appropriate response in a decentralised web3 culture like SushiSwap? Response travels through the commons, but it ideally should not violate the imaginary. The imaginary dictates the behavioural boundaries of what an acceptable response could be, and provides the community with the appropriate coordination mechanisms to act.
In SushiSwap’s case, the job was to get the cash (the developer fund) back into the hash (an Ethereum wallet under the control of the community), but the difficulty lies in how much friction this path through the commons generates with the imaginary. This is the key to understanding how change happens in decentralised web3 cultures. In any subculture, too many sparks, too much conflict with the imaginary, grinds the response to a halt. Crypto is no different.
Web3 cultures do not become inert when faced with the lack of a technical solution.
The successful response within the SushiSwap community came from the bash part of the commons. The solution could not be technical because — per the DeFi imaginary — it is not possible to simply reverse the transaction through centralised mechanisms that should not exist. Instead, the community applied pressure where it could, socially.
The SushiSwap community first began to dig into the identity of Chef Nomi. This did not result in a clear answer, but made apparent to Chef Nomi that their life would become one of the fugitive, with the community constantly on their tail. This pressure caused Chef Nomi to transfer the money over to cryptocurrency exchange owner Sam Bankman-Fried (oh the irony!), who then helped migrate the funds over to a multisig wallet, restoring the old order. From bash to hash.
This solution travelled through the commons frictionlessly because it did not violate any of the core principles of the DeFi imaginary. Contrary to popular belief, web3 cultures do not become inert when faced with the lack of a technical solution or centralised tool. Instead, they are content to evoke social solutions so long as they are not in contradiction with their cultural beliefs. Or rather, their cultural imaginary.
“[An imaginary is] a sense of the normal expectations that we have of one another, the kind of common understanding which enables us to carry out the collective practices that make up our social life. This incorporates some sense of how we all fit together in carrying out the common practice.”
Dr. Paul Dylan-Ennis is Lecturer and Assistant Professor in the College of Business, University College Dublin.
