Cypherpunk Value to Shift with Smart Contract Mainstream Adoption

Jesse Walden Predict Shift in Smart Contracts Performance & Compliance

On September 29, Jesse Walden, managing partner of Variant Fund made bold comments on the future of smart contracts. Walden predicted that the next decade will see a significant shift towards performance, cost, profitability, and legal compliance.

The cypherpunk movement of the 1980s, known for advocating privacy and decentralization, initially inspired the development of blockchain technologies. Early smart contract platforms were built on principles like censorship resistance, open source, and permissionlessness, aiming to create a democratic and equitable internet. However, these ideals are now facing the pressures of mainstream market demands. 

The Evolution of Blockchain Priorities

In a blog post dated September 30, Walden explained that the first decade of blockchain was driven by Bitcoin’s cypherpunk values. These values focused on resisting censorship and building a shared world computer. However, the current landscape shows a shift towards prioritizing speed and compliance. 

Popular use cases for smart contract platforms, including stablecoins, real-world asset (RWA) tokenization, and decentralized physical infrastructure networks (DePIN), now emphasize the decentralization of the underlying blockchain for openness, interoperability, and settlement, rather than strict decentralization.

Walden noted that many platforms no longer need to be fully decentralized or permissionless. Instead, they leverage blockchain's decentralized nature for specific functionalities, while focusing on other market-driven values. This marks a departure from the original cypherpunk ethos.

The Commercialization of Crypto

Jesse Walden argues that the commercialization of crypto, akin to mainstream music's evolution, isn't entirely negative. While it involves necessary compromises like sacrificing some decentralization for scalability, this shift can lead to broader adoption and greater impact. 

Walden believes that over time, this approach could improve decentralization and align more with original cypherpunk values. He sees this commercialization as a new phase, presenting an opportunity to shape these compromises for the continued growth and impact of blockchain technology.

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