After a three year hiatus, the Ethereum community has reunited in Bogota, Colombia for the 6th edition of Devcon. This year’s event comes in the wake of a two-year bull run that has onboarded more people on-chain than ever before and a successful merge that went off without a hitch. It was clear the themes that the Ethereum Foundation were trying to push throughout the conference. From the opening presentation to the stickers on the tables, one thing they wanted to get across was how Ethereum’s carbon footprint with Proof of Stake is now a speck of sand compared to Proof of Work. In addition, choosing a location in Latin America reaffirms their efforts to make sure that Ethereum is not just a novelty for the privileged but a reliable tool no matter who or where you are. Yet, most impressed (and terrified) me about the conference were the threats, both existentially and culturally, that face Ethereum today. Threats are nothing new but what is is the scale at which they shadow over the network and the amount of people and companies that would be affected by them.
One of the most visible concerns at the moment was pointed out by Eric Wall surrounding censorship. Currently, the domination of MEV-boosted Flashbots which are OFAC compliant since the Tornado Cash ban has resulted in 51% of blocks being censored at a validator level. To put into perspective how extreme this move is, not even SWIFT which is the encrypted messaging protocol used by financial institutions around the world are even OFAC-compliant. Having censorship at such a core level of the Ethereum network would lead down a slippery slope that is no better than the freezing of bank accounts.
Wall encourages the Ethereum community to take a note from their Bitcoin counterparts who dealt with a similar issue 5 years ago. As blocks were at risk being only handled by major entities, a pseudonymous developer named Shaolinfry reminded the community that soft fork rules are actually always enforced by the nodes not the miners. This led to the Bitcoin community to rally around UASF (User Activated Soft Fork) which ultimately took power from miners back to the people. In the case of Ethereum, Wall strongly encourages the community to take a similar grassroots approach, categorizing the refusal to submit blocks as the equivalent of a double-spend attack and to penalize the validator appropriately via slashing their stake.
Another looming threat to not just Ethereum but to crypto as a whole are regulations that are currently in the pipeline. In his talk about why crypto advocacy matters, Connor Spelliscy points out that every information empire from radio to the internet has received the government’s blessing before wide adoption happened. Crypto is no different and describes the industry’s current situation as an “uphill battle” as western governments accelerate the pace at which they are regulating crypto. In the US, the Digital Commodities Consumer Protection Act may happen at the end of the year and would ban much of DeFi as we know it. This would effectively make a great firewall around American crypto that is akin to the great firewall that exists in China. Meanwhile across the pond in the EU, the Markets in Crypto-Assets regulation would massively regulate stablecoins, severely restricting collateralized stablecoin use while effectively banning algo-stablecoin use. Such overarching action has riled up the stablecoin community with MakerDAO founder Rune Christensen advocating for the depegging of DAI from the dollar.
If both pieces of legislation are enacted, crypto will be a water-down version of itself that was once promised to the world. Spelliscy does offer several solutions including funding crypto public goods that create jobs which would make unwarranted legislation much less popular. In addition, he advocates for participation in industry associations, funding of think tanks and advocacy groups, lobbying directly, and supporting crypto legal defense funds. At the end of the day, education and clear communication which has been a weak point for crypto since its genesis.
In his presentation, linguist Oliver JL Renwick made the strong case how negative framing permeates Web3 which is at best edgy and cool but at worst confusing and cringe. The negative framing stems from crypto’s countercultural cypherpunk roots which often positions itself as adversarial to the status quo. While oftentimes technical development gets the spotlight, what often is forgotten is how important clear communication of important concepts is. He instead encourages crypto to adopt more empowering language and inviting terms for those who may not be familiar with crypto.
Overall, what I took away from Devcon is the amount of work that needs to be done to improve the “soft sciences” surrounding crypto. The way we describe and articulate the space to the outside world has a downstream impact. A more positive framing of concepts will lead to a more diverse range of talent entering crypto and clearer communication of the economical benefits of crypto will result in friendlier legislation.
