Cypherpunk is Good Business - Polar

Transcript

Um, the basic idea, let's say, from my perspective is as a social scientist, I'm looking at Ethereum from a cultural perspective. And historically in the social science literature, the way that we would typically do this is by saying that Ethereum is a polycentric system of stakeholders, right? So, instead of just saying on-chain and off-chain, so on-chain is the specs as implemented in software clients and then distributed across the nodes in this architectural topology. And then the off-chain management, maintenance, and upgrading of the protocol by the core developers.

The current social science perspective is that Ethereum is this wider ecosystem of stakeholders. Now, I was going to run through the stakeholder list. There's actually a little hidden microhistory you can look into. It goes all the way back to Vlad Zamfir, Vitalik, blockchain governance. You can just pretend that I said that, right? It's like a really interesting overview of the history of the stakeholder sets. Now, the important thing about polycentrism is it doesn't mean it's not completely analogous to decentralization, but it does try to capture the idea that there are multiple decision makers who have to take each other into account, that we can't just have unilateral decision makers, and that also there's a little bit more of a sense that some of those entities are going to have more influence than others, right? So, that's a kind of more

realistic take of the let's say the Ethereum ecosystem. Okay. Now, the other aspect of this would be imaginary. So, the academic understanding of culture, so culture is typically seen as too amorphous, ambiguous. So, the granular version that you'll tend to see is this idea of cultural imaginaries. Um, so cultural imaginaries from Taylor that we the kinds of expectations we have of one another, the decision making in terms of like legitimacy. So, in Ethereum's case, this would be something like we typically understand that centralizing decision-making is something we don't like, right? It's like a negative thing.

It doesn't matter whether that's actually implemented in the ecosystem itself. In fact, in the case of Ethereum, that's definitely not the case, but it's that we aspire to something along these lines. Now also, this imaginary tends to get rearticulated. So we saw this with the Ethereum Foundation over the course of 2025. We had the populist revolt against the EF which starts with this pragmatist demand for ETH ASA, the institutional focus. The Ethereum Foundation then integrates this into the structure itself of Tomas and Shaw Way. And then we see a reassertion again of Cypherpunk through this idea of crops. And the previous talk even had the the aesthetics of the Ethereum Foundation's mandate, which I'm going to talk a

little bit about as well. But yeah, so imaginaries are they change, right? The Ethereum Foundation that we have today, the Cypherpunk that we have today, is itself changed by that re- encounter with this pragmatist turn. Okay. Now the one that I'm interested in is the neo-cypherpunk imaginary. So the first thing to say here is that by neo-cypherpunk, this is a term that's coined by Rachel Rose O'Leary. It's being popularized by the Web3 privacy now crew. And the the neo aspect of this is meant to capture that instead of talking about like individualist classical Cypherpunk that goes all the way back to the '80s and '90s, that we should probably begin to talk about Cypherpunk in our own terms.

The blockchain variant, the specific one that pertains to say Bitcoin culture and then Ethereum culture. So that you don't have to kind of rearticulate that story all the time. Now in a system like Ethereum, in a polycentric system as academics would say, but that we would say is decentralized system, the function of something like Cypherpunk or neo-cypherpunk, I would say is to act as a regulative ideal. It's aspirational. So we have these aspirational values, but we may not necessarily actually have them implemented in reality, right? So the realpolitik situation is often quite different from the aspirational values as they are in the documents. This is a a tweet which I won't read, which I I was hoping to read, but this is 2 days before the Ethereum Foundation Monday

dropped. Myself and my colleague were allowed to take over the Ethereum account, but then nobody knows this because of course the Monday completely overshadowed the our attempts to kind of introduce Neo Cypherpunk. Now the history of this, right? The history of Cypherpunk and leading up to say Neo Cypherpunk is one that begins with Vitalik's Make Ethereum Cypherpunk Again. So there is this question that gets articulated every so often of what was Ethereum ever Cypherpunk, which I'll leave as a question, right? Whether that was ever true. But with Vitalik's Make Ethereum Cypherpunk Again, it comes back into the discussion and really it's coming back because of Tornado Cash, because Tornado Cash is the the first time that censorship resistance is explicitly shown to be not

quite the case at Ethereum's layer one protocol, right? It calls for a response. Web3 Privacy Now has mentioned popularized this. We also have Dark Fi, Logos Network, etc. But really the subterranean work, the person who's done the most let's say influencing on what we would now today call CROPS is arguably P Kal Versacchio with his Ethereum Cypherpunk Manifesto. In that manifesto you have almost everything of CROPS. He says censorship resistance, security and privacy. This is 2024 and then he implicitly mentions open access. So the open source is implicitly in the document, but it's not part of CROPS itself. Shaw-Way with DeFi Punk. So DeFi Punk is Shaw-Way's stamping her Cypherpunk vision of like what kind of project should the Ethereum Foundation fund. And

then the Trustless Manifesto, which is one of the more realistic documents, one of the ones that really emphasized that when it comes to Ethereum, actually we are in a a of trusted proprietary software and let's say 80% of what we're doing is actually like that. And then we only have really the the layer one as this sacrosanct element outside of it. The Ethereum Foundation Mandate infamous document, right? Now, my position on the Ethereum Foundation Mandate document is it's an interesting document in itself, right? In terms of something that discusses Cypherpunk and Neo-Cypherpunk, but I very much oppose the idea that this is something that you have to pledge to. I think that was a bit of an absurd situation, unnecessary cultural schism, but as a contribution to the definitions of Neo-Cypherpunk terms, very, very

interesting piece. So, for me it's like a double it's it's like a very complicated document in that regard. So, using the frame that we have today, right? We've converged on CROPs, so that current Ethereum culture has effectively said that from now on what we're going to do is we're going to say when someone asks us, "What are the properties of Ethereum?" we are expected to say censorship resistance, open source, privacy, and security, right? Now, I'm going to talk about some of those, and also how they're understood in these in the various different documents that I've I've shown, how they evolve, mostly focusing on the most interesting aspects as opposed to say just giving you the routine definitions, which people are becoming more familiar with.

And then also I'll just talk briefly about the one term that's disappeared because of course one thing that CROPs does is it says these are the important values and diminishes certain other ones. So, decentralization, permissionlessness, credible neutrality, and trustlessness have sort of gone to the wayside a little bit. They're still in the documents, mostly focusing on the most interesting aspects as opposed to say just giving you the routine definitions which people are becoming more familiar with. This definition you can find across all the documents, so you can find similar in P-CAPs work. You can also find similar definitions in the Trustless Manifesto, but the main thing that I would pick out here is that before Make Ethereum Cypherpunk Again, when we mentioned censorship resistance, we

typically had the idea that all transactions are equal in the eyes of the protocol, that you do not distinguish between buying a t-shirt and buying heroin, right? It was an abstract idea that someone sent a transaction, we do not judge it. And this goes back all the way to Bitcoin. You can find academic articles talking about this as well. But it's only with Tornado Cash that it becomes a a major concern because then we get this exogenous entity which is able to exert influence on the Ethereum protocol itself by way of the middleware where of builders, relayers, and solvers, etc. So suddenly this becomes a question of not just talking about say permissionlessness, inclusion, but also sorry, permissionlessness access, but also inclusion itself because we are

builders and relayers, etc. are effectively delaying transactions by censoring them. So the definition now includes all applications' ability to operate. So things that are built on Ethereum becomes the wider definition as opposed to transaction. In the Ethereum Foundation mandate, one of my favorite parts of is this focus on no actor can selectively exclude valid user or break functionality, including by gaining durable non-competitive control of any critical mechanisms. So the insight here or what I take from this is that by being in a position where there is no competition, so if you we have you know two relayers or two builders that are in the dominant position most of the time, even if they're not currently exerting censorship, by being

in that position that itself is a form of censorship uh and sorry, non-censorship resistance, let's say. Gatekeepers of execution, that's a nice term from the Trustless Manifesto for this this group of entities. Okay, open source and free as in freedom. So in crops or so in the Ethereum Foundation mandate, this is how it's given. It's open source and free as in freedom. In DeFi Punk, it's FLOSS, so that's free libre open source software. And uh Trustless Manifesto, as I mentioned, is the one that really nicely captures the the sense of capture, right? That Ethereum itself is actually 80% captured, 20% free. Uh in the case of, right, we had the Coinbase going down

recently. If AWS, GCP, and Cloudflare weren't dark, most apps would, too. Uh sequencing is sequencing is centralized, and so forth. In in D 5 Punk and in the Ethereum Foundation mandate, we get a sense of what kind of licenses would be supported by the Ethereum Foundation going forward. And the main takeaway here, so this kind of condensing everything for time, is that source available is not acceptable. So, it's not just like we can see the code isn't sufficient. It is necessary that also a user should be able to fork or exit, right? So, they can have a choice to let's say exit to simplify. And in terms of privacy, the again, this is P 4 Versace's influence for sure. So, in the he has this

Ethereum privacy roadmap. It's called the road to self-sovereignty. I would encourage anybody who's ever wondered like what would actually be required to reinvent Ethereum from the ground up to see what would be involved to make it a privacy layer one. It's kind of scary the amount of work that actually would be involved. He also goes into the governance question as well, because to actually really implement privacy in Ethereum would probably require from P 4 Versace's perspective a reorganization of like what the roadmap would be. Like, this is what we psychologically would be focused on would be privacy. Ethereum must provide privacy unconditionally. This is also said in the Ethereum Foundation mandate, but he's sub-tweeting, I think, privacy a little bit here a little bit without forcing users to prove their innocence.

So, compliance tools are not quite unconditional. End users should selectively negotiate their disclosures. So, this is just a nice nod to the original Cypherpunk Manifesto, the ability to selectively reveal themselves, which I quite liked. And then, Uh, maybe look little bit of a uh uh insight into the reality of uh how privacy would actually be spread throughout Ethereum is in the the D5 Punk Treasury Management document. Strong early institutional support from an EF like NC can be uniquely valuable in flipping the equilibrium toward a more privacy-focused D5 landscape. And I think that this is an important statement because uh while we do have something like an interest in privacy, so people get excited about privacy

because Merit is tweeting about Zcash from time to time, uh those of us who've been around the privacy landscape for a long time know that that interest will wane and disappear and that probably it is more like a public good uh yeah a public good that needs to be supported by entities like the Ethereum Foundation. I also like that it says EF-like entity, so it's not even necessarily saying that this would be the job of the EF. Although if you look at this post which was just before, we see that the Ethereum Foundation has got like something like 50 privacy projects ongoing. Okay. So, in terms of security, so getting to the the end of uh Crops, in Vitalik's Make Ethereum Cypherpunk Again, Crypto's a harsh environment, Peak Harberzacchio says uh

vulnerabilities are inevitable, so in the Cypherpunk Manifesto. So, when it comes to security, this is where we get the most flexibility. This is where you get all of these documents admitting the you know the the let's say the the fact that there is something like Lazarus uh out there for us to contend with. Um so, the Ethereum Foundation mandate, its perspective is that security requires simplicity including responsible minimization of lines of code and external dependencies. So, when we think about what is the actual threat layer, what does Lazarus attack? Well, it doesn't attack the layer one itself, right? They're not attacking Ethereum per se. What they are attacking is all of the dependencies that we've uh enabled like oracles and bridges and RPCs etc. And that itself is a result of the decision to go with things like

layer twos and the layer two roadmap. So, we've created uh this sort of mass of a an attack surface, and what we need to do is thinking about minimizing, kind of going back, or I guess we could call it technical subtraction, right? Um, concerns about bad actors should be addressed at higher layers of the stack. So, in Make Ethereum Cypherpunk Again, this could be a throwaway line. Maybe Vitalik wasn't really thinking about it, uh, so much, like just kind of like, uh, it's a blog post. But, I think that this is one of the more interesting statements, because it can be interpreted in different ways. We could interpret it to mean that when Lazarus attacks us, we should use all of our powers, right? So, we should stablecoin issuers should freeze funds, security councils should freeze funds, uh, DeFi United, all of that kind of aspect,

right? The pragmatist solution, make life difficult for Lazarus in real time, and taking advantage of the fact that we are actually quite centralized and trusted and all that kind of thing. But, it could also be interpreted in a different way, which is that you could say, if, uh, if Cypherpunk values had not been implemented or part of the business mindset in an entity like Layer Zero, then something like a one-to-one DVN is almost unimaginable. A Cypherpunk wouldn't, uh, have accepted that as a, uh, good good business, right? So, Cypherpunk can be good business. It depends on which way you want to, uh, interpret this. Okay, so, I'll quickly just mention, uh, yes, so this is like basically last slide, uh, more or less.

Um, decentralization, just picking this as an example of something whose, uh, status has diminished. If you've been around in crypto for a long time, this was traditionally the main value, right? This is the meta principle, but, uh, ever since, uh, Make Ethereum Cypherpunk Again, it's kind of lost its status. So, um, the uh yes so the uh Ethereum Cypherpunk Manifesto, Peak Car Versatio, this is the origin of what something you'll see on Twitter, which is the ends mean, or say, means end distinction, that decentralization is now to be understood as the means toward the end of censorship resistance. That's a new thing for those of you, let's say, who are presuming that that's a, you know, an argument that's always been around.

That That a relatively new, uh, conceptualization of what decentralization is and I think that's important to stress. The idea that decentralization is something subsumed by the broader principle of censorship resistance is new. An application should be able to continue operating even if it's core development disappears. This is the origin of the walkaway test if you're wondering. So this is make Ethereum Cypherpunk again. This is where that first appears. That's a reinterpretation of decentralization. And then also in the Ethereum Foundation Monday, the ultimate goal is for Ethereum to pass the walkaway test. So that's kind of just a stood out to me. Um okay, so I'll end on this slide. Always my lesson that I keep to my myself and remind myself, Ethereum is not a company, should not be understood as a company. If you want to understand what Ethereum is,

try to think about it through culture. You'll get an entirely different conceptualization. From my view, Ethereum is a polycentric system of multi-variant stakeholders ignited by a rich array of cultural imaginaries which are ultimately bound together by the ineliminable core of the neo-cypherpunk values of Well, we're going to have to decide, right? We could say props, but some of us might say broader teams themselves secured by a confident social layer in particular the ideologically driven part of the community. Okay, so thank you. >> Thank you very much.

Thank you very much. We will not be having any time for questions unfortunately.