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The crypto world, we are told, is brimming with “communities.”
There are Bitcoiners, Ethereans, the Dogecoin army, LINK marines. There are communities around NFTs, like Bored Apes, CrypToadz and JPEGS of rocks. There are communities around complex financial instruments like Compound, Aave, and the algorithmic stablecoin Terra. There is even, somehow, a “community” around Tether, presumably for fans of the stablecoin and its dubious dollar reserves.
At first blush, it is hard to square these “communities” with the more accepted definition of a community as a group of people bound by something tangible and persistent: shared values, political beliefs, heritage, language, even a hobby or a skill. Think Zoroastrians, Esperanto speakers, competitive Starcraft II players, trombonists, devout believers in the Gnostic Demiurge. These are true-blue communities whose ties will stand the test of time.
My instinctive reaction towards crypto “communities,” by contrast, is that they are illusory and hollow, that they spring up cynically to put a communal shine on what amount to fleeting investment cults, and that the bonds between members are expressions of nothing more than shared financial interest.
Look at any large Telegram group built around a small-cap cryptocurrency and you will see that the “community” is little but a collection of desperate individuals pumping their rapidly depreciating token. Almost all communal back-and-forth takes the form of frenzied demands for “roadmaps” and bullish price predictions. It’s the same with many communities built around NFTs, where repetitive mantras like “WAGMI” and “looks rare!” stand in as substitutes for human connection.
But maybe this is an unfair take. Surely, in this broad and varied industry, there is something resembling a genuine community?
Hoping to quell my prejudices and speak to someone who could give me a better perspective, I reached out to TropoFarmer, a pseudonymous and influential Bored Ape NFT holder and enthusiast (who also once had his thousands of followers roast me on Twitter, but let’s ignore that). I began by laying out my hateful position, and TropoFarmer was somewhat understanding.
“You’re not wrong,” he said. “But when it transcends, you get quite an amazing place. Which is why in [Bored Ape Yacht Club] people aren’t selling for even hundreds of thousands of dollars.”
I asked Tropo what’s so “amazing” about it.
“It’s just fun,” he demurred.
Fun how!? I whinnied.
“Just bullshit,” said Tropo.
Tropo’s Twitter timeline is full of shitposts, memes, and alerts about scams. I asked if that was the “fun” he was referring to, and why he needed the pretext of a Bored Ape avatar to engage in that stuff. “Seems the community is a construct around something you could do anyway,” I pointed out incisively.
And yet, Tropo noted, people are willing to pay hundreds of thousands of dollars in ETH for affiliation with this kind of thing, as well as access to the various BAYC Discords. It’s the perks, he said, pure and simple. “Beyond the social status, you’ve gotten real-life merch, events and access, connections and airdrops.”
But are there any communities forged by more than merch?
I reached out to Elco on Telegram and said that I would go one further and argue that the entire crypto way of life is vacuous. Kindly, he explained that while there are indeed certain crypto groups bound only by tokenomics, many, such as Ethereum and Bitcoin, are underpinned by full-fledged belief systems. Bitcoiners believe in things like hard currency and anarcho-capitalism, for instance, while the Ethereum crowd is motivated, they say, by the effort to dismantle the rent-seeking systems of Web2. Elco also noted that the presence of financial incentives alone ought not be enough to discredit the idea of community.
“The entire blockchain ecosystem is—at its core—a token conspiracy,” he said, “as is the country that shares a currency.”
The web3 investor Eva Beylin, who is also an influential member of the vast “Crypto Twitter community,” similarly noted that you can distinguish the genuine crypto communities from the ephemeral ones by looking at which ones disintegrate in the midst of a bear market. “You know a project is good if the community sticks around aside from financial incentives,” she told me. “Ethereum's multiple bear cycles kind of prove there is more here than just finance.”
This comports with the argument laid out by pop culture writer David Chapman in the popular essay “Geeks, mops and sociopaths,” which divides the structure of common subcultures into geeks (creators and superfans who form a resilient core), mops (fly-by-night casual fans who give the subculture social clout) and sociopaths (corporate interlopers who monetize the subculture while, inevitably, alienating the old guard). This works pretty well with Ethereum and Bitcoin: There are enough geeks in both groups that the communities have weathered many bear markets.
Still, even with those two alleged communities it is hard to tell to what extent investors’ apparent genuine devotion to the cause is tainted by their investments. Would Bitcoiners still support the cryptocurrency quite so passionately if the market tanked to zero, or would they just become standard-issue (and impoverished) libertarians? Maybe it won’t tank to zero because the community is so strong, but it’s easier to renounce a political belief and cash out than hew to the belief and go bankrupt.
Surely there is a better way!
Looking for some kind of alternative, I reached out to Spencer Graham, a member of a platform called DAOhaus that develops custom DAOs (decentralized autonomous organizations) for people in the Web3 world. Graham and his colleagues have spent a lot of time developing ways to make the bonds between DAO participants more resilient to fluctuations in the crypto markets.
While “tokens are fantastic for creating momentum behind an idea,” he told me, “financial incentives often crowd out richer social ‘incentives’ like building real relationships with people. It’s challenging for a relationship that starts out as transactional to evolve into a deeper relationship.”
DAOhaus gets its structure from MolochDAO, a framework many prominent DAOs follow that is designed to apply game theory to crypto groups.
Graham points to two specific MolochDAO innovations, both of which he believes have helped produce real connections between DAO members. The first is what he describes as the “non-transferability” of the tokens that members of MolochDAOs must purchase. The tokens can’t be traded on secondary markets, meaning they are not speculative financial assets like other tokens. “Fellow members of MolochDAOs share in ownership over the DAO and its treasury, but that ownership is not defined financially,” Graham said. That is: Nobody’s trying to pump it.
The second benefit of MolochDAO’s design, says Graham, is that MolochDAOs are not “permissionless” like other crypto groups. While anyone can buy, say, PICKLE and join the chorus of cretins in the PICKLE Telegram group, MolochDAO members are meticulously vetted.
Nice as this idea is, it still leaves the small issue that once somebody divests from such a permissioned “community,” they are no longer in it. The communities built around DAOs may be less nakedly speculative than communities built around coins, but they are still ultimately held together by a transient economic relationship.
Maybe the word “community” itself is the problem.