Holding Volatility: Exocapitalism and Web3 | Laura Lotti & Andrea Leiter

[applause]

So, I'm super honored to be sitting here with Lauren Andreas, some huge inspirations and friends to me over the past years. It's so fascinating the way that they have been cultural critics about Web3. They're both professors with a deep expertise and overlapping areas that they will discuss here with you and their reading of Exocapitalism, which maybe you could show. Yeah, the book of the year for many folks in our community. I think they Yeah, they have a very um articulate reading of how Yeah, how the topics laid out in this book are reflective of what is going on in the Web3 space in general, the kind of big tech spiraling out of control, vortex that we are in.

So, maybe if you could share a little bit about your work and what Yeah, what brought you to being fascinated around these topics and then we'll go a bit more deeply into talking about the book.

Okay. Hi. Thanks, Beth, for having us. Very very cool to be here. So, my name is Laura.

I'm a researcher. I've been involved in the Web3 ecosystem for about the past 10 years before it perhaps it was really called Web3. And I I started to be involved in it in the in an academic context and then I moved to work in a more applied research with other internet working with protocols on questions of governance, also looking at the labor contribution economies in in DAOs and thinking about developing alternative infrastructures than the one that we currently have. And I guess I come to these topics through an interest into financialization. And then there's you know, open infrastructures.

And I guess for the past 10 years the perhaps the zeitgeist or I guess a lot of the excitement around the blockchain, around web 3 was the was the time of like the big infrastructural imaginaries and utopian like initiatives to create new institutions. And I guess after AI came around a couple of years ago or started to be you know, commercialized in this like master distribution phase. And I guess reading exit capitalism for the last six months has helped us make sense of a lot of things that went on in web 3 and what we cannot but also what we could do about it to have so.

Great. Yeah, maybe by by mode of introduction, I wear two hats. I am an academic as introduced here. And I have been working in web 3 with the project at the intersection of ecology, technology, economics trying to think about how to re-root digital economy funds into biodiversity stewardship, trying to root the funds so to speak. And I would say that from the academic background I have doubled for a long time in the question of what makes haves and have nots in the world.

How was the international economic legal system developed over the past centuries so really with a long duree view of how is it that the global South is constantly missing out? What is it in these patterns that makes it so that there is always a winner and a loser? And I would say that maybe that is a take on sovereignty that doesn't come through the privacy angle, but comes really through an angle of economics and economic thinking because as much as you would have sovereignty as a legal construct for governments of the global South for a long time, the economic dependency remained. And so for me, going into Web3, what made it so interesting was the idea of recoding values, the possibility of building an ultra economy bottom up, and seeing what you can do with that in order to escape what would be a long legacy system on a very different scale. And I think that, um, basically similar to what Laura just said now, um, having done this and having tried to do this in the Web3 space for a 6-7 years, um, it's not looking great for any of the projects that are trying to do some kind of regenerative care, social work in this space.

And the question is what happened? Why is that so? And so when Laura introduced this book to me, um, via our shared friend and colleague Eric, we started discussing it because it seemed to explain a lot, um, of the sentiment that we had experienced in the Web3 space. So that's the reason why we want to bring this here. We are not the authors of the book.

We haven't written it. We also don't fully subscribe to everything it says, but there are things in here that are expressed in a way that we weren't able to do ourselves, and it puts their finger on something that's going on, um, that seems, um, extremely important to keep in mind for trying to think, how do we build together into the future?

Awesome. So maybe can you share a bit of a summary about what the book is about? And of course, the most interesting part, which is what captured your attention as a way for uh structuring and understanding some of the complexity that's going on.

Well, I mean, I think it's it's a very big task to try to do that. So, I'm not going to do it and I'm not going to do justice to it, but I do think that one of the things that is interesting from in this book is it really it puts forward a theory of value. And if you spend time in an academic context thinking about value and different theories of value, you cannot help but be confronted with a Marxian theory of value, which which brings value to labor, which says labor is the input of value into the system and surplus value is extracted. And one of the most provocative things that this book does is that it kind of moves apart moves away from this. So, I'm going to dare to read to you a little bit from this um because I think that it just does the job much better than when I try to express it.

So, they say this principle, which is basically exo-capitalism, also flips the Marxian construction of value and price on their head from things that are extracted by a capitalist from a labor force to things that can be generated out of nothing independent from any material logics simply by virtue of the interposition of latency between worlds. And they make this a bit more concrete and palpable in many ways by saying that basically the movement that is taking place in the digital economy is a movement of buy, hold, sell. And sell happens at obviously a higher rate than the buy. So, the whole magic is about how to do this well, buy, hold, sell. And in that sense, the question of the material underpinning of where the value comes from becomes secondary.

It's not the primary input of value into the system. So, I think maybe from here, yeah.

Yeah, thanks. Yeah, basically the the book describes exactly flips this idea of capitalism as something that is being historically constructed and instead it brings forward this idea of capitalism as a germ, a virus, something which is just this algorithm of buy or sell, of generating value out of nothing. And the authors describe the book as a cosmology. So, not so much as a, you know, a cosmology is something that speaks to higher truths, perhaps, but it's also something that feels somehow intuitively true. And it's something that helps make sense of certain dynamics, whether ultimately they are, I guess, true or not.

I guess we have passed the idea of truth. But, yeah, what is What is interesting is it describes the software economy as the convergence of code and the dynamics of finance, basically. And re-projects that to the whole history of capitalism, basically. It's a very provocative thesis. But, again, you know, with all these problems that we have with the end that we'll perhaps discuss later, it it helps, or at least it like it helped me to look at Web 3 through this lens.

Obviously, Web 3 and like blockchain is really about this further, perhaps, integration between the logic of finance or like monetary, you know, where money and infrastructure really come together. And so and and the book unironically describes finance in terms of tokenization. And so which is obviously something that it's very close to you know web three types of infrastructures. And so this idea of thinking about labor not so much as an input for the production of value but more simply as what is still needed to capital to generate volatility to be then further arbitrage and capitalized on. I guess it's something that helped me make sense of for instance of the you know of the like the contribution economy in those and of also open source protocol development and why it's so hard to build support structures around these relatively novel types of of work.

Perhaps another provocation of the book that it says that capitalism is not our enemy. Capitalism literally doesn't care about the humans or doesn't care about the earth. All it cares about is to lift to move further and further away from the material constraints into higher and higher realms of abstraction. And I think that's also something that has resonated a lot with the the vertigo of a lot of the increasingly abstracted dynamics within the web three space and combination of more sophisticated perhaps financial mechanisms while also perhaps again somewhat leaving behind the the humans that operate within this system.

Yeah

and I think that in a in a I mean, I I would really highly recommend everyone to read the book because it's also written very attractively in many ways and it has beautiful sentences like capitalism has never been and could never be a smooth criminal. And I think that's important also again for the question of what is the what is the input that is still needed from all that is regenerative and social labor work. So the whole machine collapses if there is no possibility of differentiation. It cannot be smooth. If it were smooth, it would be a perfectly automated system that is at zero at all times.

So the different the differentiation that enables arbitrage comes from the living world. It just doesn't care what kind of living world that is and where the volatility comes from. And it's interesting to think with that if you then look at all of the grand inventions in web 3 that have made it so that we can speak about a market cap that is in the trillions. Now, I mean, for anyone who has been in blockchain for a while, the number has been exacerbating upwards, upwards, upwards from 2016, 2017 and it's always a very impressive number to give to people who think our web 3 blockchain that doesn't matter, no one cares about it. I mean, no one would say that today anymore, but there was a long time in which people would say that and this this number of the market cap was a very impressive number.

But when you look at where does this number come from, what does it stand for, then it does stand for this extremely empty value that is basically yeah, we could also I would like to say provocatively, what are we doing? Huddle the void. It's a phenomenon of collectively huddling the void. And so that's that's extremely problematic and that continues to go also now that institutional investors are coming in. I recently read an report by the IMF about stable coins in which they are quoting without having read Exocapitalism and not knowing what they are saying that 80% of the stablecoin transactions are arbitrage transactions.

That's the IMF looking at this saying not saying that basically as we are still in the making. So they say this is a transitional thing. Maybe there will be more use value. There will be more things. I think this is what they get wrong.

This is the end game. The arbitrage game. This is not an intermediary state. So it's it's not just on a on a slow on a small level. I think that this is really what is animating so much and which makes it so hard then if you come and say I would like to have funding for a project in which we want to do you know equitable art shares or in our case in which we want to make sure that biodiversity stewards who are keeping this world alive, who are re- generating the things that we so eagerly depend on should have a more a more sustainable funding stream.

You cannot play on the same kind of X return as all the others are playing because they can go further up in the lift movement and they are faster and not so much dragged down again to use the vocabulary of the book. And so this is a big so I think if you look at it in this way and if you face that fully, it becomes a bit dizzying because the question is okay. So if this is the big if this is the big blockchain economy, what are we trying to do when we think that crypto holds the blockchain web 3 holds the key for building an ultra economy which in a sense was what I think drew so many to the space in the first place. And I mean even sitting here on the stage, I find very interesting. 2018 was the first Web3 Summit, and the space was buzzing with energy of trying to build something different.

It was a political project, with the politics, you know, we can discuss what kind of politics I have all found found their way into Web3, but the drive was a different one. So, uh I think this is a bit the the status where we are at, and the question is, what do we do with that?

Exactly. So, I think um well, I guess I would ask that back to you, but first I would want to double-click on something I think it's, you know, one of my favorite pieces that Laura wrote that was super um yeah, influential to me was um I think it was in 2022 exploring about um what the labor economy of DAOs looked like, and it was so um important at the time because nobody was thinking in this way about, you know, what it felt like this emerging type of organization. Now, it is a period piece of what a particular moment in like um yeah, what labor and uh the post-COVID tech world and in our space looked like. Can you speak a little bit to that, maybe using one of the ways of illustrating the lift and drag concepts in this book of, I mean, if that is something that makes sense to you? Like, I think this is one that's very um yeah, really touches deeply to many people in this room, so.

Yeah.

Yeah, thanks. Uh yeah, so it was, I think, 2022. It was or even earlier, perhaps. It was the peak of like the DAO moment where there were so many new DAOs popping up every day, and a lot of people like excited to contribute to them, and with Other Internet, we did this project called Web3 Work. Um to whom a lot of like friends here also contributed, and um the the goal of like the the main finding there was that um like generally, there is a again, people would contribute to this new types of organizations Uh out of their intrinsic values and you know, like intrinsic and abstract or like intangible values.

But then these systems were and still are, I think, and that applies also to the open source software development economy to a large extent. These systems were unable to price in accurately what these values correspond to. So the the results was like we've seen a lot of burnouts, we've seen a lot of like this um like organizational dramas being played out in public in public forums and stuff. And again, and and we tried like one of the big goals for us was to mobilize a lot of these protocols that we've been working with to develop some kinds of solidarity primitives or like a parallel sort of like welfare models. We have the technologies, we have the mechanisms, we could do theoretically these things.

But practically it would never these aspects never realized or never materialized or never materialized to the scale perhaps that we were hoping or we were aiming for. And yeah, I think reading this book it was a bit of a like a a form of therapy. It was like a way of of understanding perhaps that we did we tried but ultimately it wasn't only perhaps our fault is that we're like um you know, running up against like a system or like a way of increasingly abstracted and automated capital that again, literally doesn't care about labor or only cares about labor in so far as it generates volatility, that is friction that then can be again

[clears throat]

capitalized on in certain ways. So, for open source protocol, it's actually a feature, not a bug, that every 2 years approximately 2 years the people like churn out and then new fresh blood and excitement can can come in to do exactly that same work. And obviously, from a human perspective, we see that there are limitations and there are like weak aspects about it, like it's important to build these types of infrastructural and institutional knowledge and be able to pass it on. But I guess for yeah, for for the um that way of operating this like all the protocol, ultimately it's it doesn't make such a big difference because uh yes, we have the limitations, they don't really work, it maybe takes a bit longer to get up to speed with the like with the minuchins of of protocol developments, but these are things that yeah, for extra capitalism easily easy to overcome basically. Like again, using the humans and spearing them out when they're not they don't have enough they don't have any more energies to do to do the that type of work.

So, uh yeah, for the labor aspect I think that was particularly I don't know, interesting, particularly enlightening perhaps to to look at these dynamics in open source development and and contribution economies also through this lens. Then obviously there I think there is so much is this all there is? I hope not. Like I think there's many more things that acceleration is not focusing on, is not looking at, and these are where there's spaces that open up to you know, develop counter strategies perhaps. But I think this thesis unfortunately is being proven you know, correct.

I don't know. Yeah.

Do you want to add anything? Because I also had an interesting question that that made me think of which is you had mentioned at one point you know, this feeling of you know, capitalism being a virus or the specific niche brand of capitalism that we're engaging in and like web 3 community and just thinking of that in the comment about you know, things spinning out of control. Like is there a point that you would have identified where you know, the acceleration would not have been so drastic or that like the complexity would not have been you know, increasing at such a um you know, such a rate that became too much or is that not even necessarily the way of framing it?

Yeah, I mean I think that you can you can take different parts of the book in different ways. No, I mean I think it as as Laura also said it's it's introduced as a cosmology. It's introduced as a as a total claim, but I also think that it's introduced as such because it's a provocation into the space and because it wants to break kind of patterns of thinking that have become very embedded and these patterns of thinking I would say are contextualizing, historicizing, making particular and never making absolute. I mean I am a big fan of the particular and I really do also think that in many ways the way that the book describes the world is true when you live in the world of web 3 and these protocols and these financialized things, but that's really just a mini part of the world. So, let's say in economic value, it's giant.

In lived experience, it's a blurb. So, I think this is a bit where we can look at what is the lived experience? What does it mean? Where does Where do we find meaning? In the same way in which maybe you we can note that people burn out, that there is no care for each other.

The fact that it came so far also means that people are extremely dedicated and they are driven not by the exo-capitalist lift. So, there is a different kind of lift that I think drives humans to do things together, to care for each other, to make things with each other. And I think that this is something where as a web3 community, the question is how do we do that? I mean, I think what Laura researched and described is we don't care for community sufficiently. We don't care at all in certain ways.

And so, I think there is a lot of gray between that, but I think that the lift phenomenon of humans wanting to be in service, humans wanting to do good things for each other, with each other, for the planet, I think that's a that's a framing that I mean, it's not the work of the book to have that framing, no? But I think that's the rest of the world in in lived experiences in enormous ways and I think paying attention to that part being fully aware what we are facing because it's a big convergence with a lot of power, but I don't think it cuts across everything.

Yeah, this is um yeah, there are so many things to continue digging into and I'm like looking now, 13, 12 seconds. So, yeah, basically, I think to continue this conversation, if you want to go to the um the bread co-op room, then there will be 30 minutes or an hour to delve more uh deeply into it. Um oh yeah, but one more point before that.

I just wanted to say shout out to the authors. It's a great gift to the community to have this book. Thank you.

And And who are the authors again? Yes.

Did you

Uh the name The name of the authors cuz

Marek Kohn and Roberto Alonso Trio.

So, huge thank you to them if you