Acceleration and Defi | Let’s accelerate capitalism by improving the market health
Utilization of blockchain technology in the financial field has created a new market. In recent years, small-scale social experiments in the digital asset market such as crypto assets, digital securities, and distributed finance have supported the technological evolution of financial engineering. In each industrial field, efforts to promote the process of technological evolution are being carried out around the world. In addition to creating new business models and social frameworks, it is important to verify governance and potential risks. This time, I would like to consider the technological evolution in the financial markets and the expansion of the capitalist system in the context of acceleratedism, such as “X becomes a singular point when it is thoroughly dismantled and it is dismantled from within.”
What is accelerating and technological evolution in financial markets?
When the technological singularity is reached due to the thorough digitization of the financial market, the financial market is dismantled from the inside, the “outside” of the system of the financial market becomes clear, and it becomes possible to escape to the “outside”. The technological evolution of financial engineering has brought huge wealth to some investors, far from the real economy. At times, it caused a great deal of disruption to the world economy, causing a financial crisis that greatly shakes the mechanism of the financial markets.
In recent years, the advent of blockchain technology has made it possible to build a system that guarantees credit without involving third parties. A new, albeit small, market has been formed on the “outside” of the financial markets, promoting the conventional “expansion of the capitalist system”. With the advent of fintech, financial unbundling is progressing, and with the aim of “fundamental social change,” the public and private sectors are working together to digitize. Blockchain technology is expected to further accelerate capitalism, such as when digital currencies enable wealth tracking and real-time monitoring of economic activity.
Acceleration has been familiar to some people who believe in science fiction and apocalyptic ideas. The future, in which capitalism is accelerated by technological evolution and new societies are created by technological singularities, may be about to come. However, there are cases in which “external” is incorporated into “inside” as existing financial systems and laws and regulations implement digital assets, and in some cases integration progresses. There is no dramatic social transformation such that technological evolution disturbs the existing order and brings new values to the market, but reaches the technological singularity. At present, it can be said that this is just an “expansion of the capitalist system”.
There is also a theory that the singular point is the “X is dismantled from the inside by thorough implementation of X”, and it is thought that the singular point has already been reached, such as “unbundling of finance”. Moreover, since their definitions are different, it may be important to examine the “expansion of the capitalist system” in a more gradual manner when considering the acceleration principle.
Expansion of the capitalist system and blockchain technology
・Further technological evolution accelerates the capitalist process, reaching a technological singularity (right)
・Further technological evolution will accelerate the capitalist process and aim for social change (left)
From the perspective of rightist accelerationism, it is thought that “it is a long way from the point of reaching technological singularity, and now it is only one stage of the process of accelerating capitalism”. At present, social systems are responding to technological advances such as blockchain. It is difficult to assess the feasibility of technological singularities, but capitalism is expected to achieve further development (acceleration) through digitalization. In addition, efforts to overcome the dysfunction of conventional capitalism by “redistribution (or unbundling)” are very effective in promoting economic activity.
However, in the decentralized financial market, it has been confirmed that the tokens owned by Sushiswap developers were sold and the market price fell sharply. Although it is not a technical defect in the system such as large-scale hacking, it can be said that sound operation of the market is important to accelerate technological evolution and create a market with a high degree of freedom. In the process of market development, credit losses due to troubles are more or less common. However, there are many investors who are deeply disappointed with the decentralized financial markets and have lost interest in the above cases. In addition, speculation in the decentralized financial market, which is regarded as a “future financial service system” that does not require a third party, is expected to accelerate.
Currently, due to its small market size (including the early days), deregulation of decentralized finance is only at the stage of launching related organizations. However, considering the history of the crypto asset market, each project should carry out audits of smart contracts, aiming to create a more sustainable and viable market, and a more sophisticated social experiment based on capital power. Should aim to accelerate the process of capitalism.
Although we have not yet established a new social framework such as an escape from “post-capitalism,” the environment for conducting social experiments is being prepared in a way that does not have a major impact on the conventional financial system.Participation in the digital asset market is on the rise due to the implementation of legislation and dramatic changes in the social environment. Accelerating capitalism will be facilitated by efforts to overcome its dysfunction in areas that differ from traditional capitalist systems. How to accelerate the process and achieve technological evolution (whether to achieve sound development without strict regulations) is important. We believe that we should be responsible for the formation of a sound market where many people can commit themselves to the realization of social change through technological evolution without being bound by the definition of technological singularity.