Speech: Erik Voorhees

Compiled & Edited by: Deep Tide TechFlow

As Token2049 heats up in Asia, the West is also conveying its insights and thoughts to the Web3 industry.

On September 14, at Permissionless II, the largest DeFi event globally co-hosted by Blockwork and Bankless, veteran industry OG and founder of ShapeShift, Erik Voorhees, delivered an exceptionally brilliant speech.

In this speech, Erik delved into the future of finance, the comparison between code and human law, and the power and potential of decentralized finance. With his profound thoughts and rich industry experience, he expressed a strong support for open, permissionless finance and offered a deep critique of current financial regulations and the traditional financial system.

Rather than a speech, it is more of a declaration of challenge from open finance to the traditional financial system.

For anyone interested in the future of Web3, DeFi, or finance, this is a profound insight worth reading, and it has been rated by industry insiders as one of the best crypto speeches.

Deep Tide has compiled and organized this speech.

(Source: https://twitter.com/Permissionless/status/1702054516458156126?s=20)

Full Text of the Speech

Alright, ladies and gentlemen, I am Erik Voorhees, a lover of freedom and the founder of ShapeShift. Some call me a cryptocurrency elder. My girlfriend likes to call me the old man of crypto. Sometimes, I am seen as a hunter, specifically targeting those chubby, curly-haired fraudsters who overuse acronyms and donate heavily in Washington (note: a satire on certain financial practitioners playing with concepts).

Someone asked me to talk about:

Why are we here at this event? Why are we in this industry? Why are we in the current state of the industry today?

It is my honor to have this opportunity. But first, I want to get to know you, my audience (note: starting live interaction).

If you are here for the free coffee, please raise your hand. Hmm… someone is lying.

If you are here for Lambos, please raise your hand. Unfortunately, you might not get one this year, but please hang in there (possibly some kind of live souvenir).

If you are here because you love banks, please raise your hand. No one raised their hand.

If you are here for World Coin to scan your eyeballs, please raise your hand.

If you are here to celebrate KYC or other forms of mass surveillance on innocent people, please raise your hand.

Alright, if you are here to resist, please raise your hand. Okay, some people raised their hands. I am here to resist. It is certainly peaceful, but equally revolutionary. As I prepared this speech, I realized the theme would match the name of the event.

Permissionless. I love this name. It is one of the words that best captures the essence of our industry.

It is radical, it is rebellious, it is non-compliant. It is American. As an elder in cryptocurrency, let me remind you that it all began about 15 years ago with the invention of Bitcoin.

Why was that moment important? Why was it significant then? Why is Bitcoin interesting? It is interesting because it is permissionless. Bitcoin invented permissionless money, and a few years later, with the invention of smart contracts on Ethereum, we had all the tools needed to build a fully permissionless financial system.

This attribute is revolutionary; it is more essential to cryptocurrency than any other attribute. This attribute is bestowed upon all good projects in the space, and if something is not permissionless, we should at least consider it a stepping stone towards that goal.

But why is permissionlessness so novel and so difficult to achieve? In the realm of currency before cryptocurrency, all flows of money required someone’s permission. You might say cash is permissionless, but if you want to send it across any distance, it is not. Try carrying $10,000 across a border, and you will quickly be reminded that it doesn’t work that way. No, cash is not even permissionless; despite its many advantages, it is disappearing from society.

So we should be thankful that a form of permissionless digital currency was invented, as it came at a very timely moment. Why is all this important? Consider that almost all economic activity requires money. In a world where most people struggle to put food on the table, the economic realm is, in fact, the arbiter of life and death for billions. Most people do not have the luxury of pursuing passions. They work, they toil, they trade because they need to survive. Therefore, money is crucial to our human existence. Thus, we should care about its quality, we should care about its nature, and we should care about who controls it.

Permission is often subtle, but it is everywhere. Every time you pay with a card, you are granted permission. It seems like permission is just whether you have enough money. But in reality, there is another, more insidious layer of approval happening.

Banks, financial institutions, governments, and many parties along the way are strangers to you, whom you will never meet, and they bless every transaction you make. You don’t notice it because as long as you behave like a citizen, permission exists. But if you need permission to spend and trade, then you need permission to exist.

So why do we accept a world where you can only trade freely if strangers conditionally approve it? This is certainly not freedom. This is enslavement. It is certain. The chains rest lightly on most of us, but that should not make us forget their existence. If they are tolerated, they will become heavier.

Let’s acknowledge that the laws and regulations that restrict our affairs only increase. Consider the average person 100 years ago and the average person today; who is more economically free? 120 years ago, there was no income tax. Back then, it was so radical that you were actually allowed to keep the money you earned. You could even cross borders without what we call a lovely "stamp book" known as a passport. How astonishing that society could exist in such anarchy. Yet, without any income tax or immigration restrictions, America experienced the greatest period of unprecedented growth in the world. In that society, when labor and capital were unpermissioned, society often grew the fastest.

But some people like to plunder. Your earned money and the permission to cross borders freely are gradually withdrawn, always under the guise of collectivist propaganda, such as national interest. Today, all the taxes you endure, half of your money is stolen by the state. But the state is just a group of strangers. So half of your money is stolen by a group of strangers.

What excuses do you tell yourself to cope with this embarrassment? Those who plunder you and tell you it is for your own good are withdrawing the permission for you to build your own life. So what can stop this trend from continuing? What can prevent tomorrow’s people from being even more enslaved? What force can resist the increasing presence of permission?

It is us.

You may not realize it, but what we are building is an economic defense against the state’s plunder and restrictions. We say "no" to the ongoing encroachment of permission. What saves us from this phenomenon is not the so-called political process and political circus (a satire on makeshift political groups), because it is actually they who caused the current situation. Now, as free men and women, redemption is our own responsibility. All actions stem from our minds, our hands, our decisions. We are doing this, permissionlessly.

Permission is what kindergarten children should get when they need to go to the bathroom, not what respected men should need in their financial affairs.

Because if I can only trade with you at the grace of those looking down on me, then I would feel less like a man and more like a child. But is a child an appropriate metaphor? Children are usually loved by their parents. Do you feel that the CIA loves you in the same way?

Farm animals might be a better metaphor. We allow ourselves to be treated like farm animals. In the pen, we graze, we produce, we are harvested.

But we can vote. Yes, we can choose who operates the scissors. We can vote on whether we want red or blue to rob us. We endlessly debate which color is better. To give up so much permission, we really respect our leaders. We must yearn for the greatness of these lords. They must be smart, noble people. They must inspire and guide us towards goals that cannot be achieved without them. Are these descriptions accurate for world leaders? Are they infallible sages? Donald Trump or Joe Biden, such paragon of virtue, such incredible specimens of humanity, is there really any reason to submit to them? I look at the political class, those bureaucrats sucking on the milk of plundered wealth, their authority all adorned in opulence, their arrogance disguised as confidence, their insincere smiles only matched by the absurdity of their thoughts. I can find no reason to submit to the terms they attempt to impose on me.

We owe nothing to such people. But we owe a lot to humanity. That is why we are here. Cryptocurrency is our resistance. Cryptocurrency is our resistance. It is a rebellion against a system that does not deserve its authority. It is our resistance against coercion and enslavement. It is our resistance against economic, endless arrogance, and moral impotence. Cryptocurrency is our resistance against permission. As individuals with freedom and sovereignty, this resistance is nothing less than a noble restoration of dignity and grace, serving the cause of peace and civilization. That is why we are here today. But the fact is, we do not need permission from those little tyrants who cannot build anything to create great things. That is the very principle upon which America was founded.

The state’s permission is a ruse, a scam, only those afflicted with Stockholm syndrome would tolerate it. It is a curtain placed before our eyes, only because we have been too weak, too afraid, too helpless, too distracted, and often too comfortable, that we have not seen what lies behind the curtain.

Many in our industry have seen behind the curtain. We have seen that Washington is no longer necessary for a good society today, just as King George and the British Parliament were 250 years ago. Cryptocurrency is a declaration of personal freedom and financial independence. Cryptocurrency is the freedom to act for our own economic interests as free men and women in a just society, to trade, exchange, transact, build, and commerce.

We should feel optimistic about the future because we live in an era of peaceful revolution, where any two people on Earth can trade value without permission. Does that scare you?

Or does it? However, arrogance affects everyone. Are we sure we are not suffering some kind of pain?

As good skeptics, we should first doubt ourselves and our own assumptions.

Should we always ask ourselves if we are good or chaotic agents? How do we know?

Are we just rebellious teenagers wanting a chaotic world without permission?

Are we merely subversive degenerates, too immature and naive to see the value of order, launching fierce attacks against its existence?

How can we so disrespectfully condemn the necessity of compliance, the virtues of permission, and the many glorious wonders of central management? Don’t we care about society? If we succeed, won’t the bad guys thrive in society, and won’t society regress?

These are the strongest accusations against us. However, they can be easily defeated. They are defeated because what we are pursuing is not truly liberation from permission and rules, but merely a preference for objective and transparent rules over the subjective and opaque rules of the status quo. We like to say code is law, but that is a misnomer. Code is better than law, and we are demonstrating the fundamental difference between human law and mathematical law to the world.

Compare a redundant audit and formally verified smart contract with any embarrassing congressional legislation; which one is more scientifically grounded, which one actually represents order better? One is an engineering problem, the other is an election problem. Compare a smart contract where every variable is mathematically defined with the Securities Act of 1933, where a thousand-dollar lawyer argues how similar a cartoon ape’s picture is to a Florida orange grove.

The absurdity of most financial regulations is obvious, and we should not tolerate it. But we should all hope for orderly, objective, and transparent markets. For all the regulators in the audience, before you send me another subpoena, consider that this is our common position.

We all want rules. We all want the rules to be good.

This is the most important point I want to make today. The traditional financial system is built on human rules, not mathematical rules. Society can do better. Human rules are formed through a political process, and everyone acknowledges that this process is prone to error and often corrupt. Human rules rely on highly subjective human language and leave wide room for interpretation. When it comes to enforcing these already vague rules, no one can predict in advance which violations will actually be enforced.

Gary Gensler claims all tokens are securities. Well, Gary, why hasn’t the SEC enforced against all tokens? The most generous explanation is that they lack resources. Well, that still proves that financial regulations exist today in a subjective and partially enforced manner. If we care about orderly markets, how can we respect it? How can we respect it? Compare this with any smart contract that executes 100% of the time, and we can know how it executes.

Uniswap’s Enforcement Division will never lack resources; the rules it operates under are objective and transparent. We no longer have to suffer from subjective rules in the financial realm. But, it is not about getting rid of rules; we should pursue better rules. This is our task, this is our mission, this is our revolution. This is why we are here. Do you want to call us chaotic agents? Do you want to see us as destructive anarchists? We are the only ones building 100% enforceable financial rules. Code police are better than real police. We want our markets to have strong rules; any rule that is easily broken is a weak rule.

There is a law that states I cannot cross a border without declaring $10,000 in my pocket. Interesting. I can easily violate this law; it is indeed an embarrassment, the exact definition of the word. The laws of physics, the laws of mathematics, the laws of code—these laws make sense. They are powerful, consistent, and worthy of respect.

Act. Human laws, at most, are highly fallible. Perhaps they were once necessary, just as we once needed the post office to send letters. However, the post office and the SEC still exist; they are redundant and embarrassing. So I believe their budgets will increase next year. Now compare the subjective laws of regulators or rebellious teenagers with the laws of code. Compare the Frank Act of the Department of Defense with the loan contracts of AVE aimed at achieving orderly markets, which span 23 pages, with its odious tone, which has spawned thousands of pages of 400 new financial regulations. Which one better represents an advanced civilization? Which one is obviously a product of 20th-century technology, and which one is a product of the 21st century? Compare the open-source collaboration of cryptocurrency with the backroom deals of DC; which rule-making process is more noble and ethical? We are not chaotic agents; we are agents of order. While some may disagree with the order we are building, once again, no dinosaur would support an asteroid.

Do we care about society? Yes, of course. We deeply care about society. Many of us are here because we see the widespread economic injustice in the world, and we want to help. We live in society. We benefit from it, and we owe our efforts to improve it.

But unlike any politician, who forces others to comply with their views at gunpoint, we are here to build peacefully; we do not impose on anyone. So do not let the status quo tell you that you do not care about rules or society because you are building a superior technology for rules within society.

And they, the politicians, regulators, and plunderers of Washington DC, should commend you for your outstanding work in the realm of order and rule-making; compared to what we are building, they are chaotic agents. They are the ones who print billions of dollars and then pretend not to know where inflation comes from. For them to claim moral or intellectual superiority on any economic issue is absurd. They should at least politely step aside.

It is certain that we have many enemies. Many find the idea of open, permissionless finance repugnant because they are used to controlling what they did not build. Now, they finally cannot. For the rest of us, for those radicals who do not impose their opinions on millions of innocent people through force, how optimistic we are, as the light of opportunity shines for everyone who discovers this permissionless Promethean fire. There is so much outstanding creative energy in this room.

Yes, we endure what seems like endless setbacks and struggles. Yes, fraudsters are everywhere. Yes, we are condemned by the system we are trying to replace. Some of us suffer persecution, and we all occasionally feel pain. Friends, try to see through those struggles. For every noble challenge you face in your work, be grateful, for you are alive, and your work is important. Be grateful for the opportunity before you.

Consider those working in traditional finance, those cogs in the regulatory machinery, who show up to work every day with dead eyes and weak hearts. Their souls know they are not participating in anything creative or beautiful. They are not involved in anything wild or romantic. But many of you are. So embrace it, cherish it, and build upon it. Wild and romantic—these words still define the core of cryptocurrency. In a bureaucratic, oppressive, absurd world, where society seems to self-consume, grinding to dust anyone who dares to stand out as an individual against an ancient machine, the wild and romantic heart of cryptocurrency still beats between the blocks, filled with relentless ambition.

Look up and remember that you are neither a slave nor a serf. In America, the common man is noble. So, take action. Be vibrant, upright, and proud men and women. Be pioneering industrialists and reflect the nobility of that role. Build consciously and see through every lowly distraction, especially when it comes with a flag and demands contributions. Any regulator can submit a pull request; their failure to do so is meaningful. The traditional internal laws of the financial realm have long been lost to the political circus.

So now we enter a new realm; what we are building is super-law and permissionless. In this new land, in the old place of the West, we only acknowledge compliance with the sublime power of moral virtue, mathematics, and open, composable, immutable code.

In our boldness, we build things without imposing on anyone. We are not only inventing on a clean slate but also getting our hands dirty in real engineering, building the world’s first and only transparent, objective financial system for all humanity. We built it without a dime in taxes and without permission.

Consider the implications of opposing this development, opposing a set of objective, transparent rules and voluntary associations between adults, demanding obedience and submission from peaceful people at gunpoint. Examine those who do so, and you will find that those enemies of humanity lie so pathetically where they are. They no longer ignore us. They are certainly still mocking us, and they have clearly begun to fight us.

But we will win. Setting aside ethical arguments, because humans are a capitalist species, capital flows to where it is respected. Like water, it flows to where it can. When the permission of the fiat currency system restricts and stifles, our open, decentralized alternatives are ready to embrace it. True innovation is chaotic, sometimes veering off in unhelpful directions, then returning.

But capital will flow to orderly decentralized finance, just as water inexorably flows to the sea. Both will happen naturally and do not require permission. Thank you.