SEC Pre-sues Uniswap: The Core Values of Web3 and the Ideological Struggle of Cyberspace

Author: @Web3Mario

Introduction: This morning, I woke up to an interesting piece of news, Uniswap founder Hayden Adams tweeted that Uniswap Labs received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) today. He stated that he believes the products they provide are legal and that their work is on the right side of history. However, it is clear that for some time, the SEC has not been committed to establishing clear and sensible rules, but has instead chosen to focus on attacking long-term builders like Uniswap and Coinbase. The so-called Wells Notice refers to an informal alert issued by the SEC to publicly listed companies before civil litigation, allowing the notified companies to communicate and negotiate with the SEC before receiving a formal lawsuit. This inevitably reminds me of an essay I wrote two years ago about Web3. I believe that with the approval of the BTC ETF, traditional capital is entering the crypto space in large quantities, and similar events will become increasingly frequent. Upon deeper reflection, I believe the reasons lie in the uniqueness of Web3's core values and the ideological struggle in Cyberspace that it provokes. As it is the weekend, I hope to bring you some casual content.

Main Text:

Every technology embeds ideological biases, that is, it has a tendency to build the world in one way rather than another, or to assign higher value to certain things. The competition between new and old technologies is a struggle for time, attention, money, and prestige, primarily competing to dominate their own worldview, and this competition is characterized by the intense rivalry unique to ideological competition.

*------Neil Postman, * Technopoly *

Professor Postman is a scholar I deeply respect; he is one of the founders of the field of Media Ecology and has dedicated himself to exploring the relationship between technology and culture. The opening viewpoint comes from his book Technopoly in the 1990s, and it now seems that this very prescient perspective is being validated once again by a network revolution called Web3.

I believe that most people familiar with Web3 are attracted by the numerous wealth myths in this industry. The influx of substantial investments is making this market look like a "new world of gold everywhere." However, amidst the cheers, I hope everyone can carefully consider one question: What is the core value of Web3? Is it the low-cost financial services brought by cryptocurrencies? Is it the privacy protection afforded by asymmetric encryption? Or is it the so-called redistribution of internet ownership? The answer to this question will greatly influence your actions in Web3 and, consequently, the future evolutionary direction, making it worthy of our careful consideration.

What is the context of the Web3 debate?

In fact, the debate over the value of Web3 continues to this day, and even providing a clear definition of Web3 is a very challenging task. Therefore, before we start discussing the core values of Web3, let’s filter some representative viewpoints to create a consistent context for the following narrative.

First, we have the supporters of Web3, with three widely recognized answers. The first comes from Josh Stack, who works at the Ethereum Foundation:

Web 3 is a group of technologies that restructure control over the internet, including more than just cryptocurrencies, blockchains, and other products of cryptoeconomic design.

The second comes from Chris Dixon, a GP at a16z, which is considered the largest investment institution in Web3:

Web3 is the internet owned by the builders and users, orchestrated with tokens. In web3, ownership and control is decentralized. Users and builders can own pieces of internet services by owning tokens, both non-fungible (NFTs) and fungible.

The third comes from Thomas Stackpole, a senior editor at Harvard Business Review:

Web3 is being touted as the future of the internet. The vision for this new, blockchain-based web includes cryptocurrencies, NFTs, DAOs, decentralized finance, and more. It offers a read/write/own version of the web, in which users have a financial stake in and more control over the web communities they belong to.

From these viewpoints, we can extract two key points: first, Web3 is a vision rather than a fixed technological architecture or business model; second, the core of this vision is to change the current paradigm of ownership or control distribution in the mainstream web, emphasizing user autonomy and independence in the web world. A classic example of Web3 is that in the Web3 world, users will reclaim ownership of their digital assets from third-party platforms.

Taking the classic Web2 company Twitter as an example, since the data generated by users during use is monopolized by the platform, it can profit from this data through an advertising-driven revenue model. However, this value rightly belongs to the users as data producers. The platform achieves data monopoly through a closed ecosystem, stealing users' interests. This is a classic story of Web3 practitioners criticizing Web2.

Under this guiding vision, it seems that design principles for Web3 projects have already formed. On the official website of Ethereum, which is regarded as the most representative Web3 infrastructure, we can find the following content:

l Web3 is decentralized: instead of large swathes of the internet controlled and owned by centralized entities, ownership gets distributed amongst its builders and users.

l Web3 is permissionless: everyone has equal access to participate in Web3, and no one gets excluded.

l Web3 has native payments: it uses cryptocurrency for spending and sending money online instead of relying on the outdated infrastructure of banks and payment processors.

l Web3 is trustless: it operates using incentives and economic mechanisms instead of relying on trusted third parties.

On the other hand, Web3 opponents are also not to be outdone. We also choose three representative viewpoints. The first comes from Moxie Marlinspike, the founder of Signal:

Decentralization itself is not actually of immediate practical or pressing importance to the majority of people downstream, that the only amount of decentralization people want is the minimum amount required for something to exist, and that if not very consciously accounted for, these forces will push us further from rather than closer to the ideal outcome as the days become less early.

The second comes from Stephen Diehl, a computer programmer and a staunch critic of cryptocurrencies:

At its core, web3 is a vapid marketing campaign that attempts to reframe the public's negative associations of crypto assets into a false narrative about disruption of legacy tech company hegemony. The blockchain offers nothing new or worthwhile to the universe of technology. It's a one trick pony whose only application is creating censorship-resistant crypto investment schemes, an invention whose negative externalities and capacity for harm vastly outweigh any possible uses.

The third comes from Jack Dorsey, co-founder of Twitter:

You don't own "web3." The VCs and their LPs do. It will never escape their incentives. It's ultimately a centralized entity with a different label.

The viewpoints of these three critics are representative. The first doubts the significance of decentralized networks, arguing that decentralization is essentially a pseudo-demand for web users. Compared to decentralization, users care more about the efficiency of information interaction in web applications or other factors. Moreover, in terms of results, many successful so-called Web3 companies do not actually implement this principle; they merely leverage the marketing effects behind it.

The second expresses skepticism about the technical flaws of Web3's infrastructure, the blockchain. They argue that blockchain, as a "distributed database" technology, is a failure because it does not improve the efficiency of queries and inserts, and even results in significant regression, which is typically an important technical metric for evaluating database technology.

The third is skeptical of the current hyper-financialization of Web3. They generally affirm the significance of decentralization but believe that the current Web3 overly relies on cryptocurrency technology, leading to a predicament of hyper-financialization. On one hand, this makes it difficult for the entire industry to escape the laws of economic cycles; on the other hand, capital monopoly will lead to a re-concentration of power distribution.

The above information essentially reviews the current state of Web3's development. You will find that the key to resolving disputes lies in clarifying what the core value of Web3 is. I believe the answer is that the emergence of Web3 marks the maturity of Cyberspace (or to replace it with a trendy concept, the Metaverse) , where the internet occupies an increasingly significant proportion of human social life , and Web3 provides us with a relatively complete theoretical framework for internet ideology and a practical technical solution . From now on, ideology will, along with technical performance, become a reference dimension for the future development of internet technology . In summary, the core value of Web3 lies in its cultural value .

Three Stages of Cyberspace Development

Cyberspace is an ancient concept; the name first appeared in the art of Danish artist Susanne Ussing in 1960. However, since the meaning of this term was vastly different from today, we will not elaborate too much. It wasn't until Tim Berners-Lee invented the World Wide Web in 1989 that the concept gradually transformed into what we are familiar with today, thanks to the vigorous promotion by some internet libertarians. "Cyberspace is a feeling of a social environment that exists purely in the space of representation and communication… It exists entirely in computer space, distributed across increasingly complex and fluid networks."

In fact, I believe that the entire development of web technology can essentially be viewed as the realization process of Cyberspace, bringing this concept from fiction to reality. Based on the collaborative relationships and information interaction methods of internet users, we can roughly divide this development process into three stages (I apologize that the Web+ numbering method cannot adequately express my viewpoint, so I chose other naming standards):

(1) Classical Liberal Internet Era

Going back to 1989, Tim Berners-Lee's invention of the World Wide Web marked the official entry of humanity into the information age (of course, this is also inseparable from the popularization of Microsoft's first-generation MPC (Multimedia PC) standard). Through this information system, which is accessed via the internet and consists of many interlinked hypertexts, we achieved low-cost, long-distance, and high-speed transmission of information.

Thanks to the relaxed political environment and the wave of globalization at that time, we constructed the underlying technical standards of the internet through open protocols. Note that the principle of open protocols does not belong to any company or country; it resembles the characteristics of the physical world and serves as a neutral network infrastructure.

At this time, anyone could engage in low-frequency information interaction using the web through three simple technologies: Uniform Resource Identifier (URL), Hypertext Transfer Protocol (HTTP), and Hypertext Markup Language (HTML) (think back to the experience of personal blogs and emails). Internet users were generally equal, being both builders and users of the web. The process of information interaction directly relied on open protocols, and everyone could publish and obtain information using network technology according to their own will. Therefore, we call this stage the Classical Liberal Internet Era.

However, with the continuous emergence of ethical issues in the online world, such as extortion, drugs, and child pornography, the government intensified its scrutiny of online content. The main contradiction in this stage was between the principle of open protocols and government censorship. Most internet users believed that personal freedom was a prerequisite for the development of the internet, and any management measures that harmed personal freedom were seen as an infringement on the principle of internet openness. Many internet libertarians and organizations emerged, with the typical “A Declaration of the Independence of Cyberspace” being a hallmark product of this stage. These Silicon Valley leftist elites often had certain political demands, but constrained by the early stage of internet development, where online life occupied a small proportion of people's social lives and the number of supporters was limited, development was not smooth. In fact, at that time, internet technology was merely a tool for rapid information transmission for most people, not much different from a telephone.

(2) Technopoly Internet Era

Next, Cyberspace entered a phase of rapid technological development, evolving in basically two directions: one was to expand the types of information the web could carry, providing users with a more authentic information interaction experience, such as WebSocket, Ajax, and Streaming Media; the other was to lower the technical threshold of the web, thereby reducing usage costs and improving the efficiency of information interaction, such as Nginx, Apache, and Caddy.

With the explosive growth of internet technology, mastering all technologies became increasingly difficult. On one hand, this was due to the increasing variety of technologies; on the other hand, it was because technology became more complex. Internet users began to stratify. Based on their motivations, internet users could be roughly divided into two categories: network users and technology providers. Network users focused more on information interaction through the internet, while technology providers aimed to gain profits by offering low-cost and efficient technical services or tools to network users. At this time, the process of information interaction gradually relied on the technical services provided by technology suppliers, so we call this stage the Technopoly Era. During this period, many internet technology companies attracted technical experts with high salaries, hoping to achieve technological monopolies and gain monopolistic profits. This process peaked with the emergence of social media applications and the advertising-driven revenue model, forming a seemingly win-win relationship among network users, technology providers, and advertisers.

The number of network users grew significantly, the types of information became richer, and the proportion of online life in people's social lives increased, making the negative impacts of privacy breaches and illegal surveillance on network users more severe. The Snowden incident completely detonated this bomb, and the main contradiction in the online world gradually shifted to the conflict between network users and technological oligarchs, with the root of the contradiction lying in data privacy issues.

Some technical experts believe that the key reason for privacy issues lies in the current mainstream architecture of the web, where the monopolization of network resources by technological oligarchs profits from the exclusive control of network users' information. This is an intolerable situation, and thus a fundamental change in the underlying network technology is needed. In fact, this was Gavin Wood's original vision for Web 3.0, which describes a "post-Snowden era network":

Web 3.0, or as might be termed the "post-Snowden" web, is a re-imagination of the sorts of things we already use the web for, but with a fundamentally different model for the interactions between parties. Information that we assume to be public, we publish. Information we assume to be agreed upon, we place on a consensus ledger. Information that we assume to be private, we keep secret and never reveal. Communication always takes place over encrypted channels and only with pseudonymous identities as endpoints; never with anything traceable (such as IP addresses).

I believe this is a milestone because it marks the first time we have thought about the development of online society from a relatively complete ideological perspective, guiding the development of internet technology. In fact, this seems to resemble a network social system guided by anarchism. Prior to this, technological evolution mainly revolved around cost optimization and efficiency improvement.

(3) Ideological Cyberspace Era

To avoid confusion with network political philosophy, it is first necessary to clarify that the ideology here refers to a philosophy of network construction and does not involve political pursuits in real society. I believe we have now entered the Ideological Cyberspace Era, characterized by the fact that Cyberspace, as an important part of human social life, has gained sufficient recognition. The new network ideology (or network construction philosophy) and corresponding designs for network social management systems will provide new driving forces for the development of internet technology. From now on, the online world will experience fragmentation due to differing ideologies while maintaining weak connections.

In this era, the development of online society is unlikely to follow an exclusive single-threaded path. This is also why I do not like the name Web3; the situation will be very similar to the development of political philosophy after the Enlightenment. However, unlike before, the spirit of open protocols in network infrastructure will determine that this is a bottom-up development process, as building a new online society is a low-cost endeavor that does not require violent revolution. The ideologies and management systems of online societies will increase over time, with different online societies attracting the migration of network residents through their unique advantages.

The Leftward Shift of the Cyber Ideology Spectrum and the Tide of Network Migration

Having understood this development context, let us try to review the mainstream Cyber ideologies that have emerged during the development of the internet (more detailed analysis will be provided in subsequent articles):

• Classical Liberal Network: This is a network construction philosophy that prioritizes individual freedom of speech above all else, believing that excessive censorship negatively impacts the development of online society. Therefore, these network builders typically advocate for establishing neutral network infrastructure based on open principles.
• Technocratic Authoritarian Network: This is a pragmatic network construction philosophy that views the so-called online society as a product provided by technology owners to non-technology owners. The core demand of these network builders is to gain commercial benefits by providing feature-rich and high-performance networks.
• Anarchist Network: This is a network construction philosophy that opposes all forms of authority, including technological and political authority, believing that any centralized organization or technological solution cannot lead to a fair online society. Therefore, these network builders typically establish network infrastructure based on decentralization principles (I believe it is appropriate to describe the post-Snowden vision of Web3 as an anarchist network).
• Libertarian Capitalist Network: This is a network construction philosophy dominated by monetization and marketization, believing that private ownership of digital assets and an unregulated free market are core to establishing a fairer cyberspace. These network builders advocate for designing reasonable cryptocurrency-based monetary policies and economic systems to achieve the distribution of rights in online society (I believe it is appropriate to describe the hyper-financialized vision of Web3 as a libertarian capitalist network).

We cannot predict what new ideological networks will emerge in the future or which network will ultimately prevail in this great contest. However, I believe it is meaningful to propose an analytical framework at this time, which is a Cyber Ideology Spectrum, similar to a political spectrum chart. Through it, we can achieve a preliminary positioning of a particular ideological network and also locate the ideological tendencies of network users, thereby judging the direction of future development.

As shown in the figure, the horizontal axis represents the degree of immersion in Cyberspace. The further left the position, the higher the proportion of social life occupied by the online world and the greater the dependence on the internet. It is generally believed that the far-left group is the so-called CyberPunks, who believe they live entirely in the online world, while the far-right group consists of so-called network instrumentalists, who believe that the online world does not exist at all and that the internet is merely a tool for transmitting information. The vertical axis represents the classic political culture axis (authority vs. freedom).

In this setup, you will see the distribution of the aforementioned ideological networks. It can be observed that the development of ideological networks overall shows a leftward trend. I believe this trend will further develop with the advancement of immersive internet technologies, such as VR, AR, and Metaverse technologies. I am confident that in the near future, we will experience a wave of shocking migration of network residents. We do not know which ideological network will become the next mainstream, but one thing is certain: whether it is high investment returns, stronger product participation, or excellent privacy protection solutions, institutional superiority is the key factor in winning this ideological battle.