Web3 music of decentralized finance (DeFi)
If music came in chunks the size of Ludwig Van’s 9th symphony, how much music would there be?
Of course, music consists of smaller sounds/notes that together compose a larger piece. It is composability that leads to abstractions like the 9th symphony or another favorite: Mozart’s Sonata for two pianos in D.
Adam Smith recognized composability in labor in the 18th century. He saw that producing everything you might need on your own led to subpar objects created and a chronic need for higher value-added things or services. His thoughts on the division of labor were a catalyst to the industrial revolution. He saw that specializing improved the particular item produced while at the same time improved larger products made from a series of specialized products.
It also allowed for scale — and hence, the revolution …
Which brings us to web3 and a new composability. A web3 smart contract can be seen as a specialized product (or program). By itself, a new program would be unable to scale, but put these specialized contracts onto a blockchain observable and invokable by all and we have composable contracts that can scale.
These contracts are immutable and so they possess a truth that the world has never experienced. As these ‘truths’ are on a shared blockchain, it becomes possible for software applications to rely less on internal systems of truth and instead on specialized truth components or contracts deployed on public blockchains.
To keep to the music analogy, on a blockchain we can deploy various ‘note’ contracts and anyone can ‘compose’ a bigger piece of music on-chain by invoking these primitive, composable contracts.
There is more — this composition becomes permissionless and unstoppable as both the components and the composition itself are all immutably deployed and live on the blockchain.
A decentralized, composable revolution is upon us. Particularly, if the earliest ‘primitive’ smart contracts are well designed.
Bulla network (shameless shill) is one of these primitive composable protocols of smart contracts.
This decentralized revolution will be apparent in finance. Our current centralized and somewhat captured financial system will be reinvigorated by deployed financial smart contract primitives on blockchains.
Primitives like the AJT NFT above. (Aave, Comp, UniSwap and Euler to name some others)
These primitives will become a base to replicate most of traditional finance but with the added benefits of a single source of truth, greater accessibility, reusability and configurability to all.
Web3 DeFi will mean capital markets are no longer the domain of a few but that of the many.
It is very difficult to write software that is truly composable and governed by decentralized source of truth components. This is why we see many ‘DeFi’ applications solving a tricky user interface or other problems by combining web3 with a quick call to some off chain server for ‘state’.
The degree of composability will be a customer choice as well — some like Coinbase and their custody solution, others like non-custodial wallets.
Even Coinbase now offers Wallet connect (a non-custodial wallet)
It reminds me of people trying to understand / compose DeFi at the symphony level and not seeing there is a base ‘note’ or web3 component level.
Look for true composability in DeFi protocols and so remain permissionless and flexible in what music you play on-chain.