"No Chinese": Pride and Prejudice at Montenegro EDCON

By Charlie Chen, Lyv @Aki Network Research, with contributions from Nova, a Whaler community

From May 19 to May 23, 2023, the five-day Ethereum 2023 Developer Community Conference came to an end in Podgorica, the capital of Montenegro. From the Super Demo Preliminaries on the 19th to the Super Demo Finals on the 23rd, the conference held 48 roadshows and shared 53 topics. At the same time, outside the main venue, many DAOs and investors also organized various technical sharing and social activities.

During this high-intensity, high-density exchange and interaction, we sensed a tension that was difficult to express directly accumulating among the participants. Participants from different backgrounds seemed to gradually discover many conflicts in views and ideological differences, especially the tension between practitioners in the Chinese world and their counterparts in Europe and the United States. To some extent, the generation of this tension or anxiety is closely related to the content, organization, composition and background of this conference. Aki Network Research and its partners will analyze the origins of these arrogance and prejudice for readers.

Everyone is talking about Zuzalu

The core participants of this meeting mainly include Vitalik Buterin and his close team, the Ethereum Foundation, the Ethereum community, developers of Zuzalu, and various digital nomads. They gathered in Zuzalu, a first-of-its-kind social experiment in the form of a pop-up urban community, initiated by Vitalik and his friends, located in the Sea Forest resort in Montenegro.

The purpose of Zuzalu is to communicate and make decisions in a co-creation and co-existence manner to solve the development direction and problems of the Web3 industry in the next ten years. To this end, Vitalik personally invested $2 million to sponsor qualified organizations, projects or developers to enter Zuzalu, and provided them with necessary support such as hotel accommodation. This diverse combination of participants not only emphasizes the importance of underlying technology, but also highlights the importance of infrastructure such as account abstraction and user privacy, so as to ensure that large-scale traffic and transaction needs can be coped with in the future, while also paving the way for standardized entry.

Although Zuzalu, as a social experiment with a 1970s hippie style, has gained a lot of attention in the developer community, it has also attracted a lot of criticism for its centralized format, nepotism in its selection model, and its emphasis on the elitist lifestyle of Silicon Valley.

Chinese-speaking players who are not used to the local environment

Another prominent group of participants are those from Asia, who are actively seeking greater influence and value in the global market. These participants, especially representatives of Chinese projects, have a strong focus and insight into user growth and product experience. Their thinking and efforts provide rich possibilities and imagination space for the development narrative of blockchain on the application side.

However, perhaps because their innovation and practice directions differed from the mainstream ideas of the Ethereum community, they generally felt that their opinions and voices were not fully understood and valued during the meeting. This emotion and feeling may manifest as a deep sense of dissatisfaction and frustration, adding an unspeakable tension to the atmosphere of the meeting.

“Big Fan“ but ”No Chinese“

This latent contradiction and conflict was not alleviated by the extension and communication of the meeting, and was pushed to a climax in an accidental but inevitable event. The author interviewed an anonymous participant who said that he was rejected when he sought to take a photo with Vitalik: "No Chinese, thank you, but sorry." The interviewee said: "At that time, I said that I was a big fan and hoped to be photographed, and my T-shirt was covered with project labels. Many Chinese projects have previously sought Vitalik to take photos to endorse the project, so I understand this attitude."

The incident has caused some controversy in the Chinese community, and the emotions do not seem to have dissipated with the end of the meeting. On the contrary, it seems to have left a deeper mark in the hearts of the participants, as if telling us that although the meeting has ended, the real problems and challenges have just begun. We can clearly feel that in the next global market dynamics, we will not only face superficial problems, but also this invisible pressure, competition and tension.

Conflict can be understood as a fierce confrontation between two different types of ideas. Whether it is classified as arrogance, centralism, or impatience and frustration, these are superficial collisions. It is relatively simple to evaluate, classify and label these ideas. But it is a complex and difficult task to truly understand the source of these dynamics and explore the deeper reasons behind these surface phenomena.

Therefore, the author attempts to understand and interpret this process. Although the views put forward may be limited by personal perspectives and may be one-sided, criticism, corrections and feedback from all parties are very welcome to help the author gain a more comprehensive and in-depth understanding.

Too much attention on ZK infrastructure projects

Ethereum’s development path has been working hard to solve some fundamental challenges, including scalability, account abstraction, and user privacy.

These are all major issues related to the stability of Ethereum's underlying infrastructure and user experience. Although in the long run, this is paving the way for the next stage of innovation and preparing for the arrival of a wider range of applications and users, in the short term, these efforts may not form a distinct new story. In terms of the attention paid to zk infrastructure projects, Ethereum's decisions seem to be driven more by technical possibilities than the potential of the existing user base and application ecosystem.

However, we cannot ignore that although Ethereum has put a lot of work into the underlying technology and infrastructure, there is still a lot of room for improvement in building better user experience and applications. Entrepreneurs in Europe and the Middle East are too focused on infrastructure and B-side service construction, and fail to see the potential of projects that have the potential to promote new narratives in the industry. The Ethereum community needs to pay attention to and support more projects that focus on user experience and product design to better meet the needs of existing and future users.

The author believes that as an emerging industry, Web3 has huge potential and room for growth, but it has passed the stage where we can simply and roughly assume that users will grow naturally. This argument may be very clear to entrepreneurs in Asia-Pacific who have witnessed the fierce competition in the mobile Internet era, but it may take more time for European and American entrepreneurs to accept it. New Web3 users need a wider range of application scenarios to put better infrastructure to use. This is the first principle.

Beware of new centralization. Will the dragon slayer also become the dragon?

European and American venture capital circles have indeed invested more and more in infrastructure projects, which has caused the valuations of related projects to soar. However, many of these projects have not yet been able to make a strong differentiation and can only rely on airdrop expectations to attract and retain users. This has created an atmosphere of tension and anxiety in the bear market.

Viewing new infrastructure projects as a means of locking up liquidity may be path-dependent thinking, or it can be said to be a helpless move. In the blockchain ecosystem, liquidity is key, and new infrastructure projects often attract a lot of liquidity. However, this strategy may also cause some problems.

First, it could stifle innovation. If liquidity is concentrated in a few infrastructure projects, other innovative projects may lack sufficient liquidity to develop. In addition, this strategy could also make the ecosystem too concentrated, leading to a lack of competition and diversity.

Secondly, locking up liquidity may lead to market instability. If a large amount of liquidity is locked up in some infrastructure projects, once problems occur in these projects, it may trigger a liquidity crisis and affect the entire market.

Therefore, while locking up liquidity through new infrastructure projects may work in the short term, in the long term we need to find healthier and more sustainable ways to manage and increase liquidity, for example by encouraging competition and innovation, and by establishing robust risk management mechanisms.

Ethereum is a progressive and vigorous infrastructure

The key topics related to Ethereum's own development in this EDCON, including Roll-up expansion, zkEVM roadmap, account abstraction, user privacy, etc., are all old news for developers.

But at the same time, we need to be clear that Ethereum has been scheduling key infrastructure projects in a progressive manner, and the delivery has been good so far: from the transformation to the PoS consensus mechanism a few years ago, to the roll-up-centric expansion plan in the past two years, to the account abstraction that began to emerge at the Bogota conference last year, and so on.

Ethereum's technological advancement has also affected various participants in its ecosystem. For example, the PoS transformation covers the miner group, the expansion plan is mainly aimed at developers, and the current AA and on-chain privacy are infrastructure construction that directly serves ordinary users.

It can be said that Ethereum has never ignored the development of the application side. On the contrary, it is paving the way for the next project or paradigm that can break the old model in its own way. In this process, centralized organizations, such as the Ethereum Foundation and Vitalik's small circle, will inevitably have many considerations in the priority ranking of technological progress and product iteration.

As Ethereum co-founder Vitalik Buterin put forward the three major technical challenges facing Ethereum in his keynote speech: scalability, privacy, and user security. He pointed out that "In the past decade, the main focus of Ethereum has been on the security of smart contracts, and in the next decade, we will pay more attention to the security of accounts."

According to the topic classification of the agenda items on the Edcon.io official website, we can roughly understand the direction and energy allocation of Ethereum's current focus. Obviously, for Ethereum, now is the time to vigorously promote account abstraction and user privacy. This is logical - the industry needs to first ensure that the underlying layer can carry huge traffic and huge transactions, and then optimize the user interface and formulate unified standards.

Overseas communities are concerned and wary of Ponzi culture

On the other hand, in this EDCON, overseas developer communities also expressed more vigilance and concerns about Ponzi culture. Among entrepreneurs in Asia-Pacific, fomo and Ponzi should be important manifestations of market operation capabilities at least in the early stages of project growth; while outside Asia-Pacific, most people seem to only see the process of a project's asset price falling from the highest point, and underestimate the positive impact from 0 to 100 in the first half.

Of course, the entire industry also needs better consensus and community mechanisms to pressure project owners to strengthen self-regulation and self-discipline. At the same time, investors also need to improve their ability to identify which projects are real and reliable and which projects may have risks.

However, this process is not easy. Due to the anonymity and cross-border nature of blockchain and cryptocurrency, supervision and tracking become more difficult for project parties. We must face this reality and take measures to reduce this risk as much as possible. It is foreseeable that with the improvement of infrastructure and the influx of greater traffic in the future, the following response strategies will be gradually improved.

Improve industry self-regulatory capabilities: All major players in the cryptocurrency and blockchain industry should work together to build and maintain the industry's self-regulatory mechanisms. For example, establish industry codes of ethics, clarify industry norms, publicly expose violations of rules on the chain, and encourage everyone to comply with regulations. Improve investor education and public awareness: It is crucial to educate the public and investors to understand the typical characteristics of fraud such as CX plans, enhance their awareness of prevention, and be able to identify investment opportunities that seem too good to be true. Strengthen technical regulatory means: Use the transparency of blockchain to develop better analytical tools and regulatory technologies to help detect and prevent fraud. Strengthen laws and regulations: Although cryptocurrency and blockchain have cross-border characteristics, strengthening laws and regulations can still prevent and combat fraud to a certain extent. Governments should strengthen legal supervision of such fraud and cooperate with other countries to combat cross-border fraud. Encourage transparency and responsibility: Encourage project parties to publicly and transparently display information such as how their projects operate, team members, and financial situations. At the same time, they are also required to be responsible to investors and the community and to be responsible for the consequences of their actions.

East and West: How to have more effective dialogue and draw on each other’s strengths?

The Ethereum Foundation did reveal some self-centered attitudes during the event, and they seemed to lack sensitivity to the development of the application side.

Therefore, Chinese and Asia-Pacific entrepreneurs may feel that their opinions and contributions are not valued and understood enough in this process. These all reflect that the Ethereum community needs to be more inclusive and understand diverse voices, and needs to have a deeper understanding and support for truly user-oriented applications, so as to enhance the health and prosperity of the entire ecosystem.

This issue also reminds us that the Ethereum community needs to take more proactive actions to understand, pay attention to and support projects and entrepreneurs who have a keen sense of application-side development, no matter where they come from.

Although Chinese projects focus on user growth and product experience, their core narratives at the abstract level are usually not firm and strong enough, and the needs imagined by the founding team often go beyond thinking based on actual scenarios. This to a certain extent highlights that their product positioning for the international world needs to be strengthened.

Therefore, although this collision and tension may seem conflicting, it can also be seen as a valuable opportunity for learning and growth. This provides a platform for communication and understanding of different thinking patterns, cultures and values, giving all parties the opportunity to re-examine their views and assumptions.