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On-chain chaos

chaos crypto on-chain

Ever since the Nomad hack, I’ve become fascinated by how we can use blockchains to create more on-chain chaos. The idea of chaos is not unique, many of the best games I’ve played have taken advantage of exposing short bursts of massive chaos: drop parties in Runescape, the first 10 seconds of rushing to the chests in Minecraft hunger games, spawn killing in Call of Duty, etc.

I think this is unique because this feeling or rush or thrill of absolute chaos is not something (if you’re fortunate) you see in the real world, and for good reason. Chaos is a dangerous thing and not something to be taken lightly. But the idea that we can use other mediums to expose this “API” as a consequence of the game or system to take advantage of all the entropy, the coordination, the thrill that emerges feels important. It’s like unlocking a new game mechanism to do all kind of cool things.

Money is fundamentally a coordination mechanism as old as time, and crypto making the financial aspect explicit in the way we design applications and our systems unlocks this primitive to incentivize behavior and actions. Competition for money creates powerful forces that draw in all kinds of interesting behavior on-chain: bots aggressively compete with each other on all kinds of MEV, sandwiching, frontrunning/backrunning, arbs, and liquidations. Vulnerabilities in code and logic attract smart talent to find obscure ways to take advantage of the system, badly designed mechanism design attracts people to imbalance the system.

There’s a reason language like “arbitrage” and “alpha” are so common in crypto lingo - it’s because many of the implicit forces that drive behavior in society now become explicit ways of keeping the system alive, healthy, and balanced via economic incentives.

How is this related to the Nomad bridge hack? I was watching the Nomad bridge hack live as it happened and this visualization is an accurate depiction of what was going on on-chain. There are often times where maximum chaos ensues on-chain and all of this chaos is often a consequence of some necessary action against a ticking clock - in Nomad it was take some money before it’s all gone, in minting of popular NFTs, it’s minting an NFT before the supply is up, in a time sensitive airdrop, it’s getting your tx in over others.

Many of these end up purely looking like competition for blockspace, i.e. a fight to get a transaction in when there’s high demand, but those aren’t the interesting ones. The interesting ones are when there’s information asymmetry, when some group of people know something that others don’t and so even though you can see people doing something, maybe you don’t know why or how or what’s going on.

Chaos is not new, why is taking advantage of blockchains to do this useful? Well if blockchains are just coordination mechanisms, then they unlock fundamentally new or better multiplayer, interplayer, intraplayer, pvp like capabilities that we can take advantage of to create more chaos and in different ways. What type of game intentionally creates these flaws to almost guide behavior and engagement with the game in interesting ways? What type of mechanisms enable new forms of chaos - not just one to one chaos, but one to many, many to one, many to many.

And a game used not in the canonical sense of a game btw, doesn’t need to be a “game” but much of the interesting stuff that happens on-chain ends up looking very close to a “game”.

What does this look like concretely? I don’t know yet, hence this post. I think some possible paths of exploration but need more time to marinate are

  1. some nft ala loot with some flaw or interesting mechanics for minting on chain that produces new kinds of behavior, both incentivizing interesting behavior to try to “exploit it”, but also new interplayer behavior to create more chaos
  2. games where the end result is straightforward but how you interact with it creates this type of chaos

These are vague because I still don’t know yet. So if you have thoughts, I’d love to hear them.