2025-06-13 –, Side Stage - Cinema 6
Many solver-based decentralized protocols rely on competition models to incentivize actors like validators, solvers, and liquidity providers. While competition can drive efficiency, it also has a well-documented tendency to lead to centralization. As competitive dynamics favor the most resourceful players, smaller participants get squeezed out, ultimately reducing diversity and increasing reliance on a few dominant actors.
Interestingly, societies avoid competition models for roles deemed crucial to service quality, such as airport security or medical services, to prevent deterioration due to cost-cutting. However, in financial services, competition remains the norm, even when it may negatively impact system integrity.
This session explores alternative incentive models that prioritize resilience and decentralization over a pure race-to-the-bottom approach.
Talk Outline (15-20 min):
Introduction
- Introduction on relevance of solver-based protocols
The Problem with Competition-Driven Incentives
- The natural centralization of competitive dynamics
- How race-to-the-bottom leads to quality deterioration
- Examples from traditional and decentralized finance
Lessons from Non-Competitive Sectors
- Why critical infrastructure avoids competition models
- What DeFi can learn from regulated financial systems
Alternative Models for Decentralized Coordination
- Reputation-based rewards
- Hybrid incentive mechanisms
- Sustainability
The role of Solver Alpha
- What means ‘Alpha’ in the context of Solving?
- The role of liquidity, liquidity indexing and routing in solver performance
- Equitable access to liquidity and routing intelligence
- Open-sourcing solver advantages to prevent centralization
I design blockchain mechanisms that internalize systemically important roles — like market making and intent solving — within the protocol. These roles should be transparent, auditable, and accessible through on-chain logic — not reserved for privileged actors with reputation, capital, or off-chain influence.
My approach is what I call social mechanism design: engineering systems that allow participants to take on societal and economic responsibility without assuming user asymmetry. Too often, constraints are placed on users simply to make protocols easier to design — but those constraints create gatekeeping and fragility. I aim to reverse that logic.
With over a decade in financial engineering and risk management, my current work at Project Blanc and ChainSafe focuses on building intent-based infrastructure and solver networks. I see efficient, trust-producing markets not as a byproduct — but as a shared responsibility that must be embedded into protocol design.
Optimistic about technology as enabler for plurality and equality. Past life in wide area network analytics and security. Socialist at heart.