The Source of Trust in the Web3 World: From Immutability to Infinite Repeated Games

In the Web3 ecosystem, we often think of "immutability" as the ultimate trust. However, this is just the starting point of trust building.

For the assets themselves, the immutability of the ledger is indeed sufficient to establish trust. For example, the hard cap of 21 million Bitcoins, as well as the balances of ERC20 tokens, ownership of NFTs, and cross-chain transfers, are all credible as long as they are recorded on the blockchain, without the need to rely on human factors.

However, for participants, an immutable ledger is merely a basic function. What truly earns trust is not that it "cannot be changed", but that it "cannot leave" and "does not want to leave".

The path of trust in Web3 lies not in consensus mechanisms or nodes, but in the repeated transactions among participants. Trust is accumulated through repeated transactions and is also a byproduct of high default costs. It is not a "consensus" that arises out of thin air, but a tacit understanding that naturally settles in the flow of funds and performance guarantees.

In certain traditional financial ecosystems, the real "trust layer" is not only built on kinship, geography, and personal relationships, but is also established through repeated transactions. The underlying structure of financial credit is not a ledger, nor is it a verbal commitment, but rather a tacit understanding formed after multiple games of strategy. Just like peace, trust only exists within a range where mutual checks and balances can occur.

These traditional ecosystems may have understood earlier than Wall Street that understanding the background is just the beginning: true trust does not exist in decentralized nodes, nor is it cultivated; rather, it is forged through each instance of default and compliance in transactions.

High-Frequency Repeated Games and Inter-Regional Mutual Guarantee

The essence of certain underground financial networks is a trust system built on high-frequency, long-term trading. Its coverage is not limited to local areas but extends to immigrant communities around the world.

The reason why this cross-regional financial cooperation can be established relies on a core structure: high-density repeated games combined with a cross-regional mutual guarantee network.

A businessman operating overseas has been transferring funds to his family or partners in the domestic market through informal channels for a long time. Over time, a long-term repeated trading relationship will develop between him and the intermediaries. This structure is not a one-time transaction; it is based on the expectation of "I dare to give you 1 million because I know you will come back to me for another 1 million next year."

These trading networks do not rely on contracts, but rather on trust-based locked structures: family reputation, word-of-mouth transmission, and mutual guarantee mechanisms, which allow for "remote performance" even across great distances.

Cost of Default: Clearing Systems in Informal Order

In this system, trust is not an innate virtue but a result of rational choice. It is precisely because the cost of default is high that people "dare not default."

If a transaction defaults, it will not only damage local reputation but also quickly spread through family networks, hometown relationships, and clan communities, forming an irreversible social "clearing" mechanism. Although this mechanism does not go through the courts, it is enough to make one "unable to stand abroad."

This is an alternative system of "non-legal sanctions". It is not official, yet it is more efficient and more deterrent than the official one.

You may not believe in the contract, but you will care about the entire clan network's ban.

Multilateral Settlement Network of Funds: Intangible Transaction Locking Structure

Another core mechanism of this type of financial network is the multilateral clearing network for funds.

Different financial intermediaries do not operate in isolation; rather, they serve as each other's "channels" and "hedges" to some extent.

This is like a naturally formed "Layer 2", constructing a highly elastic yet strongly transaction-locked structure through the flow of funds between different nodes.

• Funds circulate among multiple points, forming an intertwining of personal relationships and interests;
• Behind every transaction, there is a "if something happens to me, something will happen to you" communal debt structure.

This system is more flexible and resilient than any on-chain bridging protocol we understand today, even though it has no lines of code.

Code immutability is just the beginning; the "no leaving" after locking up and the courage to continue the game is what makes a "Family".

In Web3, we often view "immutable code" as the ultimate trust, but that is just the tip of the iceberg.

For the assets themselves, an immutable ledger that does not lie is sufficient. However, trust in a participant or a protocol involves a higher dimension of logic and thresholds.

We should not ask: "Does this protocol have any loopholes?" Instead, we should ask: "Is this protocol willing to bind with me for 4 years?" and continue to contribute and flow within this ecosystem.

Locking assets is a form of "self-collateralization" in economic games; ve(3, 3), is a commitment in the game to prove to the community that "I won't run away, I'm willing to play long-term."

• You lock up your assets, I lock up mine, and only by locking each other up can we form a stable mutual trust;
• If you dare to gamble repeatedly, then I will believe you won't backstab------the key word is "dare";
• Are you bold enough to keep all your funds circulating within this ecosystem without leaving?

Note: The lock-up mentioned here refers not only to the tokens allocated to the project party in the agreement but also includes funds raised from public/private offerings, agreement revenues, and even personal funds of the project founders. You/I refers to the participants and between agreements.

But don't get me wrong, "locked staking" is just the beginning, just a commitment to enter the entire ecosystem's "letter of investment." The important thing is the subsequent repeated game - dare to keep the value within the ecosystem.

A DeFi protocol that truly earns trust does not depend on whether it is open-source, but rather on whether it institutionally restricts its right to exit and continuously circulates assets within the ecosystem------daring to engage in long-term multiple games is the cornerstone of trust.

In other words, a tamper-proof smart contract is far less trustworthy than an opponent who is unwilling to leave.

The Misguided Goals We've Pursued Over the Years - The Trust Upgrade of Web3 is Not Just a Module, But a Game Design

Today's Web3 seeks high TPS, low Gas, modular settlement layers, decentralization, and so on. However, these do not build trust in products, projects, or protocols.

Trust is not a technical indicator, but a structure of a long-term game relationship.

Traditional financial networks tell us: the most reliable relationships are not the rules written in contracts, but the structures written in the costs of default.

Just like the social settlement system of informal financial networks, DeFi should also be designed so that if you run away, it not only zeroes your reputation but also requires settlement of multilateral financial relationships------the locking mechanism, voting rights, and governance rights binding are the on-chain translations of these "gray settlement mechanisms."

We should build an environment that allows protocols/participants to dare to engage in infinite repeated games.

Remember, the consensus mechanism is just the tip of the iceberg; locking funds and repeated games are the alliances beneath the surface.

"Insider", not because you say so, but because you spend your time, money, and credibility with your allies, diving into the abyss together.

Epilogue: The Future of Trust, Born from an Unbreakable Alliance

"Insiders" is not just an emotional slogan, but the most powerful system of deterrence: if you exit, I am also doomed.

This systemic "irrevocability" and the courage to continuously invest and immerse are the ultimate trust structures that Web3 should pursue.

Technology can create ledgers; systems can create order; but only games can create trust.

And the best trust is not based on "belief", but on what you cannot help but believe.

Fate accounts for 30% and hard work for 70%.

Love "博" ( chess ) will win

Epilogue

In order to enhance the readability of the article, this text focuses solely on the discussion of "repeated games." Without understanding the background and high default costs, having participants ( mainly refers to merchants ) forcibly entering the environment of repeated games, which is also a form of a local optimal solution.