RecursiveStakes

It’s been a very eventful 2024 for the HonorCode project and on-chain reputation more generally, and 2025 looking even brighter with efforts like Deep Funding picking up. This year-in-review thread is a reference for the main milestones and posts so far:

@ProfSteveKeen You're describing the mechanics and effects of corporate socialism, and we need to call it like it is. x.com/RecursiveStake…

You remember what the "Dream" was supposed to look like. You get a job. You work hard. By your mid-20s, you buy that house with the white picket fence. You raise a family on one income. You retire with dignity. Look around you. That world is gone. It wasn't stolen by immigrants, and it wasn't lost to "bad luck." It was structurally engineered out of existence by a financial system designed to inflate assets while suppressing wages. In the United States in 2025, the median age of a first-time homebuyer has now hit 40 years old. That is an all-time high. Back in 1991, it was 28. That isn't a "vibe shift." It is a mechanical failure of the economy. Say you're earning $100,000 a year - a number your parents would have called "wealthy" - but it feels like $60,000. That feeling is not in your head. It is in the data. Since 2000, U.S. median household income has risen only ~99% in nominal terms. But after adjusting for inflation, real incomes are up only 8.5%. Meanwhile, median home prices are up 155%. AKA Home prices have risen roughly 18x FASTER than your real purchasing power. Home prices are growing at 150% while your real purchasing power has grown less than 9%. In 1985, a home cost 3.5x your income. Today, we are looking at national ratios of 5x to 7x. In Los Angeles, it's 12.5x. This makes the concept of the 'American Dream' mathematically impossible for most families. You aren't bad with money. The game board was tilted against you before you even rolled the dice. You can't see this tilt on a standard spreadsheet. Standard economics hides these mechanics. You need a way to visualize the flows that are draining your bank account before they even hit your ledger. If you keep relying on 'budgeting harder' while the macro-tide is going out, you will drown. You will spend the next decade cutting coupons while your net worth is silently eroded by asset inflation you never saw coming. Want to learn the real deal, drop in the comments.

@owocki The main rzn PGF's in a rut is that it should be PG 'Creditation, by pioneering a new value dimension orthogonal to $$, in a reputational space that isn't tied to $$. Then it can DIRECTLY reward actual excellence, not perceived potential, w/$$$ to follow later.

Leaving Devconnect, I felt the weight of being in a niche that might be stagnating. Public goods funding in Ethereum has lost mindshare. PGF is seen as a cost center to many ecosystems, Vitalik is focused elsewhere. Builder energy is real, but attention has drifted. Discussing this with @carl_cervone, we focused on one core issue. Most teams failed to execute well. There is a lot of well-intentioned mediocrity. In a rising market, mediocrity gets hidden. CT has an immune system for obvious scams now, but not for pervasive mediocrity. Some bright spots: - Its been great to see the rise of @OctantApp - they are focusing on the demand side with their new vault play - which I think is super smart. I want them (and their vault users) to raise a shit ton of funds and then be discerning about how to spend it. - I love what @SilviProtocol is doing with bioregional financing. Peer to peer proof of tree planting is very cool, this model could completely bypass the existing middleman-ridden NGO structure for reforestation. - @deep_funding is doing great work attracting talent from new places (AI). And scaling human judgement to fund OSS dependancies. - I like how @devanshmehta thinks about connecting revenue centers & cost centers for ecosystems. Just like how its hard to survive in nature w/o energy, its hard to survive in business without revenue. By connecting cost/revenue centers. we are able to finance ecosystem public goods in tandem with their growth. - IMO The clearest direction for @gitcoin GG25 is to focus on keeping our own spend (relatively) low while proving out our ability to build coalitions that have impact (and get upside) in 1 to 2 frontier metas with real momentum (maybe x402, AI, stablecoins, DePIN, interop, infofi privacy). Tangibly this means running public goods funding rounds there, and pairing it with token investments to build dealflow and treasury longevity. The PGF rounds build dealflow for the investment engine. - There are others that are doing great things I likely missed. Shill them in the comments and Ill RT the best takes. Thanks @carl_cervone for helping me sensemake here!

The semi-incomplete news is that the reward flow piece, allowing for actual funds to be distributed, is not in the best state and hasn't been fully deployed. Next step there is to build out proper streaming w/an existing tool. For now it's enough to try out the reputation side!

I'm pleased to finally announce a UI for HonorCode! Available on OP Mainnet here: docs-site-lac.vercel.app/app Implementing basic reputation tracking for projects, I was able to replicate the original allocation in minutes instead of hours.

@Peter_Turchin I've been focused on this tendency of the rich to escape debts & consequences a lot lately. But "wealth pump" sounds a bit too neutral when those systems were designed that way on purpose. Which is why I started calling this state corporate socialism: x.com/RecursiveStake…

The Structural-Demographic State of America: The Wealth Pump api.omarshehata.me/substack-proxy…

Here are a few examples, sry for paywall peterturchin.substack.com/p/the-structur… peterturchin.com/popular-articl…

We need to call it out for what it is: #corporatesocialism is a deliberately engineered set of financial policies, institutions, laws, privileges that allow superrich to escape negative consequences. BC what good is all that $$$ if it can't be used to carve out special treatment?

Peter Turchin is one of the few big picture thinkers able to see our society through the light of history and thermodynamics. His recent discussion of the dynamics driving inequality and the breakdown of social cohesion deserves attention.

Certainly we’ll keep seeing wealthy elites & their media stooges concoct excuses for outrageous policies, while claiming the free market is at work. But make no mistake: we’re seeing #corporatesocialism further entrench, which will continue to spew its ugly and poisonous fruit.

By overstimulating the financial sector, rent extraction and asset speculation are allowed to run rampant. Actual productive investment is not incentivized, because it’s simply easier to park capital in a sure thing instead of making a risky bet.

This past week, the #FederalReserve cut short-term interest rates in the midst of sky-high stocks and unaffordable homes, low unemployment, and rising inflation. Such a questionable move only makes sense through the lens of metastasizing #corporatesocialism.

@ProfSteveKeen This is another way of describing corporate socialism: where existing asset holders enjoy their wealth artificially inflated while the masses endure higher costs, especially for shelter. And then they pretend we have free markets. x.com/RecursiveStake…

In 1981, one stable job meant buying a house at 29, supporting a family, and planning retirement. Today, that same job barely covers rent while you compete with investment funds for basic shelter. This is about banks being allowed to flood housing markets with unlimited mortgage money for 50 years, inflating prices 2.5 times beyond what your parents paid. The rules didn't just change—they were systematically rewritten to transfer wealth. The game was rigged by design. #houses #jobs

@glenweyl @curtis_yarvin One very pressing authority-related issue is which system is best at preventing/reversing oligarchic capture of institutions which end up artificially redistributing wealth upward. After all, elites are also part of the demos and extremely adept at shaping the public space.

What do you find the most persuasive arguments of @curtis_yarvin for CEO monarchy that you'd want to make sure I address?

@PeterSchiff More here: x.com/RecursiveStake…

@PeterSchiff Very interesting it takes a libertarian wielding an AI to put the words "corporate socialism" together when it's obvious that it's a major part of the economy/market value, through QE, interest payments, health sector, etc and not only in a few isolated pockets.

Below is what ChatGPT wrote would be the ultimate result of Trump's plan to privatize Fannie and Freddie. Too bad no one in the Trump administation bothers to bounce their bad ideas off AI. If Trump privatizes Fannie and Freddie with an explicit government guarantee: When (not if) the housing market hits another crisis, taxpayers will be on the hook for potentially hundreds of billions — just like 2008. Politically, it will look like “Republicans deregulated Wall Street, handed out favors to donors, and left taxpayers holding the bag.” Economically, it will be another example of corporate socialism — private profits, public losses — which will get labeled as “capitalism failing” even though it’s the opposite. That fuels the narrative for more government control over the economy, not less. It will tarnish the Republican brand for a generation, just like the 2008 crisis did for many voters who still blame "Bush-era deregulation." In short: Trump would get short-term political applause, but his legacy would be a long-term disaster for the GOP and for free-market credibility — because the inevitable collapse would be blamed on “capitalism” instead of what it really is: a taxpayer-subsidized, government-protected duopoly.

@MattPirkowski The problem with assuming that wealth is all freely earned is it ignores state policies that ensure the rich get richer (through QE/interest, i.e. corporate socialism) by raising asset values & housing prices faster than wages. Which is why a wealth tax is a corrective measure.

Billionaires should be forced by the state to make more money, so long as they’re capable of doing so. There’s nothing special about the accumulation of a billion dollars, except for the relative “bigness” of a billion dollars within the economic network. But if controlling a billion dollars results from a significantly faster growth in personal wealth than the overall growth of wealth within a population, and if the rate at which people cycle in and out of the "billionaire" category approaches zero, it's evidence that a population has fallen into unsustainable levels of metabolic circulation, relative to energetic accretion. But isn't it desirable that a society produce those who can autonomously deploy large sums of capital in order to realize a unique vision of value creation? Yes, it is, so long as they don’t become increasingly blind, risk-averse, or obsessed with stifling competition to the detriment of a society’s overall adaptive capacity. From first principles, energetic accretion beyond some organism-relative threshold begins to induce significant costs, in terms of adaptive capacity. So, what to do when a stagnant class of intergenerational wealth accretion emerges? Some would like the state to rob the mega-accumulators of their wealth. But the state is no better than the average sclerotic billionaire at generating novel forms of (non-parasitic) societal value. So this strategy amounts to little more than burning the wealth of all billionaires (sclerotic or not) in a giant sacrificial bonfire––an outcome that might temporarily satiate those possessed by resentment, but that in general helps no one. Instead, it would make sense to implement a scheme that mandates a progressive degree of high-risk / high-reward investment, relative to accumulated wealth. This would encourage capital accumulators to remain risk-seeking and value-generating rather than, as is the base case behavior, to minimize their risk exposure beyond a certain wealth threshold by engaging in extractive rent-seeking or mere capital-on-capital returns. In other words, as one accumulates wealth, there emerges an all too real incentive gradient that descends toward parasitic cowardice and pathological control in service of wealth preservation. And to the extent capital becomes trapped within this extractive regime, a civilization's overall adaptive capacity declines, given it deploys capital toward developing meaningful forms of novel value at a declining rate, while increasing the number and extractive depth of auto-parasitic games ("financialization" being one popular term that gestures toward such games). Yet a policy of progressively calibrated frontier re-investment would help to address the problem of capital stagnation by mimicking evolution itself––it would force winners of the game to keep more skin in the game, and would incentivize them to test their relative skill at playing an ever-evolving and ever more challenging version of the wealth accumulation game. In other words, such a society would encourage a Red Queen's Race whose difficulty increases relative to one's degree of success, but without state confiscation (taxation) of wealth. While such a policy would raise the adaptive capacity of a civilization, would feel fairer due to the increased cycling of wealth to an always-ambitious entrepreneurial frontier, and would help to disabuse us of the idea that billionaires are simply good at whatever they do by forcing proof of that assertion at ever-higher stakes across a broadening frontier of moonshot investments, it wouldn't necessarily flatten the statistical distribution of wealth––it might even compound the degree of its apparent inequality! Those whose moonshots succeed might even become the first quadrillionaires. But that's not as much of an issue as it might initially appear, given it isn't wealth inequality, per se, that drives primates to murderous jealousy––rather, it's the suspicion that one is, by no fault of one's own, locked out of the game by which wealth is generated. It's often (apocryphally) said that "socialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires", yet those who drop this quote as if it's a conversation-ending insight rarely stop to ask themselves why Americans might once have felt that way, and whether that attitude was in fact a predictable byproduct of a thriving culture / civilization. As it turns out, one should expect people to feel like a "temporarily embarrassed millionaire" if they believe they're playing a societal game that offers a real chance at meaningful intra-generational success while observing overall inter-generational improvements at societal scale. On the other hand, an Eat the Rich philosophy of resentment predictably emerges when one or both of the above criteria become less obvious, or are denied outright by the average person. Yet until we realize that stagnant wealth accretion is just one symptom of an increasingly sclerotic civilization, the number of people seeking to scapegoat billionaires will grow, increasing the likelihood that populist movements will set their wealth aflame in a self-defeating conflagration of resentment. Instead, by increasing the proportion of capital directed toward meaningful entrepreneurial exploration, we could minimally leverage state power to improve the average American's shot at success. I say minimally because, while there would still need to exist an enforcement regime, we could improve Americans' capacity to generate wealth while preserving investor autonomy and avoiding the wealth-destroying, capture-incentivizing, government-mediated schemes of centralized redistribution that have become a financial albatross around the nation's neck. Whether we can get there from here is a different question, largely governed by the path-dependent incentives of our present entitlement programs. But even if not here, it's still worth thinking about, given we may have an opportunity in Mars to explore novel dynamics within a political context less tightly constrained by Earth's path dependencies. One way or another, humans will deal with the issue of path-dependent wealth accumulation. Historically, that trajectory looks like rising levels of centralized tyranny punctuated by resentment-driven rebellion, scapegoat slaughter, redistribution, and wealth destruction. While progressive taxation moderates this natural civilizational cycle, it also encourages the runaway growth of a parasitic bureaucracy that thrives off its artificially centralized position within the population's emergent metabolism (e.g. all taxation must flow to the central node, where its accumulation and disbursement authority attracts all the worst kinds of parasites). Mandatory high-risk re-investment, proportional to accumulated wealth and deployed via those who've built wealth rather than via bureaucrats, strikes me as an improvement. Of course there's no free lunch. Such a scheme raises many questions and comes along with its own set of tradeoffs––but it still strikes me as a significant improvement over the status quo.