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

In the Web3 ecosystem, we often consider that "immutability" is the ultimate guarantee of trust. However, this is merely the starting point for building trust.

For digital assets, the immutability of the ledger is indeed crucial. The cap of 21 million bitcoins lays the foundation of trust in the blockchain world. The balance of ERC20 tokens, ownership of NFTs, completion of cross-chain transactions, and so on, as long as they are recorded on the blockchain, are convincing enough without relying on human factors.

However, for participants such as protocols and project parties, an immutable ledger is just a basic feature. The key to truly gaining trust lies in their "inability to exit easily" and "willingness to participate long-term."

The path to trust in Web3 does not stem from consensus mechanisms or nodes, but is gradually established through continuous transactional interactions. Trust is a product of repeated games and an adjunct to high default costs. It is not a "consensus" that arises out of thin air, but a tacit understanding that naturally forms through frequent capital turnover and performance guarantees.

In certain traditional business circles, the true "layer of trust" is not only built on blood ties, geographical connections, and personal relationships, but is also gradually established through repeated transactions. The foundation of financial credit is not just the ledger, but also the tacit understanding formed after countless games of strategy. Trust, like peace, needs to be maintained within the limits of mutual checks and balances.

These places may have recognized earlier than Wall Street that understanding the background (KYC/KYB) is just the entry-level requirement for building trust. True trust does not exist in decentralized nodes, nor is it cultivated, but is accumulated through repeated practices of defaulting and fulfilling transactions.

High-Frequency Repeated Games and Cross-Regional Mutual Guarantee Networks

In some areas, the informal financial networks are essentially based on a trust system accumulated through high-frequency, long-term transactions. Its service scope is not limited to local communities but covers immigrant communities in various regions around the world.

The establishment of this cross-regional financial collaboration primarily relies on two core elements: high-density repeated games and cross-regional mutual guarantee networks.

A businessman operating overseas has been transferring funds to his domestic family or partners through informal channels for a long time. Over time, a long-term repetitive trading relationship will form between him and the intermediaries. This structure is not a one-time transaction, but is based on the premise of "I dare to give you 1 million because I expect you will come to me again next year for another 1 million."

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

Default Cost: Liquidation System in Informal Order

In this system, trust does not stem from innate virtue, but rather from rational assessment. It is precisely because the costs of default are high that participants "dare not easily default."

If a transaction defaults, it will not only damage the reputation of the parties involved locally, but also spread rapidly through family networks, hometown connections, and clan communities, forming an irreversible social "clearing" mechanism. Although this mechanism does not go through formal legal channels, it is sufficient to make the defaulter "struggle to stand on their own abroad."

This is an alternative system of "informal sanctions." Although it is not official, it is often more efficient and more deterrent than official channels.

In such an environment, people may not fully trust the contract, but they will definitely not underestimate the collective punishment of the entire clan association.

Multilateral Settlement Network for Funds: Intangible Transaction Locking Structure

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

Different capital intermediaries do not operate independently; to a certain extent, they serve as each other's "channels" and "hedges."

It is like a naturally formed "layered network" that constructs a highly flexible yet strongly transaction-locked structure through the flow of funds between different nodes:

• Funds circulate among multiple points, forming an intricate intertwining of relationships and interests;
• Behind every transaction lies a shared debt structure of "If I get into trouble, you will also find it hard to escape."

This system is more flexible and resilient than any on-chain bridging protocol we know today, even though it does not rely on any code.

Code immutability is just the starting point; long-term participation and continuous games are what truly define the "insiders".

In Web3, we often regard "immutable code" as the ultimate guarantee of trust, but this is actually just the tip of the iceberg.

For the assets themselves, the immutability of the ledger is indeed sufficient. However, trust in a business entity or agreement requires a higher dimension of logic and thresholds.

We should not just ask: "Does this protocol have vulnerabilities?" Instead, we should ask: "Is this protocol willing to bind long-term interests with me?" and continuously contribute value to the ecosystem and maintain fund flow.

The lock-up mechanism is a form of "self-collateral" in economic games; the ve(3,3) model is a game commitment that proves to the community "I will not easily withdraw, I am willing to participate in the long term."

• Both parties lock their funds in each other, forming a stable foundation of mutual trust;
• Only by daring to engage in repeated games can one prove that they will not be untrustworthy;
• The key lies in whether one is willing to keep funds circulating in the ecosystem for the long term and not to withdraw easily.

It is worth noting that the lock-up mentioned here not only refers to the tokens allocated to the project party by the protocol, but may also include public and private fundraising, protocol revenue, and even the personal assets of the project's founders.

However, everyone needs to understand that "locking up" is just the beginning, it is a "token of commitment" to enter the entire ecosystem. More importantly, it is about the ongoing game afterwards—whether one is willing to retain value in the ecosystem for the long term.

A DeFi protocol that truly earns trust does not depend on whether it is open source, but rather on whether it institutionally limits its own exit rights and continuously circulates assets within the ecosystem — having the courage to engage in long-term repeated games is the cornerstone of trust.

In short, an immutable smart contract is far less trustworthy than a participant who is unwilling to exit easily.

We Pursue the Wrong Goals: The Trust Upgrade of Web3 is Not Just Technology, But Game Design

The current Web3 ecosystem overly pursues high TPS, low Gas fees, modular settlement layers, decentralization, and other technical indicators. However, these are not sufficient to build deep trust in products, projects, and protocols.

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

Certain traditional financial networks inspire us: the most reliable relationships are not the rules written in contracts, but the structures contained in the costs of default.

Just like the social clearing systems in traditional financial networks, DeFi should also be designed so that once exited, it not only resets reputation but also faces the clearing of multilateral financial relationships—lock-up mechanisms, voting rights, and governance rights bindings are the manifestations of these "informal clearing mechanisms" on-chain.

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

Please remember that the consensus mechanism is just a superficial protocol; locking and repeated games are the deeper foundation of the alliance.

A true "insider" is not based on verbal statements, but rather on time, money, and credibility, facing risks together with allies.

Conclusion: Trust does not originate from an alliance that is difficult to exit.

"Insiders" is not just a simple expression of emotion, but rather the most intimidating institutional arrangement: if you withdraw, I will also find it difficult to remain unscathed.

This institutional "difficulty in exit" and the attitude of "daring to continue investing and accumulating" are the ultimate trust structures that Web3 should pursue.

Technology can create ledgers; systems can shape order; but only continuous games can forge true trust.

The strongest trust does not stem from blind belief, but is based on the reality that you cannot help but trust.

This reminds me of the classic song "Only by Striving Can You Achieve Victory."

Three parts depend on fate, seven parts depend on effort. Only by being brave to gamble can one win victory. Become an indispensable part of this ecosystem.