Financial Freedom and New Feudalism

Written by: Tulip King

Compiled by: Block unicorn

Foreword

Content coins are a scam, and this is self-inflicted. Decentralized finance (DeFi) is not better than traditional finance (TradFi), it is just different. Feudalism will replace modern states.

Cryptocurrency is regulatory arbitrage

Let's be frank: if the government were not burdened with massive debt and bankruptcy, if the Federal Reserve had not enriched the upper class through money printing, if the government had not bailed out companies on the brink of collapse, or if the government cared about reducing inflation and raising wages, there would be no need for cryptocurrencies. Bitcoin did not arise from some divine mathematical inspiration. Bitcoin arose from disgust. The message in the genesis block by Satoshi Nakamoto is not subtle: "The Chancellor on brink of second bailout for banks." This is not a random headline—it is a deliberate provocation against a system that refuses to allow creative destruction to run its natural course after 2008.

Bitcoin Genesis Block and Newspaper Headlines

There was a turning point where the government could have chosen to let the economy run its course. They could have chosen to let banks fail, let businesses go under, and embrace creative destruction. It would have been painful, but in the long run, we would have been better off. Unfortunately, the Baby Boomer generation has shown a complete lack of self-sacrifice, determined to kick the can down the road until they are all gone and it is no longer their problem (to be fair, I might do the same).

The crypto ecosystem did not invent new finance; it invented a new platform. By transferring familiar services—payments, lending, market-making—into ostensibly "permissionless" code, projects exploited the gaps left by the over-regulatory framework after 2008.

Look at DeFi: it mainly recreates traditional financial services without compliance costs. Lending? Compound or Aave are examples. Options and derivatives? Just look at dYdX or Synthetix. Exchanges? Uniswap is just a market maker with a better user experience and no KYC required. The innovation is not in the services, but in providing these services permissionlessly.

Unless mainstream regulation becomes more adaptive, this cat-and-mouse game of innovation through arbitrage will continue. We haven't fundamentally changed finance. We've just moved it to a jurisdiction with fewer police.

Not better, just different.

You need to view the economy, politics, and technology as dynamic and responsive systems. They are essentially the same thing—a coordination mechanism for humanity, constantly evolving to address any imminent existential threats. Human society continuously rewrites its "rules of the game" to tackle the most pressing issues at hand, so ranking any system by a single standard is meaningless.

History Classroom:

Feudalism: It arose during the decline of the Roman Empire, at a time when Europe lacked standing armies or reliable roads. By mortgaging land to the military, lords were able to quickly establish small-scale defense systems to fend off attacks from the Vikings and Magyars, providing protection for farmers that distant royal powers could not offer. This is not "primitive" — it is a rational response to fragmentation and insecurity.

Absolute monarchy: It arose in the 17th century to fund the enormous costs of standing artillery and infantry forces. By concentrating tax and judicial powers, the "fiscal-military state" was able to rapidly mobilize revenue and manpower sufficient to survive in great power wars. The kings were not "evil" — they were the solution to the increasingly expensive problem of war financing.

Mass democracy: developed for the governance of industrial society. Industrialization concentrated educated workers in cities, expanding wealth. Broader suffrage allowed taxation, conscription, and public education to persist politically under these new social pressures. Democracy is not "progress," but an adaptation.

The evolution of the political system and its core issues

Because threats, technologies, and social norms are constantly changing, so is the "right" political order. The system that protected farmland in 1000 or financed the army in 1700 could never manage the railroads and factories in 1900. Judging these systems outside of the context in which they were born is like asking whether a plow or a microchip is the "better" tool – it all depends on the work at hand. This means that cryptocurrency is not better than our current financial system, it is just different and hopefully more suitable for the times we live in.

I can almost say that I am a cryptocurrency enthusiast. I believe that cryptocurrencies are more suitable for the current economic/political/technological environment than any other solution. We will ultimately succeed. However, it is unrealistic to assume that cryptocurrencies will not create as many problems as they solve. You can or should anticipate that these issues will continue to escalate over the next few hundred years until they fundamentally change the world again.

Unexpected consequences

It turns out that when you provide people with an unpermissioned capital market, the first thing they do is deceive each other. This is both ironic and sad. The true consequences of cryptocurrency have emerged, and they are not all positive:

Theft and Hacking Attacks: In just 2022, North Korea's Lazarus Group stole approximately $1.7 billion in cryptocurrency. Just think, a rogue state with nuclear weapons is funding its arms program by hacking into your DeFi protocol. In traditional finance, at least there are mechanisms to freeze accounts and recover stolen funds. In cryptocurrency? Haha, the money is gone. "Code is law" sounds great until someone finds a flaw in your code and instantly wipes out your life savings.

Loss of funds: Self-custody means being your own bank, which sounds empowering until you realize that most people are not good at being a bank. About 20% of Bitcoin is permanently lost due to people losing private keys, forgetting passwords, or sending to the wrong address. There is no customer service, no refunds, no FDIC insurance. Only permanent, irreversible loss. Your funds are not "safe" – they are just one step away from disappearing due to a hardware failure or a mental lapse.

Hyper-financialization: We are rapidly adding price data for everything. People are tokenizing themselves—literally minting personal tokens tied to their reputation or output. Soon, your Twitter followers, personal brand, and even your relationships may have trading pairs and order books. Think about how you would feel when your value as a person is publicly priced for speculation. What about when a bad opinion causes your personal 'stock' to plummet by 40%? What about when your value as a person becomes as volatile as a meme coin?

These are not vulnerabilities, but features. They allow you to escape the permissioned nature of government control, while also enabling fraudsters to evade punishment. They free you from the self-custody nature of banks, but also impose unbearable security responsibilities on you. The tokenization feature that creates new financing models also commodifies human existence.

The edge of freedom is very sharp. Many who shout for liberation, once they attain freedom, do not know what to do.

Neo-feudalism

You need to think about what it means if Bitcoin (and cryptocurrency) succeeds. It means we will completely remove currency and markets from the regulatory scope of the state. A literal separation of currency from the state. This will reshape society on a scale comparable to the separation of church and state. Modern states are so dependent on controlling currency that once they lose this control, the state is destined to collapse completely.

Without control over currency, a country will lose its main leverage of power:

They cannot effectively enforce taxes.

They cannot control monetary policy.

They cannot implement financial sanctions.

They are unable to provide funding for social projects or the army.

What fills this power vacuum? I imagine that the modern state will be replaced by something more akin to feudalism. We call it neo-feudalism. Neo-feudal societies will exist in the form of patronage, and crypto giants will sit at the top of small individual empires (I'm not kidding).

Research on the asylum system in feudal society

This is not a radical theory - it has already taken shape. Look at how mainstream protocols operate. The largest token holders have an disproportionate influence over governance. Whales can single-handedly decide the fate of proposals. Founders are revered almost religiously. The Discord server has a strict hierarchy from "OG" to complete newcomers.

Combining Balaji Srinivasan's concept of "network states"—essentially cloud communities that have their own currency, governance, and possibly even physical territory. These are not "states" in the traditional sense. They are digital territories, with charismatic leaders, loyal followers, and sources of wealth and power operating outside of traditional jurisdictions.

When money exists in a neutral agreement rather than under state control, power will be concentrated in the hands of those who control capital, not in the hands of elected officials. The crypto billionaire will become the new feudal lord, providing protection, opportunities, and resources to those who join their network. They won't call themselves "lords" – they'll be founders, thought leaders, or protocol governors. But this dynamic will be familiar to medieval historians.

Do you think I'm exaggerating? We have already seen big shots in the cryptocurrency field saving entire protocols, creating personal risk funds larger than the GDP of some countries, and accumulating followers who obey them. Fragments of a new feudalism are gradually taking shape: concentration of wealth, networks of personal loyalty, privatized security and governance, and increasingly weakened state power.

This system may be more elitist and fluid than the old feudalism. You only need to click a few times to "swear allegiance" to different network nations, without being born as a serf. But the fundamental power dynamics—powerful capital holders providing security and opportunities to loyal network participants—will astonishingly bear a medieval hue.

Summary of suggestions

My advice remains consistent. In a world dominated by cryptocurrencies, where individuals are empowered beyond the constraints of today's superpowers—you need to become an exceptional individual. You need to work hard to accumulate wealth and build your own little empire.

Specifically:

Maximize your skills and reputation. In the new feudal world, your value comes from what you can do, not from your certificates or job titles. Focus on becoming a top expert in a field that people need. Even in feudal times, skilled craftsmen, engineers, and strategists could always find protection. Build a traceable public reputation that can follow you across different networks.

Accumulate hard assets across different systems. Do not fully commit to the old world or the new world. Hold Bitcoin as a hedge against national collapse, but also possess gold, productive land, and income-generating investments. During a world reorganization, cross-system hedging is the safest strategy.

Actively build your network. Start cultivating your own "micro-empire" now. This can be a Discord community, a DAO, or simply a strong network made up of excellent allies. In the new feudalism, your security comes from your network. Lone wolves will be devoured, while powerful networks will thrive.

Develop self-sovereignty skills. Learn safe operation, self-custody best practices, and independent living skills. The protection of large institutions may not last forever. Those who can manage their own security (digital and physical) will have a significant advantage.

Position yourself near power. If you can't be the lord, then be a trusted advisor or deputy. In any political system, those close to power benefit the most. Find promising agreements, communities, or network states, and become an indispensable part of them as early as possible.

The fundamental fact is that the skills required to prepare for a new feudalism are the same as those needed to succeed in the cryptocurrency field today: self-sufficiency, technical ability, network building, and capital accumulation.

Whether we ultimately enter a truly new feudal structure or merely fall into a more fragmented world composed of mutually competitive systems, those who insightfully perceive this shift early and position themselves accordingly will thrive. Those who cling to the old assumptions of wealth and power dynamics will struggle.

Cryptocurrency promises to break free from the constraints of nation-states and achieve freedom. It may indeed accomplish this—along with all the responsibilities, dangers, and power dynamics that true freedom brings. Be careful what you wish for.