Financial Freedom and Neo-Feudalism

Original Title: "Financial Freedom & Neofeudalism"

Author: Tulip King

Compiled by: Block unicorn

Preface

Content coins are a scam, and it's self-inflicted. Decentralized finance (DeFi) is no better than traditional finance (TradFi); it's just different. Feudalism will replace the modern state.

Cryptocurrency is Regulatory Arbitrage

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

Bitcoin Genesis Block and Newspaper Headline

There was a turning point when the government could have chosen to let the economy run its course. They could have chosen to let banks fail, let businesses collapse, and embrace creative destruction. It would have been painful, but in the long run, we would be better off. Unfortunately, the baby boomer generation has shown no capacity for self-sacrifice; they are 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 has not invented new finance; it has invented a new platform. By transferring familiar services—payments, lending, market-making—into nominally "permissionless" code, projects have exploited the gaps left by over-regulation after 2008.

Look at DeFi: it primarily recreates traditional financial services without compliance costs. Lending? Compound or Aave are examples. Options and derivatives? Look at dYdX or Synthetix. Exchanges? Uniswap is just a market maker with a better user experience and no KYC. 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 have not fundamentally changed finance. We have merely 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 all essentially the same thing—a human coordination mechanism that evolves to address any imminent survival threat. Human society constantly rewrites its "rules of the game" to solve the most pressing problems of the moment, so ranking any system by a single standard is meaningless.

A brief history lesson:

Feudalism: It arose during the decline of the Roman Empire when Europe lacked standing armies or reliable roads. By mortgaging land to armies, lords could quickly establish small-scale defense systems to fend off Viking and Magyar invasions, providing protection to peasants that distant kings could not. This was not "primitive"—it was a rational response to fragmentation and insecurity.

Absolute Monarchy: It emerged in the 17th century to fund the enormous costs of standing artillery and infantry forces. By centralizing tax and judicial power, the "fiscal-military state" could rapidly mobilize revenue and manpower sufficient to survive great power wars. Kings were not "evil"—they were a solution to the increasingly expensive problem of war financing.

Mass Democracy: Developed to govern industrial societies. Industrialization concentrated educated workers in cities and expanded wealth. Broader suffrage allowed taxation, conscription, and public education to persist politically under these new social pressures. Democracy is not "progressive"; it is an adaptation.

The Evolution of Political Systems and Their Core Issues

Because threats, technologies, and social norms are constantly changing, the "correct" political order is also in flux. A system that protected farmland for a thousand years or funded armies in 1700 could never manage railroads and factories in 1900. Judging these systems outside the context of their birth is like asking whether a plow or a microchip is a "better" tool—it entirely depends on the task at hand. This means that cryptocurrency is not better than our current financial system; it is just different and hopes to be more suited to the times we are in.

I can almost say I am a cryptocurrency enthusiast. I believe cryptocurrency is better suited to the current economic/political/technological environment than any other solution. We will ultimately prevail. But it is unrealistic to assume that cryptocurrency will not create as many problems as it solves. You can or should expect that these problems will continue to escalate over the next few centuries until they fundamentally change the world again.

Unintended Consequences

It turns out that when you provide people with permissionless capital markets, the first thing they do is cheat each other. It's both funny and tragic. The true consequences of cryptocurrency have already emerged, and they are not all rosy:

Theft and Hacking: In 2022 alone, North Korea's Lazarus Group stole about $1.7 billion in cryptocurrency. Imagine a rogue state with nuclear weapons funding its weapons program by hacking your DeFi protocol. In traditional finance, at least there are mechanisms for freezing accounts and recovering stolen funds. In cryptocurrency? Ha, the money is gone. "Code is law" sounds great until someone finds a vulnerability 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 banks. About 20% of Bitcoin is permanently lost due to people losing private keys, forgetting passwords, or sending to the wrong address. No customer service, no refunds, no FDIC insurance. Just permanent, irreversible loss. Your funds are not "safe"—they are just a step away from disappearing due to a hardware failure or a mental lapse.

Hyper-financialization: We are rapidly adding price data to 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 your personal "stock" crashes 40% due to a bad opinion? When your value as a person becomes as volatile as a meme coin?

These are not bugs; they are features. The permissionless nature that frees you from government control also allows scammers to escape punishment. The self-custody feature that frees you from banks also burdens you with unbearable security responsibilities. The tokenization feature that creates new financing models also commodifies human existence.

The edge of freedom is sharp. Many who shout for liberation find themselves at a loss once they achieve it.

New 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 reliant on controlling currency that once they lose that control, they are destined to collapse completely.

Without control over currency, the state will lose its primary levers of power:

• They cannot effectively enforce taxation

• They cannot control monetary policy

• They cannot impose financial sanctions

• They cannot fund social projects or the military

What will fill this power vacuum? I envision modern states being replaced by something more akin to feudalism. We call it new feudalism. New feudalism will exist in the form of patronage systems, with cryptocurrency moguls sitting atop small personal empires (I am not joking).

Studying Patronage Systems in Feudal Societies

This is not a radical theory—it is already taking shape. Look at how mainstream protocols operate. The largest token holders have disproportionate influence over governance. Whales can single-handedly determine the fate of proposals. Founders are revered almost religiously. Discord servers have strict hierarchies from "OGs" to newbies.

Combine this with 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 traditional jurisdictions.

When currency exists under neutral protocols rather than state control, power will concentrate in the hands of those who control capital, not elected officials. Cryptocurrency billionaires will become the new feudal lords, providing protection, opportunities, and resources to those who join their networks. They will not call themselves "lords"—they will be founders, thought leaders, or protocol governors. But this dynamic will feel eerily familiar to medieval historians.

Think I am exaggerating? We have already seen crypto moguls saving entire protocols, creating personal venture funds larger than the GDP of some countries, and amassing followers who obey their every word. The fragments of new feudalism are gradually taking shape: concentrated wealth, networks of personal loyalty, privatized security and governance, and increasingly weakened state power.

This system may be more elitist and fluid than old feudalism. You can "swear allegiance" to different network states with just a few clicks, without being born a serf. But the fundamental power dynamic—powerful capital holders providing security and opportunity to loyal network participants—will strikingly echo the medieval era.

Summary Recommendations

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

Specifically:

Maximize your skills and reputation. In the new feudal world, your value comes from what you can do, not your certificates or job titles. Focus on becoming the top expert in a field that people need. Even in feudal times, skilled artisans, 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 state collapse, but also own gold, productive land, and income-generating investments. Cross-system hedging is the safest strategy as the world reorganizes.

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

Develop self-sovereignty skills. Learn security practices, 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 cannot become a lord, then be a trusted advisor or deputy. In any political system, those close to power benefit the most. Find promising protocols, communities, or network states, and become an indispensable part of them early on.

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

Whether we ultimately enter a truly new feudal arrangement or merely fall into a more fragmented world composed of competing systems, those who recognize this shift early and position themselves accordingly will thrive. Those clinging to the old assumptions of wealth and power will struggle.

Cryptocurrency promises liberation from state constraints and the realization of freedom. It may indeed achieve this—along with all the responsibilities, dangers, and power dynamics that true freedom entails. Be careful what you wish for.