Radix is Florence
Nov 3, 2023 | 7 min read
Web1, 2 and 3 have all been compared to the Industrial Revolution because each has introduced new systems and organizations with the potential to supercharge global productivity. However, Web3 is distinct and its characteristics place it closer to the earlier Commercial Revolution of the 10th to 14th centuries than the more famous 18th century era.
Maps Before dApps
The first Industrial Revolution brought us the internal combustion engine, mass production, and an exponential increase of mechanical precision. The late 19th century Belle Époque saw an even more elaborate wave of innovations, including central heating, aeroplanes, plastics, computers and heart surgery. Having waited 5000 years for the farming revolution, a brand new consumer class emerged within 500, and agriculture receded as a smaller and smaller component of the global economy.
Yet, as the Renaissance built upon the infrastructure and freedoms won during the Reformation, so the Industrial Revolution wouldn’t have been possible without the groundwork that was laid by the Commercial Revolution. That time wasn’t characterized so much by invention, as by increasing access to existing goods and services.
We see exactly the same situation in Web3 today: A loud chorus of commentators are noting the lack of novel utility and consumer applications, but this is like demanding aeroplanes before the invention of the lathe. Broad consumer adoption won’t happen before transaction costs drop below marginal utility, and that still requires Web3 infrastructure to mature and cover the current economy’s uncharted hinterlands. As this process unfolds, we are seeing a steady churn of applications migrating from network to network in search of the most efficient delivery system for their goods and services.
The Florence Protocol
The Commercial Revolution began in the 10th Century when European traders carved out trade routes to the Levant, Spain, and North Africa. European agricultural societies had developed a taste for Byzantine luxuries and Eastern spices, inspiring merchants to overcome geographical, cultural, and administrative barriers to supply their customers. Principal city-states like Siena, Pisa, and Venice became the epicenters of this commercial boom by leveraging their existing liquidity, political stability, and juridical systems to facilitate trade and reduce transaction costs through contract law, property rights, monetary exchange systems, and the advent of shipping, insurance, and marketing mechanisms.
Among all of the Tuscan city states, Florence was arguably the most successful. Between 1071 and 1284 the city enlarged its walls three times and grew its population ~25x. Even after the devastation of the Black Death in 1348, the city went on to conquer Pisa and acquire direct access to the Mediterranean via the ports of Pisano and Livorno.
Despite - or perhaps because of - its inland location and pastoral heritage, Florence’s advantage lay in its people’s willingness to get their hands dirty. In the years preceding, its merchants had established a network of companies abroad engaged in commerce, banking, and government finance that together operated as a unified trade network.
In contrast, despite having vast iron deposits, rich soil, and chief stewardship of the papal accounts, Siena’s merchant bankers didn’t share Florentines’ aggressive entrepreneurship. As Florence grew, Siena couldn’t compete: its main bank collapsed in 1298 and its bankers retired as rentier landowners.
Looking across the landscape of Web3, the furnaces of infrastructure are still red hot. The Ethereum ecosystem alone is incubating ~50 rollups as satellites around its core technology. The price premium given to Layer 1 (L1) networks suggests that some might venture out on their own to join a growing list of existing competitors, including Radix, Solana, Cardano, Avalanche, and Aptos. Each network is like a city state, racing to plug the rest of the world into its standards and trade routes. Arguably, Bitcoin has been the most successful at colonizing the ruins of failing currencies, but its poor utility has largely failed to quicken the hearts of many expansionist merchants.
Most conversations in Web3 center around the monetary qualities of native assets such as $ETH and $BTC. Yet Florence only introduced a standard unit of account - the Florin - in 1252, almost at the apex of its expansion, after most of the hard work had been done. By 1300, the Florin had become the global standard, gilding in 50 years the trade routes that had taken at least 3 centuries to build. After 1400, various governments started minting their own competitors to the Florin, eventually driving it out of circulation, but that was only possible because the Florence protocol had already won: the trade routes, commercial treaties, banking network, and legal system were in place as a rich substrate for merchants to grow their businesses.
The Radix Protocol
Like Florence, Radix is also a late developer, having clocked up over ten years of research to arrive at its current form. During that time, the denizens of Web3 have looked beyond mere store of value toward financial luxuries that were previously only available offshore or to accredited investors. Ethereum and other smart contract platforms have brought exotic assets, decentralized organizations, and financial tools to our desktops and smartphones, but none in a sufficiently frictionless way to convince the wider economy that their route to market is a viable one to follow.
The obstacles faced by these early pioneers center around the architecture of the protocols themselves, beginning with the all-important developer experience. Developers are the early pioneers of Web3 protocols, seeking a protocol to host their inventions as quickly and safely as possible. The complexity of early protocols like Ethereum led to over $3bn worth of hacks in 2022, forcing developers to spend ~90% of their time on safety considerations rather than shipping products. Such a drain on resources makes Ethereum and protocols that borrow its technology uncompetitive.
One stumbling block of the Ethereum protocol is to keep token balances on vast tally charts called token contracts. Every transaction involves updating the sender and receiver accounts in the contract and wallets must query every token contract to display the correct amounts of every asset. In contrast, Radix is built around the intuitive concept of native assets that are held in smart accounts, making applications much easier to design and safer to manage for aspiring builders.
As well as a more rational architecture, Radix’s smart contract language, Scrypto, has been built expressly for the needs of decentralized finance (DeFi).
Scrypto is simple enough for complex projects such as Trove to be brought to market by a single developer and for Shardspace to roll out an advanced management suite a mere five weeks after the Babylon launch.
On the UX side, the Radix Wallet allows for simple encrypted connections to Radix applications, without the need for third-party connectors. Within the wallet, users can create and customize Personas to share as much information as they want with applications or withdraw it at the touch of a button. Finally, the Transaction Manifest gives a clear, plain-English summary of every transaction, complete with a mechanism to void transactions that fall below an expected inbound amount, for example, with an asset swap.
Radix’s decade of development was arduous, but it was necessary to build a technical foundation that can truly host global commerce. Now we are beginning to see merchants colonize it with applications and users.
The Radix Renaissance
700 years on, the blood, sweat, and tears of the Commercial Revolution is now largely forgotten because it was the birth pangs of a period of human flourishing so profound that its surviving artefacts are still among the most valuable on Earth: the Renaissance.
This is the bull case for Radix: eventually, the rhetoric of architecture and infrastructure will defer to a babble of societal and cultural flourishing. The Radix Renaissance is more than just a metaphor; it is a movement towards an era of unprecedented digital prosperity; a future where digital commerce flows with the relative ease and security of the legendary Tuscan city-state, transforming rhetoric into reality and architecture into civilization.