Abundance & Scarcity

Not financial or tax advice. This post is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This post is not tax advice. Talk to your accountant. Do your own research.

In my 5 years in the web3 space (2017 - 2022), I’ve seen oscillations between Abundance & Scarcity & back again.

During the last supercycle, major assets like BTC or ETH went up 20-50x and then down 95% from there.

I want to write a little bit about that history, and why I think it matters today.

Abundance - 2017/2018

When I first joined the space in 2017, ETH had gone on a run from the 10s all the way up to 1400.

At the time, everyone was getting into web3 (what we then called ‘crypto’). ICO promoters were all over linkedin. The membership of our local blockchain meetups grew 500%. It was a social movement that many people who were in tech or tech-adjacent were becoming involved in.

When I joined Consensys in late 2017, I was employee number 400-500, on a run up from Consensys having a dozen or so employees to having over 100 employees.

In January 2018, we had a Consensys mesh retreat in Portugal. It was a place where we could meet all of our coworkers, and participate in various activities like hiking, cooking, or going to parties with prominent music performers and even fire dancers at magnificent historical castles.

During this period of abundance, Consensys was hiring. It was common for 2 or 3 people to join a team in a week, and then 2 or 3 more joining in the following week.

More & more projects were greenlit as capital rushed into the space. Investors were in landgrab mode. 100s of experiments blossomed.

There was one problem with all of this of course. The tech didnt really work well for anything but capital formation (at the time - the main use case for ETH was ICOs).

Here’s what the Gartner Hype Cycle looked like in 2017. Youll see that blockchain was at the “peak of inflated expectations”:

The these inflated expectations, the fact that any mainstream use cases were years out, and the irrational exuberance of the bull market, sowed the seeds of the next period of scarcity.

Scarcity - 2019/2020

The market for ETH drew down 95% from 2017 → 2019. ETH went from $1400 to $80.

In november 2018, I became so concerned with the market downturn to the Finance team at Consensys:

Date: 11/21/2018
Subject: Guidance I expect from Finance in a downturn

I wanted to send a quick email about the downturn because it’s on my mind, and I suspect that it’s on the mind of other spoke leads.

I’ve been around the block as a CTO of a VC backed company a few times before, and the cycle that I see is that we raise a round, hire a bunch of people, and then have to lay them off 14 months later because we mismanaged our burn and roadmap or theres a downturn or VC interest dried up.

i really dont want to go through that here with Gitcoin.

here’s how i see things:

we just got approved for $Xmm/year in burn in august. right now we’re right around $(Y)mm/year in burn.

there are two scenarios i can see here:

  1. we continue on course to increase our burn to $Xmm through the course of 2019.
  2. we batter down the hatches, implement a hiring freeze and stricter financial management policies, and wait until the market finds a bottom and focus on revenue in the meantime. We focus on performance and maybe even exit low performer or two. After that, we can continue to our “official process approved burn” of $Xmm.

right now we are on course for (1). please please please tell me that i need to change course to (2) if that is the case.

if i can avoid it, i really dont’ want to go down the course of (1) and have to fuck up morale and our momentum, by laying off half the team 6 months later.

i’m at PHONE_NUMBER if phone is easier.


As it turns out, Consensys then went on to several iterations of restructuring - aiming for what was then called Consensys 2.0, but later refactored into the creation of Consensys Software Inc + the seperation of that SoftwareCo from the more investment-oriented projects.

This 2 year period from Dec 2018 to Dec 2020) is what I began to call The Great Bear. Here is an excerpt from that post:

The Great Bear started in 2018 as the market hit its malaise, but it really hit its apex in December 2018 - ETH drew down from $1400 a year before to only $80. This is when the music stopped. Consensys began laying off it’s staff - and many of the projects that previously did not have to worry about revenue went to being guided to “get profitable this quarter”. We were assigned a “Spinout Shepherd” and instructed that we had 3 months of capital left.

From December 2018 to Summer 2020 was the Great Bear. Asset prices had gone done 95% in the case of the large caps like ETH/BTC. Some ICOs went down 99.9% or more.

These were not fun times. I’ve also called these years The Struggle years. Our team of 10 was funded by Consensys for these years, and we struggled to get revenue, to keep morale up, and we struggled as we saw many changes in the ecosystem at Consensys during these years. Consensys divided into Consensys Software Inc and Mesh Inc - we were slated for the later (and somehow, whether by luck or by skill, our 3 months of capital kept getting extended).

Morale was hit hard during these years. In retrospect, I think we all thought we were missionaries during the Bull Market, but when the Great Bear, we realized how many of us were mercenaries. We were unable to secure budget for compensation increases through these years - and we because of that, we didnt do performance reviews. Stuck between a HR department whose attitude was “youre still lucky to be here”, many questions about our business model and longevity, and a team who was burnt out, our progress ground to a halt on many important initiatives. Our culture suffered. Our communication suffered. Our trust suffered. I worked insane 13 hour days and just YOLO built features like Gitcoin Quests or the Gitcoin Avatar builder. During this time, we fell into a habit of hiring contractors to build new product initiatives like Grant Collections or the Quadratic Lands because the core team was unable to coordinate to push these things forward.

Gitcoin almost did not survive the Great Bear. But we did.

Suffice it to say, the Great Bear was long & hard. The struggle was real. A few excerpts from The Struggle that really resonate with me about this time:

The Struggle is when you are having a conversation with someone and you can’t hear a word that they are saying because all you can hear is The Struggle.

The Struggle is when you go on vacation to feel better and you feel worse.

The Struggle is the land of broken promises and crushed dreams. The Struggle is a cold sweat. The Struggle is where your guts boil so much that you feel like you are going to spit blood.

The Struggle is when you don’t believe you should be CEO of your company. The Struggle is when you know that you are in over your head and you know that you cannot be replaced. The Struggle is when everybody thinks you are an idiot, but nobody will fire you. The Struggle is where self-doubt becomes self-hatred.

The Struggle is where greatness comes from.

One extremely fucked up thing about the struggle is that even when the external constraints are gone, you still have internalized PTSD from it. Once you’ve internalized the struggle, it does not just go away when the market turns. It stays with you. You remember. You prepare for next time. But over time, you learn to release the struggle and make turns to create new opportunities.

Abundance (2020 - present)

As it turned out, Gitcoin survived the Great Bear, and then went on to the Great Reset and is now going through a Great Revival. We now have the lindey effect of having survived a market cycle, yay!

And we are again in abundance mode! Here is what I am seeing:

In January 2018 February 2022, we had a Consensys mesh GitcoinDAO retreat in PortugalBoulder. It was a place where we could meet all of our coworkers, and participate in various activities like hiking, cooking, or going to parties with prominent music performers and even fire dancers at magnificent historical castles going snow tubing or hanging out in the hot tub.

During this period of abundance, ConsensysGitcoinDAO was hiring. It was common for 2 or 3 people to join a team in a week, and then 2 or 3 more joining in the following week.

More & more projects were greenlit as capital rushed into the space. Investors were in landgrab mode. 100s of experiments blossomed.

Maybe you notice a pattern here. This period of abundance is a fractal of the period of abundance from 2017/2018. Of course, history doesnt repeat but it does rhyme. There are things that are different.

  1. DEFI, NFT, DAOs all exist now. The tech does not provide some useful use cases.
  2. GitcoinDAO did not exist in the last cycle. GitcoinDAO is now in charge of it’s own governance. No more asking Consensys Finance for favors, yay!
  3. The whole ecosystem is now just more mature & more established. Stablecoins exist, lots of great wallets exist. The Merge is coming.

Is the supercycle dead?

Here is what proponents of the BTC super cycle think will happen:

Of course, stock to flow is a flawed model insofar as it’s not necessarily predictive of the future. Prominent twitter accounts that promote stock 2 flow often change their targets, so the above should be taken with a grain of salt.

The space has been historically been very coupled to Bitcoin, which historically has operated on 3-6 year bull/bear cycles. Will it continue to do so?

The answer is anyones guess, but I tend to subscribe to the view that the one giant wave that was oscillating between bull/bear will start to de-couple into multiple smaller waves of smaller magnitudes, more coupled to the segments of society they disrupt. For example, I think that alt-L1s, L2s, privacy tech, DEFI Summer, NFTs, and DAOs are all waves. Its possible that Internet of Jobs and public goods and regen could be upcoming waves, and likely that we’ll see repeat waves for each of these subsectors. (these are my opinions, dont make any investment decisions based on these things - do your own research)

Zooming out

When I zoom out, I can’t help but see the cyclicality of the supercycle playing out.

of course this is kind of an extension of an centurys-long cycle of financial markets between fear & greed, bull & bear, infrastructure & application:

and its affects on people:

Winter is coming

This all leads me to my final point:

Winter is coming.

I don’t know what will cause it. But I know the cyclicality of this space (and just markets in general). I know volatility. And I know that many of my new frens are summer children who do not have exposure to these things.

I hate to be a wet rag, I really do. But I just can’t help myself. Having gone through the struggle once, I really want to be prepared to win the next struggle.

So GitcoinDAO, here is my prompt to you

  1. how do we make the most of our current abundance?
  2. how do we set a floor on how bad things can get during the next bear?
  3. who all will be sticking it out (keeping the flame alive) during the next bear? in what capacity? under what terms?
  4. how do we maximize the utility & anti-fragility of the Gitcoin network?

I have my own ideas, but I want to make space for others to sensemake around this.


As an outsider, I think the biggest risk to GitcoinDAO’s ability to survive a return of the Great Bear (which I do see happening) is its current over reliance on GTC to fund workstreams, grants, and other ad-hoc proposals. Diversifying reserves into non-correlated assets should be an immediate focus in times of abundance to ensure GitcoinDAO does not enter a self-fulling negative feedback loop that may arise from over reliance on a single source of capital (GTC). GTC is down a fair bit from its peak, and if it becomes the primary source of income for contributors during a Great Bear, it may suffer a death spiral. I’m well aware that Gitcoin does have some other assets in its treasury equivalent, but dog meme tokens aren’t exactly an uncorrelated asset…

One additional thing GitcoinDAO could do now is to set clearer expectations on workstream funding, including established yearly limits. The quarterly budget approach across workstreams is not consistent and does not seem sustainable – this is a sensitive topic, but I personally think there needs to be more top down expectations regarding yearly workstream budgets (ideally with the ops team setting those expectations and communicating down). And of course clear and transparent accounting throughout the year. If you get in the habit during the good times, we will enter the bad times in a stronger position.

Lastly, GitcoinDAO needs to maintain very high standards with regards to retroactive funding of past contributors or projects, and possibly put out an edict that GTC reserves shall not be used to retroactively reward past efforts (unless there was a clear contract).


I am glad you are asking these tough questions … I can’t answer them from a market/economic point of view. However, here are some ideas.

Winter is coming? So then, nature takes time to fall asleep, has built reserves, pauses and regains clarity. Nature also has supercycles. So how do create synergies with nature?

  1. how do we make the most of our current abundance?
    learning that abundance is something that can be cultivated within us, such as gratitude and acceptance, and does not depend on external circumstances. Dropping into fear limits our abilities to come up with co-creative solutions during rough times, so we better make sure that we learn to take care of our very own mental, emotional, spiritual and physical readiness. Self-Awareness and Self-Leadership first.

  2. how do we set a floor on how bad things can get during the next bear?
    a vision and mission that reaches beyond the bear and generates enough pull from the emerging future to surf the big wave. we know what that vision feels like in every cell of the body.

  3. who all will be sticking it out (keeping the flame alive) during the next bear? in what capacity? under what terms?
    It will be important to work on building reserves for all 8 forms of capital - individually and as an organization. That is, cultivating a culture of resourcefulness (similar to abundance) will support this.

  4. how do we maximize the utility & anti-fragility of the Gitcoin network?
    building local IRL hubs to live and commune… ?

Let’s not forget: Nature knows that spring will come after winter.


Though past trends become less and less relevant as the industry adoption changes, it is good to have a general-purpose winter plan aligned with the DAO at all times.

  1. Define winter: Ether price drop of 70% below previous 6 months peak?
  2. Define pre winter: Ether price drop 55% below previous 6 months peak?
  3. Build separate emergency winter fund during abundance which is enough to pay x months(median of last 3 winter periods?) of rentals/subscriptions for the DAOs lifelines.
  4. Primarily activate 2 plans for the above scenarios – (i) Workstream budget (ii) Grants
  5. For workstream budget one option is to payout in GTC estimates when the budget was finalized IF pre winter scenario is activated. Also make it a practice to have a winter scenario budgeted by all streams?
  6. No question of layoffs, DAO contributors are missionaries. Its is wise to give them visibility to a winter scenario at all times so that they prepared to budget their expenses in USD/EUR or whatever currency they primarily transact in.
  7. Grants- here we might need to come up with a winter matching mechanism. Try and keep the funds flowing for projects which are core to the mission, cut down matching to the rest.
  8. Keep all the above policies documented so that no one is taken by surprise if it is activated.
1 Like

I really appreciate this post, and conversation. Having been in ConsenSys, Gitcoin Holdings and now the DAO and Foundation It has been a tremendous learning on how to capitalize on momentum, and eating when there is food on the table. Perhaps Kevin and I are too close for me to be objective, but I too have observed a similar trend to what @owocki describes below. Gas prices alone have shown the change in interest in NFTs, but Eth’s price is still holding steady while Defi 2.0 and lending options are starting to gain traction. The (relatively) micro waves will likely offer more stability, but also offer some opportunities (for financial stability).

I am optimistic that as solutions (new protocols for untapped market problems) come online we will continue to see a tide that raises all boats. There was a recent explosion in L2s, but with gas prices much cheaper, I wonder if we will already see consolidation in the space (like we did with NFT marketplaces, and Defi platforms). The rate in which an explosion of options is created, then a contraction seems to be accelerating. The oscillations are getting smaller. stability is forming (at a macro level).

I want to name that this is me ^^. I don’t have experience from the last 5 years in the space, and this bring both advantages and disadvantages. I am more open to risk, I am more familiar with how to scale and grow teams & markets. I am less versed in “being a cockroach to survive.” I am hopeful that with partnership from those who have been here for years, and wisdom from my Web2 growth days we can forge an even keel approach that is tempered in learning from a diverse range of experiences.

As someone who is now leading the Gitcoin Foundation, the sustainability of our Mission - the DAO’s mission… Gitcoin’s Mission - is what keeps me up at night. It is the reason I am critical of budgets and how we are spending our treasury. It is why I am critical of the impact Workstreams have… the impact we are able to sustain, and the progress we need to continue to strive for. Though I have been only part of this team for a year and a half, the continued success of our collaboration and impact feels like the most important thing.

We are doing a few things to sustain Gitcoin in the short term (treasury diversification, better budgeting practices), but I fear we have not yet done the analysis on which workstreams are delivering the impact we need to propel ourselves prudently into the future (bear or bull).

As organizations scale, planning cycles need to be more thoughtful, the horizon in which we aim teams toward needs to be further into the distance, more ambitious. When I was at Twitter, I watched dozens of failed acquisitions happen because we had an arguably short sighted vision of “serving the world’s public conversation” (or just copy facebook for a while there :zipper_mouth_face:)… having a vision of “serving the world’s interactions” would have delivered that same purpose (serving the public conversation) but expanded our horizon and given executives more ability to grow into a technology company, instead of a single product company (imagine if Twitter hadn’t fumbled Vine… the first TikTok). Google, Amazon, Microsoft, Facebook (kinda) all made the leap to technology company. Twitter, Snapchat, Now even Netflix are realizing they missed the mark of that goal. Software will continue to eat the world.

For Gitcoin we have talked about the DAO sandwich:

  1. Impact DAO (We are here today, with grants and Public Goods funding)
  2. Protocol DAO (We planted seeds with Coordination Party Kit, now Grants 2.0 and soon the Registry, perhaps even dCompass, Kudos)
  3. Investment DAO (though we have made a couple investments to date, Gitcoin has an incredible advantage in discovering top teams, projects and protocols ahead of the market based on our communities participation in Grants rounds)

One of the questions that keeps me up at night is, how do we ensure we maintain momentum and our growing impact (#1 from above), while also investing heavily in #2 (Protocol advancements). While not losing sight of our goal to fund much of the world’s public goods (investments made by us today pay forward the funding for future projects - Aqueducts, commitments to public goods funding, etc.)

Workstream leads should be thinking about scenario plans for continued growth, and then contraction. The rigor that goes into that evaluation is often helpful, but can be very time consuming. I get the sense we are just starting to hit a tipping point where most WS leads are now spending more time “parenting the DAO” than they are running their workstream. CSDO has formed as the leadership team of the DAO (it is the workstream leads across the DAO, so it makes sense). But, there is no formal budget for these leadership roles. These Leads are doing double duty, running the DAO and their Workstreams. It means there is often less planning at both levels (for the whole DAO and for their workstreams).

I suspect we will see some proposals to determine how best to care and nurture both the DAO and the workstreams in the near future.

To Kevin’s questions, we have some key milestones ahead of us that IMO will ensure we are not stopped short in our quest to build and fund public goods:

  1. Finish up our transfer of assets from Holdings to ensure the DAO (foundation) can stand on its own
  2. Execute on our treasury diversification and ensure we have stability in our treasury (perhaps hire a fractional CFO type to guide us here as well)
  3. Deliver on core Protocols (Grants 2.0 is the most important to start)

These things need to happen while we also come together as a DAO, and strengthen how we work together, how we govern, how we make policy and how we encourage more participation in our mission.

Outlining novel plans for different scenarios is a great idea, and something I would love to continue to explore with CSDO and the DAO as a whole.


Here is a wild idea to give us some diversification and anti-fragility! Will keep it brief to start. Just imagine…

Owning a hydro-electric generating station. We could lease it out to crypto mining companies indefinitely or we could try to use the power to mine our own. I think much simpler to lease it out because I think an established player is needed to get reasonable fast access to the asics or whatever mining hardware is chosen. As a benefit, the location is on the wild northern pacific coast which means mining hardware can come by container ship direct to prince Rupert and barged South from there for super easy access to the site (compared to inland).

I found a hydro generating plant for sale in North America that used to produce 1-1.5 megawatts and asking-price is under 3 mil USD. All licences and permits are supposedly ‘in-place.’ There is no crypto mining facility (yet). We will need to build that part.

You want to build the system that builds systems? How about take it one meta-level higher and build (ok generate) the power that all systems need? In a world of dwindling resources and voracious appetite for electricity, owning a hydro-electric plant could be a real strength. Especially when we can ship that power around the globe as digital tokens.

This is serious infrastructure to support a long-term vision. I would love to see a Dao to attempt this task. Could probably get the local indigenous groups involved. I wonder how much start up capital we need to build a warehouse full of mining hardware.


I think this post is worth a re-read now that the market has taken a downturn & more scarcity is upon us :slight_smile:


This is a really really great read, thanks @owocki I feel that we do tend to take for granted what is normal when we are in abundance (CryptoPunks, et al.) and building during periods of downturn. It’s probably a human sentiment to do so, but it’s often good to zoom out once in a while and plan for the eventuality of cyclical markets.