The financial trickster who takes a long view of crypto

Most people in crypto believe in the near future. They do not invest for returns years from now. They want strong returns next week. But Lisa JY Tan, founder of Economics Design, takes the long view.

Why it’s important: Tan and her team work with companies to design the economics of their token projects, which have become more complicated since Bitcoin started with its simple economic model.

What they say: Even those who are really into crypto for the ideas have too short a time horizon.

• “Everybody wants the utopia to exist right now,” she tells Axios in an interview during a visit to New York City for the Mainnet crypto conference.

Context: Bitcoin started with this idea: a fixed supply of 21 million bitcoin distributed on a predictable schedule over 100+ years.

• Tan talks as if she looks a quarter of a century old. That is in contrast to most people in space who seem to believe that the world economy can be reorganized by the New Year.

Of the note: The hottest topic for cryptocurrency policy makers is stablecoins. Congress keeps teasing out some form of legislation, for example.

• “It’s about substitutability,” says Tan. Governments fear a stable coin that undercuts the money they create.
• “Once we start figuring out the whole monetary policy, we can create our own asset,” says Tan. Governments, as much as they don’t want to admit it, fear it.
• Money has value, she says, because you can use it to pay taxes, and it gives governments a lot of power to manage society. But if the government’s money is spent less, it reduces power.

Yes, but: Governments end crypto with central bank digital currencies (CBDCs).

• Tan is all for them joining the fray.
• “The government’s job is to make sure the whole economy runs smoothly,” she said. “CBDC is an oil that energizes the entire economy.”
• She looks forward to the government experimenting with ways to stimulate the economy, such as digital money that expires (so it can’t be stashed away).

What we’re looking at: It is very fashionable in crypto now to scoff at the idea of ​​Terra, which broke crypto in May, or any attempt at an algorithmically stable coin, but Tan still believes there will be a functional software-powered token one day.

• I think in the long term, she says. “If you think about it, current monetary policy is an algorithmically stable coin. It’s just on a different scale.”
• It may sound like reinventing the wheel, but Tan argues that fiat is like a 2D perspective, and that crypto – in time – will provide more 3D.

Bottom line: The original decentralized stablecoin is MakerDAO’s dai, and right now that idea is to decouple from the US dollar. If it doesn’t do it now, eventually some big stablecoin will, in Tan’s view – when the crypto is huge and the models more sophisticated.

• Until then, Tan will help with many experiments. “That’s why crypto is super interesting, because you create little ecosystems where the way it’s designed is aligned with your philosophy,” says Tan. – Something that is great fun.