Gods Awaken: The Rise of Network States and TSI
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Gods Awaken: The Rise of Network States and TSI
On the faintly visible peaks of Olympus, the gods are awakening.
Navigating Web3 tides with focused insights
Author: Jingyi, Founder of Yunqifangda, Advisor at LD Capital (Twitter: @SulaXyz)
“Be brave, reveal to us whatever divine will you know.
I swear by Apollo, dear to Zeus—the god
to whom you, Calchas, pray when revealing his will to the Danaans—
so long as I live and see the sunlight spread across the earth,
no man beside the deep-sea ships shall lay violent hands on you.
No Achaean shall harm you—even if your words name Agamemnon,
who now claims to be the best among the Argives!”
—Homer’s *Iliad*
Between the 14th and 16th centuries, Europe experienced at least 166 large-scale wars threatening national survival, with each war lasting on average over eight years. Annually, more than two or three conflicts were often ongoing simultaneously, and 15 wars lasted longer than eight years. From the dawn of the Age of Exploration in 1500 to the eve of the Industrial Revolution in 1700—a span of 200 years—Europe was at war for 95% of that time. To win one war after another, European states had to spend over 80% of their annual fiscal revenue on military expenditures. The emergence of war-driven capitalism profoundly shaped Western civilization and the global economic order. The fundamental reason lies in an era where territorial expansion and population annexation were primary growth models: violence offered the highest return on leverage. City-states required stronger governments to protect themselves from violence. The Hundred Years' War saw the rise of British hegemony, establishing English as the dominant language of global knowledge and commerce. Britain's victory on the Plains of Abraham set the stage for the American Revolution. India became the country with the largest English-speaking population today. Continuous inflows of wealth fueled the Industrial Revolution. The contest for power and global dominance became the central logic of major economies.
Today, however, humanity has transitioned from the industrial age into the information age. The logic of social structure and economic growth has fundamentally changed. The cost and returns of violence are declining, and its forms are evolving.The fundamental human conflict has shifted from great-power hegemony to the contradiction between highly advanced technological productivity and limited resources.Exploring outer space to expand resources and enabling more efficient allocation of production relationships are paths currently being explored. In the information age, network economies will inevitably flourish, giving rise to more advanced organizational and individual forms—NETWORK STATES and TSIs (The Sovereign Individual).
The strategic importance of gunpowder weapons and maritime navigation has been superseded by remote communication and high-throughput computing. The late fifteenth century was a dark and desperate era—but not uniquely so. Before every transformative shift, social turmoil and instability are inevitable. Today, winner-take-all competition, the long arm of authoritarian politics, high-cost division of labor, and the relocation of mass production are all poised for change. This transformation has already begun and will intensify, based on the following realities:
Market Efficiency Prevails Over Power Distribution
According to Marxism and institutional economics, the determining factor in resource allocation is not the market, but the power structure embedded in institutional arrangements. Institutions and resource allocation are two key endogenous variables, with power held by different groups serving as the main driver of institutional change. This power stems from both legitimate political authority under political systems and actual political influence derived from existing resource distributions—essentially, economic power.It is precisely the distribution of power that determines economic institutions, resource allocation, and growth rates.
We can easily identify two underlying assumptions of this view: first, the strength and stability of power; second, sustained economic growth.
Yet today, governments face mounting debt and deficits, resorting to currency inflation to pass costs forward, while struggling to find new engines of growth. The world has entered an era of zero-sum competition. The protective and leveraging functions of state power are weakening. After factoring in risk and preferences, resources will inevitably flow toward markets offering higher allocative efficiency and favorable tax environments.
High Government Fiscal Burden
Take the U.S. government: over the past thirty years since 1990, only in 1999 and 2000 did the federal budget record slight surpluses. For the other 28 years, it ran fiscal deficits.
Over the next nine years (2022–2031), total U.S. federal revenue is projected to grow at an average annual rate of 3.45%, reaching $5.957 trillion by 2031.
Meanwhile, federal spending is expected to grow at 3.88% annually during this period, reaching $7.812 trillion by 2031.
Based on these projections, the U.S. federal deficit in 2031 will reach $1.855 trillion (source: Congressional Budget Office). Against the backdrop of a rising network economy, the ability to collect tax revenue is likely to decline further.
Accelerating Monopolization and Concentrated Capital Investment
Monopoly and concentration are outcomes of industrial-era development, with economies of scale birthing modern corporate giants.
Since the 20th century, standardization and divisibility in labor have led to rapid increases in equipment and industrial scale. Effective economies of scale raise barriers to industrial iteration and replacement, resulting in relatively long product cycles. We observed stable market conditions and profitable business models emerge during the golden eras of growth in both China and the United States.
However, as society advances and markets mature, further scaling or structural transformation requires ever-increasing fixed capital investment, inevitably leading to rigidities in production efficiency. In the information age, information technology reduces equipment investment costs, shortens product cycles, accelerates iteration, and intensifies competition.
Complexity Surpasses Primitiveness
Today’s world has evolved into an immensely complex and intricate behemoth.
Darwin’s theory of evolution posits that organisms evolve through “genetic variation” and “natural selection,” with mutations occurring randomly. However, modern biology reveals life as a complex feedback system built on biomolecules, whose changes are influenced by numerous factors. While everything follows discernible patterns, the system’s complexity, precision, and algorithmic scale are vast. Society itself is constructed from countless living beings interacting with the material world.
In *Hidden Order: How Adaptation Builds Complexity*, researchers from the Santa Fe Institute—a leading school in complex systems science—analyzed cities, the human immune system, the central nervous system, and ecosystems. Despite differing details, these systems share common traits: they exhibit coordinated functionality and persistence amid change. These properties depend on widespread interactions, aggregation of diverse elements, and adaptive learning. Challenges faced by systems like economies, the internet, and embryos—such as trade imbalances, computer viruses, and birth defects—have strikingly similar underlying mechanisms.
From a speck of dust to the vast cosmos, self-adaptive complex systems that do not rely on centralized control will prove the most enduring and advanced. And what lies ahead will only grow more complex.
The Mathematical Essence of Oneness
Historically, shifts in global order and geopolitics stemmed largely from the leverage of violence. In the information age, primitive conflicts over violence and defense, grounded in property preservation, can be resolved within a world built on 0s and 1s—using mathematical properties. Mathematics is the most rigorous science. Although math is symmetric in equivalence, resource consumption on either side of the equation is asymmetric—for instance, multiplying prime numbers versus factoring them.
This intrinsic characteristic is already shaping the network economy. Asymmetric cryptographic algorithms (RSA) and elliptic curve cryptography (ECC) use cryptographic proofs to form the foundation of property security in today’s encrypted world. The crypto manifesto *The Sovereign Individual*, written in the 1990s, clearly foresaw this possibility. High-throughput computing has uncovered this asymmetry, paving the way for new economic models that rely more on spontaneous adaptive mechanisms and less on conscious decision-making or bureaucratic resource allocation. A new system centered on protection will starkly differ from the industrial-era model dominated by coercion.
Given the above background and facts, we can clearly see the inevitability of change and predict:Network States independent of powerful governments and jurisdictional systems will emerge, and TSIs will rise.
As depicted earlier in the *Iliad*, in the age of gods, deities lived alongside humans, indistinguishable in appearance. Yet the gods possessed peak productivity and intellect, wielding greater control over resources. Mount Olympus, home of the gods, was mysterious and abundant, yet inaccessible to ordinary laborers. Perhaps humanity’s earliest spiritual imagination foreshadows our ultimate form. In the not-so-distant future, powerful TSIs will coexist physically with ordinary people, yet inhabit a more independent cyberspace—like the children of Zeus in Greek mythology, enjoying unique cultures and systems beyond the reach of parliaments and monarchies. These TSIs will command greater resources and transcend traditional power structures. In this new world, there will be an independent, rational, and efficient allocation system governed by shared consensus rules. As this day approaches, everything will be重构 (reconstructed).
The definition of TSI should not be limited to a single natural human, but include any collective embodying complete free will and independent consciousness. Thus, a TSI can be an individual, a tightly-knit organization, or a unified set of logically connected digital identities. A human individual who has physically died may still persist in cyberspace if their historical data can be fully integrated and their personal will simulated and executed via algorithms and programs. Theoretically, such a TSI would never vanish from the digital realm. This could mark the first time in human history that immortality in the digital world begins—freed from physical constraints.
The emergence of ChatGPT will accelerate the lifting of seals. Rising computational power under Moore’s Law will summon Aristotle’s “talking tools.” He referred to humans; in our coming world, these “tool-humans” mean applications capable of interaction, execution, and even self-learning and improvement.
All of this will trigger profound societal transformations, including but not limited to the following aspects:
Global Digital Nomads
Future identities will take root and grow in cyberspace, extending corresponding social layers from there—bottom-up in nature, fundamentally different from nationality, which is a product of systemic compulsion. Digital nomads freely choose their residence and offshore registration locations (if needed), with the right to enter or exit. They avoid paying heavy imposed taxes. In other words, the protection offered by governments in physical space becomes an optional service for digital nomads—they are customers of government, not subjects of rule. Some early digital nomads may return to the real world and resume citizenship, while others embrace this new identity and lifestyle, becoming true TSIs building wealth and resources within network states.
Network Economy Will Not Be Universally Welcomed
Individual liberation and freedom have never been universal human desires, nor does everyone wish to win the next game. Aversion to risk, and the search for shelter and belonging, remain prevalent mindsets. Uncertainty about the future fuels discontent, often accompanied by nostalgic longing. Those most fearful of new technologies may come primarily from the middle classes of wealthy nations, who perceive threats from AI, blockchain, and other information-age innovations—and this group is enormous. Meanwhile, many at the top of today’s social pyramid will resent the newfound freedoms of TSIs and launch moral and舆论 (public opinion) attacks from high ground.
Declining Resource Allocation and Tax Capacity of Major Governments
As the need for state protection diminishes, individuals and capital will shift funds to jurisdictions offering superior market-based allocation and favorable tax regimes—and retain the ability to withdraw at any moment. Declining tax capacity may drive Western governments to use authoritarian measures to suppress the network economy. Recent CFTC lawsuits against Binance and earlier SEC rulings classifying all cryptocurrencies except BTC as securities are just the beginning—harsher actions lie ahead.
Breakup of Large Organizations, Disruption of Existing Divisions of Labor, and Transformation of Work Forms and Functions
Bloated, inefficient platform organizations will undergo massive layoffs, eliminating “low-effort, high-pay” jobs. Employment will shift toward project-based, time-based, or task-based arrangements—not necessarily tied to formal positions within organizations. Outstanding individuals will earn labor returns exceeding those of any previous era.
Artificial Intelligence and Cryptography Are Two Sides of the Same Scale, Penetrating, Influencing, Constraining, and Balancing Each Other
ChatGPT represents the ultimate optimization of concentrated resources, while cryptographic technology is the foundational pillar of decentralization—like two ends of a balance. All things develop and balance through contradictions. Future business model innovation will involve trade-offs along this spectrum.
Emergence of Cyber-Commercial Entities and Super-TSIs
Applications emerging today—metaverse, DID, DeFi, GameFi, etc.—will eventually interconnect via various protocols and cross-chain bridges into a unified information network, forming cyber-commercial entities. Within this space, super-TSIs will control vast resources.
Cognition and Thought Equal Individual Wealth Capacity; Network Economy Becomes the Largest Economic System
By 2025, participants in the network economy will number in the millions. In an age of information explosion, cognition and thought will become scarce and valuable resources. Among them will emerge many more Bill Gates. The greatest economic phenomenon of the next 30 years will be the network economy—not the BRIC nations.
The existence of the network economy—with its more efficient resource allocation, elimination mechanisms, and self-adaptive, bottom-up complex systems—will accelerate its own growth and iteration. Its flourishing will inevitably give rise to new organizational forms and business models, leading to the birth of network states: independent yet organically integrated with the real world, forming a unique and massive economy. Digital Nomads and TSIs will constitute the core of this economy.
Predicting the future is never easy. Attempting to sketch its faint silhouette helps us better understand the present. In the commercial development and investment landscape of the crypto world, several trends may emerge:
Blurring Boundaries Between Infrastructure, Protocols, and Application Layers
Due to unpredictable user preferences and low development barriers for applications, competition in the application赛道 (sector) is fiercer, and current ecological positioning remains relatively weak. Today, major funds tend to favor investments in infrastructure and public chains, driving valuations in these sectors to extremes, concentrating resources while yielding low efficiency—after all, not every public chain can rapidly build a thriving ecosystem. In the cyber-commercial space, a likely future scenario is that products solving specific user pain points may themselves be open-source protocols—or even L1 blockchains—such as app-specific chains. The idea of “fat protocols, thin applications” refers to functional distinctions rather than technical architecture. Applications will ultimately be the decisive weapon capturing the scale of the network economy; infrastructure without use cases is meaningless. Meanwhile, continuous improvements in infrastructure—like L2 solutions—lower development costs and enhance performance, creating a symbiotic relationship that may even merge the two in certain contexts.
User Application Scenarios Based on New Paradigms
Since 2017, countless application forms have emerged, yet none have achieved mass adoption. Partly due to timing and cycle, but also because new business models are still forming. Startup teams must possess profound insight to build from fundamental needs—an immense challenge. Based on prior analysis, though exact user experience demands and product forms remain uncertain, we can anticipate several directions under the broader trend of cyberspace and cyber-commerce: content creation platforms built on technology, network construction under new contractual frameworks, cross-chain identity and socialization, convenient decentralized trading and asset protection, and governance of network states. It is encouraging to see ChainIDE, a platform for developers building smart contracts, already supporting over 70,000 dApps deployed front-end and back-end; and over 180,000 contracts signed via EthSign, with Token Table—a commercial infrastructure based on this new contract paradigm—now launching on testnet. These are platform and foundational tools addressing real pain points. Though their impact remains small today, explosive growth is expected by 2025 as the new era unfolds.
An Intermediary Layer Bridging Native Crypto Spaces and Real-World Commerce Will Emerge
Not everyone desires full autonomy or possesses the capability for self-custody of assets. However, given expectations of traditional financial collapses and monetary over-issuance, many will still allocate assets within crypto. Centralized exchanges currently fulfill this role, absorbing significant liquidity. In the future, intermediary applications occupying similar niches but offering richer functionality will emerge. Their business models will extend existing internet demands, but integrate more deeply with the crypto network in payment and content layers.
Finally, standing at the crossroads of history, gazing into the distance, we already see the faint peaks of Mount Olympus—where the gods are awakening.
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