S3T.2 Wild West Emerging Financial Ecosystem, Roadmap of risk and reward, Black Chipmunks, BirdCast and more!

S3T.2 Wild West Emerging Financial Ecosystem, Roadmap of risk and reward, Black Chipmunks, BirdCast and more!
Hot Sauce - Mixed Media, Ralph Perrine 2004

Blockchain is enabling a new financial ecosystem that is more inclusive, and gaining momentum. Planning when and how to participate requires a roadmap based on the phases of change.

The Emerging Financial Ecosystem will change how value flows. In today's financial ecosystem, "value flows inward to institutions at the center" rather than "outward to people at the edges" as put by A16Z's Chris Dixon who argues that blockchains are enabling a financial ecosystem that is "more inclusive, fair and transparent." Jump into the thread here: ‌

It is gathering momentum fueled by corporate expectations and institutional investments. According to Deloitte's 2021 Global Blockchain Survey 76% of executives believe digital assets will be a strong alternative or replacement for fiat currencies in the next 5-10 years. Leading institutional investor adoption includes BlackRock, JP Morgan, Goldman Sachs, Deutsche Bank, Morgan Stanley, Henyep Group, Square, MassMutual, Harvard and Yale. These and more are making significant investments, not only in Bitcoin but also in broader crypto asset classes.

So how should a investors and change leaders be thinking about their involvement? This is where a Risk and Reward Roadmap can be helpful as described next.


I was out with friends yesterday in on of our local villages and came across this, a simple art piece showing beauty.

Roadmap: Risk and Reward in the Emerging Financial Ecosystem

There seems to be a phased pattern in the way new risks and opportunities (and new things in general) become acceptable over time. This phased pattern can provide a helpful roadmap when thinking about where we are in the emergence of the new financial ecosystem, and the timing of risks and opportunities in that emergence. The following will help you think about what kind of participant or investor you want to be and how and when you want to get involved.

Phase I: Experimentation

The new thing is not well understood, even by its most diehard practitioners.

  • Risk is high and its magnitude and implications are very unclear.
  • Reward is low, over-stated, or unclear.

Players with the ability to accept risk have a slight chance of gaining significant rewards. This is the domain of pioneers who are intrinsically motivated to blaze new trails regardless of risk. This Phase for cryptocurrency (and the emerging financial ecosystem it is spawning), in my estimation, was something like 2009-2019.

Phase 2: Stabilization

The new thing is becoming more understood by those who focus on it, and they understand it well enough to sometimes eek out good results for themselves or for a narrow group of stakeholders, but its broader impacts to other stakeholders or the broader community is still not fully understood.

  • Risk is significant, and its implications (what could go wrong, how bad it would be) are still not fully understood.
  • Rewards are becoming clearer, and are significantly better than what is available in the status quo.

Players with the ability to accept higher risk have a reasonable chance at gaining significant rewards. This is the domain of the risk seeking investor. This Phase may have been 2017-to present, and yes, maybe phases overlap.

Phase 3: Adoption

In this phase the new thing is becoming more commonly understood and accessible, easier to use.

  • Risks are tapering to be more in line with risks present in the existing status quo.
  • Rewards are commonly recognized as significantly better than what is available from the status quo, and there is enough of a track record to give consumers and regulators confidence on this point.

This is the domain of the early adopters. They may not have the resources and risk appetite of the risk seeking investors, but they will participate if they perceive that the risks inherent in the new financial ecosystem are becoming similar in magnitude to the risks presents in the existing financial ecosystem.

Phase 4:  Absorption

The new thing is no longer new. It has become the status quo, and its adherents may resist whatever new things are now emerging.

  • Rewards are no longer significantly better than what is available in the status quo.
  • Risks are not significantly different/worse than what is available in the status quo.

This can become the domain of laggards, the inertia class, those who are comfortable, soaking in the receding glow of past successes.

So where are we now? And what is coming next?

The emerging financial ecosystem seems to me to be somewhere in late Phase 2.

How fast will we get into Phase 3? A lot rides on the quality of the conversation between crypto innovators and regulators...which has so far been semi-productive at best - and all sides can take a fair share of the blame.

When we get Phase 4 will the upside be over? Not necessarily: the decentralized nature of the emerging financial ecosystem may offer an alternative outcome. It may be that the new financial ecosystem is so fluid and so diverse that new opportunities for risk and reward continue to surface due to the dynamic rapid evolution in the space.

We may be 5-10 years away from Phase 4. Events in the next 2-3 years will likely shed light on whether Phase 4 will see the rise of a new status quo vs a continued diversification and innovation in this fascinating space.

Takeaway: Now is the time to experiment and explore how this emerging financial ecosystem could drive better social equity, better healthcare, and financial inclusivity. Change leaders across multiple industries are already making the first attempts. To get a sense of the more sober minded attempts underway, check out Coinbase Earn - a series of 1-3 minute videos that provide quick briefings on some of the leading blockchain contenders in this emerging financial ecosystem.


Jordan Lake, Durham NC

Outdoor Almanac

What's Happening Outside

Found! Rare Black Chipmunk!

Much to our delight, this Chipmunk showed up in several yards in our neighborhood recently. Apparently its unique color is due to a melanistic variation that causes the chipmunk in these cases to have black skin, fur and eyes.  One turned up in Maine a few years back and there are scattered reports elsewhere. This Massachusetts Audubon post provides a good overview of melanistic variations that occur in different animals.

Birdcast - Bird Migration Realtime Tracking Maps

This time of year, just after sunset millions of birds take to the skies and fly south as part of their annual migration. Some migrate modest distances - for example from inland to coast area slightly further south, while others travel thousands of miles.

Cornell University's BirdCast gives you a window into this phenomenon by providing radar maps and updates showing the movements of these birds each night. They also provide notes and commentary on species on the move through your area. Spring and Fall are opportunities to see birds that may not be in your area during most times of the year.

To help these migrating birds travel safely, consider turning off your outdoor lights at night around your home and business (like they do in Texas). Bright lights can disorient migrating birds and result in preventable deaths. ‌


Thank you for reading! S3T (pronounced "set") is written with the realization that having a healthy wealthy world requires healthy ecosystems of all types - natural, financial and social. This in turn requires healthy communities and healthy individuals. These make up the sets of things we care about and focus on in our lives.

Now you are all s3t!