# How Web3 and RWAs Unlock Exponential Wealth via a Computable Economy. | Devcon SEA

- Channel: [Devcon](https://streameth.org/devcon)
- Date: 2025-10-07
- Duration: 24:22
- Watch: https://streameth.org/watch/yt-Mf8KUbNrO58
- YouTube: https://www.youtube.com/watch?v=Mf8KUbNrO58

## Description

Keynote based on Justin Banon And Prof. Jason Potts academic paper:  How Web3 enables the transition to a new computable economy and exponential growth in economic complexity, wealth, and prosperity by extending the reliability and programmability of on-chain transactions to the entire economy via RWA tokenization. Web3 is not just a new information technology, it is a new institutional technology on the scale of language, writing and code.

Speaker(s): Justin Banon, Jason Potts
Skill level: Intermediate
Track: Real World Ethereum
Keywords: RWA, Economics, web3

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Devcon SEA was held in Bangkok, Thailand on Nov 12 - Nov 15, 2024.
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## Transcript

[Music] hi everyone um so we're here to talk to you today about the computable economy and real world assets and um how this can unlock um exponential wealth okay um so my name is Justin Bannon and uh I'm a founder of uh a couple of real world asset protocols boson protocol and also feron protocol yeah hi everyone I'm Jason pots um founder of the blockchain Innovation Hub at rmit University in Melbourne and a crypto Economist so the talk we're going to give today is based on uh academic paper that we wrote ear ear this year on the computable economy so to start if we look at the history of uh the economy um and we go back say to the Stone Age we see this um pretty significant um growth in human wealth and if we if we zoom in a bit on that uh optick what you see is in the last 3 or 400 years this real Str strong exponential growth in in human wealth and the question is what's caused that yeah so um what we want to do is to tell a story of how economies have evolved and what this means for you know what crypto is bringing into this story and we've got a we've got a narrative that argues that we are going through a revolution at the moment of a very particular sort so um origin of wealth um the standard story we know about this is new technologies so you know once upon a time this was fire and then you know steel and steam and and and you know we gradually worked their way through a sort of sequence of hundreds and thousands of you know new Industrial Technologies that gave us the modern economy and that's you know that's the story of long run economic growth is is fundamental new Industrial Technologies but there's a second sort of technology that is often overlooked and it's it's this is the one that we want to sort of try and um help you to understand stand here and this is the technology of Institutions um institutions are a coordination technology um the very first one that fundamentally gave us modern economies um 7,000 years ago was writing writing enables people who don't know each other to coordinate in space and time by you know recording facts about who owns what or whose cow is that or who who's who owes me some honey and that sort of beginning of writing um you know 7,000 years ago as the beginning of history and modern economies um First Institutional technology was a revolution in terms of human human welfare um what other big institutional Technologies we've had um joint stock company 14th century 15th century um created the idea of sort of organization of of of the corporate form to gather resources together um we've heard institutions in timekeeping and so on with universal clocks um working their way through we've had Revolutions in um in in democracy and sort of recordkeeping of of of ownership and identity and other sorts of fundamental protocols but this the story that we have is that Industrial Technologies or technological change you fundamentally driven driven by research and development um is is the main explanation for that that hockey stick rise but the reason it keeps going up the reason we keep getting new and new levels of of of of of growth is that these sort of institutional Technologies provide sort of languages and coordination mechanisms to to to to create new generations of coordination technology and what we are going through now the sort of the the crypto Revolution that's being powered up by Ai and all of these other digital Technologies is a fundamental new type of economy um we've called it a computable economy um we distinguish this from an industri industrial economy where all the fundamental institutions of an industrial economy were done by government um in terms of recordkeeping in terms of you know fundamental asset Registries and the money and so on um so this idea of this is where're up to now in terms of a new um institutional technological Revolution to create a new type of economy that fundamentally Works digitally fundamentally Works globally um we haven't seen a revolution like this for for hundreds of years um that's the nature of thech techological change we're seeing now the the sort of the way we want to frame this is this sort of computable economy Revolution which is an Institutional technology Revolution made possible by a series of other Technologies you know computers and so on um what is going on is this is a continuation of the evolution of compute in the universe um we described the evolution of economies in beginning you know beginning sort of 7,000 years ago through to to the present as a series of Step changes as we moved up the in the institutional technology stack from written language through to to to coordination so on all the way through that process has been going on for millions and billions of years and the the way to think about this is that every so often on The evolutionary trajectory we get these huge breakthroughs these fundamental shifts in terms of the underlying sort of language um of of of evolution um evolutionary um biologists call these meta you know meta system Transitions and the idea is is that a digital economy is the latest phase of a meta of a metasystem transition where we're able to finally sort of start to write um all of the things in an economy um into to be able to sort of interact with each other now what that means um is that the the where we are now in terms of evolutionary um in terms of the evolution of economies in terms of institutional evolution is at this this a new transition in terms of creating a new computable substrate and this idea of economies um are not like you know economies have computers in them but fundamentally economies are computers they're they're ways of computing sort of resources together um to create economic value markets do that um organizations do that protocols and platforms do that as well and the sort of the next step in terms of how economies are going to develop and evolve is to really sort of push what we can do with that with that compute level Justin so if we if we unpack um the nature of this computable economy let's first look at computers so I mean computers will transmit store and receive data in a highly reliable way um and and computers will also run programs so if you if you run the the program 1+ one it will always equal two and because of this sort of reliability and the the determinism of computers you can build highly complex applications on top of them and if you look at this you know our modern sort of uh internet and digital economy that's that sort of evidence of that however if we look at at sort of today's economy um what we find is that if we want to sort of transmit value um often what we have to do is transmit via intermediaries like banks for example and the these intermediaries introduce um sort of risk of default they introduce fees they're slow um and also you know if you want to sort of store and retrieve value we have the have the similar problems and so also when you want to run economic Pro uh programs on on uh the the current economy we do this by having a contract so let's say you know you you have a contract with someone to provide a service and they don't provide that service what do you do well you have to take them to court this is slow it's expensive and it's fuzzy so instead of having this sort of deterministic and reliable substrate we have a sort of a fuzzy unreliable substrate and that really limits the complexity of applications that you can build on top um and our claim is that with a with a a computable economy when we're building an economy on this fundamentally more reliable substrate of of blockchains you get some properties that are much closer to a computer than today's economy so you know smart contracts can enable the transmission of value in a in a very reliable way um when we want to store and receive value it's possible to do this in a way that is reliable but that requires re Ires a particular type of of of uh uh procedure for tokenizing uh these assets and we'll we'll get into that in a second but it is possible to do that and so um with with this kind of combination of properties it's possible to run economic programs on a blockchain substrate that give this kind of reliability and determinism that that you that you don't get within today's economy and the result of that is enabling much greater complexity to be built on this this substrate um so here's our claim is that you know blockchain technology enables a new computable economy and unlocks exponential wealth through increased complexity but the condition is that we've got to tokenize all forms of capital all assets with with the same strong commitments um and so what we mean by strong commitments are that you know all the assets that we tokenize and bring on train on chain need to be uh Trust minimized secure and verifiable ownership and enforced by cryptography um and so you know most assets the the current onchain assets have these properties inherently and there are many many assets from things like debt Equity that where they can be transferred entirely on chain and will will then have these these kind of properties of strong commitments but there are always a class of assets that will have a physical residue physical assets and these can't entirely be um represented on chain so there's a couple of problems with physical assets one is this physical asset Oracle problem so if I tokenize my car and you buy the token how can you be sure that you'll actually get the car and then this kind of fair exchange problem of how how do we ensure that the exchange that's happened is is fair until the quality and terms agreed um and so you'll find there are a number of generic um solutions for tokenizing physical assets so the first one is this kind of centralized model where you will have a trusted entity um that will that will hold the assets um and issue a token the problem with this is it has exactly the same problems as the as the today's economy where we're trusting centralized entities and that doesn't have sufficient reliability for for us to kind of have have this kind of computable economy and then there are there are two other methods so one is where you lock up funds um and and for for this uh method it's very transaction cost efficient because a protocol can just lock up the funds at very very low cost but it's Capital inefficient um and so this tends to work for sort of low to medium value items that you would usually use someone like Amazon or Ebay for um but it wouldn't work for very high value items um and then secondly the other method is to lock up the actual physical asset and here we have I mean it that's more costly because you're going to be using um physical entities to to do this but the capital efficiency is much greater because you can release the funds immediately upon wome okay thank you all right um why is this a good thing why are we sort of excited about this idea of a sort of Step change in economic Evolution and the question we sort of want to address here is what is the argument for why we might expect that hockey stick just to keep going up like what is the what what is the argument for why we' expect to see further and further growth and you know the the counterargument here is well you know limited resources and finite planet and you know post capitalism and you know it can't keep growing forever but the claim here is it could and not in the sense of you know more and more resource intensity type of growth what we're just describing is not economic growth what we're describing is economic evolution in the sense that the fundamental coordinating mechanisms of an economy just get better and better in terms of processing distributed information and this is a sort of crucial Insight is that you ask what are what is an economy um an economy is a way that a bunch of humans come together and create resources and and and and and provision each other um you know we use it for making stuff and doing stuff but we also use economies to organizing and growing knowledge um economies are the basic mechanism by which we organize our resources for Innovation and our resources for um you know protection of environment and just all of the things that we want to do collectively and that notion of economies as coordination mechanisms is the key thing we want to sort of emphasize here that what just happened with the sort of digital crypto distributed computable economy is that we've got a step change in our ability to coordinate our you know our Collective actions together and that that shift what does that mean it means that we can start solving much harder problems so industrial capitalism what did it do um you know many things but one of the main things that it sort of did was it lifted a sort of medieval Society you know particularly in one part of the world and then gradually spread around the world out of poverty it was a poverty alleviation mechanism that it's not complete it's got a long way to go yet um it's caused some new problems um in in that process around um you know ecological sustainability but it was a mechanism that enabled you know a group of humans that got bigger and bigger and bigger to solve some fundamental problems economies are knowledge solving mechanisms um what we can start to do now if if we can if we can if we can sort of digitally connect all of the things in the world bring them online um enable them to become visible to to a mechanism we can start to solve a lot harder problems so challenges around um dealing with externalities a sort of the climate change problem a lot of ecological problems you know a lot of just fundamental things that we're currently relying on governments to do or trying to sort of re-engineer human belief systems and so on we're using cultural mechanisms or political mechanisms to solve which you know we're making some progress with that but it's not um it's nothing compared to the to the power of sort of being able to harness economic mechanisms to solve that so one of the sort of you know the reason that we see this this sort of optimistic sort of argument about why this Curve will continue to rise not because of you know economies keep growing forever but economies evolve to take on and start to solve much much harder and and deeper problems so um problems around um internalizing externalities um classic eological type problems um Step changes in in Innovation um particularly around sort of a lot of biomedical type problems um and opportunities is just that ability to bring more and more resources to connect sort of capital around the world into sort of taking these these things on where at the moment the only mechanism we really have for doing that are either large corporations or or governments or various sort of coalitions on that again it's kind of an okay solution it sort of works sometimes but it's nowhere near as powerful as it could be and it's this it's this sort of argument that the more we can do this the more we can sort of drive real world assets on chain um the more sort of we can we can start to bring just information from all you know from a full stack of information onto sort of trying to sort of solve these types of problems so that's the argument for for why a computable economy is is good um why this is something sort of aspirational that we want to work towards um why the sort of next sort of continuation of that hockey stick isn't isn't more and more industrial growth or or post capitalist growth it's using global economic systems to solve even hard and more General sort of problem so that's that's where we find ourselves um that's why we're sort of excited about this this this direction of of what what this type of institutional Revolution toward um computable economies can bring thank you all right that's awesome let's go to the Q&A session guys so please scan the QR code here and ask the question it's going to pop up on the screen and you guys here we go let's fast let's go to first let's go for the one Wonder answer I'll take that one thank you um so the sort of Economics that we're dealing with here um is not traditional sort of neoclassical economics um the the the reason for that is that what we're sort of driving to is is is far more um institutional economics information economics um mechanism design and trying to sort of understand what we can do with that as a um to design sort of global internet-based digital economic systems where what we're fundamentally engaged in right now is this new opportunity to essentially design Economic Institutions from scratch um these need to be integrated with economies as they currently exist we'll use a lot of Institutions that that we've had from industrial economies to carry over for that but there's an enormous opportunity here to to just massively increase this the scale and scope of things that are in the economy and the first step to that is basically um identification attaching data to these things enabling to be bought online that process of bringing um much more of the stuff in the world the stuff that we care about and want to organize and try and sort of Shepherd and so on um in into the economy so industrial economies did that in a big way from from feudalism to sort of modern capitalism that was a 600 year old process of bringing a bunch of stuff into into the economies um turning it into Capital but a bunch of stuff got left out of that um and critically envir a lot of resources a lot of sort of um problems that we we a lot of sort of factors of production weren't sort of part of that so I think you know there's a there's a new opportunity here to create a new type of Economics so you know we've called it computable economics for a computable economy um but that's the that's the sort of challenge that we're trying to we're trying to meet here all right we have like one extra minute for your guys to answer the question so don't don't be too rushed we have time all right let's go to the second question which one you want to answer first um yeah I can definitely put the the presentation uh online I'll uh put it on the boson protocol website so boson protocol. um we'll have that up later today yeah all right uh is the presentation is publicly available for people yes all right cool let me Mark that up let's go to the uh the third yeah the can you elaborate that more there was one just up here as well was that yeah which one you want to answer you can you can pick any yeah what was the one pre yeah this one can we ask that one can you uh scroll down a little bit that oh just the one above the presentation one yeah um Okay so so this yeah I mean this is um one of the core challenges of tokenizing a physical asset and um so it's this kind of physical asset Oracle problem so that as I mentioned in the presentation there are kind of three ways three main ways of ensuring that you know you can have some control over a physical asset one of them is to use a centralized um sort of system and Trust that that centralized um intermediary but that kind of um well it does it doesn't unlock computable economies and um is is is very much just you know using the the current methods so aside from that you have you have two um two ways of doing it one is you can lock up the funds um you know within a protocol and the second is that you can use a a trusted um verifier and custodian uh to to lock up the actual physical asset um and and in that case um you know the protocol would still control who the custodian releases the asset too um and and so those are the two main ways of of of um enabling this for physical assets yeah let let's do the last question here which one you want to answer um the financialization of everything that's an interesting point so I don't see this at all as financialization of of of the world what I see it as is the um computition of of the world what we're trying to do is to bring all of the you know anything that we want to be part of of of an economy which means things that we want to organize and coordinate things that we value and want to organize and coordinate we to bring them into an economy the standard way you do that is with property rights or just you know attaching ownership and identity and prices and so on into something one of the things that can go wrong with that is it becomes financialized and becomes a speculative object but the reason that you're wanting to do that in the first place is because you you care about something and and you want that information in a in a system to coordinate um the the flip side of financialization is basically politicization um if if when there are things in parts of of a of an ecosystem and global economy and so on that aren't part of the economy externalities what happens is that we have to use a different mechanism for coordinating that mechanism is usually politics um sometimes that works great if we have you know high quality politicians and everyone votes rationally and you know we have a we have a you know a legitimate institutional process that to produce only good political outcomes that system really can work um it's just it doesn't always work like that and not all countries have have have have that sort of State um so this idea of sort of trying to bring in um things that currently sort of aren't part of the economy to turn them into part of the economy through a process of of you know attaching of sort of capitalizing them or attaching asset or attaching identity to them enables them to be computed by the economy it enables them to be efficiently rationally allocated um to find sort of the best re uses for them so um you know now financialization is a risk of that but politicization is the sort of counter