Vibhu Norby, the CEO of DRiP, recently spoke at Solana Breakpoint and highlighted the benefits of blockchain technology in reducing speculation. He emphasized that blockchain’s transparency and rapid information flow eliminate the need for guesswork in asset valuation.
Using a simple prop—a bag with a purple wig—Norby demonstrated how knowing what’s inside eliminates speculation, drawing a parallel to blockchain technology. In a blockchain system, all participants have access to the same information, making it difficult for speculation to thrive.
Norby explained that speculation often arises from a lack of complete understanding of a situation. In traditional markets, investors make educated guesses about asset values based on incomplete information. However, blockchain operates differently by making every transaction visible on a public ledger, reducing the need for speculation.
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Blockchain Speculation
Norby further delved into the concept of loans in blockchain and DeFi to illustrate his point. In traditional lending, loans are often based on credit and opaque valuations, leaving room for speculation. On-chain lending, on the other hand, requires full collateralization, where the loan is fully backed by the asset’s value, which is publicly visible and verifiable, making it less speculative.
Despite the rapid fluctuations in token prices, Norby clarified that it is the market quickly discovering the real value of tokens, rather than pure speculation. He noted that faster blockchains like Solana (SOL) contribute to reducing speculation by enabling nearly instantaneous price discovery.
Norby pointed out that many tokens experience rapid devaluation as the market identifies their lack of underlying worth. While speculation can never be entirely eradicated, Norby believes that blockchain’s transparency and speed inherently counteract speculative behavior.