22 - Art is an exercise in remixing
“Creativity” is the act of having original ideas. Many in “creative” industries take umbrage with the concept of “original ideas.” They argue that no idea is truly original because we get inspiration from many places throughout the world. There is much truth to this line of thinking, but the counterargument is that with enough inspiration from enough places, you have changed those foundational ideas enough for the outcome to be something completely new and different. Andy Warhol is one of the greatest art remixers of all time and serves as a great example of originality through alteration.
Blockchains create an environment for massive creative remixing. We learned over the past few weeks that how we visualize a blockchain can occur in many different ways. Blockchain.com and etherscan.io both show a blockchain but do so in their own unique way. They are able to do this because the transactions on a blockchain network are completely public. Taking this one step further we can begin to take low level blockchain information and narrow in on specific smart contract activity.
Review building a house
Before we jump into the nitty gritty, let’s review some fundamentals. Blockchains can be equated to building a house. A blockchain network serves as the foundation; a smart contract is akin to the house structure; and application interfaces are the facade of the house. The house analogy can help to visualize the different layers of an application, but it abstracts two important terms: “back end code” and “ front end code.”
Non-technical readers may have never heard the terms “backend” versus “frontend” before, but the basic idea is that there are two different categories of code. Backend code directs what a user can do and creates application functionality. It is our structure and is used to create smart contracts. Frontend code, on the other hand, dictates what the user can see and provides a way for anyone to use the functionality built by the backend. “Backend” and “frontend” are terms that come from traditional software development and are not blockchain industry specific. An example you can think about is Gmail, where backend code dictates what happens when you click the “Send” button, and the frontend code dictates what the “Send” button looks like and where it is placed on the screen. You can think of smart contracts as publicly deployed backend code bases that provide users with specific functionality. Most of the time the team that created the smart contract will also create the frontend application. Interestingly, the front end of blockchain based applications are not stored on a blockchain and can be created by anyone not just the smart contract development team, using the smart contract as the backend.
Open source remix
In order for a blockchain to operate correctly, everything including the code needs to be publicly available. We learned in “Disagree? Grab a fork” about the concept of proprietary versus open source software development. Blockchain’s being open source allows anyone to access their codebase and fork the chain which is essentially remixing the original blockchain. Being open source also means that anything published on a blockchain including smart contracts can be remixed. Today, blockchains are often not the things being remixed. Rather the targets are the applications built on top of them i.e. the smart contracts.
Remixing is controversial and can be described as positive or negative depending on the audience with whom you are speaking. On the positive side, the ability to remix has led to the massive acceleration of innovation. The term “innovation” today is often used out of context, but its basic definition is “a new method, idea, or product.” Andy Warhol obtained the images of Marlyn Monroe from a 1950’s movie called “Niagara”. Most people are unaware of this because Warhol remixed her photos in a unique enough way for them to become their own phenomena. When we look at Marlyn’s colorful face, we think of Warhol not of Henry Hathaway, the director of “Niagara”.
The good and the bad
In the world of blockchain, smart contact remixing and the resulting innovation happen at a mind numbing rate. One of the best and most famous examples of smart contract remixing is the Sushiswaps remix of Uniswap. Uniswap is well known in the blockchain space for being a popular decentralized exchange (DEX) built on the Ethereum blockchain. DEX’s are not the topic of today’s piece, but we will be diving into them more in the coming weeks. For the sake of this discussion, a DEX is simply a way for anyone to exchange assets with another person through a smart contract. Centralized exchanges like Coinbase allow you to exchange but require that they hold onto the assets during your transaction. DEX’s allow you to do the same thing coinbase does without relinquishing your assets to a company or individual.
In August of 2020, an anonymous figure known as Chef Nomi launched a fork of the Uniswap protocol and named it Sushi Swap. The new DEX was identical to Uniswap with a key difference: they introduced something called a governance token (SUSHI). The governance token was going to allow anyone who held voting power over the direction of the Sushi swap DEX development and allow users to receive fees from the trading that happens on the Sushi Swap exchange. Other applications in the blockchain space had previously created governance tokens to encourage users to participate, but Sushi Swap was the first DEX to do so. Uniswap was eventually forced to launch their own token (UNI) in order to compete with Sushi Swap. Over time the two DEXs have diverged even more. Sushi swap has added more financial products outside of their original DEX such as lending and borrowing while Uniswap has continued to improve their exchange functionality.
The story of Sushi Swap is fascinating, but the key takeaway for this piece is that the actions of the upstart DEX resulted in advances in many applications across the blockchain industry. These advances have provided users with new functionality and served as the foundation for blockchain projects that have come after. With this said, there are those who believe that what Sushi swap did was wrong, in part, because Sushi used their governance token to attract users from Uniswap to Sushi by offering the users rewards in sushi token to migrate from Uniswap. The incentive structure has been named a “vampire attack” because Sushi was sucking the assets being held and traded on Uniswap onto their platform.
The take aways
Like it or not, remixing happens in all creative pursuits. Musicians, artists, and technology developers all experience it. Blockchain network remixing can occur, but the more common remixing occurs at a smart contract level. New innovation has spurred more advances encouraging a cyclical process of creativity. Builders in the blockchain space are using what came before as a foundation for much of what is being created. There is no doubt that future innovators will continue to do so.