The Cornerstone of Trust in the Web3 World: From Immutability to Infinite Repetitive Games

In the Web3 ecosystem, we often consider “immutability” as the ultimate means of building trust. However, this is just the entry threshold of the trust system.

For digital assets, the immutability of the ledger is indeed crucial. The total supply of Bitcoin is fixed at 21 million coins, and this unchanging fact lays the foundation of confidence for the entire blockchain world. Similarly, the balances of ERC20 tokens, the ownership of NFTs, and the completion status of cross-chain transfers, once recorded on the chain, are convincing enough without relying on human factors or emotional elements.

However, for the participants in the ecosystem—whether they are protocol developers, project teams, or investors—the immutable ledger is merely a fundamental feature. What is truly convincing is not just that it “cannot be changed,” but more importantly, that it “cannot be easily exited” and “is unwilling to leave.”

The path of trust in the Web3 world does not merely exist in consensus mechanisms or node networks, but is embedded in every transaction between ecological participants. Trust is a product gradually accumulated through repeated transactions and a necessary result of high costs of default. It is not a “consensus” that arises out of thin air, but an understanding that naturally settles in actual operations such as fund circulation and performance guarantees.

In certain traditional business communities, the real “trust layer” stems not only from kinship, geography, and personal relationships, but is also established and built through countless transactional games. The foundation of financial credit is not just a ledger, nor is it simply a matter of identity recognition, but rather a tacit understanding formed after multiple negotiations. Trust, like peace, can only truly exist when all parties can create sufficient deterrence.

These traditional business models may have realized earlier than Wall Street that understanding the counterparty (KYC/KYB) is just the starting point for building trust: true trust does not only exist among decentralized nodes, nor can it be cultivated; rather, it is gradually established through repeated defaults and compliance, transactions and cooperation.

1. High-Frequency Repeated Game and Cross-Regional Mutual Guarantee Mechanism

The essence of certain traditional financial networks is a trust system built on high-frequency, long-term trading accumulation. The customer base of such networks is not limited to local areas but covers business communities in multiple regions around the globe.

The establishment of this cross-regional financial cooperation mainly relies on two core elements: high-density repeated games and cross-regional mutual protection networks.

A businessman operating overseas has been routing funds to domestic family or partners through specific channels for a long time. Over time, he forms a stable long-term trading relationship with intermediaries and agents. This structure is not one-off but is based on a long-term expectation such as “I dare to give you 1 million because I believe you will need me to exchange 1 million again next year.”

These trading networks do not completely rely on formal contracts, but rather on a trust-locking mechanism: family reputation, word-of-mouth transmission, mutual protection mechanisms, etc., which enables “remote performance” even across thousands of miles.

II. Default Costs: The Clearing System in Informal Order

In this system, trust is not an innate virtue, but rather the result of rational choice. It is precisely because the cost of default is extremely high that participants “dare not easily default.”

If a transaction defaults, it will not only damage the local reputation of the parties involved but will also quickly spread through family networks, hometown relationships, and clan communities, forming an irreversible social “clearing” mechanism. Although this mechanism does not operate through formal legal channels, it is sufficient to make the defaulter “struggle to establish themselves in the global business network.”

This is an alternative system for “informal sanctions.” Although not officially recognized, it is often more efficient than official channels and also more deterrent.

In such an environment, you may not fully trust the binding nature of contracts, but you will certainly care about the evaluation of you by the entire business circle and the possible collective sanctions.

3. Multilateral Settlement Network of Funds: The Intangible Transaction Locking Structure

Another core mechanism of this type of financial network is the multilateral clearing network for funds.

Different financial intermediaries do not operate in isolation, but rather serve as each other’s “channels” and “hedging” tools to some extent.

This is like a naturally formed “layer two network” that constructs a highly flexible yet closely connected structure through the flow of funds between different nodes:

• Funds circulate among multiple nodes, forming a mutual dependence of relationships and interests;

• Behind every transaction lies a structure of collective responsibility that implies “if something happens to me, you also cannot escape responsibility.”

This system is more flexible and resilient than any on-chain bridging protocol we understand today, even though it does not rely on any code.

4. The immutability of code is just the starting point; long-term participation and continuous competition are the core.

In the Web3 ecosystem, we often regard “immutable code” as the ultimate guarantee of trust, but this is actually just the tip of the iceberg.

For the assets themselves, the immutability and authenticity of the ledger are indeed fundamental. However, for an ecological participant and the trust in a protocol, higher-dimensional logic and standards are required.

We should not just ask: “Does this protocol have potential vulnerabilities?” Instead, we should ask: “Is this protocol willing to be bound to the ecosystem in the long term? Is it continuously contributing value and liquidity to the ecosystem?”

The locking mechanism is a form of “self-restraint” in economic games; the ve(3,3) model is a game commitment to prove to the community that “I will not exit easily, I am willing to participate long-term.”

• When multiple parties choose to lock their assets, we establish a stable foundation of mutual trust;

• Only if you dare to gamble repeatedly will I believe that you won’t be unfaithful — the key lies in the attitude of “daring”;

• Are you willing to commit resources to this ecosystem for the long term and not withdraw easily?

Note: The lock-up mentioned here refers not only to the tokens held by the project party but may also include funds obtained from financing, protocol earnings, and even the personal assets of the project founders. The “you/me” here refers to various participants in the ecosystem.

But it is important to note that “locking” is just the beginning, merely a “token of commitment” to deeply participate in the ecosystem. More importantly, it is the subsequent ongoing interaction — whether one is willing to keep value in the ecosystem for the long term.

A decentralized financial protocol truly earns trust not just by being open source, but by whether it has designed its system to limit its own exit rights and continuously circulate assets within the ecosystem—daring to engage in long-term repeated games is the foundation of trust.

In other words, a tamper-proof smart contract that can exit at any time is far less trustworthy than a partner willing to participate for the long term.

5. The Key to Trust Upgrade in Web3: Game Design Over Technical Indicators

The current Web3 ecosystem is overly focused on technical indicators such as high TPS, low Gas fees, modular settlement layers, and the degree of decentralization. However, these are not sufficient to build deep trust in products, projects, and protocols.

Trust is not merely a technical metric, but a structure of a long-term game relationship.

Traditional financial networks tell us: the most reliable relationships are not the rules written in contract terms, but the structure reflected in the costs of default.

Just like the social settlement system in traditional business circles, decentralized finance should also be designed in such a way that if someone chooses to exit or betray, they will not only lose their reputation but also face multiple economic penalties—such as lock-up mechanisms, voting rights, and governance rights binding. These are the concrete implementations of these “informal settlement mechanisms” in the blockchain world.

We should strive to build an environment where protocols, project parties, and investors are willing to engage in infinite repeated games.

Please remember that consensus mechanisms are merely surface-level agreements; lock-up and repeated games are the true alliances beneath the surface.

A true “comrade” is not based on verbal promises, but rather on time, capital, and credibility, facing risks together with allies.

6. Conclusion: The Source of Trust Does Not Come from an Alliance That Is Difficult to Exit

“Insiders” is not just a simple slogan, but the most deterrent institutional arrangement: if you withdraw, I will also be harmed.

This institutional “difficulty in exit” and the attitude of “daring to continuously invest and settle” are the ultimate trust structures that Web3 should pursue.

Technology can create a reliable ledger; systems can shape order; but only continuous games can truly build trust.

The strongest trust is not supported by mere “belief”, but is built on the foundation that you cannot help but trust the other party.

This reminds me of the philosophy in the classic song “Only those who work hard will win.”

Luck accounts for 30%, while effort accounts for 70%.

Only by daring to continually gamble can one ultimately win.

Become a part of this vibrant ecosystem.

Postscript

In order to enhance the readability of the article, this paper mainly focuses on the core concept of “repeated games.” Under the premise of insufficient understanding and high default costs, encouraging participants (especially project parties and investors) to actively enter the environment of repeated games is also a form of local optimal solution.