Of course Ethereum is not a walled garden the way AOL was. Anyone can write and deploy a smart contract, whereas adding functionality to AOL required a contract and a custom implementation. What I mean instead is that much of AOL’s growth in both revenues and functionality was financed by AOL itself. AOL made a lot of investments in startups which then purchased advertising on AOL, at least in the early days of this, extended AOLs functionality.

The decentralized finance (defi) space, which is frequently touted as Ethereum’s strongest use case, has some parallels to this. A ton of defi is in some way or another financed via Ethereum. Many decentralized finance projects have their own Ethereum based tokens. Some have been founded by people who have large personal Ethereum holdings. Consensys has been an active investor in the decentralized finance space.

Now when the dotcom bubble burst, it turned out that many of the companies that AOL had backed went out of business resulting in a loss of both revenues and functionality (much of which had migrated to the open web in any case). It is unclear to me, as of today, how much defi activity is actually connected to productive economic activity, as opposed to speculation and financial transactions within crypto. After looking at a number of projects recently it all feels incredibly self referential, solving problems inside crypto, such as derivatives or swaps on tokens, where the underlying tokens don’t appear to have much actual use. Again, many of these tokens only exist because it was easy to issue them on Ethereum to begin with.

It is entirely possible that we are witnessing the creation of a new financial system. This may be a case of bootstrapping in its original sense. As the system gets built it finds ever more actual usage. But it is also possible that it is a giant house of cards where both the financing and the problems being solved all relate back to the same source, namely Ethereum. It is in that sense that I am asking whether Ethereum is the AOL of crypto.