Dismantling the White Horse Gate, from Open Finance to Open Art

Encryption technology has given birth to “open finance” and created “open art”, which seems to be an art without borders, or at least, we are still far from its borders.

This article is from PAKA, written by PAKA Labs researcher MIDDLE.

The historical drama “Three Kingdoms” presents a story that at the end of the Eastern Han Dynasty, Cao Cao, who had already crossed the system to become king of Wei, was just one step away from the empire.

Once Cao Cao’s son, Cao Zhi, had an urgent matter to enter the palace, and could save an hour’s journey if he went through the White Horse Gate (one says: Sima Gate). According to the regulations of the Han Dynasty, only the carriage of the Son of Heaven could pass through the White Horse Gate. Cao Zhi, because of his father’s power, did not think so and intended to pass through the White Horse Gate. When Cao Zhi arrived at the White Horse Gate, he was stopped by Xun Yu, an old minister loyal to the Han Dynasty. Xun Yu said, “If the father does not follow the rules, the son does not follow the rules either”. When Cao Cao arrived and heard this, he first reprimanded Cao Zhi, but then ordered the White Horse Gate to be dismantled and said to Xun Yu, “Here, in the future, the main road will be open to everyone, so where are the rules you speak of?”

Dismantling the White Horse Gate, from Open Finance to Open Art

In the context in which I tell this story, however, the protagonist is neither the usurper Cao Cao nor the domineering genius Cao Zhi, but the White Horse Gate. We will use this as a metaphorical symbol: the White Horse Gate symbolizes the taboos of the old order, while the Great Road to Heaven is used to refer to the new system of openness and universality.

In the real world, there are many “White Horse Gates”, and crypto-hackers are breaking them one by one, and the crypto movement triggered by crypto technology can be said to be a vigorous movement of “dismantling the White Horse Gates”.

Open Currency

In 2009, the Bitcoin network emerged, allowing humans to transfer value over the internet without relying on any centralized institution, and Bitcoin itself became a new, digital form of value carrier. Hayek’s theory of “denationalization of money” and “freedom to coin” was realized in a way that no one had ever thought possible.

In 2014, a talented Russian teenager tried to develop a smart contract based on Bitcoin, but found various restrictions, so he started a new kitchen and developed Ether, and blockchain entered the 2.0 era (smart contract era) from the 1.0 era (electronic money era). From Bitcoin to Ether, issuing cryptocurrencies has become much easier. On top of that, the Turing completeness of Ether also makes cryptocurrencies programmable, laying the foundation for the birth of open finance.

Open Finance

With the programmability, human beings began to build “open finance” based on “open currency”. Compared with traditional finance, open finance has the following openness.

First, the openness of data. This is a characteristic that open finance inherits from open money. In traditional finance, there are numerous black boxes and information asymmetries, which have even led to serious consequences like the “subprime crisis”.

In open finance, all records are traceable, searchable and permanently recorded on the chain, and any financial service can be publicly viewed, and any financial derivative can be clearly traced back to its underlying assets. These are the inherent characteristics of crypto technology, which makes open finance not need to rely on regulation to come to institutions to enforce information disclosure and punish fraud, like traditional finance.

Second, the openness of access. Both for the creators of financial services and for the users, finance in the crypto world is free. Developers are free to create financial services, and users are free to participate without any third-party permission. This is not comparable to the traditional financial world, which is full of taboos and barriers.

Third, the openness of ownership and governance. In the traditional financial world, the providers of financial services are often centralized institutions, which erect various barriers and make it difficult for ordinary people to get their hands on them. In an open financial system, the flow of governance passes is not restricted, and the holder of the pass will become the actual owner of a financial service and can govern through proposals, voting and other forms.

Fourth, the applications are open to each other, compatible and combinable. Open finance is all-encompassing due to its open access, with currencies, securities, derivatives, alternative assets, everything, stablecoins, lending, synthetic assets, DEX blossoming.

On top of this, open finance has also developed a system of interconnected protocols that allow different parts of open finance to be combined into an organic whole, with protocols that can be called upon each other, and existing protocols that can be used as infrastructure on which to build more complex financial services. This feature gives open finance almost unlimited potential for growth, and more financial innovations will continue to emerge.

Although the term “DeFi” has been agreed upon, I prefer to use the term “open finance” because “openness” is the essential characteristic of crypto finance, not decentralization. Openness is the essence of crypto finance, not decentralization. Even if you are a centralized service provider, you can be part of open finance as long as you make full use of crypto technology and do the most basic “data openness” first.

If the data black box of centralized financial institutions, the access taboo, the lack of liquidity due to the monopoly of ownership, and the lack of interaction between different service providers are the four “white horse gates”, open finance has successfully dismantled them.

In addition, open finance also provides a new vision for macroeconomic research. Macroeconomic research has always been based on limited historical experience and theoretical assumptions due to the lack of experimental conditions, which makes macroeconomics like a metaphysics that no one can say clearly.

So far, there are at least 10 theories explaining economic cycles, which seem to be self-consistent but contradictory, and it is impossible to understand the exact cause-and-effect relationship in macroeconomics as in microeconomics. In open finance, we finally have an experimental environment to study macroeconomics, or at the very least, we have a control group outside the real world, and thus we can start to expect an ultimate explanation of economic cycles.

Open Art

Imagination is, arguably, the closest human ability to God. In human society, there is a special category of activity in which people create in the pure sense of the word, based on their imagination: artistic creation.

As history has evolved, so have the ways of artistic expression. For example, during the Enlightenment, as rationalism dispelled religious theology, religious figure painting was transformed from an expression of divinity to an expression of humanity, so to speak. For example, the invention of the camera in the 18th century brought the realistic painting pioneered by Leonardo da Vinci to an end, resulting in abstraction, impressionism and cubism.

So what changes will encryption bring to art as a new technology with a powerful transformative power? We already know that cryptography has given birth to open finance, and by looking at it, we find that cryptographic ideas and art forms under the conditions of cryptography are producing some interesting changes, and cryptographic artists are dismantling the “white horse gate” and creating “open art”.

Open Art Extent

The value of art comes from the ability to give people a visual or other sensory experience, or to inspire thought and imagination. For collectors, the value of art lies not only in the appreciation of the experience, but also in self-expression and identity, social identity, and also includes simple donations and offerings, often these factors are superimposed to form the value of art, and it is difficult to separate them.

In the past, these values were constructed independently by the artists and carried in the artwork. But crypto-hackers have discovered that the creative process, the way of creation itself, the collection and circulation process, can all be an important part of the construction of value.

Dismantling the White Horse Gate, from Open Finance to Open Art

everydays: the first 5000 days

This is the first work in the field of crypto art to be auctioned at a high price and to trigger the NFT investment in Fomo, called “everydays: the first 5000 days”, which is a collage of 5000 paintings. What is important is that Beeple insisted on painting one work every day for 5000 days, expressing a kind of long-termism spirit, and the spirit expressed by this creative process is the real connotation of this painting.

Dismantling the White Horse Gate, from Open Finance to Open Art

The Red and the Blue

This is “Red and Blue” created by Chinese artist Liu Jiaying. The author released 100 gradient color blocks from red to blue through Ether and conducted a year-long bidding auction where audiences could bid for their favorite blocks. The artist did not express the meaning of each color block beforehand, and some interpreted it as a mapping survey of political tendencies under the Sino-US trade competition, while others interpreted it as a competition between sensibility and rationality, passion and calmness.

In this artwork, the artist has hardly created anything, but has created a platform for collectors to construct value through bids, which form part of the artwork.

Dismantling the White Horse Gate, from Open Finance to Open Art

First Supper

This painting, First Supper, has been described as a representative of Async Art. The core value of this painting comes from the way multiple artists work together in layers. The painting is not a static image, but consists of a main canvas layer and 22 sub-layers, each created by a different artist.

The collector can purchase the layers individually and customize the layer parameters to change the image on that layer. As a result, it is an asynchronous artwork that changes over time.

There are many variants of similar crowdsourced play. For example, one artist creates a landscape painting, other artists continue to paint based on the edges of that painting, requiring continuity in the painting, and so on, creating an ensemble painting created by multiple artists.

We hope that more people can enjoy art, we hope that “the swallows in the old days flew into the homes of ordinary people”, but art that is used to express profound ideas is the fate of the high and the low. “Artistic democracy” is a false proposition, we do not want art to be reduced to entertainment. Perhaps the way to make art more inclusive is not to let more people appreciate it, but to let more people participate in creating it. The socialization of the art creation process will give rise to more new forms of art.

An open art trading market

NFT, as a carrier of artworks, realizes the deposition of artwork rights, and although infringements occur from time to time, the traceability of NFT makes it easy to defend rights.

In the traditional art trading market, the gallery or curator is the center of power, the artist’s voice is small, the artist must rely on intermediaries to find buyers, and only the head of the established artists can escape from their dependence on galleries and curators. However, in the NFT marketplace, the divide between artists and collectors has been bridged, and while artists still need professional curators to help them promote their work and build and manage communities, it is clear that the bargaining power of artists has increased significantly. Many NFT trading markets can support royalty settings, allowing artists to enjoy the long-term benefits of their work forever.

With a new power structure where artists’ creativity is fully respected, and where more creativity is only inspired when it is respected, crypto and NFT will create a more prosperous and vibrant art market.

Open programmability: infinite possibilities

The full name of NFT is Non-Fungible Token, compared with FT (Fungible Token), it has non-interchangeability and indivisibility, however, we should pay more attention to the same characteristic of NFT and FT, that is programmability. Programmability gives crypto art new possibilities, including the possibility of changing over time, the possibility of financialization, and the possibility of displaying in the social arena.

The possibility of change over time: In the case of First Supper, for example, the artwork goes beyond a static image and will change over time, and this change itself becomes part of the art. Of course, this is only one form of change, but a more meaningful form of change is the ability to leave a collector’s mark as the artwork moves from collector to collector.

In Puzzle Ventures’ Nico Yang’s article “What is Open Art”, one way to do this is to give collectors access to “electronic inscription rights” and “electronic inscription rights”. I think a step further would be to allow collectors to annotate the artwork, with the annotations put into the metadata of the transaction in which the artwork is purchased.

Financialization possibilities: through interaction with DeFi applications, artworks can be lent as collateral, ownership of artworks can be broken down into shares and owned in a decentralized manner, and artworks can be used as underlying assets and synthesized into new assets, or derivatives. There are already projects in practice in each of these directions. Through financialization, artwork further increases liquidity and the mechanisms for value discovery.

Gamification possibilities: The programmability of NFT will also give art the possibility of more gamified interactions. For example, CryptoKitties incorporates reproduction mechanisms into crypto cats, and more complex mechanisms such as forging, crafting, exchanging, and random generation could be incorporated, which has a wealth of possibilities. Of course, some may think, is art that is gamified still art? I don’t know, but games are the ninth major art category besides painting, sculpture, architecture, music, literature, dance, theater, and film!

The possibility of displaying in the social field: Some people say that owning NFT artwork often does not mean owning the copyright of the original work, so how can I show that I own it?

In addition to the aforementioned ‘inscriptions’ and ‘annotations’, I believe that the Metaverse is the home for NFT artworks, because it is there that they can be fully displayed and their social value realized. The Metaverse is not very mature now, with mostly game/toy attributes. I believe that in the future, the Metaverse will precipitate real social relationships, form a new social field parallel to the real world, and develop life/tool attributes.

With the development of NFT programmability, we will find more cascading and synergistic art creation behaviors: for example, some people design buildings, some people do wall painting on the walls of buildings, some people do virtual decoration in the interior of buildings, and some people display ornaments in the interior, in which the building itself, wall painting, decoration, and ornaments are both independent art and part of the overall artwork. Such composability synergy is far richer than the multi-layered synergy of First Supper. It can be said that the combinability of open finance formed “DeFi Lego”, and the combinability of open art will also give rise to “Art Lego”.


Encryption technology has given birth to “open finance” and created “open art”, which seems to be a kind of art without boundaries. At least, we are still far from its boundary.

In “Three Bodies 1”, there is a fictional organization called “Science Frontier”, and what Science Frontier does is to explore the limits of science by using scientific methods. So, let’s wait and see: artists use art to dismantle more “white horse doors” and explore the boundaries of art.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/dismantling-the-white-horse-gate-from-open-finance-to-open-art/
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