@raizo
🧵 Markets as cognitive systems: a thread on market intelligence and the future of financial interfaces.
🔸 Markets are information processors that compress countless data points into actionable signals. Their intelligence emerges from participants and interfaces working together as a distributed cognitive system.
🔸 When market complexity exceeds participant capacity, the system breaks down. This is Ashby's "law of requisite variety" in action: systems only remain viable when their response range matches environmental challenges.
🔸 Today's permissionless markets suffer from this exact problem. DeFi removed institutional barriers but amplified information asymmetries. Result? Markets driven by hype rather than fundamentals.
🔸 Traditional finance uses institutions to absorb complexity for participants. This creates stability but becomes "numb" to new signals and resistant to innovation.
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