I stumbled upon a thread last week, buried under the noise of another memecoin pump. Zhu Su, the mercurial founder of Three Arrows Capital, had drawn a line from oil to artificial intelligence. He argued that AI would inevitably commoditize—its models, its data, its very intelligence—just as crude becomes gasoline, diesel, and asphalt. The thread was vintage Zhu: bold, sweeping, and tantalizingly deterministic. It painted a future where AI becomes a low-margin public utility, controlled by state-backed capital, its value derived not from innovation but from scale and cost efficiency. I felt the familiar pull toward that narrative, because it is seductive. It offers a clean, almost architectural closure to a messy, chaotic field. But as I sat in my Nairobi office, the hum of a backup generator reminding me of the fragility of infrastructure, I couldn't shake the feeling that the oil analogy, when applied to blockchain, is a trap. It is a trap because it replaces the moral architecture of decentralization with the cold physics of extraction. And we, as builders in this space, must resist it. Not with blind idealism, but with a clear-eyed understanding of what makes blockchain fundamentally different from any commodity that came before it. Tracing the moral code behind every token, I realized that the commoditization narrative, if uncritically adopted, would strip our industry of its very soul.
The AI-oil analogy, as articulated by Zhu and echoed by many in the crypto commentariat, rests on three pillars: capital intensity, resource homogeneity, and eventual regulation. Oil required enormous upfront investment—wells, refineries, pipelines—and once the technology matured, all barrels of crude became roughly interchangeable. Profit margins collapsed, and the industry consolidated around a handful of players who controlled the most efficient infrastructure. The analogy suggests that AI, driven by the hunger for GPUs and the convergence of model capabilities, will follow the same path. OpenAI's GPT-4o, Google's Gemini, and Anthropic's Claude will become indistinguishable at the API level, and the money will flow to those who own the cheapest electricity and the biggest data centers. On the surface, this seems plausible for crypto too. Bitcoin mining has already commoditized into a race for the cheapest power. Proof-of-stake validators compete on yield, not uniqueness. Layer-2 solutions offer interchangeable execution. The narrative whispers that all tokens will eventually trade like barrels of oil, differentiated only by liquidity and narrative hype. But this is where the analogy breaks down, and it breaks down because it ignores the fundamental purpose of blockchain: the preservation of human agency through verifiable scarcity and censorship resistance. During my six months auditing ERC-20 standards in 2017, I learned that the integrity of a token is not in its price but in its rules—the immutability of its transfer functions, the transparency of its issuance. Oil has no such rules. It is a dead resource; blockchain is a living protocol.
Let me ground this in a specific technical discovery. In the early days of the DeFi Summer, I helped a small team in Nairobi design a token for a community-driven water project. We debated whether to use the standard ERC-20 or a modified version with a tokenomics wrapper that would enforce a 1% donation to a local school on every transfer. The standard ERC-20, by design, treats all tokens as functionally identical—a commodity. Yet the moment we added that wrapper, the token became non-commoditizable. Its value was no longer just a reflection of supply and demand for a generic unit; it was tied to the ethical commitment of its holders. The code was written to ensure that every transaction reinforced a social contract. That wrapper, just 30 lines of Solidity, transformed the token from a potential commodity into a vessel for community values. Tracing the moral code behind every token, I see that the blockchain’s unique power lies in its ability to embed values directly into the logic of value transfer. Oil cannot do that. A barrel of crude is a barrel of crude, whether it funds a school or a war. But a blockchain asset can be programmed to embody the ethics of its community. This is not a marginal feature; it is the entire point. The fear that crypto will become commoditized like oil arises from a misunderstanding of what we are building. We are not building a commodity market; we are building a library of human agreements, each one written in code.
Take the OpenSea royalty fiasco of 2022. In its early days, OpenSea enforced creator royalties on secondary sales. It was a fragile social agreement, but it worked. Then, under competitive pressure from marketplaces like Blur and LooksRare, OpenSea surrendered the royalty enforcement to optionality. The result was a rapid commoditization of NFTs. PFP projects that once promised ongoing income to creators saw their royalties drop by over 90%. The soul of the NFT market shifted from supporting artists to speculating on floor prices. Building libraries where others build empires, I watched this collapse with a heavy heart. I had helped launch the Savanna Voices NFT collection in 2021, a collaborative effort with 10 Kenyan digital artists. We structured a DAO-governed royalty system that ensured 70% of secondary sales returned to the artists. The collection sold out in 48 hours, raising $150,000. But within months, the royalty enforcement was gone, and the artists saw their income evaporate. The market had commoditized their work, treating a 1/1 portrait of a Maasai elder as interchangeable with a Bored Ape. The artists were not producing oil; they were producing stories. And the market, driven by the logic of commoditization, failed to recognize the difference. The lesson is clear: commoditization is not an inevitable destiny; it is a choice made by platforms and users. If we accept the oil analogy as destiny, we absolve ourselves of the responsibility to design systems that preserve value beyond price.
Now, let me address the elephant in the room: the capital intensity argument. Zhu Su’s AI-oil analogy correctly notes that AI requires massive, often state-backed capital. The same is true for Bitcoin mining and Ethereum staking. But there is a critical distinction. In the oil industry, capital intensity creates a barrier to entry that concentrates power into a few hands—the Seven Sisters, then the national oil companies. In crypto, capital intensity is mitigated by the permissionless nature of the network. Anyone with a computer and an internet connection can validate transactions on Ethereum or Solana. The barrier is not capital but knowledge and patience. Community over capital, always. During the 2022 bear market, my educational platform, The Open Ledger, faced a 60% drop in donations. I downscaled to a core team of four and pivoted to open-source curriculum development. I personally rewrote 40% of the course material to focus on risk management and ethical governance. That pivot required no venture capital, no state backing. It required a community of 20 young developers I had mentored from underserved communities. They contributed code, translations, and stories. This is the kind of resilience that oil commoditization cannot replicate. Capital cannot buy community; it can only try to own it. The oil analogy implicitly assumes that the only viable path is top-down, capital-intensive, and regulated. But blockchain’s path is bottom-up, community-driven, and censorship-resistant.
Yet, the contrarian angle demands I acknowledge where the analogy holds water. Ethereum’s transition to proof-of-stake, for instance, has made staking a commoditized service. Large staking pools like Lido and Coinbase offer near-identical yields, and the differentiation is minimal. Similarly, Layer-2 solutions on Ethereum—Optimism, Arbitrum, Base—are converging in functionality, with users chasing the lowest fees and fastest finality. There is a genuine risk that the execution layer of blockchain becomes a commodity, where the only competitive advantage is cheap bandwidth. But this is where the comparison ends. A commodity like oil has no governance layer. You cannot fork a barrel of oil. You cannot propose a protocol upgrade to change the chemical composition of gasoline. Blockchain layers, however, have governance, and that governance is the ultimate antidote to commoditization. I have seen it firsthand in my work on the African AI-Blockchain Ethics Charter, where we designed mandatory transparency audits for AI-driven smart contracts. That charter is not enforceable by code alone; it requires community consensus and regulatory buy-in. It is a deliberate act of non-commoditization. The blockchain ecosystem has the tools to resist becoming a pure commodity market: DAOs, constitutional NFTs, and moral tokens. But these tools require intention. Without intention, we will drift into oil’s fate.
The takeaway is not a call to abandon efficiency or scale. It is a call to remember why we started building in the first place. Listening to the silence between the blocks, I hear the quiet hum of a thousand small communities running their own nodes, writing their own smart contracts, and refusing to see their tokens as mere barrels of value. The AI-oil analogy is a useful warning, but it is not a prophecy. If we treat it as prophecy, we will build a world where the only thing that matters is cost per transaction. We will forget that every transaction carries a story, a purpose, and a commitment. We are not here to turn blockchain into the next oil empire. We are here to build libraries that outlive empires.
