How memory becomes a moat

A thought that’s stayed with me over the past few weeks: tokens that govern state will accrue value, while tokens that govern schema won’t.

The distinction seems subtle but it isn’t. It touches the core of how value concentrates in open systems, and why some protocols accumulate gravity while others remain just infrastructure.

Let’s start by unpacking what “state” actually means.

Stateless and stateful systems

In software, state is memory—the record of everything that has happened from time t₀ to tₙ. A stateful program remembers; a stateless one forgets after each interaction.

Stateless systems - like HTTP or IP - process requests independently. They’re fast, scalable, and composable because no memory carries over. Each interaction is atomic.

Stateful systems do the opposite: they retain context. They build continuity. Each new input depends on the last. Databases, operating systems, and blockchains are all examples. They maintain a living record of past events and use it to determine what comes next.

Statelessness gives performance. Statefulness gives meaning.

From code to memory

Blockchains are, by definition, stateful machines. Every block is a crystallized memory of all prior actions. As time passes, their value shifts from the elegance of the code to the richness of the accumulated state.

Think of it this way: a protocol begins as code, but over time it becomes a vessel filled with data, users, and relationships. Code bootstraps; state compounds.

A service like Google Search illustrates the same dynamic. Every query not only serves the user but also refines the model, improving results for everyone who follows. The global state becomes more valuable with every interaction.

So while software may begin as an artifact of logic, it matures into an artifact of memory. Over time, value migrates from how it works to what it remembers.

The locus of value

If value migrates from code to state, then the power to govern state becomes the most valuable position in a system. Tokens that govern state decide how memory evolves—who gets liquidated, what parameters shift, what data is canonical. They shape the trajectory of value.

Tokens that govern schema, by contrast, decide on structure: how data is organized, what parameters exist, what rules might one day apply. Schema defines the scaffolding. State defines the living organism within it.

Schema tokens matter when a system is new. State tokens matter once it works.

Over time, the asymmetry compounds. Governance that influences future state captures value. Governance over schema becomes utility.

The market prices the difference instinctively. Control over memory is control over power.

The paradox of growth

There’s a cost, of course. The more memory a protocol accumulates, the heavier it becomes. Statefulness slows computation, just as institutional memory slows organizations. But that friction is inseparable from persistence — it’s what gives the system continuity, identity, and resilience against amnesia.

Blockchains are not valuable because they compute efficiently; they are valuable because they remember precisely.

Memory as moat

Every software system starts as schema and ends as state. Every network starts as coordination and ends as history. That history becomes the moat. It’s what new entrants can’t copy, and what old participants can’t easily leave behind.

Tokens that govern state are therefore not just governance tokens. They are claims on the protocol’s memory, on the inertia of everything that came before.

In a world where information is cheap and code is open, memory is the last scarce resource.