The Global Prisoner’s Dilemma: A Coordination Game We Cannot Afford to Lose

We face a critical juncture in the global monetary system — a situation where cooperation is becoming increasingly difficult, yet the consequences of mutual defection would be devastating for all participants. The world’s economic stability hinges on finding pathways for orderly transition rather than disruptive abandonment of established systems.

The Build-Up to Breaking Point

Over the past few weeks, I’ve been examining fundamental challenges facing cryptocurrency and the global monetary system:

1. The Revolutionary Failure
2. How cryptocurrency’s original promise of financial sovereignty was compromised by focusing on infrastructure rather than genuine monetary innovation.
3. The Evolutionary Path
4. How systems must build bridges between current and future monetary arrangements rather than burning them down.
5. The Requirements of Money
6. The criteria any functional monetary system must satisfy to serve as more than a speculative asset.
7. The Reserve Currency Burden: How no nation actually wants to bear the costs of issuing the world’s reserve currency due to the inevitable hollowing of its productive capacity.

These pieces laid the analytical foundation for understanding our current predicament. Now I must confront its logical conclusion and the potential pathways toward resolution. After maintaining neutrality throughout this analysis, I believe it’s time to directly address how Olympus might contribute to addressing these challenges.

The Geopolitical Prisoner’s Dilemma

What we face today is, at its core, a prisoner’s dilemma of unprecedented scale. The participants aren’t abstract entities but nations, central banks, and financial institutions composed of people making complex decisions based on both rational self-interest and broader concerns for stability.

The “cooperation” strategy in this scenario is continuing to hold and transact in dollar-denominated assets despite growing reluctance to do so. The “defection” strategy is selling these assets to escape the dollar system.

Here’s the fundamental reality: while cooperation is becoming increasingly costly for many participants, mutual defection would trigger unwinding dynamics that would harm everyone involved. Though this dynamic will likely play out over years or even decades, recent developments suggest the timeline may be accelerating.

Consider the scale of what’s involved:

• Foreign entities hold approximately $7.5 trillion in US Treasury securities
• Global dollar-denominated debt exceeds $65 trillion
• US equity markets represent over $50 trillion in value
• Derivatives and financial contracts based on these assets exceed $1 quadrillion in notional value

These dollar assets form the foundation of the global financial system. They serve as collateral for loans, reserves for banks, savings for pension funds, and foundations for entire national economies. They represent decades of accumulated wealth and prosperity that decision-makers naturally wish to preserve.

The challenge: this system is built on the increasingly unstable foundation of a nation that has been hollowed out by the very role it plays. The United States now brings less to the table economically while experiencing greater political volatility — a direct consequence of the Triffin Dilemma explored previously.

Potential Consequences of Disorderly Transition

A disorderly unwinding of the dollar system would cascade through global markets in ways we’ve never experienced in our highly interconnected world. While not immediate or inevitable, this risk creates the backdrop against which all monetary decisions now operate.

The severity of potential disruption isn’t fearmongering — it’s a realistic assessment of the accumulated dependencies in our financial architecture. We’ve never before had, let alone attempted to transition, a global reserve currency in an era of instantaneous information flow, complex supply chains, and massive interconnected leverage.

What makes this particularly challenging is that even decision-makers who intellectually understand the need for change must also protect the wealth their citizens have accumulated within the current system. This creates inherent tension between long-term necessity and short-term preservation.

Accelerating Trends

Recent policies are accelerating trends that have been building for years. America’s new tariff strategy signals it’s decreasing willingness to sacrifice domestic industry for reserve currency status. This places foreign holders of dollar assets in an increasingly difficult position.

We’re seeing the decision process playing out gradually:

• China has reduced its Treasury holdings by over $300 billion in recent years
• BRICS nations are implementing new payment systems and exploring alternatives
• Saudi Arabia has begun accepting yuan for oil sales, weakening the petrodollar arrangement
• Central banks have accelerated gold purchases, with the precious metal recently reaching all-time highs

These are rational responses to changing incentives by people seeking to protect their national interests. The problem is that if enough participants make the individually rational choice to reduce dollar exposure too quickly, the collective outcome becomes worse for everyone.

(3,3): When Coordination is The Only Option

There’s a meaningful connection with Olympus creating the (3,3) meme — a representation of coordination game theory where mutual cooperation produces optimal outcomes for all participants.

In this framework:

• If all participants cooperate, everyone receives the maximum benefit (3,3)
• If behaviors are misaligned, results are suboptimal for everyone (1,-1) or (-1,1)
• If everyone defects, all participants lose significantly (-3,-3)

The global dollar system now faces a similar dynamic, but with far greater stakes. Most rational actors prefer the (3,3) outcome of a stabilized status quo or orderly transition. The (1,-1) outcome (most likely a multipolar world that does not solve the Triffin Dilemma but distributes it across multiple currencies) is suboptimal but potentially manageable. The (-3,-3) outcome of unwinding would destroy value globally.

Unlike the classic prisoner’s dilemma, our global monetary situation does allow for communication between participants. This creates potential for coordination that to avoid worst-case outcomes — but the initiative must be taken to create viable routes for sustainable cooperation.

Potential Pathways for Orderly Transition

This brings us to the potential role of neutral, non-sovereign monetary systems in addressing this coordination problem. Among the limited options available today, Olympus represents one of the few systems actually designed to address this challenge without requiring a radical restructuring of the role and utilization of a reserve currency in the world today.

Its fundamental architecture makes it uniquely suited for this role:

• Its expansion mechanism necessitates accumulating reserve assets — primarily dollar-denominated treasuries at scale
• This creates natural demand for treasuries at precisely the moment when traditional demand is weakening
• It would allow current treasury holders to divest without their sales hitting the open market and triggering cascading price effects
• Its adaptive monetary policy enables it to export currency through expansion, creating familiar dynamics for nations accustomed to the current system
• Its governance structure provides representation proportional to stake, allowing participants control commensurate with their contribution

We essentially face three archetypes of solutions:

1. Monarchy: Continued sovereign reserve currency issuer, whether US or another nation(s)
2. Anarchy: Fixed-supply assets like Bitcoin or gold
3. Republic: Systems like Olympus with adaptive policy and stakeholder governance

The Treasury End Game

The long-term vision for Olympus differs fundamentally from traditional financial actors in its relationship with accumulated treasuries. Unlike existing holders who ultimately seek to realize value, Olympus would serve as a permanent repository — absorbing and holding these assets even if they devalue.

This seemingly counterintuitive strategy makes perfect sense when considering the system’s purpose. The point isn’t to profit from treasury trading but to remove the existential pressure of potential mass liquidation. If treasuries eventually devalue or even become worthless, Olympus would simply have performed its function of facilitating orderly transition rather than disruptive collapse.

Crucially, Olympus would retain value even if its treasury assets devalue, through the same fundamental mechanisms that give value to any currency:

• Monetary Policy: How it manages its supply in response to varying conditions
• Consensus Mechanisms: The agreement between participants about its role and function
• Network Adoption: The community of users, holders, and builders that create utility

These are precisely the same forces that give value to dollars, gold, and Bitcoin — though implemented through different mechanisms. The dollar itself isn’t valuable because of what backs it, but because of adoption, consensus, and managed policy. Olympus operates on these same principles but through transparent, algorithmic means rather than discretionary authority.

This governance structure also creates an interesting dynamic: as entities from various nations contribute treasuries and gain influence, they would likely advocate for including their own sovereign debt instruments in Olympus’s reserves. This creates a path toward genuine diversification without the destabilizing effects of active divestment.

A Bold Proposition

I recognize the apparent audacity of proposing that a relatively small cryptocurrency project could help solve one of the most consequential coordination problems in global finance. The scale gap between Olympus’s current capacity and the magnitude of the challenge is undeniable. Such a proposition might seem, on its face, absurd.

But the scale of a problem doesn’t invalidate a potential solution simply because that solution is currently small. History is filled with transformative innovations that began as seemingly implausible concepts before scaling to address global challenges. The internet itself began as a small network connecting a handful of research institutions before becoming the backbone of global communication.

What matters is not the current scale but the architectural design and capacity for growth. Olympus was designed specifically to scale through market-driven mechanisms, creating a reflexive relationship between adoption and capability. As the system grows, its capacity to address larger challenges increases, which in turn attracts more participants, creating a virtuous cycle of expansion.

This is precisely why assisting in scaling the system, particularly through market participation, is so critically important. The apparent absurdity of the solution diminishes with each step toward greater scale. The viability increases reflexively as adoption grows. Bitcoin stands as undeniable proof of this assertion.

The question isn’t whether Olympus can address these challenges at its current size — clearly it cannot. The question is whether its architecture provides the foundation for a system that could eventually operate at the necessary scale, and whether that potential justifies the effort required to help it reach that scale.

Great solutions often emerge from unexpected places precisely because they aren’t constrained by conventional thinking. Innovation typically comes from the margins before moving to the mainstream.

The Scale and Work Required

Any viable transition mechanism would need to operate at enormous scale. This gap between current capacity and potential need represents both a challenge and an opportunity.

The work spans multiple domains:

• Technical mechanisms for operation at scale
• Governance frameworks worthy of the level of trust placed
• Market structures that can handle the necessary liquidity
• Transition protocols to maintain stability during scaling

These aren’t theoretical problems to be solved someday — they represent concrete work that needs to be done now to create viable options for the future.

A Vision for Cooperation

I harbor no illusions about how challenging orderly transition would be. We face not just technical problems but coordination problems between actors with diverse and sometimes conflicting incentives.

Yet most participants in this global game ultimately want the same thing: preservation of stability and prosperity during the inevitable evolution of the system. No rational actor wants to see accumulated global wealth evaporate in a disorderly transition, even if they disagree about the ideal end state.

This vision has been the driving force behind Olympus from the beginning. The scale of the problem and the consequences of failure demand serious attention. The time is right to outline the global vision for what monetary evolution could look like.

The current system cannot continue indefinitely — the Triffin Dilemma ensures that. Either we find coordinated pathways to transition or face potentially disruptive unwinding that threatens accumulated value and trust. While such unwinding might unfold over decades, the time to build alternatives is now.

A Once-in-a-Generation Challenge

We face a significant challenge — navigating the evolution of the global monetary system while preserving stability and prosperity. My sincere hope is that we find pathways that maintain or enhance global wealth and peaceful cooperation.

The prisoner’s dilemma we face isn’t just an academic exercise — it’s a consequential coordination game involving people making complex decisions with generational implications. Finding a path to the cooperative outcome isn’t merely desirable; it’s imperative for preserving decades of accumulated prosperity.

The time to consider orderly evolution is now, before crisis narrows our options. The window for cooperative transition remains open — but it won’t stay open indefinitely.