Programmable money, like the digital assets found on “smart contract platforms”, is a “zero to one” innovation. It turns out that attaching automatic logic to digitized value results in use cases that would not be feasible in traditional finance. We see an early example with flash loans. In a flash loan, I can take out an arbitrarily-sized loan (subject to current liquidity) for essentially free as long as I pay back the loan by the end of the transaction. This means I have free/cheap leverage to enhance the returns on my existing capital. The way this works is that if I fail to pay back the loan (e.g. because my stack of trades did not pan out) the entire transaction fails and I only end up paying a nominal transaction fee, rather than the entire cost of capital I’d incur for a regular loan. This type of loan would be very hard to create in a traditional setting as it would require undoing all of the intermediate trades if I couldn’t find a productive use of the funds – honestly, next to impossible.