Five Stages of Disintermediation.

For most of history, every trust question had the same answer: an intermediary. A bank vouched that you had the money. A broker vouched for the trade. A registrar vouched that you owned the property. A platform vouched that the seller was real. They stood in the middle, they charged for standing there, and over time they captured a large share of the value that moved through them.

Thomas Philippon’s research puts a number on that toll. Studying 130 years of U.S. finance, he found the annual cost of intermediation at roughly two percent of outstanding assets, and found that it rose over the last thirty years instead of falling. Trust is what that margin buys. When trust becomes provable and portable, the margin faces competition for the first time.

Intermediaries are not obsolete in principle. They become obsolete in arithmetic. I expect the shift to arrive in five stages. Identity and proof are the foundation for every stage after the first.

Template contracts

Observable today. Standard agreements executed by software.

Composed contracts

Emerging. Agents assemble agreements from verified parts.

Adaptive contracts

Projected. Terms that adjust to verified conditions.

Emergent instruments

Projected. New financial forms that only machines can coordinate.

Dissolution

Projected. The middle layer becomes infrastructure.

The job changes. The toll booth closes.

Does this mean the end of banks, brokers and platforms? No. Someone still has to vouch for the facts a proof is built on. Before a proof can show you are an accredited investor, a trusted party has to check that you are and attest to it. In trusted agent commerce, the attestation happens once, and the proof travels on its own.

That changes how much rent an intermediary can extract. Much less. It is probably not a good time to be a bank that plans to keep doing business the way it does today. It is a very good time to be an institution that understands its future job is attestation, not toll collection.

Run an intermediary audit

1. List who vouches for youWrite every intermediary your business depends on for identity, payment, ownership or reputation.
2. Ask which trust could become a proofFor each one, ask whether a verifiable proof could replace the check made on every transaction.
3. Place each on the five stagesMark whether that relationship is observable, emerging or still projected.
4. If you are the intermediary, choose your jobAttestation or toll collection. Plan for the first.