Our focus is on supporting projects that prioritize user ownership and participation, as we believe this is the key to creating a more equitable and inclusive economy. The ownership economy, also known as the web3 economy, is gaining traction and transforming the way we interact with digital platforms.

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Hatched by Glasp

Aug 24, 2023

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Our focus is on supporting projects that prioritize user ownership and participation, as we believe this is the key to creating a more equitable and inclusive economy. The ownership economy, also known as the web3 economy, is gaining traction and transforming the way we interact with digital platforms.

At its core, the ownership economy empowers users by turning them into owners. This shift not only provides users with a stake in the success of the platform but also enables them to benefit from the value they help create. This concept is exemplified by the rise of user-owned financial markets, social networks, investment clubs, and digital assets.

The market capitalization of the tokens tracked by CoinMarketCap has reached a staggering $1.76 trillion as of April 2022. While this is still a fraction of the global stock market capitalization, it highlights the growing importance of the ownership economy. Bitcoin and Ethereum, the two largest cryptocurrencies, have market capitalizations of $725 billion and $337 billion, respectively.

To sustain growth in the ownership economy, it is crucial to go beyond simply offering user ownership. While ownership can attract initial users, it is not sufficient to ensure long-term success. Products and services need to have strong product-market fit and address widespread user needs. For marketplaces, liquidity remains a key factor in user adoption. Additionally, intrinsic motivation should not be crowded out by extrinsic incentives, as this can lead to temporary engagement.

New token distribution designs have emerged to boost user loyalty. Axie Infinity, a popular blockchain-based game, has demonstrated strong player retention over time. Traditional liquidity mining programs have often led to short-term participation, with many users exiting within the first few days. However, new token incentives are shifting focus towards contributor growth rather than just deepening liquidity. Lockup periods and vesting mechanisms are being used to encourage long-term engagement.

User ownership also fosters richer ecosystems of projects and contributors. The permissionless nature of blockchain projects allows for the creation of decentralized networks and the building of applications on top of existing platforms. CC0 NFT projects, for example, enable the free use of assets, expanding the possibilities of ownership. This approach stimulates collaboration and innovation, creating a virtuous cycle of value creation.

One of the key advantages of the ownership economy is that it allows users to become owners earlier and participate in value creation. Web3 companies are launching tokens, on average, 2.7 years after their founding, while traditional VC-backed companies typically go public after 5.3 years. This shift towards early ownership democratizes access to value creation and empowers a wider range of participants.

In conclusion, the ownership economy is reshaping the way we interact with digital platforms, offering users the opportunity to become owners and participate in value creation. However, sustaining growth in this economy requires more than just offering ownership. Strong product-market fit, liquidity, and preserving intrinsic motivation are crucial factors. New token distribution designs are also emerging to boost user loyalty and contributor growth. Ultimately, the ownership economy fosters richer ecosystems and allows users to become owners earlier, democratizing access to value creation.

Actionable Advice:

  • 1. Focus on strong product-market fit: When building a product or platform in the ownership economy, ensure that it solves a widespread need for users. This will help sustain usage and attract long-term engagement.
  • 2. Implement smart token incentives: When designing token incentives, consider factors such as timing, magnitude, and eligibility. Optimizing these incentives can preserve users' intrinsic motivation and encourage long-term participation.
  • 3. Foster collaboration and innovation: Embrace the permissionless nature of blockchain projects and encourage the building of applications on top of existing platforms. This will create a richer ecosystem of projects and contributors, driving value creation.

With these actionable advice, you can navigate the ownership economy and leverage its potential for positive social change. By prioritizing user ownership, strong product-market fit, and fostering collaboration, you can build a successful project in the ownership economy and contribute to its growth and development.

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