The Ownership Economy 2022 – Variant: The Intersection of User Ownership and AI

The Ownership Economy 2022 – Variant: The Intersection of User Ownership and AI

Introduction:

The ownership economy has emerged as a powerful force in the digital landscape, offering users the opportunity to become owners and participate in the value creation of various networks. This shift towards user ownership not only presents new avenues for builders to leverage market incentives but also has the potential to drive positive social change through the distribution of wealth-building assets. The ownership economy encompasses a wide range of projects, from user-owned financial markets to user-owned social networks, investment clubs, and digital assets. In this article, we will explore the key elements of the ownership economy in 2022 and its intersection with the early days of AI.

User Ownership: Jumpstarting Growth and Sustaining it:

While user ownership can jumpstart growth by capturing user attention and fostering initial adoption, sustaining that growth is a more challenging task. Simply giving users ownership through tokens is not enough to ensure long-term usage and competitiveness. Strong product-market fit, solving a widespread need for users, is crucial for sustaining usage in the ownership economy. Moreover, liquidity remains a significant motivator for users in choosing one marketplace over another. However, there is a concern that ownership may crowd out intrinsic incentives, leading to a more transactional and temporary engagement with products. To address this, token incentives should be optimized to preserve users' intrinsic motivation through progressive decentralization and careful consideration of timing, magnitude, and eligibility.

New Token Distribution Designs: Boosting User Loyalty:

In the quest for long-term sustainability, new token distribution designs are playing a pivotal role in boosting user loyalty. Traditional liquidity mining programs, although effective in driving short-term participation, have not contributed to long-term sustainability. However, recent developments indicate a shift towards token incentives that prioritize contributor growth over deepening liquidity. Axie Infinity, for example, has demonstrated strong and consistent player retention, showcasing the effectiveness of innovative token distribution designs. Curve's voting escrow contracts and Gro's vesting mechanism are examples of how lockup periods and vesting can encourage long-term engagement and loyalty.

User Ownership and Richer Ecosystems:

One of the key benefits of user ownership is its ability to foster richer ecosystems of projects and contributors. Shared ownership reinforces network effects and creates a disincentive for users to switch to other blockchains. This permissionless nature has attracted users, creators, and developers, who have started building around and on top of these projects. CC0 NFT projects, by enabling free use of assets, extend the definition and possibilities of ownership. This approach stimulates building, creation, and collaboration, leading to a more vibrant and diverse ecosystem.

The Ownership Economy and Early Days of AI:

The ownership economy and the early days of AI are two transformative forces shaping the digital landscape. AI, specifically language models like LLMs, Transformers, and diffusion models, herald a new era of technology capabilities. Unlike previous waves of AI, where value largely went to incumbents, the current wave of AI enables startups to create new market openings. ChatGPT's launch marked a significant milestone in mainstreaming AI's potential. However, we are still in the early stages of AI adoption, with multiple waves of AI to consider.

Actionable Advice:

• 1. Focus on strong product-market fit: While user ownership is crucial, it should be coupled with a product that solves a widespread need for users. Prioritize building a product that captures user attention and provides a seamless experience.

• 2. Design innovative token distribution models: Experiment with new token distribution designs that prioritize long-term user loyalty and contributor growth. Consider lockup periods, vesting mechanisms, and other strategies to encourage sustained engagement.

• 3. Foster collaboration and building: Embrace the permissionless nature of the ownership economy to foster collaboration and building within ecosystems. Encourage users, creators, and developers to build around and on top of projects, creating a vibrant and diverse ecosystem.

Conclusion:

The ownership economy, with its focus on user ownership and the distribution of wealth-building assets, is reshaping the digital landscape. While user ownership can jumpstart growth and create positive social change, sustaining that growth requires a strong product-market fit and careful optimization of token incentives. Moreover, the ownership economy fosters richer ecosystems of projects and contributors, reinforcing network effects and stimulating collaboration. As we navigate the early days of AI, the transformative capabilities of language models and other AI technologies create new opportunities for startups and incumbents alike. By embracing user ownership and leveraging AI advancements, we can unlock the full potential of the digital landscape and drive innovation towards a more inclusive and equitable future.