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.