Web3 — Community first

Community is the killer app for Web3

The core ethos of web3 is 1) disintermediation and 2) meritocracy: 1) taking away the middle-man by enabling true peer-to-peer social and transactional relationships and 2) rewarding people based on their actual contributions, both financially and through social recognition. The way most value is being created on the web is through communities of people coming together, collaborating, being a part of something. With native ownership and payment layers built in, web3 has the potential to fundamentally rewire the core social and economic construct, and deliver on people’s and consumers’ deep desire to be a part of a creator, brand or passion community in refreshing new ways. Forging stronger and more direct connections between creators, icons, brands and their fans, turning passive audiences into active members and stakeholders.

By aligning incentives across members and stakeholders, decentralised web3 communities can maximise both social capital and utility value. Creators are looking to engage their fan base in more meaningful and value enhancing ways; involving them into a co-creating process and sharing the upsides with them. Leading to a different kind of patronage, with fan supporters turned into equity stakeholders in the combined cultural value and upside. Why subscribe when you can invest? Why just participate if you can partake in the value being created? Why just play when you can have a say as well?

Social capital is typically being accrued by users or members delivering some proof of capability or affinity (“Proof-of-X”). This is not just a play within online social networks, but manifests itself in the “real” world as well. A significant portion of brand value is derived from the social capital attributed to owning and exposing branded products. Community belonging, membership and fandom are often mixed up with bespoke admission criteria and reputation norms which will ultimately dictate someone’s status and privileges within the group. Social capital typically combines elements of recognition with systems of rewards. Recognition (or social credentials) refers to attribution of status and reputation, whereas rewards are linked to monetary and non-monetary benefits of belonging to a certain member class or reputation tier.

Web3 will offer new and much more optimised ways for enabling, recognising and rewarding social capital. Due to its decentralised nature, proof-of-X will not be determined by a single centralised platform or middle-man, but can be negotiated and defined differently by every bespoke community. And while reputation can be highly subjective or status can be gamed, smart contracts can create a transparent and trustless rule-based system to recognise and value member contributions. Crypto tokens (fungible or non-fungible) can be used to reward status or contributions, and because of their composable nature, specific utility and privileges can be attached to these tokens to provide additional benefits to token holders. As with equity shares, this could also be linked to certain voting rights or governance permissions. And the attached utility isn’t just restricted to the digital world, but can provide access and other benefits in the physical world as well. As such, these utility tokens combine access to O2O (online-to-offline) products and experiences with financial and tradeable value (reflected in the value of the products and services it represents).

In aligning incentives between leaders (core creators and team) of a community and its members, smart contracts and token economics will not only be able to govern access to utility, but also incentivise all stakeholders in developing and co-creating additional utility. Harnessing the power of the collective, communities can leverage diversity of talent and capabilities, while benefiting from inherent network effects to maximise the combined utility value.

Finally, through issuing social or community tokens, members and fans will be able to partake in the combined social capital and utility value being created. Social tokens are the foundational incentive layer for creators and curators to distribute value to their communities as they grow. Tokenised communities will bridge existing creator economies to become true ownership economies, with members, consumers and fans enjoying a direct connection to the icons, creators and brands they love, while having a stake in the collective value upside they co-create. The token asset value in itself will be determined by its utility value (what the asset provides by way of patronage, status, access, exclusivity or benefits within the community it’s being recognised in) and its social capital (community vibrancy and sustained engagement).

With attention being the only truly scarce currency in the digital and physical world, vibrant communities will be those that have mastered the skill of luring and retaining attention, while leveraging the inherent network effects into a virtuous circle of increased reach and engagement. Sustaining attention requires continuous community building in terms of social capital and utility value; sustained and engaged communities become perpetual promotors, driving network effects and positive feedback loops for growing overall pool of attention and acquiring greater mindshare of the broader ecosystem.

Community as the killer app for web3, owned by the people leading and participating in them, and orchestrated by tokens. Communities Beat Individuals Any Day of the Week.

Join our email list and get notified about new content.

More :