A constellation is born: Approaching the Web3 platform economy
As many envision a world in which both information and value flow freely, new pathways for sustainable income streams are emerging online
The internet envisioned a world in which information flows freely. Three decades after the invention of the World Wide Web, we are seeing a new generation of web applications known as ‘web3’, or what some are calling the web of value. These applications use decentralized technology like blockchains to make activities traditionally mediated by financial institutions, such as transferring, borrowing, and investing, accessible without gatekeepers. Web3 envisions a world in which not only information but value flows freely.
With greater accessibility, however, we run the risk of over-financialization, with finance both enhancing and restricting more of our actions online. The question of how to promote sustainable finance on web3 comes to the fore. Amidst the recent mainstreaming of speculative hype around digital art NFTs, memecoins, and cryptocurrencies, there are several examples of pathways to creating more sustainable income streams for creators on web3, which we can learn from as the technology develops. At their core, each of these examples looks toward what tools for collective identity, finance, and ownership online mean today.
One approach to web3 centers on sharing attribution. A new web3 software platform called Mirror takes this approach, aiming to change the publishing game. At first glance, Mirror is most similar to Medium, a blogging platform that allows creators to independently publish their work while tapping into the software platform’s social network. In addition to providing tools for displaying content like Medium, Mirror goes one step further, enabling creators to embed ways to earn income directly in their posts. Even more than subscription fees, this means creators using Mirror can easily auction, crowdfund, and tip creative work using cryptocurrency tokens. Creators can add a Mirror crowdfund, like a Kickstarter campaign, to their post as easily as they would add an image. This has led to Mirror becoming a software platform not only for blogging but a wider range of work, including crowdfunding residencies, novels, and essay collections, which enables creators not only to receive funds for work they’ve produced but to raise funds for future endeavors.
One of the most interesting ways to earn income on the platform Mirror calls “splits”. Splits enable creators to identify others who have influenced their work, and split a portion of funds raised with them. In a sense, this enables posts to attribute not only wider intellectual credit but economic credit to ideas. You could think of splits as Venmo for footnotes.
True to the aim of the web3, Mirror supports creators directly receiving income from their work and redistributing a portion of this income to other creators who made it possible. The practice of sharing attribution could lead to a stronger support network for creators outside of traditional institutions.
Holding in Common
The mainstream emergence of NFTs, cryptocurrency tokens that represent unique digital assets such as artworks, has led to a series of high profile art auctions this year with sales in the millions. One of the most prominent auctions, the sale of Edward Snowden’s charitable NFT called “Stay Free”, grossed $5.4m. While stories in the press included the high price tag, they often left out the interesting story behind the collectors. Known as PleasrDAO, the collectors are a group of individuals interested in shaping the cultural values of web3. The PleasrDAO collective first came together to bid on an NFT by the artist pplpleasr. Given high auction prices, the idea behind PleasrDAO was simple: a collective of fans could pool funds to place bids and compete with other major bidders to win auctions. After winning their first auction, PleasrDAO went on to collect other works, such as the Edward Snowden NFT, raising millions to benefit the Freedom of the Press Foundation.
While groups collecting artworks may not be new, platforms unique to web3 such as “multi-signature accounts” enable the rapid rise of collectives such as PleasrDAO, herstoryDAO, and PartyDAO, which now greatly challenge traditional institutional collectors. Used by all of these collectives, a multi-signature account platform like Gnosis Safe can be described as the web3 version of a joint bank account, with several individuals having signatory rights to shared assets.
Gnosis Safe extends the capacity of a legacy joint bank account, allowing groups to create an account, pool funds, and manage assets like cryptocurrency tokens such as NFTs in a matter of minutes. Gnosis Safe emphasizes the practice of holding in common, in which members collectively manage assets and vote on how to spend funds.
Another approach to web3 centers on distributing ownership. Coined by investor Jesse Walden, the term ‘ownership economy’ economy refers to “software that is not only built, operated, and funded by individual users—but owned by users too.”
In one instructive example, after years of successfully building a community of users, a popular web3 software platform Uniswap launched a cryptocurrency token called $UNI and distributed it to its employee team, investors, advisors, and user community. It did not publicly share information on the cryptocurrency token prior to its launch, and it distributed the cryptocurrency token $UNI to users based on their previous transaction history. This both rewarded the community for using the platform and made them co-owners of the software platform. Today, Uniswap holds public votes for $UNI cryptocurrency token holders on the development of the software platform. Many similar experiments to distribute ownership to software platform users followed from this example, which more meaningfully distribute ownership to their user communities, such as the Gitcoin and Tornado Cash web3 software platforms.
The practice of distributing ownership means bringing cooperative principles to software platforms, making users owners of the software platforms they use. Because web3 makes it technically easier to distribute ownership, this practice foreshadows the formation of social organizations that can incorporate greater practical knowledge from stakeholders without increased operational overhead.
At large, these practices of sharing attribution, holding in common, and distributing ownership showcase a brighter side of the web3 constellation, one that is usually outside of the volatile daily news cycle. In this light, we may see many new sustainable institutions flow from the web of value.
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