In crypto, user-ownership can help drive network growth faster than any Web 2 growth hacking tricks
But nailing an effective ownership distribution is one the biggest challenges (and opportunities) for teams.
Best practices remain murky.
Can we fix that? Thread 👇
Taking a step back, figuring out ownership distribution is an exercise in Mechanism Design:
"a field in economics and game theory that takes an objectives-first approach to designing economic mechanisms or incentives, toward desired objectives..."
Mechanism design assumes rational behavior, and is easiest to reason about when the designed-for objective can be verified deterministically.
Miner rewards in BTC & ETH are an example of mechanism design for verifiable work: PoW + transaction ordering.
In DeFi and other crypto apps, the objectives that mechanisms are designed to reward are far more complex, the stakeholders more diverse, and the type type of work being done more subjective—making it difficult to verify.
Each time an app runs an ownership distribution program—whether via ICO, liquidity mining, or treasury governance program—there is data to learn from and iterate on.
These learnings are happening faster and faster.
To help accelerate this, we need a data driven approach to measuring whats worked and what hasn't.
KPIs to measure against.
And from that, we can back out best practices that may be repeatable across projects, further accelerating iteration.
Together with @eddylazzarin I put together a list of tradeoffs to measure against.
The plan is to back out data driven insights to help builders make better choices!
So what trade-offs and metrics are interesting to measure when considering the effectiveness of ownership distribution?
On tokens issuance:
- Distribution speed: fast (YFI) vs. slow (COMP)
- Decelerating vs. Linear vs. Accelerating
- Retroactive vs. continuous
- Reward based vs. sold
On users engagement:
- # Uniques
- Median Capital Balance/Gini Coefficient
- CAC vs. LTV (h/t @dberenzon)
- Liquid vs. Vesting/LockedUp
- Dividend vs. Burn vs. Pure Governance?
- Flat vs. Delegate Governance
On governance participation:
- Continuous (MKR) vs. Discrete (UNI/COMP)
- Mandatory (YFI) vs. Optional
- High Quorom (UNI) vs. Low (AAVE)
- Foundation vs. On-Chain
No doubt there are many more; would love to hear more ideas!
I'd also like to plug a small Telegram group I'm starting for folks interested in doing this kind of rigorous analysis so we can help each other push the thinking faster. DM me for an invite!
And finally, @VariantFund is hiring a Research Analyst to help with this kind of analysis, among other things.
I'm confident we can get the learnings on this into high gear here. And when that happens, we'll be well on our way to seeing The Ownership Economy break out from L1s and DeFi to other exciting verticals that make the crypto economy more colorful.
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+ A detail oriented self-starter, intellectually curious, with strong analytical and communication skills
+ Thrive off of new ideas and excited to push our thinking
+ Have a technical background or a demonstrated ability in data-driven analysis
+ Are excited to design and track the metrics that are most critical to understanding and forecasting the progress of important crypto and Ownership Economy projects.
Opinion: like most waves in tech, developers and technologists were first to harness the innovation of crypto tokens & markets to drive the development of community owned products at scale.
This idea is at the core of the success of #Bitcoin & Ethereum, but it doesn't end there.
Ever since @UniswapProtocol tokenized $SOCKS (unisocks.exchange) I've been excited about the potential to democratize financial inclusion while also to supporting creators, founders, their projects and ideas.
Thats why its exciting to see @withFND launch today—a platform for creators to mint tokens that represent a piece of their work.