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Here is today’s roadmap:
Article: Braintrust and Capitalism
Tweet: A Pseudonymous Investor Raises An NFT Fund
P.S. If you are new here, take a look through this web3 starter guide to get caught up to speed :)
Article:
Braintrust: Fighting Capitalism With Capitalism
I’ve been thinking about tokenomics recently. Packy describes them as the following:
“Tokenomics help design economies by setting rules for how tokens are distributed, what participants can do with them, and how value accrues to them.”
Braintrust, a talent marketplace like Fiverr and Upwork, is experimenting with designing their ‘economy’ through tokens. When you go to their website they look like a normal web2 company. They do not focus on being a web3 company but use tokens to engage their ecosystem. This idea could work for web2 companies looking to enter into web3. Instead of a decentralized Twitter, what if you got tokens for positively impacting the Twitter ecosystem (e.g. sharing thoughtful tweets, inviting other users, etc)?
By studying Braintrust, I believe tokenomics are valuable for the following reasons:
Lower customer acquisition costs: Braintrust is unique because it distributes ownership to users who help contribute to its growth. These users are called “Connectors”. When a Connector refers a member they earn a token. This token can be withdrawn into fiat currency, accumulated to grow voting rights, or used to connect to jobs. Incentivizing Connectors with tokens allows Braintrust to have a lower cost of customer acquisition. These lower costs allow the marketplace to charge a lower take rate. The lower take rate can lead to more customers.
Reducing friction: Building products is hard. One of the reasons is that users do not do what you want them to do. Due to friction within the product (e.g. maybe it’s there’s too much data to fill out when you’re creating a profile), users will fall off the expected user journey. Once they do, they risk not understanding the value of the product. Product Managers focus on ways they can reduce friction for users. Braintrust uses tokens to reduce this friction. For example, Braintrust provides tokens at a.) setting up your profile, b.) inviting others, and c.) when you complete a project. Incentivizing tokens in high friction points in the user journey increases the onboarding of users. I.e. Braintrust can incentivize users with tokens for their desired user behavior.
Benefiting early users: One method to support early users of a network is through airdrops. Airdrops are a way of a.) distributing tokens, usually for free, to numerous wallet addresses, b.) gaining the attention of new followers resulting in a larger user base, c.) sharing voting and governance rights with early users of a product, d.) recognizing and rewarding early users of a product. An analogous example of an airdrop in web2 would be if Uber gave equity to the early drivers on the platform. Or if Airbnb gave equity to the early hosts on the platform. Who wouldn’t rave about a new company that basically just gave them free money? Braintrust has yet to do this yet but can in the future.
There are a number of risks associated with tokens on a platform. One big one includes governance. The ideal web3 company provides tokens for ‘governance’ ( a fancy word for voting and decision-making authority). Governance tokens are normally distributed within DAOs. If governance tokens are available for investors to trade, that can lead to concentrated interests buying up voting rights and centralizing power.
Packy goes into further depth about Braintrust, Tokenomics, and more. If you’re reading this and have been exploring these concepts, I would love to chat.
Tweet:
I talk about Punk 6529 a lot. This is the first person I have followed who is pseudonymous. It’s challenging my thinking on reputation, credentials, and identity. For most of human history, we have needed to represent ourselves through our real names, background, and experiences. Today that is starting to be challenged.
Punk 6529’s reputation has been built through threads about NFTs. I would be open to investing or working with people that are pseudonymous if I could see their track record and it was verified. I know, this is pretty out there. It might be idealistic, but seeing people becoming reputable without sharing their identity makes me hopeful for a more equitable society.
This tweet aligned with Mario Gabriele’s article “The Future of Solo Capitalists”. He speaks on the rise of individuals starting their own venture firms. More solo funds are being started is because the distribution of messages is now coming from influential creators online. Despite being non-crypto, this idea connects well with the rise of Punk 6529 and their fund.
Bonus:
That does it for this week of Web3 Wednesdays.
Till next time,
Jay 💕