Author: Jerry, Cherry, BeeGee
Submitted by: TheprimediaDAO
If we put the Builder economy at the level of human civilization evolution, it will bring about the foundation for the transformation of the economic system: clan tribes (small countries with few people, joint labor, and joint distribution), agricultural civilization (slave owners, monarchs, and religion), industrial and commercial civilization (capital and politicians), technology/information civilization (technology, capital, and politicians), digital civilization (user Builders in the blockchain/Web3 era co-construct and share), interstellar civilization (unknown)...
We have the opportunity to write a new narrative chapter for the "end of human civilization" with "distribution/decentralization of blockchain/Web3, token incentive mechanism/Builder economy, smart contract/DAO organizational governance structure", and we can even look forward to interstellar civilization after digital civilization in a coherent manner (only when humans complete digital advancement will they have the ability to pursue the stars and the sea).
In the historical perspective of the advancement of human civilization, the evolution of civilization is driven by the adaptation and transformation of the environment by the survivors. Therefore, in the era of digital civilization, the iteration of the survival paradigm/labor value of individuals and the economic structure/production relations of the entire ecosystem will be of decisive significance. We should first enter the construction of Web3 infrastructure based on how Builder users can play a spontaneous construction role based on their interests and expertise in the digital civilization/Web3 ecosystem, and obtain corresponding status and value returns based on their contributions.
After the seminar on breaking the three major obstacles of "Integration of Web3 Technology and Industrial Life" planned by TheprimediaDAO, we conducted a supplementary interview with SafeTreasury, a one-stop asset management and collaboration platform for Web3. We used SafeTreasury's commitment to providing DAO/Web3 applications with DID elements such as assets/rights and reputation/credibility, with the contribution of Builder users as the core, and providing users with on-chain asset management tools, and promoting the division of labor and collaboration and ecological co-construction of users in DAO/Web3 applications as an example. In the context of the advancement of digital civilization, we analyzed the implementation path of the Builder economy in the iterative process of Web3 applications and the systematic value opportunities.
1. Iteration
Let us first clarify the concept of Builder economy in a broad sense. For example, Bitcoin mining, DeFi liquidity mining, and PLay2E are all manifestations of the equity return of Builder users' contributions/data assetization. Therefore, the Builder here is not limited to the developer group, but the entire Web3 ecosystem builders, including miners, developers, creators, operators, etc., who provide valuable labor in the construction of the Web3 ecosystem and can therefore obtain corresponding equity returns.
1.1 Changes in the universal survival paradigm
In the context of iteration, our best contrast effect is the content creator economy. Content creators/Builders in the Web2 era can earn income by doing what they like and promote the content commercialization model of the creator economy, but this is not enough to promote the iteration of the economic structure, and it is not enough to provide content creators/Builders in the entire ecosystem with an opportunity to change the survival paradigm, because it can only provide limited income opportunities - only the top 1% of creators with a large number of fans and readings can have sustainable business operations. For example, 1.4% of musicians on Spotify account for 90% of revenue; more than half of Twitch's revenue belongs to the top 1% of anchors.
More importantly, it is still an economic relationship in which centralized institutions exploit/harvest workers - centralized platforms in the Web2 era take the majority of the economic value contributed by content creators/Builders. For example, record companies and streaming platforms almost completely monopolize the market share and content product distribution rights, and typical music artists can only earn about 10% of licensing royalties.
According to Linktree's report data, 35% of content creators in the Web2 era do not have enough money to make a living, and 59% have not realized content monetization at all. Watashi, the founder of SafeTreasury, has nearly ten years of product design and management experience in the Web2 era and has devoted himself to project practice and community building in the NFT trading market. He believes that Web3 is deducing the content creator economy of the Internet era to a survival paradigm of workers/Builders in the digital civilization era.
Take PLay2Earn as an example. Although PLay2Earn has gradually become a gimmick for speculation/hype by currency circle harvesters and is withdrawing from the center stage of the Web3 application era (replaced by Web3 games and metaverse games), it still provides us with a good practice of a digital economic activity with personal survival paradigm utility that everyone can participate in.
Source: Nansen.ai
Watashi believes that this is mainly due to the fact that blockchain/Web3 provides users with low-cost value creation and efficient asset circulation/transaction. For example, the number of active wallets participating in the native token SLP is used as a representative of the number of Axie users, which was close to one million at its peak. Most of these users do not need to master technology and programming languages to understand and use complex financial infrastructure, but when they can complete payments through SLP in a few minutes, PLay2Earn is exploring the survival paradigm of Web3 workers/Builders in the iterative process of digital civilization.
As more and more workers/Builders enter the survival paradigm level of user production behavior, the convenience of on-chain asset management and services becomes particularly important - this is exactly the problem that SafeTreasury wants to solve: read all on-chain transactions and display them in a more readable way; track all tokens and DeFi assets; support single-signature and multi-signature Gnosis Safe transfers; filter transactions by wallet, label, token and date; add financial tags to transactions in batches, and add notes... After completing the payment of builders/contributors based on individual contributions and on-chain data records, SafeTreasury is also developing on-chain DIDs to establish DID elements such as individual reputation values in the community to empower the Builder economic process.
1.2 Iteration of organizational management forms
In the Web2 era, centralized decision-making and contribution (salary/option) conversion and evaluation system iteration are carried out simultaneously. The practice of DAO/Web3 shows that by using encryption technology to achieve decentralization, no third party, and anti-censorship characteristics, social organization management has another way of playing. The contributions of workers/Builders can be recorded, the equity settlement method is public, and the Builder obtains corresponding value returns according to his contribution. This is bound to motivate members to devote themselves to team building.
Workers/Builders can also obtain corresponding permissions to participate in the governance and decision-making of the community based on their contributions. This can avoid the influence of subjective factors in single-point decision-making in the centralized era to a certain extent, and further optimize the economic structure and governance paradigm based on the Builder economy.
1.3 Necessity of community quantification mechanism
The founding team of SafeTreasury believes that serving contributors requires tracing the historical data of each contributor. This corresponds to the quantitative mechanism and the rights and permissions behind it. Smart contracts and blockchains have brought the Internet into the era of ownership. The contributions owned by users can be directly used in the calculation of users' rights and interests. The value of the builder's contribution in the builder economy is related to the incentives obtained by the builder.
To complete a quantification mechanism suitable for the current community, the community needs to do the following:
The rights and interests of builders are not determined by the platform, but by the builder and the community based on objective facts and community positioning.
The community itself has a clear positioning and vision, with effective and lasting metrics for measuring user contributions.
All contributions and behaviors of users in the community can be stored persistently and cannot be changed, and can be proven without a third party. That is, user contributions need to be uploaded to the chain at the right time and in the right way. After the data is persisted, builder contributions can be analyzed offline to ensure that builders do not need to focus on their own contribution records and worry about the income from their contributions. Personalized recommendations can be made, and builders' preferred areas, strengths, and work habits can be analyzed to help builders participate in division of labor and collaboration more efficiently within the application.
2. Path
Looking at the economic system in the context of technology, product and application iteration, comparing the points/equipment incentives of Web2 applications and the token/token incentives of Web3 applications, the points/equipment of Web2 applications can only be circulated and consumed within isolated applications, and do not have an economic mechanism for investment, consumption and trading within the application ecosystem. The contributions/data/assets of Web3 application users are attributed to the Builder user DID in the form of asset rights confirmation such as tokens/NFTs, and can be circulated across protocols and applications. On the basis of consumption/payment/transaction scenarios, it also has the financial function of investment/arbitrage. Each Web3 application is an independent "small country" with a closed economic system, and the tokens/tokens it issues are the "currency" for the operation of the economic system of the application/"small country". Therefore, there will definitely be a singularity at the macro level, and the entire Web3 ecosystem will have enough applications/"small countries" running freely, and Builder users will devote themselves to the co-construction and sharing of the Web3 ecosystem with their respective interests/specialties (close to the self-owned and comprehensive development of Marxist people), and thereby support the non-competitive economic ecosystem of "small countries, few people, mutual benefit and win-win" of digital civilization. However, from a micro perspective, especially in the early stages of Web3 ecosystem co-construction, a non-competitive economic ecosystem will not be formed spontaneously. On the contrary, there are no "borders"/boundaries between applications in the Web3 world. Builder user DIDs can be active in multiple competing Web3 applications, so each Web3 application needs to grab more Builder users to participate in the ecosystem co-construction of its own project. The founding team of SafeTreasury believes that Web3 applications need to consider how to better motivate Builder users to participate in collaboration and ecosystem co-construction more persistently and deeply when their own token/token incentive mechanism does not yet have an economic system closed loop/Builder user transactions to survive. Compared with the one-step "full project token" incentive, the combination of "project token + stablecoin + legal currency" would be a better approach. The value of a project token is 0 at the beginning, and only by relying on the joint efforts of builders can the value be continuously consolidated and pushed up. After all, builders are also people, and they will also have real needs in the current environment. To this end, a compromise and flexible approach is needed to motivate contributors.When the value of the project itself is established and the business flywheel starts to run, it is possible to gradually switch to the "full project token" incentive, thus forming a self-closed chain ecosystem. Token incentives can be roughly divided into two types: Commitment compensation is more like a formal job, investing a certain amount of time each week in the work of the DAO. The specific work is continuous and is constantly arranged according to the needs of the organization. It is not required that individuals produce specific results at a fixed time; Retroactive compensation corresponds to temporary work, corresponding to clear work results, usually work that can be completed in the short to medium term and is easy to quantify. Compared with the traditional equity incentive mechanism, work incentivized in the form of tokens has the following advantages:
High asset liquidity and short time to market (no need to wait for acquisition or IPO)
Automatically match market compensation (startup equity value is tied to company value at last fundraising round)
Rewards are more directly related to the company’s technology products and community value, and are not subject to the company’s capital structure.
Compensate for lost employee benefits due to external factors (capital gains, payroll taxes, and local regulations) in different ways
Access underlying liquidity from lending markets without triggering a taxable event
Get additional tokens for staking, lending and yield incentives
Transparency in the token dilution process. Coordinate with stakeholders on possible changes to the total token supply in a transparent manner.
The incentives (and pros and cons) in the web3 community include:
Retroactive bonuses (funds/tokens), where contributors are rewarded retroactively after their contributions (flexible for the DAO, no long-term commitment, but high uncertainty for contributors);
Salary stream (funds/tokens) (can encourage long-term, stable contributions, but not for special jobs)
Collective rewards (funds/tokens), where the collective evaluates the rewards that individual contributors deserve (there is a decentralized collective evaluation mechanism, but it makes individuals more uncertain about the rewards they receive)
Governance rights/tokens (give members a better sense of participation, but the value of governance tokens generally fluctuates greatly)
Tips (funds/tokens), paid directly by a central authority (the fastest way to reward contributors, but very centralized and income may be uncertain);
Bounties (money/tokens) (great for special tasks, but properly monitoring the completion of tasks is a challenge)
Donation (suitable for incubating complex plans/projects within DAO, and it is also difficult to test the effect)
NFT (can be used for tickets, reputation systems, but limited liquidity)
SBT (SBT can become a personal reputation certificate, combined with DID to become a resume in the web3 world)
This incentive system not only ensures the incentive mechanism, but also attempts to solve a very realistic problem in the early stage of Web3 ecological co-construction - when some excellent Builder users do not have other full-time/commission jobs in the real world, how can a Web3 application take into account its real survival problem based on the Token incentive mechanism. For example, a Builder user of ThePrimediaDAO participated in more than three co-research and co-creation collaborations in a month, and his contribution was approximately equal to two independent completions of content investment and research analysis articles. While obtaining the corresponding amount of Token incentives, ThePrimediaDAO can infer that he is almost in a full-time state to participate in co-research and co-creation. Therefore, in order to better play his role, he is given an incentive bounty of 600U-1000U funds, which ensures his survival in the real economic world. Therefore, for early Web3 projects, effective fund management is as important as on-chain asset management. Based on the above analysis, SafeTreasury has formed a collaborative platform that serves the Web3 ecosystem by combining "Web3 application fund management + Builder user on-chain asset management". Therefore, in addition to on-chain related services, SafeTreasury also attempts to provide a more transparent financial disclosure solution for Web3 community governance, attempts to establish Web3's financial norms and generate financial statements, and creates an aggregator that integrates all assets for Builder users and Web3 applications. 3. Value In the long history of human evolution, the formation of each civilization era is a manifestation of the adaptation of human social order to changes in the external environment/survival structure. Digital civilization is no exception. Human nature is complex. The law in the real world is the bottom line of human morality and regulates human social behavior. In the web3 world, smart contracts regulate the behavior of builders and ensure the normal operation of community governance. The internal coordination and governance of the community requires members to share common values and goals, and the constitution (smart contract) is the interface of common values. The main forms and structures of existing DAO constitutions: modeled on the concept of modern constitutions, defining powers and responsibilities through clauses; imitating declarations, expressing values and guidelines to be followed; applying the digital constitution of communities and Web3 projects, encoding the mentioned goals, values and rights. This is called computational constitutionalism, that is, communities are defined by their use of smart contracts.The constitution is a product of decentralization in the community, and decentralization also defines a specific narrative of how the community collaborates. It is mainly reflected in: the right to propose, the right to question proposals, the right to vote, non-discrimination and the right to withdraw. The constitution defines the goals and values of the community. The goals are mainly divided into: developing Web3 specific technologies; spreading technology to benefit the world; building communities. The values expressed are: openness, inclusiveness, free and decentralization. The founding team of SafeTreasury believes that under reasonable decentralized governance rules, early builders and contributors can obtain part of the value they help the platform create, and eventually govern and control it more. It is essentially handing these companies over to builders - this is the biggest social transformation created by decentralization here. We can imagine that in the process of digital civilization based on the iteration of Web3 applications, this is a new survival structure paradigm, a little more equal, a little more socialist, which allows every Builder to participate in the economic creation and sharing that is happening in the world, and has corresponding social governance rights and interests based on their contribution, rather than limiting it to a few people such as capital/technology/politicians. Web3 applications will therefore greatly unleash human creativity. While completing the evolution of digital civilization, humans can also imagine interstellar civilization... Note 1. This article was co-researched and co-created by TheprimediaDAO. The main collaborators are TheprimediaDAO initiator Jerry (@ThePrimedia) and TheprimediaDAO Builder, Open Knowledge DAO core-builder Cherry (@cherry_yang_cn). TheprimediaDAO Builder and TigerVCDAO Investment Head BeeGee (@BeeGeeETH) also contributed to this article. Note 2. This article is the second article of "Breaking the Problem of Web3 Technology and Industrial Integration", which belongs to the TwitterSpace theme series "Looking for the Next Bull Market" planned by TheprimediaDAO. The participants of the salon seminar include TheprimediaDAO consultant Dyson, TigerVCDAO initiator Peter, NonceGeekDAOFounder Li Dagou; Co-founder of CrossSpace and Type V DAO leoninweb3; Assure_pro Chief Growth Officer, Assure Wallet Developer Terry