Problems in the Ownership Economy?

There’s a lot of promise in this concept of an Ownership Economy: basically networks and digital organizations that are owned and operated by the users of those platforms.

Rarible is an early pioneer in this model, and many of the buyers/sellers on rarible.com are ideal candidates for this Ownership Economy model. But what we are seeing in practice is that the overwhelming majority of RARI recipients sell their RARI upon receiving them. The end result of that is that instead of being user owned, it is speculator / investor owned, just like traditional companies.

Are all ownership economy projects going to follow this path?
Is this a problem?
If it is, how can we get creators and collectors holding their token more?

Food for thought, would love to hear your ideas!

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I think before we can expect users to value ownership, we need to educate them on WHY ownership is important.

In my angel investing course earlier this year for content creators, a big part of what I had to educate creators on was why they should even care about investing in startups, versus just doing brand deals and being compensated with cash. It was a complete mindset shift for them from optimizing for short-term income vs. long-term wealth building. In a world in which only 55% of Americans are invested in the stock market, I don’t think we can take it for granted that people understand why ownership matters in the first place.

Aside from education, perhaps there can be exploration of other means of facilitating user ownership. Today, tokens bundle both economic & governance components – maybe those should be split into separate “share classes,” with users receiving disproportionately more governance rights. Taking inspiration from the real world, worker-owned co-ops involve membership interests that are non-transferrable and non-marketable, ensuring that business decisions reflect those who have functional roles.

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Agreed. Education is important and projects need to inform their users as much as they reasonably can.

Splitting tokens into separate share classes is quite a novel idea. Are there any projects in the space exploring/implementing this?

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The issue stands in incentivisation to hold rather than be educated. With the right incentives, education will naturally occur as there is something worth learning about.

Right now tokens are being earned but its only perceived value is in its price. Young tokens are yet to hit a state of maturity where holding out-weights the benefits of selling. IMO this can be changed by

  • pegging the value of the token to another which holds perceived value, say BTC or ETH. This means users are more willing to hold than to sell and volatility is somewhat mitigated.
  • lock up, tokens are paid out more frequently at the start but also have a lock up period. This is the same principle that traditional financing has so that investors, which creators are essentially being by holding the token are. The premise here is earlier the entry, the higher the risk but also higher potential of reward.
  • lastly during the lockup period the tokens have voting rights to mitigate the direction of the dao on a voice credit system which is a quadratic voting system that prevents majority rule (allowing daos to grow without manipulation). this means that the third incentive to hold is in direction of Dao rather than a waiting period.
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I think once people can easily stake their tokens for yield, they’ll hold rather than selling.

Volume is at 12 M USD per month right now. So that’s 600,000$ in fees per month, 7.2 M USD per year.

Circulating cap is 37 M.

If people clearly understood that they could receive 20% real yield by staking, less would sell. Most Artists are not familiar with owning parts of a business and what a governance token even really does. The governance aspect distracts from the true utility which is a portion of protocol fees.

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Currently, there’s literally no need for creators/collectors to hold their tokens, and we can’t blame them for that. Plus, I don’t think staking will solve this issue for most of those creators/collectors. How about creating an innovative/fun way to stimulate the demand for holding the token?

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