Featured - Web3 - September 6, 2023

Web3, Tokenomics, and the Pursuit of Real Business: Part 1

Ladies and gentlemen, it’s high time we had a chat about the wild, occasionally wacky, and always wonderful world of Web3 and tokenomics. For most of you this will make as much sense as when I was speaking passionately about net neutrality, only this time it’s about the need for a real business underlying any Web3 project. It’s not just about the technology, it’s about creating a sustainable economy.

For those of you who are still getting their bearings in this digital frontier, let’s start with the basics. Web3 – the internet of the future, where blockchain technology and decentralized finance are as common as cat memes on Reddit. Tokenomics – the study of how cryptocurrencies work within the broader ecosystem, think of it as the economics class you wish you’d paid attention to in high school.

Now, imagine a reality TV show where contestants have to build a Web3 project with a solid tokenomics structure. (Note to self: we should do this!) They’re not just creating a shiny, new cryptocurrency out of thin air (that’s called vaporware); they’re tasked with creating a real economy for their token to thrive. They would need a marketable idea, generating real income from real customers to support their tokenomics, especially if we include fancy staking and rewards incentives. It’s like Gordon Ramsay’s “Kitchen Nightmares,” but instead of fixing failing restaurants, we’re building sustainable economies.

Let’s break it down a bit more. For our Web3 project to truly stand the test of time and be as enduring as Betty White’s career, it needs to have a solid business model. A tokenomics structure without a business model is like a Kardashian without Instagram followers – it’s possible, but it just doesn’t work.

So, what does a successful business model look like in the Web3 world? It’s about creating verifiable income, just like any other business. You wouldn’t expect a lemonade stand to survive without selling lemonade, would you? The same principle applies here. The tokenomics structure needs to be supported by a business that’s bringing in income, just like the Marvel franchise needs to keep making superhero movies to keep the fanbase (and their income) alive.

But why stop at a business model? Why not aim for a 100-year circular economy? Now, I know that sounds as ambitious as trying to beat Tom Brady in a Super Bowl, but hear me out. A 100-year circular economy is a system that’s designed to be sustainable over the long term. It’s about creating a tokenomics structure that can stand the test of time, like the Rolling Stones of the cryptocurrency world.

The world of Web3 isn’t just about creating a new cryptocurrency. It’s about building a sustainable business model and a circular economy that can survive and thrive for the long term. It’s about creating something that’s as enduring as the love for “Friends” reruns, and as successful as Taylor Swift’s music career.

So, next time you’re thinking about jumping into a new project, remember to think about the business model. After all, you wouldn’t want to end up like the Fyre Festival of cryptocurrency, would you?

In Part 2 we will dive deep into the economics of tokenomics so you know just what to look out for!