WEB3

Web 3: What’s the use cases, business models? Read on!

“Crypto is just flipping some jpegs & currencies, what’re you actually doing?” So I’ve been asked xx times.
My TLDR answer: Tokens/currencies are not web3 by themselves, they are a means to an end.

What kind of ends?
Fascinating new business models.

Like what? Read on ๐Ÿงต..

1/24 Distributed Supply Chains

eg. inventory storage.
Extra backyard space? Imagine a SC network where everybody who wishes can be a mini-warehouse owner and gets rewarded in AmazonW3 tokens for holding inventory. Spend these on Amazon purchases, avail discounts etc

2/24 OTT subscriptions.

Had my Netflix subs been issued as an NFT, I would’ve been able to sublease it and earn rental while Netflix would’ve attracted more customers “lessors” who would’ve rented it to non-customers who don’t use Netflix ‘enough’ to pay for the entire subs.

3/24 Cross-pollination

HUL owns a number of brands & keeps acquiring new ones. Bootstrapping customers on new brands requires hefty $$. A 100% fungible HUL-W3 token issued every time I spent on an existing brand would help leverage existing customer base for new brands saving $$

4/24 Movie distributors.

PVR could airdrop me PVRW3 tokens which I could stake in movies I liked. Stakers now have incentive to promote their favorite movie –> world of mouth drives more customers to PVR + token value appreciation benefits stakers.

5/24 Influencer economy

Zara/Levi’s etc give tokens to influencers for promoting their merchandise to their audience. Influencer gives tokens to patron who can use it for discount at these stores driving up brand sales and enabling influencer earn more via token ownership.

6/24 Movie/Sports franchises

Disney owns the Marvel, Star Wars and various other franchises. A DisneyDAO can distribute tokens to their loyal audience where owners of this token get to vote on scripts/characters/storylines/location/release times etc.
Contd..

7/24 Pre-release retail buy in = more tickets sold = more profits for Disney = appreciation in token value = profits + positive incentive for DAO members
8/24 2-sided platforms

Sellers earn platform tokens for good rat+reviews. Tokens could be used for discount on commissions, listing fee etc. Sellers have greater incentive to upgrade their products/services and better quality of sellers on platform would drive customer growth.

9/24 MDR on payments

~ 0.7-3% MDRs are ridiculously high. Mostly to cover non-recovery. Mastercard can airdrop their tokens to their customers every time a successful, timely transaction is made. Tokens could be redeemable for a % share of the fee charged from merchants.
Contd..

10/24 contd..
Earning through tokens = responsible behavior = low NPA = lower costs to cover due to non-payment = more profits for Mastercard = token appreciation = positive behavior in customers
11/24 Health/fitness memberships

Earning though nonpaying fat-a**es like myself is a passe. Give token rewards to people actually working out that can be used to avail extra in-time/health insurance/extra services/merchandise etc.

12/24 PPC Marketing stack

Currently, co’s pay Google/FB to get impressions/clicks. This is getting expensive. Airdrop tokens to customers who “choose” to be shown ads on an alternative platform (eg Brave browser). Higher user intent + nudge –> increased conversions, lower CAC.

13/24 It’s not tough to see all these use cases align incentive and increase transferability/share-ability in a manner that either distributes costs or uncovers new revenue pools or both.

It’s not to say that these fundamental models don’t exist in the current world.

14/24 Referrals, points, miles, loyalty programs etc are all stemming from the same principles. What tokenization and digitization in general does is reduce dead weight (thus bringing the overall costs down) and expand addressable market size
15/24 All of these ideas would require answering the following:

a. What is the objective?

– In case of AmazonW3, do I wish to minimize costs or do I wish to improve fulfillment rates? Or reduce TAT? Each of these will have a completely different tokenomics design.

16/24 b. What actions of whom to incentivize?

– Want organic customer growth? Incentivize existing users for original UGC. E.g. Users tweeting about their favorite movie tagging PVR cinemas where they watched it.

17/24 c. How much incentive for what action

Solving for adverse selection – remember the snake charmers’ story? You get the point.

18/24 d. does the incentive act like a demand stabilization factor?

Tokens for hotel points is a good example. If tokens are in the secondary mkt, low demand = token price drop = more people slashing tokens for bookings thereby inc. demand for inventory and vice versa

19/24 These examples currently are some design experiments at best, and a lot of web3 infra would need to be built for seeing these as success stories (e.g. high cost of public blockchain atm cant support business models with high frequency of transactions eg e-comm)
20/24 That said, these are some of the many use cases of what a tokenized infrastructure could look like. Tokens provide a means for growth, and are thereby an effective tool to solve for problems that currently either limit market or increase costs.

Like?

21/24 1. cold-start problems
2. principle-agent problems
3. moral hazard problems
4. barriers to participation (high costs, access to info..)
etc.

Not tough to see why platforms plays are red hot candidates for tokenization-led business models

22/24 PS: Tokens DO NOT solve for PMF. Just because there’s a token, doesn’t mean there’s even a valid problem and a solution. Many excellent use cases are very well handled w/o tokens. But this line of thinking helps visualize the transition to a tokenized economy.
23/24 I hope you’ve found this thread helpful.

Follow me @0xTrippyBunny for more.

Like/Retweet the first tweet below if you can! https://twitter.com/0xTrippyBunny/status/1574634771522629636

24/24 I’m attempting to model tokenomics of some of these new designs – hmu if you’re interested in brainstorming! DMs open. Please contribute to this thread with more interesting use cases that you can think of, would be great to see some whacky ideas ๐Ÿš€
EDIT:
2. Principal*-agent problems ๐Ÿ˜€

Follow: @0xTrippyBunny

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