Building Communities with Social Incentives
Fostering a community with economic incentives tied and reputation
Building a community is hard. We join communities for a sense of belonging. A way to believe in something and have passion for a common purpose.
At first, nobody believes in the purpose of a community —community builders need to evangelize and keep building towards their purpose.
Some communities are large and global, like Ethereum. Then there are subset communities of Ethereum, such as De.Fi, a community for decentralized finance platforms.
Crypto-communitites are largely formed around tokens. Membership for these communities are strictly ephemeral. Most users are holding tokens for a limited amount of time, just to make a quick buck. They aren’t even considered members of the community, they’re speculators and bet-seekers.
Then there are a few builders who hold tokens because they feel a sense of ownership with the network itself. Take Lane Rettig for example, the co-founder of Crypto NYC. He’s also an independent core Ethereum developer.
Cryptocurrencies are a double-edged sword — they solve for liquidity and transfer of value but lack the binary nature of belonging to a network. When users are rewarded with a fungible tokens for contributing to a network — they look to liquidate to realize profits.
Additionally, existing members or contributors of a large community fail to be incentivized correctly. Jill Carson puts it best below:
Working for or on just a single protocol is often suboptimal for the individuals best positioned to do so. Many of the most skilled, seasoned veterans of the industry believe strongly in the tenets of open source and would prefer to work on multiple projects. As outlined above, this is also suboptimal for the overall ecosystem. There are many synergies in the work being done across protocol initiatives, but the fractured system of competing fiefdoms that has emerged does not allow those synergies to be leveraged. This results in mass replication of work across projects (ironically, not dissimilar to the replicated work of miners in a proof of work system). — Jill Carson, “Free Company”
Contributors are more incentivized to work for a subset community rather than the larger community, creating duplicated work.
Economic motives aren’t enough to be considered “part of the community” to most users. Users want a way to signal that they’ve contributed to a specific network, and have proven their skills to belong to a community. Skills should also be global. If a user contributes to a specific network, they should be able to showoff their contributions in a standard way known to all networks to foster a collaborative environment.
We can solve this problem with a non-fungible token. Non-fungible tokens are provably unique — and can distinguish two community members from one another. A user can receive a non-fungible token based upon a user’s specific contribution to the network and community.
Think of it as receiving a new karate belt.
When a user completes a specific amount of tasks, they receive a new non-fungible token that represents their level of completion — something to show off to their social network that they belong to a specific community. Why?
We need to highlight builders within a community and reward social capital along with economic incentives.
We need to give blockchain entrepreneurs the toolset to foster a community, by rewarding and highlighting the most important builders of a specific community. Xpo.network is doing just that — a way to highlight contributors to existing networks by rewarding non-fungible tokens.
Because we’re building a community platform, for communities, in front of the community, we’re going to be transparent with our building process.
Design Challenges and Questions:
We’re faced with a number of design challenges to figure out how communities want to reward & signal the most important members of the community. Here are a number of questions and decisions Prism Labs is thinking about:
- Roles of tokens as economic incentives — What are the role of incentives in a contribution network? Are incentives purely economic? How do we balance social capital (reputation) with financial incentives?
- Roles of tokens as social capital— What are the roles of tokens within a community, apart from just an economic award? Is it a sense of accomplishment or inclusion? How do fungible tokens differ from non-fungible tokens in this regard?
- Reputation — How do we port existing social capital from other closed ecosystems? Can we create an on-chain reputation layer in the form of unique non-fungible tokens?
- Global, recognizable badges — How do we create a justifiable, global level system in the form of non-fungible tokens? How do we define the amount of “reputation” someone should earn when tasks aren’t necessarily discrete?
- Creating a toolkit for community builders, and a signaling platform for members — How do we create a marketplace that’s useful for community creators and community members?
We’ll be releasing a series of posts over the next few weeks detailing our journey in accomplishing our mission to enable a way for users to provide signaling in a decentralized network. In the mean time, you can sign up to reserve your username here.
Prism Labs is building Xpo.Network — a way to incentivize and highlight contributors to a network. We believe that it’s important that to foster a collaborative decentralized ecosystem across the globe. Interested in what we’re building? Sign up below for more updates and help us test our product👇
