On The Other Side ep 69 - Ownership is a consumer experience w/ Jess Sloss + Josh Cornelius
Primer: The consumer era for crypto is here! How does it relate to ownership in DAOs? What was it like in the early days? Let’s find out from Jess Sloss and Josh Cornelius of Seed Club in this episode of On The Other Side.
Background
Josh
Spent 10 years in product roles at early-stage start-ups
Had a few success stories and founded a few small companies
After he scaled down his last company, he was looking for new opportunities
Decided to jump into Web3, with a particular interest in social tokens
Heard about Jess everywhere and decided to join Seed Club
Jess
“I was fascinated by the idea of building the Hotel California in crypto.”
- Jess Sloss
Interested in networks taking over the world
Social media emerged early in his career and he saw the downsides of it
Saw the potential for tokens to represent ownership of networks
Have been in crypto since 2017
In 2020, he brought people together in a Telegram chat to explore how the intangibles of the internet might be valued using tokens
DAOs Are Consumer Products Thesis
There’s an infrastructure phase and a consumer phase
In the consumer phase, anyone would be able to come in and use off-the-shelf tools to build a DAO, issue music NFTs, etc.
DAOs are structured like products/experiences that you can join and be a part of
Orgs That Embody DAOs As An Experiential Consumer Product
Cabin will be rolling that vision out
They are building sort of Balaji’s vision but it has human beings at the core of it
Friends with Benefits is another example
The Arkive team is building Atrium, a tool that enables people to curate the real-life museum they are building
Nouns and their product suite, ownership, and consumer experiences
In the early stages, people wanted ownership experiences and not ownership responsibilities
Most crypto is a consumer product (e.g. Bitcoin is a consumer product)
Stripping Away Responsibilities While Still Giving People The Experience Of Ownership
If you hold Ethereum as a token, you believe in it and get the benefits of being able to use the network
If you are not a core developer, you are not necessarily contributing to the actual functional maintenance or operation of the network
This is probably the default way that people participate in networks today
Will end up having smaller groups of people that are able to create exceptional value and being paid well for it, with the vast majority just getting to participate
The teams that do the best job will be proactively designing ownership experiences
In Seed Club, they experienced huge demand for people participating in their project selection process
They built a native product for people to review accelerator applications
Definition Of Ownership
Most people in DeFi want a token that represents ownership in a network where the number goes up
This is a universal experience in many networks
Only a subset of people value control over the parameters
The main consumer demand for crypto has been number go up. Jess does not see this as a negative thing
It makes it challenging for builders
The long-term sustainability of these networks comes from human involvement in these networks
“We're realizing how nuanced ownership really is. Like you can have structural ownership and not feel like an owner, and you can feel like an owner and not have any ownership.”
- Josh Cornelius
On-Chain Executable Ownership
Being a DAO from day 0 introduces more challenges than advantages
It makes more sense to postpone being a DAO and figure out what you are actually building and whether it resonates with people first before implementing on-chain governance
Another question involves distributing ownership
Builders building early-stage products have a deep ideological belief that they share
Early decentralization/distribution of ownership can be directly opposed to building the project effectively
They are getting at this idea where ownership narratives are used to bootstrap interest and attention toward the actual distribution of ownership
This gives builders more time to understand the dynamics that exist and to actually distribute that ownership in an effective way
Blur is an example. Their core mechanics include variable rewards with different phases
Consumer products want to get a sense of how people are using their tools before meaningfully distributing that ownership
On Liquidity And Number Go Up
Nobody wants to put in time and effort, own something, and see it get devalued
There’s a difference between mercenary liquidity farming and long-term sustainable network design, protocol design, or token emissions
Liquidity is both a blessing and a curse
Metalabel, one of their recent cohort participants, did a drop
It’s a multiplayer tool for co-creating records, NFTs that bundle a whole bunch of things together
The Vitalika t-shirt drop got picked up by a bunch of NFT communities
As Vitalik was an author of one of the papers, alongside Gitcoin and Metalabel itself, the whole narrative was spun up
The team was not stoked about it, as the narrative got away from them
A lot of people bought the tokens without knowing why they bought it
Think that liquidity/attention will turn out to be a plus for them over the long-term
On Liquidity
It’s necessary for most of these brands/products to become compelling, valuable, long-term networks
People are moving away from the public square to more niche spaces, where crypto is an example of
In these spaces, people come together and create a lot of value without needing millions or billions of users
Crypto has given us a worldwide market with 24/7 liquidity
There are 8 billion people in the world, with only a small subset of that in crypto
There’s a huge opportunity for growth in crypto
Are DAOs As Consumer Products Scalable?
Their distribution is too valuable for them not to exist
Optimistic that people will figure out how to coordinate around these tools at a massive scale
At the infrastructure layer, it has to be capture resistant and immutable
Currently, we are seeing a massive experiment on decentralized social media like Lens, Farcaster, etc.
Think that governance will happen at a more local level
Any Last Words To Add?
The time to build is now
The consumer era of crypto is here or around the corner
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