The ownership economy has emerged as a critical concept in the world of Web3 and the creator economy. It represents a fundamental shift in the way we think about value creation and distribution, enabling individuals to take ownership of their contributions and participate more fully in the economy.
In this article, we will explore the concept of the ownership economy, its significance in the creator economy, and how DAOs and other ownership-focused tools and platforms are empowering creators to take ownership of their work and earn a fair share of the value they create. We will also examine successful projects that have utilized blockchain technology, DAOs native token using, and other tools to enable ownership and decentralization in the creator economy.
What is the Ownership economy?
The ownership economy is a term used to describe an economy where people have a vested interest, such as through voting or owning stocks or stock options. In the context of Web3, it also encompasses blockchain-based projects that provide individuals with the opportunity to earn capital via cryptocurrencies.
The ownership economy is a concept that has gained increasing importance in recent years, particularly in the context of Web3 and the creator economy. It refers to an economy where individuals have a stake in the game, often through stock or stock options. This concept is particularly relevant for community-based businesses, which rely on the engagement and participation of their stakeholders. In the creator economy, the ownership economy enables creators to have ownership and control over their work, without relying on traditional gatekeepers.
This is achieved through the use of decentralized autonomous organizations (DAOs) and other ownership-focused tools and platforms, which empower creators to take ownership of their work and earn a fair share of the value they create. With the rise of Web3, the ownership economy has become increasingly accessible to creators, providing them with new opportunities to build sustainable businesses and communities around their work.
Overall, the ownership economy represents a fundamental shift in the way we think about value creation and distribution, enabling individuals to take ownership of their contributions and participate more fully in the economy.
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The Role of DAOs in the Ownership Economy
Understandably, many of the initial uses of the DAO concept were investment vehicles to raise funds of varying kinds. Given the underlying structure voting power of the blockchain technology, distributing funds was essentially the simplest operation that could be achieved using an on-chain governance process. As we’ve discussed previously, this has made the use of DAOs for crowdfunding initiatives particularly compelling.
What is a DAO?
A DAO is a decentralized autonomous organization, a type of bottom-up entity structure with no central authority governing body. Members of a DAO own tokens of the DAO, and members can vote on initiatives for the entity. Smart contracts are implemented for the DAO, and the code of the smart contract governing the DAO’s operations is publicly disclosed.
Empowering Creators through DAOs
In the creator economy, the impact of Web2’s highly centralized business model is increasingly apparent. Powerful platforms such as YouTube and Twitch (owned by Google and Amazon, respectively) gatekeep access to their sizable audiences through opaque and restrictive monetization policies. The result is creators losing control of their work and failing to achieve fair rewards, while fans, for their part, remain passive consumers.
However, the DAO token and model can fundamentally transform the creator economy toward what has been described as an “ownership economy”. A DAO-operated social media platform would offer transparent rules for how content is distributed instead of the proprietary and ever-evolving algorithms of existing platforms. It would also allow creators and users to exert direct control over the platform’s development. Most importantly, it would provide a model of collective ownership in which creators and their supporters both have a stake in the success of specific content. By tokenizing content – through fractionating it as NFTs, for instance – creators could earn automated royalties while their supporters would be able to invest in the content they enjoy.
Examples of Successful DAO Projects
While DAOs were initially utilized for crowdfunding and funding initiatives, the power of the concept has recently expanded beyond these limited applications. In various sectors, innovative concepts have begun to emerge that could potentially challenge some of the most ingrained and destructive aspects of the Web2 ecosystem.
In the creator economy, successful projects have utilized DAOs to enable ownership and decentralization. One prime example is Nova DAO, which allows creators to tokenize their content and provide exclusive benefits to their supporters, all while retaining ownership and control. Additionally, other successful projects such as BitClout, a fully decentralized, social media platform, and FlamingoDAO, a DAO for NFT collecting, have implemented DAOs in innovative ways to enable ownership and decentralization.
Uniswap (UNI) is the top-ranked DAO in terms of the amount held in its treasury, with a total market cap of of $6.2 billion and a treasury of $2 billion. With 316.1K members and a participation rate of 1.6%, UNI is the largest DAO. Similar to Uniswap, Compound (COMP) is another notable DAO.The Uniswap DAO was established in September 2020, distributing over 1 billion $UNI among its development team, community members, investors, and advisors.
Today, the Uniwap DAO has over 300,000 members who can vote on governance protocols, listed tokens, exchange fees, and more using their $UNI tokens. UNI token holders can also delegate their votes to other users, which comes in handy in situations where one feels that another member of a traditional organization is more qualified to decide on a given proposal. One recent vote that took place was whether Uniswap should deploy to the Ethereum L2 solution Polygon.
Foundation vs. DAO: The Future of Creator Economy
The creator economy has disrupted traditional structures, enabling individuals to build businesses around themselves. However, the lack of necessary support and strategic resources has invited criticism of creator burnout and isolation. The ownership economy, built on DAOs and NFTs, aims to extend the promise of the new media structure even further.
Foundation Creator vs. DAO Creator models
Foundation Creator models involve a centralized entity that controls the creation and distribution of content. In contrast, DAO Creator models empower creators, operators, and consumers to collaborate under legal framework of a new, interdependent ownership mechanism.
Pros and Cons of each approach
Foundation Creator models offer the benefits of a centralized structure, such as established distribution channels and resources for creators. However, it can limit creativity and ownership for creators, as they have to work within the hierarchical structure and guidelines set by the parent brand owners.
On the other hand, DAO Creator models provide creators with more control and ownership over their work, enabling them to monetize their content in new ways. However, it requires a more community-driven approach that can be challenging to navigate.
Real-world examples of successful projects
Examples of successful Foundation Creator models include YouTube, which has enabled creators to build their own channels and communities within the platform. In contrast, DAO Creator models like Mirror.xyz have enabled creators to monetize their writing by selling NFTs. Other examples include Foundation, a creative platform that allows artists to mint NFTs of their work, and Gitcoin, a community-driven platform that enables creators to crowdfund their projects using cryptocurrency.
Leveraging DAOs and NFTs in the Ownership Economy
Non-fungible tokens, or NFTs, are unique digital assets that are stored on a blockchain. NFTs are used to make money and represent ownership of various types of assets, such as art, music, video games, and more. The use of NFTs has become increasingly popular in the ownership economy as they allow creators to have greater control over their work and receive value for their creations.
The benefits of using DAOs and NFTs in conjunction with each other
Firstly, DAOs allow for decentralized decision-making, voting rights, and ownership, which can be highly beneficial for creators who wish to maintain control over their work. With DAOs, creators can work collaboratively with a group of individuals who share the same vision, and each member can have a say in the decisions that affect the project. This can lead to more innovative ideas, smaller projects, increased efficiency, and greater accountability.
Secondly, NFTs provide a way to prove ownership and sell unique digital assets. NFTs are digital assets that are unique, scarce, and cannot be replicated. By using NFTs, creators can ensure that their work is unique and that they have full ownership of it. NFTs can also be used to create new revenue streams for creators, such as selling digital collectibles or allowing fans to own a piece of their work, which is probably the best incentive for creators to adapt and get into the NFT space.
By combining the benefits of DAOs and NFTs, creators can have even greater control over their work and receive more value from their creations. Creators can use DAOs to manage their projects and work collaboratively with others, while NFTs can provide a way to prove ownership and create new revenue streams. This combination can lead to a more decentralized, transparent, and equitable ownership economy, where creators have more control over their work and can receive more value from it.
Examples of successful projects that have leveraged both DAOs and NFTs
In addition to Flamingo DAO and Axie Infinity, there are other successful NFT projects in the NFT space that have utilized both DAOs and created an NFT project to enable ownership and decentralization in the creator economy. Another example is the Nouns DAO, which is a community-driven project that aims to create a unique digital identity for each member. They used a DAO to govern the project and issued an NFT project as a representation of each member’s digital identity. NFT owners can use their NFTs to access exclusive content and participate in community members based governance using some sort of decentralized governance token.
Furthermore, the Bored Ape Yacht Club is a successful project that leverages both DAOs and NFTs. This project is a collection of unique digital ape NFTs, which members can use to access exclusive club benefits and participate in community governance. The project uses a DAO to govern its operations and collectively decide on community initiatives. The Bored Ape Yacht Club has gained a massive following and has become one of the most popular NFT projects.