DeFi “fair start” is not only a mechanism, but also a movement

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The fairness movement emerged from DeFi because of the composability of this ecosystem and the experimental preparation for new guidance mechanisms. But the fair start is a far bigger movement than most people think.

Original title: “DeFi 丨 Why is “Fair Start” a campaign? 》
Written by: Ryan Sean Adams
Translation: Olivia

More than just a mechanism, “fair start” is a movement.

A fair start is not only a fundamental subversion, it will also prove to be one of the most important economic developments in our industry.

Now is an important moment. Fair start is not only to provide a path for outliers and experimenters, not only the superficial label we put on the hurried project fork, but of course it is not always A simple mechanism that brings fair results .

But if the discussion only stays at the surface level-anchored to imperfect first-generation guidance methods (for example, liquidity mining is only suitable for whales), and incorrectly associates allocation issues with overall feasibility (for example, Sushi) , Then, the new generation of founders will ignore the most strategic arrow in their quiver.

With today’s rapid development, the infrastructure and strategies adopted by the founders of Fair Start will be obvious in the next 6 to 18 months. With their development, fair start will become the standard market path inside and outside our industry .

The evolution of founders and community dynamics

Fair start has changed the most important dynamic in our ecosystem: the dynamic balance between the founder and the community.

So far, this dynamic balance is mainly determined by venture funds and investors . why would you said this? Because when the only feasible solution to bring the Internet to the market requires raising funds, venture funds become the largest shareholders.

Therefore, it is not surprising that the dynamic evolution of the founder and the community has attracted the attributes of the founder-investor relationship.

Although this is an acceptable setting, it is far from ideal. Indeed, there is a common desire for the success of the network between the two parties. However, when most of the equity in the network is owned by all parties, a special tension arises, because its fiduciary responsibility is its source of capital rather than the network itself. Sometimes these interests are the same, but make no mistake. When the music stops, it is not certain who will get priority.

Therefore, the founder will naturally question the long-term consistency between the network and its largest owner.

Understanding mismatches

In this context, we can re-examine one of the core issues of founder and community dynamics. Why should the creation team allocate their own resources as soon as possible and conduct pre-mining?

The answer is simple: lack of trust .

The founders do not fully trust that the community will give them a profitable share in the established network to compensate for their work or incentives for future work.

Can you blame them?

The existing lack of trust between the founder and the community is (to a large extent) a side effect of grafting yesterday’s investment structure onto tomorrow’s network for economic coordination.

This was a mismatch from the beginning, but we have not thought of a better way so far.

Through the fairness movement, you have the ability to design various network guidance and distribution methods, and ultimately you can form a dynamic balance of the community with fiduciary responsibility and long-term network goals. Choosing the fairness exercise provides us with an opportunity to free ourselves from the declining dynamics and re-adjust the most basic interests .

Fair games are web-native and suitable for (different) purposes. Although I don’t expect every investor to agree with this point of view, I hope you can remember that most investors’ arguments stem from (natural) historical concerns about investors in the process of bringing new projects to the market. The importance of overemphasis.

I am not saying that venture capital in the crypto sector suddenly loses its status.

The evolution of fairness movement takes time, and good people around the table are always important . But considering that if the Internet is economically feasible and the community is full of vitality, then these good people will be everywhere. They just participate to gain the same status as other members of the community.

Reduce risk for future fair startup founders

Establishing a new code of conduct-the founders and the community work together more smoothly-is essential for fair release in the future. Because before the establishment of better norms, fairness movement will be considered as a choice for founders to take higher risks .

In order to improve the conditions for a new round of fair movement to reduce risks, we need to establish new founders and community behaviors, including:

  • Establish an early ownership distribution strategy that founders and investors can trust
  • Quickly establish an incentive mechanism for future work
  • Arrange smart contract (sometimes economical) review
  • Put success into action

At this moment in history, a fair start is to establish a new form of economic cooperation and coordination.

When we have more public cases of successful fairness campaigns for reference-in these cases, the community’s behavior is also in the founder’s best interests-we conclude and establish a new model of community formation and relationship.

In the new model, the founder does not need to worry about the operation of the fair movement, because the behavior breach and the rule book will include meaningful compensation for the founder. In the new model, any community that does not act in accordance with the emerging set of healthier norms will be used as a negative growth indicator to signal future members and contributors. Economics learn to solve it by itself.

Fair start is a brilliant path, and those who follow will depend on the mechanism created .

Deciding to become the founder of the early fairness movement, you take the risk of designing new mechanisms and opening up new paths. However, by actively creating a new way for future founders and turning their ideas into reality, you can shape the future of the entire ecosystem-the project topology.

Call for the establishment of an alternative ecosystem

In history, there are only a handful of founders of the fairness movement, but this phenomenon is about to change dramatically.

Based on the many conversations we have with founders around the world on Fair Startup, I believe that for every founder who wants to raise traditional capital today, there is at least one (and probably more) high-quality local crypto founder. Their appearance will form the first generation of fair launch founders.

Take a moment to think about the environment in which these pioneers lived. The first generation will work independently of each other, working with existing venture capital supporters to build an alternative network ecosystem from the ground up.

In fact, they are creating economically meaningful mechanisms to prove the feasibility of a fair start model – and YFI is not just a flash in the pan.

Here are a few key benefits of this alternative ecosystem:

Active decentralization

While gradually transferring network ownership to the community, gradual decentralization is a useful method . But it is assumed to start to concentrate. Due to the emerging dynamics and behaviors, the fairness campaign has the opportunity to start with a small core team and a fully decentralized, highly engaged community. Progressive decentralization is absolutely feasible, but the fair start method is carried out under a different set of assumptions.

The default of the organic community

The traditional path provided capital, but forced the founder to build a community from scratch . Starting a community manually is a daunting task, and unbalanced economics has not made it easy. A fair start provides capital, but it also creates fertile soil for an organic, vibrant community from the beginning—using more balanced economics. Today’s encryption community is becoming more capable governors in units of blocks, and their confidence in operating a wholly-owned agreement becomes stronger with each vote.

On which basis do you think these new and active community governors are most likely to be built?

Double-sided demand

Since both sides of the market have demands, fair start is facing huge resistance. As a founder, you can ship quickly, skip the traditional fundraising process, and improve the overall token issuance. On the other hand, your community can get better incentives to participate, without the suspense of VC, and reduce the risk of smart contracts. Both parties in the market have a great need for a fairer release because it improves many key aspects.

Build you and your community

Cryptocurrency adopted the role of reducing (financial) gatekeepers at the beginning of its establishment. Therefore, I think that its continued reduction of the traditional capital formation process is an expansion of its original mission.

In the final analysis, fair release allows you to bring the project to the market without the traditional capital barriers and the risk of deviating from the standard path. It exists to support you in building what you want to build, for the people you want to build, while reducing external pressure that may change your intentions.

With a fair start, you can build yourself and your community .

Expand on DeFi

The fairness movement emerged from DeFi because of the composability of this ecosystem and the experimental preparation for new guidance mechanisms. But I believe that fair start is a far bigger movement than most people think. It can be said directly:

Fair launch methods will become one of the most important creations of encryption technology, and will eventually find applications in many other fields.

Let’s take the “ownership economy” as an example. Here, we have an ecosystem where the community is the owner and governor of physical/digital products and experiences. Although the financial market is also playing a role, it is a world with a different meaning compared to DeFi. However, these adjacent ecosystems have an important intersection: infrastructure.

Shared infrastructure is the key .

When the founders and communities in the ownership economy see what the fairness movement in DeFi is doing, a few people will try to transplant the evolution of the fairness movement into their own communities. Thanks to the shared infrastructure and composability, this operation can be implemented quickly, so fair operations will be spread.

If fair launch mechanisms and strategies create some economically meaningful networks and products in a few ecosystems, I expect some less obvious areas will follow suit. Why do you say that? Because for a large class of networks based on founder communities, the benefits and flexibility conferred by a fair start will be needed. So, while it may seem like a small minority today, as parallel movements like Quit the Community continue to resonate with people, a fair start (if fully developed) will have far more impact on founders and communities than DeFi.

From a certain perspective, it may be difficult to see through the whale games and exit scams to which the term “fair start” applies. I fully understand the existing skepticism. But when you jump out of the superficial dialogue, you will find that the core of something-although it is far from perfect today-can meaningfully evolve and reorganize our existing ecological main drive.

From this perspective, the fairness movement initiated more than just a collection of mechanisms.

Fair start is a movement .

Source link: bankless.substack.com