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Protocols as Minimally Extractive Coordinators — Placeholder
Protocols can still charge fees. They shouldn’t lose money. They can become incredibly, incredibly valuable (see: Bitcoin, Ethereum, Uniswap, and on and on). But if they charge fees that are too high, they’ll lose. As Burniske put it, “Any unnecessary extraction from the process of exchange is a tax that will ultimately be weeded out by copy-paste... See more
Packy McCormick • Minimally Extractive Meta
Instead, an optimal equilibrium may be 1) protocols sustain themselves through "productive fees" that make the the protocol better, faster, stronger such that products want to build on top, and 2) product teams charge "extractive fees" that capture the value they create for end-users.
Jesse Walden • Productive Fees : Valuable Protocols / Extractive Fees : Valuable Companies
Web3 teams have an opportunity to learn from and improve on the strategy of commoditizing the complement. In this essay, we’ll discuss why building and commoditizing a product on top of a user-owned protocol offers maximum leverage to execute this strategy, with potential for stronger economic equilibriums that drive growth, and value, beyond that... See more