Signaling on the Internet

It’s interesting to compare scarcity in education to the startup world. YC has grown its class size 25x+ in the last 10 years while elite universities have mostly kept class sizes the same. The startup ecosystem embraces more founders because their status is determined by exits; elite universities keep classes small because their status is determin... See more

It’s fair to look at something like a CryptoPunk and ask why it costs so much. But it’s also worth looking at sneakers and asking why they cost so much. It cost $5 dollars to make the shoe, so the rest of the value comes from signaling based on the shoe’s rarity and the narrative told around the shoe.

For social networks, one way to monetize is via social amplification. Instead of cutting off your users by imposing a paywall or membership, charge them to separate themselves from the crowd. Tinder does this with super likes. Fortnite does this with virtual skins. And nowadays, some DAOs, like FWB, are token-gating their Discords so members can jo... See more