The Ownership Economy 2022

What is the ownership economy? The products and services that will define web3—and the next generation of the internet—are those that transform users into owners. We call this the ownership economy.

Tokens can be useful in capturing user attention and bootstrapping initial adoption, but they need to be coupled with strong product-market fit—solving a widespread need for users—in order to sustain usage.

1. User ownership can jumpstart growth, but sustaining it is more challenging Giving users ownership in the form of tokens can be a powerful alternative to paid marketing, helping to bootstrap networks and overcome the cold-start problem.

State of the ownership economy in 2022

The ownership economy is big and growing DAOs, decentralized autonomous organizations, are online communities owned and governed by their members. They can be thought of as the organizational building blocks that make up web3’s economic, social, and cultural landscape.

2. New token distributions designs are boosting user loyalty In theory, when users become owners and are (literally) invested, they should become more highly engaged and retained. Today, the reality is mixed.

In contrast, for crypto projects, giving users ownership can function as marketing, drawing in new users through the promise of ownership and increasing engagement as a result of having skin in the game.

Facebook's mobile app install advertising business reached $2.9 billion in revenue, comprising 17% of Facebook's total ad revenue. That’s a huge sum of money going into the pockets of an intermediary platform—Facebook—rather than flowing to app developers to invest in R&D and product improvements, or reaching the end users in the form of lower ... See more

There is also the question of whether ownership actually crowds out intrinsic incentives to use a product, causing users to engage with products in a more mercenary, transactional (and likely temporary) way.