Incentive Design

There’s this cool idea in software that you “ship your org chart” called Conway’s law: “Organizations, who design systems, are constrained to produce designs which are copies of the communication structures of these organizations” I’d offer a similar law for investors: “you… Show more

The most existential question in crypto: what will be the relationship between tokens and communities? At stake: can DAOs bring virtue back to scaled organization? Or will they accelerate the economics-only mentalities that have been corroding society? A way-too-long-🧵👇

@JoePompliano: Stockholm is living 100 years in the future ![](https://pbs.twimg.com/media/FN_qW67XEAY4FW3.png... See more

0/ Token incentives are a popular way to distribute ownership to people that provide a useful service But as we've seen, some of these distributions are easy to game and are less effective in hitting their key objectives Here's my framework for thinking about this 👇

For products to work at scale they need sustainable business models and networks. Would love to see more discourse in web3 about the complex financial incentives conflicts that we’re going to see if the movement goes beyond DeFi/trading-related use cases. A few examples👇

airdrops are cool - we love the "free" $, but bootstrapping a community around a token drop does little more than gather a community of speculators, rather than actual users. 1) do token holders care about the community? 2) what utility is associated with holding the token?

i luv airdrops but token incentivizes aren’t a replacement for: * core product value * engagement / retention * organic growth * intrinsically motivated community * active dev ecosystem (especially in consumer apps)

Does crypto improve distribution for creators? Maybe, maybe not (thread)

Prediction: virtual economist will be one of the most in-demand jobs of our time 👩‍💼🔥 As web3 grows and games become virtual economies where millions live and work, designing systems where users feel rewarded for time spent will be a critical skill Short thread 👇

reputation comes from sustained integrity over time this is where DAO contribution tracking, rewarding small, game-able actions, often gets it wrong