Where the Ownership & Attention economy intersect
A look at how crypto uniquely empowers people by giving the power of the attention economy back to the people through ownership
The cryptocurrency space has brought along a lot of interesting investment theses with it. Out of all of them, the ones I found most interesting were the concepts of the ownership economy proposed by the Variant Fund and the attention economy by Eugene Wei. They are both compelling individually, but even more compelling when you start to look into where they intersect/overlap with one another.
Ownership Economy
At a very high level, this thesis posits that users of the protocols/products in the economy can now own a part of the economy that they participate in, thereby allowing them to capture some of the value of the entire economy growing. While there are instances in the Trad world where early participants can be owners as well, crypto makes it uniquely possible at such a large scale for a wide variety of applications. Users provide value by participating in the economy and gain value by participating in it.
Let’s dive a little deeper. With the so-called web 2 companies, (Facebook, Uber, Airbnb, Youtube, and the likes) the user has a very unique focal point. All the value of the protocol is generated by them, they provide the service and consume the service while the company provides the platform almost acting as an intermediary. However, despite the users being key to the company’s success, they get minimal value, these companies have made trillions of dollars but all of that value is primarily captured by the founders and insiders. Yes, individuals working as content creators/influencers have uniquely benefitted from the web 2 companies but the centralization of control in terms of rules and monetization is starting to cause major issues.
Therefore, the only logical step forward is to empower the users by allowing them to own a piece of the economy. There is no better way to align incentives. It is also unique in that users can contribute a lot more to the economy overall in terms of taking part in the building, participate in the governance, and overall just be more involved and contribute in deeper ways. This is much better when compared to an economy where there is no transparency with differing levels of exploitation.
Attention economy
Eugene based his article on two key principles. Humans are status seeking monkeys & humans seek the most efficient path to gain social capital. Social capital refers to likes, follows, retweets, subscribers etc. Social media companies have spotted this characteristic in humans and turned it into an unstoppable money-making machine. It doesn’t take a genius to know that almost anyone can be famous nowadays. On apps like Facebook or Instagram the ones who were early amassed the most social capital and some managed to retain it which drew other people in seeking this same social status, while an app like TikTok optimized its algorithm to create the most efficient path to success. Out of all the apps, TikTok is the one where you can get famous the fastest with the least amount of effort, its designed to continuously keep people coming in and when they get that instant gratification of fame, it makes them stick around. All different paths lead to the same goal, allowing people to achieve a certain social status which wasn’t previously possible. This created the attention economy. The attention of the users who view the content on these platforms is monetized through ads, sponsorships, brand deals amongst other things.
It is very clear that the attention economy is here to stay, but is the current web2 model the way forward? There are tons of flaws in the incentive systems between the company, the creators, and the users. The value isn’t distributed fairly. These companies represent a central point of failure, which means that at the whim of the decision of any board member in the company, tons of people dependent on social media could lose their jobs. Secondly, the advertisers are king. Money talks and when they throw big bucks to censor content to their liking, there is nothing anybody can do but listen. There is also this uncertainty of monetization from the platforms which makes most people instantly selling their own personal products such as merch or whatever else. It is clear the users like the model, but they also want more control. I believe this is made uniquely possible through crypto.
Crypto empowers the individual to a greater degree. There are ways in which the attention economy can be tokenized to give the individual proper control over their brand.
NFTs
NFTs are synonymous with digital art, but they are also an example of where the ownership & attention economy intersects. Creators can directly engage with their audience through NFTs while also having complete control and ownership over their content. The possibilities are endless. You can make special events such as giveaways or meet & greats accessible through NFTs, exclusive content can be accessed through NFTs, things like music can be sold through NFTs. The possibilities are endless. However, what’s important to know is that by having this layer of digital value and provable ownership, creators can govern and interact with their communities according to their terms.
Another application is gaming. If you stretch yourself to think about it, gaming right now is an iteration of the attention economy. The games are created and the users’ attention is monetized by the game publishers in many different ways. Some games choose ads, some games choose micro-transactions, and some games choose to have users pay an up-front price. However, users still have no ownership over their in-game items. They spend hours and hours of their attention without being able to actually own what they ‘worked’ on. There have been many secondary marketplaces where in-game items and leveled-up accounts are traded for real money but many of those have been quickly shut down. NFTs now unlock provable ownership at every level of gaming. Whether it is a skin, a player card, an upgraded character, a gun, or any other in-game item, users can now own everything they use and do with the items as they please. There is no centralized point of failure.
Social Tokens
Social tokens are an overlooked sector in the crypto space. They provide a unique method of community interaction and content monetization. Currently, social tokens are still used rather sparsely mainly because there is no compelling reason for anybody to use them. Creators don’t know what to do with them and the fans don’t really want to keep spending money on rather unnecessary things. However, once mechanisms are developed such that the audience can benefit from these tokens, I think it’s inevitable that they will blow up. I don’t know what these mechanisms would look like but I know that there are teams working on this, and once the audiences are incentivized to use these tokens, the creators will naturally come because the true ownership will benefit them and it also creates unique ways to engage with your community. It’s a relatively underexplored space that can create a win-win-win scenario.
Conclusion
This is a somewhat surface-level look at where these 2 powerful concepts intersect. There will be a lot of innovation around this in the near future but I thought I’ll just share some of my thoughts on the matter. Crypto has created the layer of value on the internet which is why I feel this intersection is an interesting area to explore. Projects who figure out the secret sauce will win hugely over the coming years.
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