Web3 economic development roadmap

A priority ordered roadmap of economic development focus areas for Web3 networks

Many of the economic systems and processes currently adopted today could be replaced by Web3 technology. Transitioning from what society is using today towards what it could use in the future is going to take a large amount of development effort to create the networks and alternatives and an ongoing amount of iterative improvements before these new systems are able to support a global population.

The amount of effort required to develop all of these Web3 systems is understandably enormous. The sheer scale of the work involved only helps to emphasise the importance of effectively prioritising and ordering the execution effort that is involved. The decision of what to focus on first could either delay or increase the velocity of the adoption of Web3 technology.

This roadmap is attempting to recommend a logical order for executing these new ideas and emerging economic systems. It is worth noting that all of these recommendations and ideas could be executed in parallel with one another, and this may make sense for some Web3 ecosystems. However, prioritising the most important things that will generate the most impact should help with creating stronger foundations that can then help with supporting the other focus areas.

1. Treasuries & funding

Web3 ecosystems are able to create circular economies that generate income for their treasury. This income can then be used to fund initiatives that help to maintain and improve the network. A number of protocols, applications and other ecosystem initiatives could also be funded. Treasuries will become increasingly owned and governed by the entire community that participates and contributes towards these networks.

A treasury and funding process could have a dramatic long term impact on growing a Web3 ecosystem as it could reliably fund ongoing initiatives that help to improve and grow the ecosystem.

The current recommendation for Web3 ecosystems is to first set up their treasury and funding process to prove that they are able to generate a positive return on investment using any genesis community treasury allocation. Learn more about treasuries, income, funding and contributor funding here:

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2. Money & treasury income

Once a treasury and funding process is set up and able to prove that it is effective the next step for a Web3 ecosystem is to consider how they will generate treasury income over the long term. Wealth taxes represent a promising solution for generating a more reliable and ongoing amount of income for the treasury. Treasury income could be used to fund ecosystem contributors directly. These contributors could then make ongoing contributions to the ecosystem.

Web3 ecosystems commonly have their own network coin that is used to pay for the operation of the network. This network coin is itself a form of money. People can use it to pay for using the network or use it for conducting exchanges with other people. Many of these Web3 ecosystems also enable the creation of token based assets. These tokens could represent anything digital or physical. Many Web3 networks create an open and permissionless free market for systems of money to emerge as anyone is able to create their own token that is then adopted as a form of money.

How the network coin and any tokens are held and used within these ecosystems will have a profound impact on the incentives that exist for each user. The system of money becomes an increasingly important factor for preventing wealth concentrations from occurring over the long term and for generating treasury income that can sustain ongoing ecosystem development. The system of money will impact every protocol, application, user and organisation that uses and relies on these networks.

The current recommendations around money are for ecosystems to consider adopting demurrage via a wealth tax for their network coin. You can learn more about monetary theory and how this has been applied to Web3 here:

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3. Organisations

The most important organisations that initially emerge out of the adoption of Web3 technology will be the Web3 ecosystems themselves. Web3 networks are themselves an organisation. People participate in, use and can even work in these ecosystems through the treasury funding process. A circular economy that generates income for the treasury that then funds impactful initiatives creates an environment that is somewhat similar to existing government and corporate organisations where revenue is generated and then this used to improve the organisation. For corporate organisations this could mean improving the goods or services they can provide. For Web3 organisations it will commonly mean improving the network and functionality that is available for the wider ecosystem. Web3 technology can be used to completely reimagine how organisations are owned, governed and incentivised. Systems could be created that are much more democratic and egalitarian for electing and funding contributors. These funding systems could also spend more time refining how they will reward high performing individuals due to the impact of their contributions.

The current recommendation for Web3 ecosystems is to consider how they can focus on the importance of contribution in their ecosystem and how contribution will play a vital role in the long term sustainability of the ecosystem. Web3 ecosystems ultimately want to incentivise top performing talent to repeatedly contribute towards their ecosystem. Contributionism is an economic model that explores how contribution could become the primary factor for determining how organisations are owned, governed and incentivised. The model is highly suitable for Web3 ecosystems and any emerging organisations that emerge in these networks. You can learn more about Contributionism here:

Contributionism

4. Identity

Identity will be an important part of the previous focus areas, such as for developing treasuries and for organisations that want to adopt Contributionism. However it’s worth discussing identity in a bit more detail.

As more and more people start to contribute towards these Web3 economies it will become increasingly important to develop and adopt technology that gives contributors more ownership over their identity, reputation and data. If this isn’t achieved it could lead to the centralisation of key pieces of infrastructure which these contributors rely on to participate and contribute to these economies.

Contributors could be regularly funded in these ecosystems. Contributors should be able to benefit from being able to build up their reputation using an identity they own. Attaching data and information to that identity will be an important part of enabling people to prove who they are and what impact they have generated for these ecosystems. Some of this data could include records of their contributions, educational achievements or network connections and endorsements. Contributors should be able to use this data to prove their value and then move between different Web3 ecosystems due to the reliability and trust in these identity solutions.

Reliable identity systems open up the opportunity for more solutions to be built in these ecosystems such as uncollateralised lending. Strong digital identities should help with providing a growing amount of value to the end user.

Perfecting the funding systems and organisational structures will involve the ongoing development and refinement of identity solutions that can empower the individuals that use and increasingly rely on Web3 technology. Identity solutions could help with further aligning the incentives with rewarding people that have made the most impactful contributions towards these ecosystems.

5. Governance

Founding entities fulfil an important role in the initial stages of a Web3 ecosystem. They help to develop the initial infrastructure, treasury systems and funding processes. As these systems start to mature it becomes increasingly important that these founding entities start to decentralise every part of the ecosystem. This will mean that the community will eventually need to handle the operation and moderation of the network, treasury and funding process as well as any other decisions.

If these governance responsibilities are decentralised too soon there is a risk that the complexity to improve and maintain the network is too high for the community to handle. The community will only have so much expertise and ability to make well informed decisions about what important changes need to be made to the network, treasury or funding processes. The founding entities will want to improve the ecosystems systems and processes as much as possible before handing over the full control to the community to avoid or at least minimise the potential stagnation or chaos caused due to excessive complexity. Every Web3 governance system and process needs to be justified. Each governance process will need to be designed to minimise the complexity wherever possible.

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6. Exchange

Web3 ecosystems commonly enable the creation of tokens. These tokens can represent new systems of money that anyone could adopt. It is likely that these networks will experience an ongoing amount of competition between a variety of different money systems.

Recommendations do not need to be made about what systems of money need to be developed as this will become a naturally occurring process in a free market for systems of money. Web3 ecosystems create an environment where these ideas and solutions can compete with one another. People will be able to create or use any system of money that they prefer. A natural evolution of money systems should happen over time. To learn about why token based assets are suitable for systems of money that facilitate exchange you can learn more about token money in these resources about Web3 money:

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