Phygital girl, phygital world, phygital… Stack? As we move from a fragmented physical world bookended by two digital experiences, to one continuous phygital experience, so too must the fashion and commerce industries learn to navigate them both seamlessly. More specifically, the phygital world will be enabled by a new phygital tech stack. As we explored what a hypothetical phygital world might look like in Part I of this essay, we began to see the various layers of this stack begin to shape up – but more specifically, they fall into the following categories:

Phygital Commerce Protocols

Our Staud example begins with ordering a bag online – a seemingly simple process that, between purchases, shipping, disputes, returns, resale and more, is actually already quite complex in traditional commerce. Purchasing that bag becomes exponentially more convoluted in the phygital world, as both a digital and physical good must be accounted for at all times, remaining linked throughout the journey.

Phygital commerce transactions must facilitate digital to physical redemptions (and vice versa), handle disputes and returns, enable resale, and much more – ensuring the accurate sending and receiving of both NFTs to wallets and physical goods to individuals. Solaire, a protocol building in this space, has illustrated the problem clearly here:

This new retail infrastructure will span web2 and web3 – thus commerce protocols must as well, tokenizing both goods and the commitment to trade real world “Things” as NFTs — a solution that Boson Protocol is currently working on.  It is upon these protocols that the remainder of the phygital stack, from consumer platforms to marketplaces, will be built upon and integrated with.

Real World Bridges

To ‘mint’ the Staud bag on-chain, consumers will tap a Near-Field Communication (NFC) chip – the hardware predominantly used at present to bridge digital and physical products, worlds and experiences. Embedding an NFC Chip in the physical item is the first step to tokenizing the good, thereby accessing the benefits of the blockchain. The NFC chips themselves are a commodity, however companies like IYK, Kong, and others are building the smart contract platforms around the NFC chips that enable both the minting of the companion NFT, as well as the connections to POAPs, digital autographs and other digital experiences.

Consumer UX

As the Staud bag attends events in NY, collects digital autographs and accumulates music playlists, this “context” creates a unique product identity. Much like we presently share our personal identities on social platforms like Instagram and TikTok, so too will the identities of our fashion items, makeup and more be shared on a social app in the future. These identities, which could include provenance, ownership, loyalty and rewards, physical experiences, music playlists and more, will live and be visually represented in an interactive and aesthetic way. On this hypothetical platform, consumers might:

1. Dress Their Avatar: Consumers could accessorize their avatars with their digital bag, thereafter exporting it to the Fortnite universe (for example).

2. Learn the Origin Story: With a tap, consumers could access their ‘Digital Product Passport’, showing the product’s supply chain history, and watch a video of the bag being made by a seamstress in Los Angeles.

3. Collect Loyalty Rewards: One could imagine a web3 community-engagement platform like TYB plugging into (or being exported out from) such an app, allowing consumers to engage in (and be rewarded for) community events, co-creation, social sharing and more. 

 Attending a Staud pop-up in New York and scanning your bag earns you 10% off your next order!

4. Engage with Friends: This consumer platform represents a new era of social media. People can interact with their friends, influencers, and celebrities through the things they own (and what they do in them) — via POAPs, photos, playlists, autographs, etc. Style influencers like Leandra Medine are already experimenting with this — albeit on a platform hastily pieced together due to current tech limitations.

5. Make Commerce Social Again: Imagine strolling down the street, when a girl compliments your bag and asks where it’s from. Normally, you would name the brand and continue on, leaving her to search on Net-a-Porter and purchase it on her own, while you receive no recognition nor attribution for your influence. Instead, she scans your bag, immediately pulling it and your profile up on the platform. She purchases it on the spot, and you receive a 5% revenue share in turn. She loves your style, and decides to follow you for future outfit inspo. This is the future of social commerce.

A single platform for one, or one platform for all? There are two distinct visions for this consumer UX — individual brand platforms or a universal multi-brand one. The difference is not dissimilar to the FWB app vs. Discord. Both models are likely to exist, differentiated by the class of fashion good they cater to — luxury or middle market.

1. Luxury: Luxury brands like Hermes trade at high multiples in large part due to Brand. Preserving the brand integrity is thereby paramount, and this is true for the phygital consumer UX as well. Hence, luxury brands might lean towards exclusive platforms, emphasizing their unique brand experience.

2. Middle Market: While brand continues to be important for all consumer goods, it may pale in comparison to the need for better distribution and customer acquisition (and thus lower CAC). For smaller fashion brands like Staud, a multiplayer platform would provide the distribution that social media platforms like Instagram and TikTok once promised.

   1. Exceptions: Massive middle-market brands like Nike or Zara might merit their own platforms due to their vast brand influence.

Marketplaces

The web3 industry has heretofore approached marketplaces with a ‘one size fits all’ mentality, building based on function (NFTs), rather than form (whatever that NFT represents). This is the era of OpenSea, Zora, etc. Kyle Samani has previously argued that marketplaces should be optimized around the type of content they host, and this is no different for phygital goods.

While heretofore we have referenced web2 marketplace Net-A-Porter, the reality is that the future major fashion and beauty marketplaces must be built to support the buying and selling of phygital goods on crypto rails.

The front-end of these marketplaces may look web2 in nature, with intent-based search and social discovery tools, while the back-end would be distinctly web3 in nature, with infrastructure like phygital commerce protocols, minting capabilities, crypto payment rails, token-gating and more.

Brands

Much like the Staud example, future fashion and beauty brands will be 'phygitally-native', utilizing NFC chips from inception and crafting GTM, advertising and social strategies for a bridged physical-digital world. By seamlessly transitioning between IRL and URL, these brands can better incentivize and track consumer behaviors, offering more sophisticated rewards in return. Expect these brands to operate on commerce protocols, sell on phygital marketplaces, and pop up on next-gen social commerce platforms. Brands like Kiki, 9dcc, Sol3mates, and Cult & Rain are paving the way.

There are a plethora of companies building in this space. Many can be seen in the market map below:

The Case for Vertical Integration

The Staud example is chalk-full of new consumer behavior. Companies innovating in this space must guide users through an entirely new market, with new consumer behaviors, commerce journeys, and more. Whenever pioneering a new product and behaviour, it is important to own the entire consumer journey for smoothness and engagement. Shopify CEO Tobi Lütke echoes this, saying “the vertical facet of our business is the most significant, and aids in customer acquisition.” In this instance, controlling the consumer journey requires vertically-integrating and going full-stack from the NFC chip to the marketplace, and even the brand itself.

(Ph)ull-Stack Phygital

In the future, many fashion experiences will look like our hypothetical experience with Staud. However, there is a long way to go between the present and this ideal future. Ultimately, the phygital fashion space is still incredibly nascent, with a long road full of educating both consumers and brands on both the benefits and new behaviors that a phygital good can give rise to. Streamlining the adoption process will require a vertically-integrated company that can create a seamless consumer experience, and rapidly iterate and improve upon its offerings based on consumer feedback — ultimately fostering adoption, building trust, and driving the phygital space (ph)orward.

In exchange, the first minter receives a share of protocol rewards in perpetuity.

This is a massive unlock to onboarding more creators to Ethereum. Now, you don’t need ETH in your wallet to create – the first action you take on Ethereum could be an action that helps you earn ETH instead of spending it.

Race to mint First. Earn Protocol Rewards

Inspired by this development, the Forefront team launched a new experiment: MintFirst.

MintFirst is an experiment in protocol fee incentives. The website is a simple, live feed of new lazy mints waiting to be brought onchain. Collectors can now “race” to onboard creators to Ethereum, potentially earning rewards in the process.

In this world, we may see an entirely new class of collectors who are financially incentivized to collect and create from new artists. The curator class receives yet another business model.

V1 of MintFirst includes:

• A live feed of all new pre-mints.

• A curated feed of pre-mints by creators relevance.

• The ability to mint directly in-app.

• Sound notifications for new pre-mints.

https://www.mintfirst.link/

Support creators. Earn money.

Welcome a new class of creators to Ethereum.

In the future, fashion and commerce will be phygital (no matter how much you hate the word). It could look a little like this:

After purchasing a Staud bag online, it arrives embedded with an NFC chip. A quick tap of your phone mints its digital twin as an NFT in your digital fashion closet (DFC), a social platform where friends & followers can see your fashion items, and what you’re doing in them.

At a Staud x New Balance event in SoHo, scanning your bag earns you a POAP, f joins your bag in your DFC. As a thank you for attending, both brands drop you a 10% discount. Fast forward: you’re at a Drake concert, and he digitally autographs your bag. Your friend Emily ‘likes’ the signature and teases, “Introduce us? 😍”. Finally, the bag reminds you of Mediterranean summers, so you curate a Spotify playlist called ‘Sobremesa’ and link it to your bag via your DFC.

Eventually, you decide to resell your bag which, having attended events in New York, met Drake, and accumulated some great music, has a higher resale value than a regular Staud bag. Plus, this experience has strengthened your connection to Staud, making you more likely to buy from them again in the future.

This imaginary phygital experience may sound far off, but the tech stack is just around the corner, and with it lies a new world of brand and consumer experiences.

What the Phygital?

An (obvious) portmanteau of the words physical and digital, phygital goods pair physical goods with their digital twin, often via Near-Field Communication (NFC) Chips. Ideally, this twin lives on-chain as an NFT. A number of tailwinds are driving the adoption of this technology, unlocking previously inaccessible features and experiences for brands and consumers alike. There are five main areas which I expect phygital technology to revolutionize:

1. Your Digital (Interoperable) Twin

The Tailwind: Digital Wearability

As new, younger generations spend more time in the 'metaverse,' their desire for their digital appearance to mirror their real-world style will grow. In fact, research conducted by IoDF and others has shown that, while there is certainly demand for some magical realism, the majority of users hope to accurately represent their real-life identities in their digital avatars – which extends to fashion choices. Phygital items make this easier than ever before, duplicating your closet into the digital realm. Ideally, these assets will be interoperable and can be used across multiple virtual worlds.

The Phuture

Luxury brands have taken note of this demand, capitalizing on the opportunity by creating partnerships with virtual worlds including Roblox and Snapchat. Most recently, Ralph Lauren released their limited edition phygital Polo x Fortnite P-Wing Boots, the physical version of which retailed on RL’s website, with digital versions redeemed on Roblox. Tommy Hilfiger debuted their FW23 collection simultaneously on the physical runway and on Roblox, with phygital items available to purchase in-world. Luxury luggage brand Rimowa partnered with RTFKT to release a limited-edition phygital cabin suitcase.

A seamless phygital experience is necessary as “authentically expressing yourself is core to the player experience”, argues Epic Games president Adam Sussman. In the future, this will be the norm, with all physical fashion goods available to redeem in digital form (does anyone else remember Webkinz?).

2. Proof of Provenance

The Tailwind: Forthcoming Regulations

Forthcoming EU regulation and consumer demand for supply-chain transparency are making proof of provenance and ownership that much more important — something that phygital goods uniquely enable. The European Union recently introduced the Digital Product Passport (DPP) as part of new sustainability initiatives. This mandates the tracing of the origins of consumer goods, ensuring adherence to environmental and circularity standards. Set to take effect in 2026, it highlights the growing significance of product provenance.

Subsequently, in a report outlining potential implications of the DPP, the Boston Consulting Group and Web3 platform Arianee suggest that this regulation will “accelerate adoption of utilities including product information access, certificates of authenticity and ownership and… [ultimately], virtual product replicas.” 
 An on-chain digital twin offers the ideal repository for metadata regarding proof of provenance, authenticity, and ownership.

The Phuture

In a post-DPP world, phygital goods with digital IDs that carry information regarding materials, supply chain, manufacturing and general provenance will be a must, not a maybe. Startups like Eon, Evrythng and Arianee, as well as LVMH’s own Aura Blockchain Consortium are leading the way, partnering with brands like Prada, Levi Strauss Co. and conglomerates LVMH and Kering to bring the phygital technology to the luxury sector. The idea is that, with a simple tap of one’s phone, consumers can gain access to detailed ‘eco-credentials’ of their items.

Daniela Ott, Aura’s general secretary describes a future in which every phygital product holds readily-available data including certificates of authenticity, supply chain traceability from the beginning of the value chain down to resale, and even content such as videos of the artisan who manufactured the watch, bag, etc. This kind of information and connection with the consumer is unprecedented. Ott herself says “especially for young consumers, authenticity and traceability are a must, so if [they’re] a must, how do you get that in a cost-effective way to a large number of products? We couldn’t do that before [phygital goods].

3. Rethinking Resale

The Tailwind: Counterfeits & Fraud

Increasingly sophisticated counterfeits pose continued threats to both resale and luxury markets, and thus authenticating secondhand goods is costly, labour-intensive, and fraught with error. This has led to razor-thin margins that have negatively impacted the likes of The RealReal and other public resale platforms.

The adoption of NFTs and blockchain technology via digital twins allows goods to circumvent these traditional, extensive authentication processes, thus conserving time, costs and resources. Additionally, phygital goods facilitate enhanced traceability in secondary markets, enabling brands to consistently engage with new product owners across the item’s lifespan.

The Phuture

Today, fashion resale is a many (many, many, many)-step process whereby consumers manually upload product details on platforms like StockX and Vestiaire Collective, set prices subjectively, send the item for verification upon sale, following which the platform verifies it (a lengthy and costly step) before sending it to the final buyer, who remains unaware of the item's provenance. This no longer need be the case with phygital goods.

Pioneering brands like Chloé and Pangaia are showing how a phygital p2p resale world is just one click away. For Chloé’s recent capsule collection, a swift tap of a phone leads consumers to a neat “ReSell” button that immediately connects to Vestiaire Collective. In an ideal future, one click uploads the digital twin to the resale platform, no manual photos needed. A similar process is followed at Pangaia, who recommends pricing predicated upon historical sales data as well as the condition of the item. As the phygital goods at both Chloé and Pangaia are inherently auto-verified, no further verification is required, and sellers can send goods directly on to the buyers. The buyer, in turn, can now maintain a direct connection with the brand via their digital twin. Thus, a true circular economy is finally achieved.

4. The New DTC – Direct to Community

The Tailwind: Rising CAC

As social media platforms have become infinitely more crowded and competitive, and Apple’s recent privacy regulations have restricted customer targeting across digital channels, customer acquisition costs have skyrocketed in recent years. In fact, CAC is estimated to have increased 60% since 2018 and 222% since 2013.

This has caused endless difficulties for DTC brands who relied on social media advertising as a primary form of customer acquisition, and share prices of the top 10 DTC apparel brands have fallen as a result – 70% in 2022, compared to a decline of only 32% for the MSCI World Consumer Discretionary Goods Index in the same period.

Brands are being forced to rethink their customer acquisition methods, and explore new distribution strategies, off of traditional social media platforms, in order to retain existing customers and reach new ones.

The Phuture

Phygital goods allow brands to bypass traditional social media platforms and connect directly with consumers via their products themselves. To date, brands have been limited to engaging with their consumers in one of four main ways: email, social media, community chat platforms (like Geneva) and IRL events. However, engagement across these platforms, and across the digital and physical worlds, goes unconnected, unattributed, and unrewarded.

With a phygital good, brands can incentivize and track actions across both virtual and physical worlds, creating an unmatched community engagement and loyalty program. Consumers can be incentivized to wear the product, vote on governance decisions, co-create with the brand, share products, attend events, and much more – all tracked via the NFC chip and NFT. In turn, consumers would be rewarded with points that can ultimately be exchanged for products and perks– this is an entirely new world of community engagement.

Brands like Kiki and 9dcc are pioneering this new world:

KIKI: As the first phygital beauty brand, owning a Kiki beauty product (the brand has started by launching a line of ‘nail art’ products), allows you to mint an NFT, which opens up a world of co-creation and community engagement. Kiki NFT holders earn points by voting on product decisions, sharing Kiki with friends, engaging with the brand on a daily basis, and more. Those points can then be spent across the Kiki universe, on new products and other perks & benefits. At present, the physical product acts like a trojan horse for digital ownership, which in turn presents opportunities for the community to co-create the brand alongside Kiki. I’ve previously explored why this is valuable here.

9dcc: While Kiki is using phygital goods to incentivize engagement in the digital world, GMoney’s 9dcc is taking the opposite approach, by motivating consumers to engage with the physical product. 9dcc continues to run brand experiments, including sending games like black jack to holders on a frequent basis, which consumers only have to tap their NFC chip to play. Playing earns brand points, which can similarly be spent on future products and perks. In addition, consumers can link POAPs to their NFC chips, allowing individuals to collect these digital stamps upon meeting new friends, attending events, and more. In partnership with IYK, the brand also offers the ability to ‘digitally autograph’ goods, as explored above.

As brands seek new ways to engage with their communities and acquire new customers, phygital goods allow for an innovative, seamless extension to traditional loyalty programs that can incentivize not only engagement with the product itself (heretofore impossible), but more broadly better track (and thus reward) all actions across the digital and physical worlds.

5. Building Product Identities

The Tailwind: Social Commerce

The current growth of the social commerce market (30.7% CAGR from 2022 to 2030) is largely being driven by Gen-Z (to no one’s surprise). The stats are, at this point, well-known, yet still shocking – 97% of Gen-Z turn to social media as their main shopping inspiration, 58% of Gen-Z make most purchases based on recommendations from content creators (of all sizes), and 61% have purchased items from ads on TikTok. For these young consumers, shopping is and has always been, an inherently social experience in which the people wearing the products provide context and a sense of narrative. The products themselves, however, have lacked a similar identity – until now.

The Phuture

Storytelling, narrative building and identity have always been at the core of what makes fashion goods valuable. These stories are what allow the consumer to connect with the *brand* rather than simply a product, ultimately creating a longer lasting relationship. Therefore, these narratives have been confined either to said brand, or the individual carrying the product, rather than the product itself. Brands lend heritage, origin stories and more, content creators build context – where to wear a good and how to style it – yet the product itself derives none of this value.

The most exciting unlock of phygital goods (in my opinion), is the ability for the fashion good to move through the physical and digital worlds, collecting “context”, thereby allowing each piece to create its own unique identity. Ideally, this ‘context’ would live and be visually represented in an interactive and aesthetic way. One can imagine a digital fashion closet (or makeup counter), in which digital assets from sundresses to shoes or nail polish are stored, along with the context they collect. This context could consist of:

• Event Attendance: POAPs collected for concerts, parties, brand pop-ups and other events can all be linked to your phygital good – like that Drake concert you attended.

• People Met: A Nikola Jokic-autographed Nuggets jersey hanging on your wall can only be seen by the few friends who come by your apartment, but a digital autograph can be shared with all of your followers.

• Photos: ‘Outfit of the Day’ style photos get an automatic upgrade when attached to the actual product itself, allowing for instant purchase by followers and outfit-admirers.

• Music Playlists: Brands like Aimé Leon Dore and Gimaguas regularly create playlists that reflect the brand identity, further helping create a brand world. This can be taken to the next level when the playlists are created for each product – and linked to the digital twin in turn.

• Mood Board: A green knit set takes you down a Gwyneth Paltrow in Great Expectations rabbit hole, as you compile a mood board of photos, writing, and film references on Cosmos. A quick link to your green cardigan provides a fresh source of inspiration for your followers.

• Etc…

In summary, as each phygital good moves through the world, it collects its own context, and develops its own narrative, its own identity, and thus its own value. Phygital items, in bringing to the forefront the social experience of each product, inherently create a more social shopping experience as a whole. This is the next era of social commerce.

Phygital Girl, Phygital World

Today, the fashion and commerce worlds are separated by the physical and digital. To paraphrase Draup founder Daniella Loftus, we purchase clothing on digital e-commerce websites, receive and wear the physical items, then post digital photos of our outfits on social media. The physical clothing item is sandwiched by two digital bookends.

Tomorrow, the physical and digital worlds will be bridged, and the majority of fashion experiences will look like our hypothetical experience with Staud – phygital. In a phygital world, the relationship between a brand, its product and a consumer doesn’t stop after purchase, or on a social media platform – it transcends both, and thus intertwines an experience beginning with the supply chain, through a first purchase, loyalty program and brand engagement, social experiences, resale and much more.

The phygital revolution (for that is what this is) will finally fulfill the potential that was created when fashion and commerce first went digital decades ago – the opportunity for consumer brands to transcend this world, and become a world themselves.

This is Part 1 of a two-part series on phygital fashion. Part 2 will be published next week. Stay tuned!

--

Tokenized communities need to make money, but how?

Forefront is back with a series of essays on Economic Models for Tokenized Communities. Today, we're kicking off with three pieces:

Economic Models for Tokenized Communities (GATED): This piece outlines 9 models that communities can use for generating value for the DAO, their pros and cons, and (when relevant) examples of them being used throughout the ecosystem.

https://www.forefront.market/blog/economic-models

Dropping as a DAO (GATED): This essay walks through the benefits and drawbacks of "Droposals" (h/t @0xigami), with a quick discussion of the cultural and governance implications for communities.

https://www.forefront.market/blog/dropping-as-a-dao

The Opportunities and Limitations of Nounish DAOs (OPEN): From Chris Carella, this essay is arguably the clearest explanation of why Nounish DAOs are so important, what types of communities should leverage the model, and what communities should avoid them.

https://www.forefront.market/blog/nounish-daos

Gated essays are available to all Forefront Membership Pass holders.

Non-members can also mint this piece (bottom of page) for ~$5, granting them access to both gated pieces.

After 100 report passes are minted, all essays will be open to the public. Otherwise, everything will be public on Thursday, May 11.

If these topics interest you and you'd like to explore further, we highly encourage you to grab a Forefront Membership Pass and join the community!

Forefront is a community of builders and creators in and around tokenized communities, exploring at the frontier of the ecosystem.

Today, we’re excited to announce some changes to the Forefront Newsletter, including:

• New Themed Sections: crypto intersects with a lot of fascinating spaces. To kick things off, we’ll be launching an all-new Crypto x AI section in the existing Forefront Newsletter. Over time, these themed sections will adjust to what’s most interesting in any given month.

• Sponsorship Highlights: the Forefront Newsletter now runs on monthly partnerships with values-aligned web3 projects. For March, we’re excited to be partnering with Otterspace! If you’re interested in partnering with us for future months, shoot us a DM.

• New Reading Experience + Referrals: the Forefront Newsletter will be moving to a new platform allowing us to construct an all-new reading experience and even build out a referral program with some cool swag (stay tuned!).

We’re continuing to improve the Forefront Newsletter, and we’d love to hear your feedback on how it can continue to be the best email you receive every week.

If you’re still not a Forefront Newsletter subscriber, here’s your chance. We’re excited to use Mirror to highlight their new “Subscribe to Mint” feature. Mint this open edition to show your support for the Forefront Newsletter and subscribe to future editions!

The Forefront Newsletter is the premier curated publication to stay-to-date with all things DAOs, tokenized communities, and web3 social.

This week we cover…

• NFT Marketplace Royalty "War"

• 0xJustice on DAOs Governance <> Coordination

• a16z Part 4 on Web3 Apps <> Protocol Regulation

• Joey Debruin on Authenticity in Digital Networks

• Collab Land $COLLAB Launch

• Mainstream news and more...

Read Edition 128

https://forefront.market/blog/newsletter-edition-128

Sponsor the Forefront Newsletter

Looking for a way to support Forefront?

We’re opening up the FF Newsletter to sponsors interested in sharing their company, project, or community with 10,000+ of web3’s most curious minds. If you are interested in becoming a sponsor, check out our Sponsorship Page.

***

Subscribe to the Forefront Newsletter

Join over 10,000 subscribers in receiving the Forefront Newsletter directly to your inbox each week:

https://www.forefront.market/newsletter

The Forefront Newsletter is the premier curated publication to stay-to-date with all things DAOs, tokenized communities, and web3 social.

This week we cover…

• FWB Social Software Launch

• JPGs María Paula on Curation <> Communities

• Packy McCormick w/ Startup Prophecies Market

• Shopify Blockchain Suite for Merchants

• Mainstream news and more...

Read Edition 127

https://www.forefront.market/blog/newsletter-edition-127

Subscribe to the Forefront Newsletter

Join over 10,000 subscribers in receiving the Forefront Newsletter directly to your inbox each week:

https://www.forefront.market/newsletter

Sponsor the Forefront Newsletter

Looking for a way to support Forefront?

We’re opening up the FF Newsletter to sponsors interested in sharing their company, project, or community with 10,000+ of web3’s most curious minds. If you are interested in becoming a sponsor, check out our Sponsorship Page.

The Forefront Newsletter is the premier curated publication to stay-to-date with all things DAOs, tokenized communities, and web3 social.

This week we cover…

• Forefront’s 2022 Tokenized Community Year in Review

• Rally Sidechain Shuts Down

• Mason Nystrom on Cryptoeconomic Business Models

• Derek Edws on Digital Stores of Value

• Zora's Dee Goens on Open Editions

• NounsConnect Launch

• …and more

Read Edition 126

https://www.forefront.market/blog/newsletter-edition-126

Collect this Edition – Edition 126

The Forefront Newsletter has been community-curated since its launch in late 2020. You can support by collecting this edition:

Subscribe to the Forefront Newsletter

Join over 10,000 subscribers in receiving the Forefront Newsletter directly to your inbox each week:

https://www.forefront.market/newsletter

Sponsor the Forefront Newsletter

Looking for a way to support Forefront?

We’re opening up the FF Newsletter to sponsors interested in sharing their company, project, or community with 10,000+ of web3’s most curious minds. If you are interested in becoming a sponsor, check out our Sponsorship Page.

The Forefront Newsletter is the premier curated publication to stay-to-date with all things DAOs, tokenized communities, and web3 social.

This week we cover…

• The Open Edition Edition

• a16z Crypto team "Regulate Web3 Apps, Not Protocols" Part III

• Variants COO Shough.eth on Token Ownership

• Leighton on DAOs <> Companies <> Protocols

• @camiinthisthang w/ Account Abstraction Guide

• Public Assembly feature on Zora Zine

• Mainstream news and more...

Read Edition 125

https://www.forefront.market/blog/newsletter-edition-125

Collect this Edition – Edition 125

The Forefront Newsletter has been community-curated since its launch in late 2020. You can support by collecting this edition:

Subscribe to the Forefront Newsletter

Join over 10,000 subscribers in receiving the Forefront Newsletter directly to your inbox each week:

https://www.forefront.market/newsletter

Sponsor the Forefront Newsletter

Looking for a way to support Forefront?

We’re opening up the FF Newsletter to sponsors interested in sharing their company, project, or community with 10,000+ of web3’s most curious minds. If you are interested in becoming a sponsor, check out our Sponsorship Page.

Last week, Forefront launched an entirely new membership experience. We're excited to shed some light on the decision-making process and what's next for Forefront.

Over the last year, Forefront has become the home of tokenized communities: from media to product development to conversation, there is no better place to build at the frontier of tokenized communities than the Forefront ecosystem.

It was becoming increasingly clear, however, that while our mission was firm, our communication of that mission was not.

Folks were coming into the community for all sorts of reasons. Maybe they heard that Forefront was a good "starter DAO." Maybe they wanted to write an essay. Maybe they were checking out a product and wanted to learn more.

While the thread of tokenized communities held all of these initiatives together, the community was deeply fragmented.

At the same time, we had no formal definition of membership. Some things were token-gated, but "Forefront member" was becoming synonymous with "Forefront contributor." At first, that was okay! We wanted to incentivize contribution first and foremost. But in doing so, we were implicitly ignoring some really excited, curious folks who could help make Forefront even better through their participation.

Finally, we had a media and community arm that was creating lots of value for the ecosystem, we weren't sustainably generating revenue on that side of the ecosystem. Community members were looking to propose and get projects funded in line with the tokenized community thesis, but governance was clearly restricted by budget.

All of these factors pointed in the direction of designing the Forefront Membership Pass.

The Design

Designed in collaboration with Occulted, each NFT embodies the emergence and fluidity of tokenized communities through the juxtaposition of the Infinity Flow across a multitude of backgrounds grounded in natural colors, patterns, and tones.

The Infinity Flow comes from an essay written by SpaceXponential during Season 2 of Forefront, representing the polarity between individual autonomy and collective awareness in DAOs.

Occulted also helped design Forefront’s Genesis NFT drop an early NFT project in the first year Forefront was getting off the ground.

There are 88 unique backgrounds, randomly selected at mint. Every single one of them paints  a beautiful picture of the emergence of Forefront's community and work.

The Access

The Forefront Membership Pass is now the sole access token in the FF ecosystem. The $FF token will remain the sole governance token. We believe this dichotomy will make governance in the Forefront ecosystem even more valuable, given stronger legibility and a sustainable economic model.

In the new year, we'll be releasing a calendar of events, media, and experiences available to Forefront Members.

If you're not a member, don't worry -- the newsletter, public events, and essays will continue to be free.

The Mint

https://mint.forefront.market/

Minting is now live to the public at 0.3ETH.

For those who held partner tokens prior to Thanksgiving 2022, you can still mint at the discounted 0.25ETH.

For former Forefront contributors and Genesis NFT holders, you can mint for free (just pay gas).

There are only 888 passes available. Once sold out, it will be up to the Forefront community to put to governance how community inflation will evolve over time, and how future revenues will be allocated.

The Next Chapter

We could not be more excited to usher in this next chapter of Forefront. As we continue to develop new products and media at the frontier of tokenized communities and web3 social, our community will have infinite opportunities to build, learn, and create at the frontier of this new world.

You can learn more about everything that Forefront is up to, including our membership program, in the FF Wiki.

To infinity.

-- The Forefront Core Team

Our work was grounded in the idea of the Vibez Infinity Flow, an approach first articulated by Forefront Community Lead Caroline that puts humans at the center of DAO design. The Vibez Infinity Flow centers around a primal reality that exists within each human being that must be accounted for in community design: the inner impulse toward autonomy on one hand, and community on the other.

In her original essay, Caroline explained that this manifests itself on two levels. On the individual level, there is a polarity between autonomy and contextual awareness. On the organization level, there is a polarity between decentralization and coherence. Forefront was designed to empower contributors to repeatedly reconcile and harmonize these complementary opposites through their work. Each of our initiatives this season – from the inaugural Web3 Creator Residency, to the emergence of FF Labs, to the incredible insights published on the FF Journal – was an avenue that contributors with different skillsets could latch onto to engage with the community in the way that resonated most.

Multiplayer Expression

A recurring theme around Season 2 was the unforkable creative expression that emerges when you bring creative people together around a common passion.

FF Labs emerged as a site of free-flowing creative jams and digital performance art commenting on the web3 space, where DAO polymaths were given an avenue to shine. From projects like WeRent to Nicolas Gage and more, Labs became the home for creative critiques of many of the problems and discussions we face in web3 every day.

The Web3 Creator Residency was an experiment in community-driven engagement in an artists’ creative process. Creators bounced ideas off of each other and riffed on learnings during our weekly Open Studio sessions.

The Forefront community was given a rare glimpse into their creative processes as they embraced the process of building in public, sharing each breakthrough and vulnerability with care and growing as creatives in the process. The dialogue from these sessions dug deep not only on each creators’ individual artistic philosophies, but also what it means to be a creative in the digital age, at a time when art exists in a context of environmental degradation, inequality, and rabid rushes for wealth. We saw artists embrace biomimicry and the reflection of natural forms in mediums such as Blender and Unity, with D3MO’s lush environmental soundscapes and Nico’s intricate community, architecture, and game design in Agartha. We saw hyperlocal community engagement in an effort to use art as a vehicle for social change– in both the public ledger and the public sphere– with Entes’ detailed portraits and “vortex” installation in an iconic park in his native Peru. We also saw debates on how to approach one’s craft, from the rigorous, self-imposed guidelines and rules embraced by Kabuki to the free-flowing, intuitive creative process embraced by D3MO and several others. Most of all, whether it was the incremental adjustments of noise and texture of Kabuki’s Cables GL sessions for his generative NFT collection; Alex’s meticulous sampling of percussion and audio editing in her live song production streams on Twitch; or D3MO’s virtual sculpting process in Blender; the Forefront community was able to see the bleeding edge of digital craftsmanship and have a tangible impact on each artists’ final work and process.

What both of these experiences taught us is that creativity is an infinite game that the current paradigm of individualistic creator tools fails to adequately capture. The future of online creation is creative squads and digital-first artist collectives that subvert digital creation tools to fill in the holes internet culture is missing and drive movement in the dominant culture. Our focus on social tokens and DAOs at Forefront is not just a governance and coordination tool, but a creative medium for bringing together top artists and giving them a way to more easily monetize what they create together.

Collective Empowerment

Giving our members utmost freedom to pursue their passions in a community context was key to upholding the Vibez Infinity Flow, and we achieved it by allowing for more free-flowing creative processes.

FF Labs optimizes for emergence. Regardless of technical or design experience, anyone is welcome to contribute ideas to public jam sessions, with the community organically choosing and prioritizing which ones most accurately meet the needs of the community at the moment, and the web3 ecosystem more broadly. Normalizing rapid experimentation allows us to stay on the bleeding edge of tokenization and get our community involved in product strategy in a truly pluralistic way. It’s the creative prerequisite for us coming up with ideas such as Adjectives, a tailored community dashboard for the Nouns community, and Terminal, our flagship community metrics product.

The FF Journal also optimizes for emergent ideas, promoting original thinking from across the web3 space. This season, we featured essays from more freelance writers than ever, giving contributors from other communities an avenue to engage with our community and share cutting edge DAO2DAO thinking.

Providing loose structures that contributors can freely participate in when they see fit is our bet on creative drive being a core motivator for contributors. In future seasons, providing incentives for more sustained, deeper creative engagement in order to retain our talented group of contributors is a key focus for us.

Forefront contributor Neesh constructed the visual foundations of these lessons from Season 2 and beyond. This new visual direction captures the essence of what it means to contribute to a DAO and sets the tone for what we believe is the future of tokenized communities: a framework for incubating creative ideas – united under a single, strong vision – that eventually congeals into spinoff projects and products that add value back to the overall community.

In his sequel to our original Tokenized Communities essay, Jihad wrote that what makes tokenized communities valuable is that they “accrue value based on how well they can incentivize people to do cool stuff with their friends, and then pay it forward.” By focusing on motion and growth, as well as abstract, natural forms that capture a sense of organic movement, we’re reflecting the work we’re doing to create tools and content that help tokenized communities collaborate better and more creatively into every aspect of our brand.

Forefront “Infinity Drop”

We’re happy to present you two artifacts from Season 2 and the exploration that occurred: two iterations of Neesh’s incredible design. To celebrate how far the community has come and the lessons we’ve learned, we’re collaborating with Metafactory on the Forefront “Infinity Drop”.

Forefront “Infinity White” S/S Tee

https://shop.metafactory.ai/products/infinity-white

Forefront “Infinity Black” Hoodie

https://shop.metafactory.ai/products/infinity-black

Product Details

• 100% pre-shrunk cotton

• Front and back print

• Made in the USA

• Never to be printed again

• Limited supply

"Infinity Drop" opens to the public Today, Sept 22 and will run until October 5, 2022.

Cop → “Infinity White” S/S Tee

Cop → “Infinity Black” Hoodie

Beyond Seasons

With Season 2 behind us, Forefront has a newfound clarity on our strengths as a community and what we want to accomplish moving forward.

Our product strategy is rapidly developing, with Terminal and Adjectives already live, and a new projects protocol for tokenized communities being developed right now.

Additionally, we’re excited to further invest in media initiatives across the Forefront ecosystem, highlighting the ideas and builders at the frontier of tokenized communities and web3 social.

We’re excited to open up new avenues to engage the Forefront community as we hone in on our core mission: building at the frontier of tokenized communities.

S ∞ 2

co-written with Krishna Nandakumar, with substantial help from Vernon Johnson, David Phelps, Carlos Diaz-Pedron, Tomer Ben-David, and Jad Esber.

Ethereum (as most know it) is simply one implementation of the Ethereum blockchain. The Ethereum Virtual Machine, on the other hand, is open-source blockchain-based software that allows developers to create decentralized applications. It is the global virtual computer that records the state of every smart contract the network stores and agrees on. Solidity is its programming language.

EVM was the first software to offer smart contract capabilities to developers and has grown into a thriving ecosystem with valuable developer network effects that extend beyond the Ethereum blockchain alone. In fact, some of the notable blockchains that use EVM have their own token economies and consensus mechanisms, completely separate from the ETH token and ETH mining. The innovations, infrastructure, and user growth on other EVM chains are leveraged by the Ethereum blockchain seamlessly and vice versa.

Network Effects of Permissionless Protocols

The network effect is a phenomenon whereby an increase in users or participants improves the value of a good or service, sometimes exponentially. The Internet, for example, is more valuable to you with everyone on it than just a handful of people/organizations. Social networks are another common example.

Open-source software and ecosystems benefit from similar network effects: the more developers build on or integrate with it, the more valuable it is for everyone. But that’s not all that OSS may benefit from. If most of the infrastructure and applications atop the network are also open-source, network effects are multiplied.

This is why EVM network effects are so strong: every user onboarded permissionlessly and every line of code written openly, regardless of which network it was for, improves the value of all EVM chains. It also improves the defensibility of EVM compared to alternatives.

EVM Compatibility

A protocol is EVM-compatible if its smart contracts can be executed on the Ethereum virtual machine. Practically, this means that the protocol’s contract must be written either in Solidity, or have a package that compiles its code into byte code that can be run on the EVM.

Consider zkSync, a zero-knowledge protocol that aims to reduce transaction costs and speed. The protocol supports solidity smart contracts with no changes required in most cases. On the other hand, StarkNet - another zk roll-up - has a native language called Cairo. It is currently not EVM-compatible, but teams are working to build compilers so that it can be executed on the EVM, and a transpiler for the other direction (EVM -> StarkNet) has already been built. Other examples of EVM compatible/native blockchains and layer 2s include Ethereum Classic, Polygon, BSC, Optimism, Arbitrum, Gnosis Chain, Avalanche, and Celo. You can see them all and hundreds more on Chain List.

Why is composability important?

EVM is JavaScript with billions of dollars in spending capital. It has a first-mover advantage, and all the money and resources spent on furthering EVM with new solutions are available to use and expand upon without permission. Therefore, it becomes highly advantageous to build on EVM rather than to build an ecosystem from scratch, even as another L1 or side-chain.

It’s worth noting that some consider JavaScript to be an infamously bad programming language – but it was the first. Attempts to replace it (Dart) all failed, and only improvements that targeted it as a transpiler (Typescript) have succeeded. The network effects were so strong that any break in composability made an attempt to replace it unviable, regardless of the quality of the language. The same may be true for EVM.

For builders and operators, composability means they can leverage one or more of the following:

1. Rich Metadata, Identity System, and Social Graph: addresses are the same across EVM chains, meaning that any new project or chain can leverage the metadata associated with a user/address to solve cold-start problems, source content, add sybil-resistence, establish a social/interest graph for each user, airdrop on cheaper chains, etc.

2. A thriving developer ecosystem: Community support on platforms like an active Ethereum Stack Exchange. Many of the top smart contract blockchain developer ecosystems are using EVM.

3. Tools for Web3 builders: Some tools include Gnosis Safe, Snapshot, WalletConnect (and most of the supported wallets), Zerion, Metamask, and Etherscan. There are many open-source toolkits like OpenZeppelin, Hardhat, and Foundry.

4. Interoperability: Cross-chain governance using Snapshot strategies, cross-layer swapping of stablecoins and base tokens (ETH, MATIC, etc.), identical address system, etc.

5. Optionality: Developers building on one chain or instance can smoothly migrate to a better one or launch their own with little friction. This is a massive advantage to developers placing lots of faith on the relatively new blockchains they are building on.

David Hoffman

@TrustlessState

#Ethereum’s modularity produces a positive feedback loop between utility, decentralization, and throughput.

This is the alpha of the 2020’s

75

6:43 PM • Apr 4, 2022

Examples of EVM Adoption

Beyond building on Ethereum itself, traditional businesses have caught on to the advantages of building on EVM. JP Morgan, for example, built their enterprise blockchain on their own Ethereum fork named Quorum. TikTok launched its NFTs on ImmutableX, a layer 2 roll-up (on Ethereum) for NFTs. 100 Thieves released their first NFT airdrop on Polygon, an Ethereum side-chain running EVM.

Other blockchains are also attempting to interoperate with Ethereum, building EVM implementations on their own chain. Some examples include Solana (Neon), NEAR (Aurora), and Cosmos (Evmos).

Evidence of EVM Network Effects

1. Ethereum has the largest developer ecosystem of all blockchains by far. According to Electric Capital’s 2021 Developer Report, Polygon and BSC (also EVM chains) are in 6th and 7th place, respectively. In fact, at least 8 of the top 20 blockchain ecosystems are running EVM.

2. Many chains have built EVM-compatible implementations on their own chain (Solana and Cosmos, for example) yet no one is building or calling for building contract compatibility with other chains on Ethereum (like Move or Cosmos SDK).

3. Looking at the top projects built on Ethereum, it takes them several times longer to migrate to a non-EVM chain than an EVM one. For example, Celo (EVM compatible L1) benefited from a versatile block explorer (Etherscan), a wallet used by millions (Metamask), and a robust and well-audited multi-sig solution (Gnosis Safe) within its first few days/weeks of mainnet. Chains like Solana, or worse, Cardano, may not have a trusted multi-sig solution for many years.

4. Some of the largest EVM blockchains are constantly applying the learnings of Ethereum in real time. For example, Polygon (EVM compatible L1) is already burning MATIC after implementing a proposal nearly identical to Ethereum’s EIP-1559. Winning EVM blockchains will continue to leverage this strategy.

Pedro Gomes

@pedrouid

What if @gnosischain or @0xPolygon would implement EIP-3074? We don’t always have to wait for Mainnet to push core changes

Be the change you want to see on Ethereum! Let’s make outstanding UX

117

4:29 AM • May 27, 2022

Potential Challenges in L2 EVM Composability

Some L2s are signaling that they might break equivalence with EVM at some point soon to try some features that either only makes sense on L2 or would take a long time to get Ethereum Layer 1 to integrate. In a sense, we might enter a world where L2 EVM implementations slightly diverge and become testing grounds for new EVM features. This might break 1-1 code deployability at some point down the line.

That being said, as long as the state between the layers remains composable, it should be insignificant, typically keeping execution properties to a minimum when bridging data between chains. And as long as an adapter can be written on the other end and the state format makes sense between the two chains, minor execution differences might not be a blocker. It could resemble how JavaScript developed, where ES6 existed before some browsers supported it.

Non-EVM Chains

What does this all mean for competing chains and ecosystems? They’ll need massive budgets and must find ways to serve the EVM audience. The ecosystem model can work for non-Eth projects if they move quickly and efficiently. Solana, one of the worthy challengers, is still missing some of this software despite spending massive amounts of capital to catch up.

Additionally, there’s a ton that EVM can't do and there will be applications that are only possible outside EVM long-term and will drive value to other VMs too. It’s worth noting that some unique projects have begun choosing different solutions than EVM, Stepn, for example, is on Solana. This may be evidence that EVM isn't winner takes all and there will be plenty of applications outside. It’s worth mentioning that the same was true for JS, but every year the number of applications that are impossible to build in the browser with JS goes down.

Interchains and Parachains

Cosmos, Polkadot, and other blockchains have taken a composability-first approach that is winning over competent builders and users. While years behind the EVM ecosystem, Cosmos SDK enjoys very similar network effects, but most of the composability is asynchronous meaning it happens in multiple steps with various verifications. Until now, Cosmos didn’t have identical addresses for accounts across chains, though this is meant to change soon. CosmWasm is super new, and the ecosystem is missing important mechanisms such as a robust oracle solution for DeFi. JunoSwap (the AMM on Juno), for example, launched months late with disorganization and incomplete code.

Solutions like Celestia seem to take these network effects under consideration, allowing Ethereum and other EVM chains to function as the settlement layer. This will retain EVM composability but with much more optionality and scalable security. This approach may be the topic of discussion surrounding Layer 1 blockchains in the coming years.

Conclusion

Developers and L1 competitors should seriously consider the massive advantages of building on EVM currently. For most cases, I expect an existing EVM chain or layer 2 will be sufficient for most needs, though they may need specific features that the EVM isn’t built for. EVM is years ahead of its competing ecosystems and this will continue to increase adoption and network effects. However, ETH supporters need to reconcile the possibility that a different EVM-based chain may capture much of Ethereum’s market share in a manner that doesn’t necessarily trigger demand for ETH.

Resources

https://app.yup.io/collections/ethereum-virtual-machine/SPl7hYt

About: Nir (nir.eth) has been in the web3 space for many years with a particular passion for web3 social and DAOs. He’s the co-founder of Yup and deeply involved with large projects in the space such as Forefront.

FYI: ETH from this mint will go to Forefront DAO and various EVM-related Gitcoin Grants

While they have much in common with more traditional organizations, tokenized communities promote fundamentally different economic models than the mainstream organizations that preceded them.

For example, we value traditional companies based on assets and cash flows. Companies with more capital – or expected ability to absorb more capital in the future – are ideally valued more highly than others.

That isn’t the case for every organization. Jacob Horne argues in his essay on “Hyperstructures” that crypto protocols built with certain traits are valuable not because of cash flows (e.g. through extractive fees) or asset valuation. Instead, they are valuable due to the shared ownership of the protocol by those building on and using it.

Jacob highlights the "threat of the fee" – the ability for token-holders to turn on fees at the protocol level – as the valuable component of ownership, since rational owners won’t want to devalue the protocol by enacting an extractive fee.

In other words, companies are valuable when they continuously extract value for shareholders. Protocols are valuable when they continuously create value for the public.

However, not much has been written on the economic model for tokenized communities more broadly. This essay will explore what tokenized communities are, why they are valuable, and why they will create fundamentally new means of value-generation and distribution.

What is a tokenized community?

Tokenized communities can take many forms, but they can be defined by the following:

1. Tokenized: coordinates around a commonly held token on a blockchain.

2. Platformless: not inherently tied to any centralized platform or tool.

3. Self-managing: leadership is distributed amongst roles, not individuals.

4. Collectively governed: governed by all token-holders.

5. Meme-driven: working toward the proliferation of a common meme.

6. Positive-sum: economic model is expansive, not extractive.

7. Aspirational: actively working to progressively fulfill the first 6 criteria.

Tokenized community: a progressively self-managing and collectively-governed community that works toward the proliferation and development of a common meme using a token as its primary means of coordination.

A tokenized community doesn’t need to be centrally planned or mission-driven from day one. Tokenized communities are often “headless brands,” developing emergent narratives through decentralized means. However, while the mission of a tokenized community may be emergent, the consensus must be clear to and embraced by stakeholders.

Let’s dig into each of the characteristics in detail:

Tokenized

A tokenized community must be tokenized… shocker!

What does it mean for a community to be tokenized? Simply put, tokenization implies that a community is using a token as its primary means of coordination. The token is a proxy for some larger meme or set of values.

For example, FWB is tokenized. Membership is limited to tokenholders above a certain threshold. Events are token-gated. Content is token-gated. Life in FWB revolves around the token.

On the other hand, Time Magazine minted an NFT collection. Time is not a tokenized community. The community at-large has not adopted the token as a means of organizing around the brand in any meaningful way.

Platformless

Tokenized communities are platformless social networks.

Given their use of a token as the primary means of coordination, they are not tied to any communications tool or social media platform. They are independent of centralized infrastructure.

A good way to test this for most tokenized communities today is to ask: if their primary communications tool (e.g. Discord) disappeared, would this community still exist?

Being platformless means that tokenized communities can be truly global and open.

Self-Managing

In self-managing organizations, leadership is distributed across roles, not individuals.

Rather than there being one leader in a community, there are many. Hierarchy is dynamic based on the specific function being carried out, the scope of the decision, or the context of the work.

Tokenized communities enable us to unlock new forms of work and coordination across previously unrelated groups of people.

Collectively governed

Tokenized communities are collectively governed.

This does not mean that token-holders vote on every decision in the community. Rather, it means that power in the DAO ultimately lies in the hands of token-holders.

Tokenized communities ensure some means of voting out core contributors and creating, editing, and ratifying community-wide proposals. This is most commonly manifested in treasury governance – members of tokenized communities have a say in how the group’s treasury is allocated.

While leaders might be pushing the community forward, tokenized communities make sure that the puck stops with the collective.

Meme-driven

Collective governance is pointless without a common meme driving the community forward.

Tokenized communities are working toward a collective goal or upholding a shared set of values. In other words, tokenized communities use tokens to coordinate around the proliferation of a shared meme.

By meme, I mean an idea or element of culture that evolves as it spreads throughout a network.

Let’s take some examples:

• Krause House: own and operate an NBA team.

• Gitcoin: support and fund public goods.

• Forefront: support and build tokenized communities.

Being meme-driven is a necessary component of tokenized communities – it makes “sharing in common” valuable.

Positive-sum

Tokenized communities are positive-sum.

Tokenized communities create value by building expansive value on top of existing protocols and information in line with the shared meme of the community. Despite being open source, with little to no “proprietary” resources, tokenized communities create value for the entire network by giving supply and demand side access to tokenholders.

Aspirational

Finally, tokenized communities are aspirational.

While using a token doesn’t inherently make a community self-managing or decentralized, the benefits of (and value accrual to) the token aren’t maximized unless those criteria are upheld.

However, no organization will fulfill the first 6 criteria purely on day one. Tokenized communities are progressively working to fulfill the above criteria, making an underlying and defining north star of every tokenized community to build a better tokenized community. This is best articulated in the thesis around “progressive decentralization.”

The Economics of Community Tokens

Tokens are investments in memes. Tokenized communities use tokens to coordinate around the proliferation of a meme.

This simple idea has deep implications for token economics.

As mentioned at the beginning of the essay, protocol tokens are financially valuable in large part because of the "threat of the fee." Taking this idea to its extreme, a token’s governance power is powerful because it gives you the ability to conserve the vibes. As a builder on the protocol, you hold to help ensure that you can’t get deplatformed. As a user, you hold to help ensure fees don’t increase. As a passive investor, you hold to help ensure that the protocol continues to grow.

All of these goals are served by playing positive-sum games, ensuring that the protocol stays open and as valuable as possible for everyone.

Community tokens follow a similar path to value accrual. While short-term value may accrue to the token through gating access (e.g. to Discord, content, product, events, etc.), long-term value accrues when community members are holding to:

1. Influence the meme. As a holder, I want to have a say in how the meme is manifested. In other words, token governance is a means of contributing to a headless brand. The balance between meme conservation (group) and evolution (individual) is manifested in the Vibes Infinity Flow.

2. Spread the meme. As a holder, I also want to ensure that more value is continuing to be created for as many new community members as possible. This increases the value of the meme, a net-positive for everyone involved.

In some ways, this is no different than other financial assets in communities we’re a part of today: I want to make my neighborhood as nice as possible so that my home value increases. I want to give back to my university so that the value of my degree increases. I want to be a productive citizen so that the national economy grows.

Community tokens serve as financialized coordination tools in previously unfinancialized communities.

So how do tokenized communities economically sustain themselves? This is primarily a question of how individual members and contributors get paid, so that they aren’t forced to allocate time elsewhere. Unlike protocols, people need to be paid.

I don’t think this question has a concrete answer yet, but there are many promising experiments. Paying contributors with the native token is one way, and I believe long-term there will be more creative ways to use community tokens across the DeFi ecosystem.

However, a key point to make is that fees/traditional pricing models aren’t inherently bad, but they should be expansive: the value captured should be directly aligned with the value created. Economic models for tokenized communities should be viewed through the lens creating value for the community rather than capturing value from the customer.

One Token, Many Communities

If tokens are investments in memes, every community doesn’t need a unique token. Protocols already have this figured out.

The most successful protocols are built to be the foundations of countless platforms. Zora is built to be the infrastructure powering millions of NFT marketplaces. Uniswap is built to power exchanges across a variety of apps and wallets that integrate it.

The most valuable community tokens will be widely used across organizations as a means of coordinating the development of a common meme.

You could imagine thousands of communities with unique membership NFT collections, each with their own perspective on how public goods should be funded. Each of them could use the same ERC-20 ($GTC) as a coordination tool.

This isn’t the only way forward. Very opinionated tokenomics might not be possible without each tokenized community having some sort of unique coordination token. The point is that if club tokens are representative of the memes, then “community M&A” might actually take the form of just… using the same token.

Rafathebuilder touches on this idea in his post on DAO leadership:

The last piece is crucial. The benefit of developing others compounds over time and outweighs the initial investment required. As a result, those with most influence in web3 are often those that have helped others become leaders.

This might be the killer feature of DAO leadership: there’s an incentive for mutual growth. This self-reinforcing loop becomes a recursive process.** **

The same is true at the organizational level. Tokenized communities become more valuable as they empower other communities to form and grow around a shared meme.

Just as the biggest protocols will have millions of platforms building on top of them to serve specific users, the most successful community tokens will have millions of communities building on top of them to serve specific sub-groups and expand access to new sets of people.

Thus, community tokens can be broken into two categories:

1. Network Tokens: tokens that represent a shared meme that act as a “schelling point” to connect other communities that aim to proliferate that meme in a specific way or for a specific audience.

2. Membership Tokens: tokens that represent membership in an individual community that falls under a “network’s” umbrella.

This is why both NFTs and ERC-20s will continue to be important tools in the community token toolbox. Much more on this in another essay to come.

The Future is Tokenized Communities

This essay takes heavy inspiration, in format and in content, from Other Internet and Jacob Horne, who have written extensively about protocols, tokens, and “market-protocol fit.”

Like protocols, there will always be some incentive to fork community tokens. Today, launching your own token is basically free money. Speculation is a powerful force which is why we see so many tokens (and rugs) launched every day.

However, tokenized communities are not protocols. At birth, tokenized communities are “a token and a dream.” They are an opportunity for and a mechanism by which people can coordinate around a shared meme. They are meme first, protocol/product second.

As the ecosystem matures, communities will realize that it is mutually beneficial for participating groups to lean into a shared network token rather than minting their own from scratch. Community tokens will act as a “schelling point” for groups embracing a common meme, who will be able build on top of existing economies rather than recreating their own.

Tokenized communities are the future of organizing. Let’s keep building that future.

Thank you to Scott, Katie, Chase, Krish, Ed, Joey, Julia, Flex, and Reka for edits, comments, and jam sessions for this piece.

Also, a huge shout out to Other Internet, Jacob Horne, and Rafa for the incredible insights that brought this essay to life.

***

Forefront Season Two has finally arrived.

If we’ve learned one thing over the last year, it’s that DAOs are hard. But working through those challenges are exactly what creates a community worth fighting for.

There has been a recent shift in the ecosystem's dominant narrative, with many DAO operators and contributors realizing the need for more nuance in current conceptions of decentralization, autonomy and hierarchy.

Community is at the center of all that we do at Forefront, so our overarching aim will always be to nurture and enhance human flourishing and well-being.

Season Two will be all about supporting people in tokenized communities to do their best work.

Off-Season Recap

As Season One came to a close, we realized we needed to reflect, recover, and recalibrate to truly make Forefront a valuable and mission-aligned space for everyone involved.

Thus came the Off-Season.

The purpose of the Off-Season was to give the community ample space, time, and structure to answer three key questions:

1. What is Forefront’s North Star?

2. Who is Forefront for?

3. How can Forefront build a community that takes care of its people and makes a consistently positive impact on the ecosystem?

Candidly, these are questions that every DAO should be answering from Day 1. But during Season One, it quickly became clear that the answers to these questions were increasingly diverging at every level of the community.

For Forefront to continue to grow, there needs to be sustainable frameworks and systems that create appropriate structure for contributors, so that we’re all headed in the same direction. This requires time, better processes, and deep focus.

Our core team structured Off-Season sessions to address these questions in-depth, leveraging a variety of existing frameworks and innovating on new ones.

The Vibez Infinity Flow

To this end, we have crafted an approach to DAO Design & Governance that we call “The Vibez Infinity Flow.” This approach seeks to place the human being at the center of DAO Design. More specifically, the Vibez Infinity Flow recognizes a primal reality that exists within each human being: the inner impulse toward Autonomy on the one hand, and Community on the other.

In the context of a DAO, this primal Polarity expresses itself on two levels:

1. Individual-Level Polarity. At the level of the individual who is a Contributor of the DAO, the polarity is between Autonomy (freedom and unique self-expression) and Contextual Awareness (belonging and being a part of something greater).

2. Org-Level Polarity. At the org-level, the polarity is between Decentralization (that which is emergent, fluid, and adaptable) and Coherence (deliberately designed structures that give alignment and continuity to the community, ie, the North Star).

At the heart of Forefront’s DAO Design is the intentional creation of avenues by which these complementary opposites are brought into relationship, so that they may be reconciled and harmonized, again and again, by each Contributor.

During Season One, Forefront experienced fundamental issues arising from an imbalance of these two forces. This manifested as:

• Onboarding as fast as we can vs. as much as we need to, creating substantial overhead and degrading the experience of existing contributors. This prompted us to pause onboarding before the end of S1.

• Lack of appropriate scaffolding or structure to direct creative energy. Lots of ideas, little execution.

• Contributors felt confused with DAO priorities and/or overwhelmed by perceived “messiness.”

• Systemic contributor over-commitment led to abandoned projects and sub-par work quality.

Seeking Alignment: Forefront’s North Star

After this necessary Off Season work, the community landed on Forefront’s North Star:

“Forefront is the launchpad empowering web3 explorers to create at the frontier of tokenized communities.”

In Season Two, this implies a focus on three primary objectives:

1. Develop an intentional "A-Z" Onboarding Program that activates and delights Contributors and Community Members.

2. Build out a Web3 media engine focused on research, deep storytelling, and curation for social tokenized communities, their development, their philosophy, and their use-cases.

3. Develop a collaborative product strategy to support social tokenized communities and solve key ecosystem problems (think DAO Terminal, FF Staking, etc…).

A lot falls within the scope of those objectives, so we need to get really concrete about the principles and practices that we discovered during the Off Season to maintain the balance of the Vibez Infinity Flow:

1. The Forefront Forum (F3). A bi-weekly live discussion forum convening Core Staff, team Stewards, and all active Contributors. This continually refreshed contextualization ensures that the actions of sovereign individuals and groups cohere with the mission and priorities of the DAO community as a whole.

2. “Maximal trust and delegation” and Decision-Mapping. This philosophy explicitly grants specific decision-making authorities and constraints for all core roles (Staff, Leads, Coordinators and team Stewards) and working groups, with the goal of pushing decision-making to places of highest context.

3. Alignment Triangle, OKRs & Reflection Epochs. The Forefront DAO integrates into our production cadence rhythmic periods of rest & reflection. During these Reflection Epochs, the entire DAO is engaged in reflection, evaluating the impact of our activities against our shared commitments and OKRs.

Forefront Season Two

So what will we be working on in Season Two? The DAO has aligned on some inaugural working groups that will kick off with the start of the new season. Some of these may be familiar, and others are brand new:

• Onboarding (DAO Contributor & Community)

• Web3 Creator Residency

• Community Programming

• FF Journal & Museum

• FF Daily

• FF Newsletter & Wrapped

• $SOCIAL Index

• Metagovernance & D2D

• FF Product Labs

We’ve also revamped our approach to Onboarding and our Contributor Framework. The Vibez Infinity Flow is powered by Contributors who have wherewithal and resources of time and attention. Without these basic resources, Contributors are stymied in unfolding their autonomy in service to the North Star of the DAO.

Our Season One experience showed us that the “base layer” of our Contributor Community needs high-commitment Contributors. We’ll be onboarding contributors using a new Role designation to indicate their level of work commitment.

1. Pioneers. Forefront is the Contributor’s sole work focus [in terms of hours, minimum 30-35 hours/week].

2. Oracles. Forefront is the Contributor’s primary, or top 2, work focus [minimum 20-25 hours/week].

3. Alchemists. Forefront is a Contributor’s "part-time" commitment [15-25 hours/week].

4. Voyagers. Forefront is a low-priority commitment for the Contributor [10-15 hours a week].

The Core Team will seed initial working groups, acting as informal stewards and progressively decentralizing as “2nd generation” stewards naturally emerge. We will be prioritizing Pioneers and Oracles in the onboarding process, although not every working group will require them.

Join Forefront: “The Pulse of Web3 Social”

Forefront is The Pulse of Web3 Social.

In Season Two, we’re doubling down on what we do best: rapid experimentation, creation, and curation for social tokenized communities and their members. Some contributors have considered this vision a mix between a “web3 Rolling Stone” and a “web3 MSCHF.” Our core focus will be to empower web3 explorers to create at the frontier of tokenized communities.

We’re actively looking for new contributors to join us on this journey. If you’re as excited as we are about the future of Forefront, join the Discord and reach out to any Forefront core team members.

There will be a formal contributor application going out soon. Additionally, members of the Forefront team will be hosting Twitter Spaces and other events over the upcoming weeks to talk more about Forefront, Season Two, and contributor needs.

We’re building a new world for creators and organizations. Join us.

S ∞ 2

That’s where Project St. Canon comes in: over the past ten weeks, our writer’s guild has put together a canonical list of resources spanning various topics, themes, and trends pertaining to digitally native token communities. 

We wanted to create this canonical report, but we also wanted to run a new kind of experiment in social curation: once we aligned on weekly sections, we put up the contents of each report to a community vote, democratizing the content creation process. Forefront token holders selected their favorite resources, people, and projects that would form the official output of each canon section. 

Today, we’ll take you through the foundations of our experiment, the outputs of our work, and the lessons gained from this first ever experiment in collective tastemaking. Whereas we set out to create a playbook for community content curation, this write up is more of an investigative summary of our learnings, with some implications and teasers on our next experiment!

1. Ideation

We started Project St. Canon with a few key questions in mind:

• Can collective tastemaking become a core $FF function?

• Is an at-scale curation model through tokens possible?

• How can we incentivize entire communities to vote?

• Can the canon inspire new token holders and community members?

From the very get go, we landed on the mechanics of Mirror’s Write Race as the most efficient way to tackle community token voting and curation. Mirror is by far the most seamless way to experiment with collective decision-making, and one of the lessons we learned off the bat is how effectively we can track metrics and output through the platform. 

To give ourselves breathing room in between sections, we decided on a biweekly cadence for publishing our separate canon sections—changing one variable per report so we could better control for outcomes and track the validation of our various hypotheses. 

2. Experimentation

Structured below is the rundown of the core variable sets we iterated on for each section:

• Edition I: New Discord Channel: For the first edition (Podcasts), we decided to launch a 'Canon' channel in Forefront (#canon) to incentivize people to share their favorite resources and talk further about the race.

• Edition II: Rebranding as the Web3 César: On the second edition (Newsletters), we decided to re-brand the project and make it more relatable to something people know: The César. We teased in our announcement a final ceremony with all the nominees and called this experiment the FF Awards, trying to see the response (positive or negative) for a yearly ceremony in the space, rewarding those having pushed the space forward and coming back on the important events. On top of the "Narrative" experimentation, we also experimented with concrete call-to-actions. That's why we incentivized FF holders to vote by offering them a POAP and asked nominees to share with their community in exchange for a special NFT (a "Forefront Award Nominees" NFT.) Finally, we decided to improve our internal process and came up with a Notion Doc helping make sure we don't forget anything.

• Edition III: Direct Outreach to Nominees: From the third edition, we started to actively reach out to all nominees, asking them to spread the word across their community - mentioning we're offering them a special NFT. In this section, we really tried to increase engagement by targeting very active communities. 

• Edition IV: Trialing the Scarcity Effect: On the fourth edition (Best Tools), we tried to implement scarcity and created a live event, only allowing Forefront members to vote for 2 hours. We wanted to see if this would increase the number of people voting on the race.

• Edition V: Elevating Every Variable: For our fifth and final edition, focusing on the best digital economy essays, we reflected on which edition performed the best and reverted to the original idea of a weeklong mirror race in which community members voted asynchronously. Rather than executing on a new ideation session, we wanted to hone in on our lessons learned and refine the factors we had already iterated on.

3. Lessons Learned

Ultimately, participation in the Canon lost steam following each edition—our fifth edition, which we internally thought to be the strongest yet, had the lowest community turnout. 

Per our original goal, these key takeaways and suggested countermeasures are an attempt at redefining the playbook for collective tastemaking. We clearly have a lot more to experiment on, but have learned so much so far. 

Takeaway #1: Set clear KPIs from the onset

Over the weeks, we struggled coming up with new ideas as we didn't optimize for a specific outcome. Without clear KPIs, we’ve been trying different ideas that were going in different directions.

With this experiment we could have optimize for two possible outcomes:

• The goal to open more the Forefront community - To achieve this goal, we should have organized a "curate-2-earn" mechanism, where people could curate the resources they wish to see in the next editions and earn $FF for their work. With this in place, more people would have had the chance to join the experimentation and the Forefront Community. We could have tracked the result with the total number of $FF holders before and after the experimentation.

• The goal to increase the participation rate - To achieve this goal, we should have rewarded tokens those who've voted, incentivizing everyone to participate in the experiment and increasing the overall participation rate. We could have tracked the result with the number of votes during the race on Mirror.

By not sticking to one of those outcomes, we didn’t optimize and ended up losing energy in not crucial tasks.

Takeaway #2: Keep it short and sweet

Originally, we wanted to release 7 sections. However, considering the time it would have take and the reduced engagement we received edition after edition, we decided to cut down two sections that we thought were already widely covered (Top Creators and People to follow on Twitter). Even 5 sections may have been too long given how participation dwindled for the Best Essays section. 

In hindsight, we also should’ve made the lists more digestible as well. People have a very short attention span, and with some of our lists running as long as 25 entries, there’s a high chance most people scrolled through the first few and closed out of the list. When making lists for engagement, it’s important to highlight important categories and keep the lists digestible. 

Takeaway #3: Watch out for whales

We also talked about implementing quadratic voting and paying the winners $FF depending on their number of the vote (1 vote = 1$FF for the winners). While quadratic voting typically better democratizes the decision-making process, we found that the mechanism here actually created more inequity. 

In every category Forefront was nominated, we won—naturally, given that our community holds the greatest share of $FF. If we want to truly integrate new networks in the voting system, we need to find a way to account for the whales. Unfortunately, Mirror Write Race doesn’t support more versatility with their token voting process—we can’t enable other tokens to vote on our Mirror posts, or limit the number of tokens participants can vote with. 

In the future, we’re considering creating our own voting mechanism via a token-gated link only accessible by $FF holders, who can then vote through a basic script. We’ll have to rethink the UX and development here, but this is something we’re considering for our next creative experiment (more on that later!)

Takeaway #4: Reprioritize community curation

This was a big one. Our team of five people manually curated each section, jamming out and adding entries in that fit the criteria. We used this resource [https://www.forefront.market/learn/social-tokens/projects]  shared by Carlos to come up with the criteria for each category. Instead of curating the nominees ourselves and asking $FF holders to vote for their favorite, we would have created more momentum by asking the community to curate the nominees directly. By involving the community early on, members would be more inclined to participate in voting later on. We thought about implementing an idea similar to this in the curation channel. People submit potential entries for the future section, and if chosen in the final list, we tip them a certain number of FF tokens. (8 FF)

Takeaway #5: Incentivize with our members in mind

What do participants gain from voting on each edition? What is the reward for collective tastemaking? Voters are $FF holders, and needed more incentive within our community—specifically, financial ones. Considering the current number of $FF token holders, perhaps a low participation rate was to be expected; in this case, our primary focus should have been on increasing signal and accounting for incremental gains. 

We considered putting our marketing budget towards a prize for the communities who received the most engagement on their posts, once we’d reached out to them regarding their nominations, but ultimately didn’t implement this in time. As we continue to expand on what it looks like to create with community, we’re focused on adapting our incentives based on our evolving core audiences.

Takeaway #6: Take full advantage of the DAO democracy

People management and guild HR is something mwe still haven’t collectively solved for. We’re still learning how to most effectively leverage the decentralized community structure: rather than creating true autonomy and mobilizing the team as a whole, the canon project felt a lot more centralized, with Eliot pushing all the momentum and people chipping in sporadically where they could. Perhaps Takeaway #5 applies here, too: in what ways could we have better engaged our team members to contribute high quality, consistent work?

In an ideal setting, we would have also leveraged the power of the DAO to tap into different guilds—we would have loved to create infographics to add to our SEO, but didn’t have the internal bandwidth or the systems in place to engage with members of the design guild. 

4. Building the Playbook

We learned a whole lot over the course of these past 2.5 months. Returning to our original questions:

• Can collective tastemaking become a core $FF function?

• Is an at-scale curation model through tokens possible?

• How can we incentivize entire communities to vote?

• Can the canon inspire new token holders and community members?

Project St. Canon left a lot of these theses unanswered. As the first ever experiment in collective tastemaking, we didn’t account for the growing pains that would encompass such an experiment. Instead of being able to focus on answering the right questions for our playbook, we spent a lot of these ten weeks learning how to better structure and execute on the process. 

To properly build the playbook, we’re diving deeper—with our upcoming Museum project, taking collective tastemaking to a whole new level.

Project St. Canon focused on the curation and synthesis of existing content—but our Museum project will center on creating new content from the current. Taking the learnings we garnered from our first phase of experimentation, we’re involving the community from the very start: every two months, the $FF community will align on an exhibit theme, spending the subsequent four weeks sourcing the best “artwork,” exhibitors, and thought leaders to showcase in our gallery. 

Instead of focusing purely on what’s out there, we’re giving our social networks time to create custom exhibits to present in the $FF Museum—from podcast interviews, to NFT drops, to intentional written work, to new media, and more. We’ll see these exhibits presented gradually, over the course of the following month, giving the audience time to really engage with and digest the essence of the exhibits. With this extended timeline, we hope that we’re able to merge beyond the Forefront community to connect with the communities that play a part in our gallery.

There’s more to be done in the conceptualization of our Museum project—but the outcomes of Project St. Canon provide a strong foundation for thought. We’re excited to keep you updated on our progress and learnings as we continue to build towards a better, more comprehensive playbook on collective tastemaking. Until then—take the time to check out the best of the best of our Digital Economy Canon in our final report!

Want more?

Follow Forefront on Twitter  and join us on Discord.

Thanks for being here 🔥

Further resources:

Announcements & Results:

• 

  Forefront

  @forefront__

  

  1/n - Gm! Introducing Forefront Digital Economy Canon
  
  A curated list of canonical resources related to digital-native token communities.
  
  LEARN MORE ↓

  

  forefront.mirror.xyz

  Introducing Forefront Digital Economy Canon

  TLDR; The FF Writers Guild will release a new section of this Digital Economy Canon each other week, available on the Forefront Website. This project is an ongoing experiment in community curation,...

  67

  11:01 AM • Nov 9, 2021

• 

  Forefront

  @forefront__

  

  1/n - We're thrilled to announce the winners of the Forefront Digital Economy Canon's Podcast edition
  
  Here's a snapshot of the finishing line:
  
  @levychain - 13,239 $FF
  @chaserchapman - 12,806 $FF
  @forefront__ - 12,039 $FF
  
  → forefront.mirror.xyz/token-race/baf…

  

  39

  10:28 PM • Nov 15, 2021

• 

  Forefront

  @forefront__

  

  1/n - Gm! We've curated the best web3 newsletters for the Digital Economy Canon – now it's your turn to vote on your favorites!
  
  ↓ LEARN MORE
  forefront.mirror.xyz/bbXvCO2wi9yuw6…

  36

  11:36 AM • Nov 23, 2021

• 

  Forefront

  @forefront__

  

  1/ - We're thrilled to announce the winners of the 2nd Forefront Digital Economy Canon Edition — Top 10 Newsletters
  
  Here's a snapshot of the finishing line:
  
  @cupofnft - 11,117 $FF (shining star)
  @forefront__ - 9,063 $FF
  @Darrenlautf - 6,752 $FF
  forefront.mirror.xyz/token-race/baf…

  17

  10:58 PM • Nov 29, 2021

• 

  Forefront

  @forefront__

  

  1/n - Because community is everything in Web3, we're highlighting this week not 10 but 25 of the best communities in the space - now it's your turn to vote on your favorites!
  
  The third section of the Forefront Digital Economy Canon is now live - LFG ↓

  

  forefront.mirror.xyz

  Forefront Digital Economy Canon - Section 3: Top Tokenized Commu…

  TLDR; The FF Writers Guild will release a new section of this Digital Economy Canon each other week, available on the Forefront Website. This project is an ongoing experiment in community curation,...

  43

  11:42 AM • Dec 8, 2021

• 

  Forefront

  @forefront__

  

  VOTING IS NOW LIVE!
  
  Vote on your favorite web3 tools in the next two hours to be selected for our next NFT airdrop check out our post here for more details on our choice tools.
  forefront.market/canon/tools

  15

  12:17 PM • Jan 18, 2022

• 

  Forefront

  @forefront__

  

  1/n — With over 18k votes, we're thrilled to announce the final line up of FF Canon's Web3 tools edition
  
  Here's a snapshot of the finishing line:
  @coinviseco - 6,900 $FF
  @ensdomains - 3,540 $FF
  @gnosisSafe - 2,091 $FF
  forefront.mirror.xyz/token-race/baf…

  21

  11:36 AM • Jan 20, 2022

• 

  Forefront

  @forefront__

  

  1/n — gm! In this last section of our Digital Economy Canon, we're showcasing the 15 most interesting and thoughtful Web3-related essays, covering the history, technical foundations, and operations of DAOs.
  
  Read, share and vote — LFG
  forefront.market/canon/essay

  49

  12:06 PM • Feb 2, 2022

Useful resources:

• Internal Notion Doc

• Digital Economy Canon

• Final Report

Vote on Races’ statistics:

• Section 1: Podcasts - 10 nominees, 50.3 votes total

• Section 2: Newsletter - 10 nominees, 37.2k votes total

• Section 3: Tokenized Communities - 25 nominees, 98.3k votes total

• Section 4: Web3 Tools - 10 nominees, 18.7k votes total (For 2h only)

• Section 5: Must-Read essays - 15 nominees, 11.8K Votes total

• Average: 43,26k votes per edition

Twitter’s engagement:

• Section 1: Podcasts - 15 Retweets - 4 Quote Tweets - 73 Likes

• Section 2: Newsletter - 7 Retweets - 3 Quote Tweets - 40 Likes

• Section 3: Tokenized Communities - 7 Retweets - 5 Quote Tweets - 44 Likes

• Section 4: Web3 Tools - 3 Retweets - 2 Quote Tweets - 16 Likes

• Section 5 - Must-Read essays - 14 Retweets - 6 Quote Tweets - 52 Likes

• Average: 9 Retweets - 4 Quote Tweets - 45 Likes

There is no article or book so far that can cover the depth and breadth of the Social Token space. However, the Forefront Writer’s Guild has curated a list of canonical resources related to digital-native token communities.

Throughout 10 weeks, we’ve asked Forefront community members to vote from this list for their favorite resources in the different categories. We came up with 17 resources that the community has elected as the best resources to represent the Social Token space.

We hope you will dive in and use this repository as a comprehensive guide covering the big picture, technical details, and practical operational guides.

If you’re interested in going further, you can access all sections and nominees on the Forefront Website.

Section 1 - Podcasts to Listen

• Mint by Adam Levy

  Discover an exclusive look into how the creators of today are building the communities of tomorrow using web3 primitives like social tokens, DAOs, and NFTs, to name a few.

• On The Other Side by Chase Chapman

  The Other Side is a podcast focused on the intersection of society, culture, and crypto. The crypto space is quickly moving past simply building infrastructure DeFi protocols and has spawned a cultural renaissance of sorts. Chase takes listeners down the crypto rabbit hole to explore topics such as building culture in crypto, finding your tribe, mental health in web3, and many more interesting points.

• The Forefront Podcast by Forefront DAO

  The forefront podcast lets you explore & build at the Forefront of the Web3 playground. Avoid the noise and surface the signal on the state-of-the-art tokenized communities in the internet-native economy. Enjoy this biweekly roundup of the latest & greatest in social tokens, DAOs, and more.

Section 2 - Top Web3 Newsletters

• Cup of NFT by Gian Ferrer & Elle

  Cup of NFT is the perfect newsletter to never miss an update on the latest in NFTs! Cup of NFT is a newsletter for people who view NFTs as a powerful tool for creation and empowerment. Every week, it shares high-signal news on culture, media, and NFTs, and features different kinds of artists from different parts of the world.

• FF Newsletter by Forefront DAO

  The Forefront newsletter is a weekly newsletter showcasing content and market insights on Social Tokens and DAOs. Each Monday, Forefront will bring you the latest news, data, and insights on the projects, people, and trends driving the emerging social token space.

• The Daily Ape by Darren Lau

  The Daily Ape is a daily newsletter that aggregates the top stories across the web3 space. It’s a really easy read that just includes headlines and links to read more on the topic. The newsletter is divided amongst different categories including news, DeFi, long reads, and project breakdowns.

Section 3 - Best Emergent Tokenized Communities

• Llama

  Llama is a DAO that has built a suite of products surrounding treasury management for other DAOs. They currently work with some of the largest DAOs in the space including Aave, Uniswap, Gitcoin, and Friends with Benefits.

• Forefront

  Forefront is the leading insight aggregator across the social token landscape. It’s the home of exclusive content on creator economy, a weekly newsletter and profiles for 23+ projects and counting.

• Friends With Benefits

  Friends with Benefits is the ultimate cultural membership powered by a community of our favorite Web3 artists, operators, and thinkers bound together by shared values and shared incentives ($FWB).

• Protein

  ProteinDAO is reimagining and redefining a new meaning of growth for this exciting new world. By regrounding their long-term community, they seek to create a place that encourages and nurtures a new definition of growth, based on mutual collaboration, conversation, and the needs of the community.

• SeedClub

  Seed Club is a social token incubator. Through their 6 weeks program, they help creators launch and grow social token based projects. Their goal is to be community owned and governed.

Section 4 - Best Web3 Tools

• Coinvise

  Coinvise allows anyone to launch and manage their own personal or community token and came up with an efficient set of tools that allow tokenized communities to do airdrops, vesting schedules, quests, and more. As the blockchain-powered creator economy continues to grow, powerful tools like Coinvise will become much more important in the near future.

• ENS Domains

  The Ethereum Name Service(ENS) has been a fundamental building block of the web3 space. An ethereum iteration of DNS, it allows users to shorten their wallet addresses to customizable, digestible names of their choice. So instead of sending funds to a long traditional ethereum address, funds can be sent to yourname.eth.

• Gnosis Safe

  Gnosis Safe is a smart contract wallet running on Ethereum that requires a minimum number of people to approve a transaction before it can occur (M-of-N). If for example you have 3 main stakeholders in your business, you are able to set up the wallet to require approval from all 3 people before the transaction is sent. This assures that no single person could compromise the funds.

Must Read Web3 Essays

• A Prehistory of DAOs by Kei Kreutler

  This long-format essay retraces the history of DAOs. It aims to show future DAOs can move towards a syncretic theory of organizations, meaning a theory that incorporates a wide range of cultural patterns, practices, and influences while recognizing their inherited political biases.

• Squad Wealth by OtherInternet (Sam Hart, Toby Shorin, Laura Lotti)

  Squads are reemerging today as a potent cultural force that rejects a strictly individualist market philosophy. This essay aims to explain how squads, thanks to a strong internal coordination, can decrease transaction costs, enabling greater productive capacities and financial opportunities as a group.

• How I Got a Job in Ethereum & Crypto by Jackson Dame

  Jackson now has >45k followers on Twitter, works at most-loved ethereum wallet company Rainbow, and is probably one of the most knowledgeable people in the NFT space. But in the summer of 2020, Jackson knew close to nothing about crypto. Learn about what Jackson did to get immersed and land their first crypto job.

Want more?

Follow Forefront on Twitter  and join us on Discord.

Thanks for being here 🔥

The more the lines are blurred between our digital and physical lives, the more our digital identities will become more complex. Our work is already being done almost exclusively online, having internet friends has become commonplace, and we're slowly tending toward a moment where our digital life will become just as consequential as our physical life.

Everyone will eventually have to play the Great Online Game, and the questions around digital identities will become (if not already) central in our society.

In this context, we'll have to explore different tools to better measure and reflect the quality of our exchanges online, encompassing the entirety of our online presence. In my opinion, web3 wallets will play a considerable part in this future by seizing the opportunity of doubling down on social tokens.

What is Identity?

Before getting into what is needed to measure better our online identity, it's essential to clearly understand what is included in our idea of identity.

In the physical world, we can use our driver's license as a way to prove our Identity, but it doesn't really tell us much about a person. To get to know a person, you might ask shared acquaintances, Google them, have a conversation about their favorite things, etc. Identity is complex and multifaceted. Our identity is more than just the core vital stats - name, serial number, and rank. Our identity is constantly evolving, and there isn't one "true self," but many sides to our identity, which we employ depending on the context (at work, on Twitter, with friends etc.). To get to "know" someone, you need information from all of these areas. And only then will you get a sense of who they really are.

That is why I believe our online identity will be decentralized. With decentralization comes interoperability, enabling us to bring our data from one platform to another, resulting in a much better user experience. Decentralization will also allow for easy access to all of our data scattered across web3, simplifying how we manage it all.

Now, we need the tools and the interfaces that will allow us to manage everything easily. What we need today are better wallets.

What traits should a wallet have?

The future of wallets won't only focus on transactions, but will be native tools built around personalization, navigation, interoperability, and integrating strong social components. They will reflect much more of who we are and be inherently social.

These new web3 wallets, such as Rainbow, as opposed to current traditional wallets such as Metamask, will be much more like your email address or your LinkedIn than your bank account. You'll share your wallet with colleagues and platforms so they can contact and identify you. Your wallet will be decentralized, created by you, and you'll control the data you want to share and the experiences you want to highlight by granting, revoking, and sharing partial access to it.

For wallets to better reflect the entirety of our online Identity, we'll need them to prioritize the quality of our interactions over the quantity.

Today, wallets are building their user experience around the quantity of transactions. They're building their product in a way that makes it easy for anyone to see if you've attended an event (by leveraging POAPs, for example), but almost impossible to tell if you've actively participated. They allow anyone to see if you've voted on a proposal in a DAO, but don't create the right experience for others accessing your wallet to see if you've read what this proposal was all about and if you had a strong opinion on it.

No wallet showcases beautifully which communities and DAOs you're a part of and how involved you are in those communities. The tech is already here, and it's easy to envision a system where the more active you are in a community, the more skin in the game you have. Some platforms, such as Coinvise, have already implemented such features focusing on social tokens better to reflect the quality of work and implications in communities, but what's lacking is the design component and the context around it.

With our life and our work happening more and more online, it seems essential to refine how our online Identity is showcased and find new ways to measure and reflect the quality of our work and interactions online.

This is why wallets should double down on social tokens.

Social Tokens as a Measure of Digital Reputation

Social tokens are already widely used today.

Contributors working for DAOs today receive social tokens proportional to the good work they accomplished. For example, with KPI options, contributors will be paid more if a project's KPI reaches predetermined targets before the given expiry date. The better they work, the more tokens they receive. Another example is Coordinape, which allows DAO leaders to create "Gift Circles," enabling contributors to collectively reward each other depending on the value they perceive from each other's work.

In the JUMP community, a community for agency professionals and brand marketers who are passionate about web3, DAO leaders have implemented “tips,” where any member can reward another by sending them social tokens through a tool called Collab.land. In Water & Music, a research DAO building the innovator's guide to the music business, active members have been rewarded through airdrops (proportional to their involvement).

The problem is, with current wallets, users have no easy way to show their tokens to others. Web3 wallets optimizing for social tokens – creating a dedicated space for them and allowing users to manage them easily (hide, showcase, etc.) – community members could bring their reputation across DAOs, allowing DAO leaders to assess the candidate’s value upfront, better assess their needs and experiences, and onboard them to projects accordingly.

Why aren’t social tokens widely used for reputation yet?

While we don't yet have the wallets I’ve envisioned, some emerging wallets are already pushing in the direction of better ways to measure reputation through showcasing NFTs.

While this is a great step forward, we need new wallets to recreate and improve these kinds of experiences with social tokens, which offer far more granularity than NFTs and are already used daily in tokenized communities to measure quality of work.

While very promising, though, we still have many problems to overcome before social tokens can become an effective reputation system.

First, we still have to overcome technical blockers and find ways to get a full picture of a person's identity while they navigate across ecosystems (blockchains, platforms etc.). Rainbow is already tackling this problem by allowing their users to see all of their tokens, even from different blockchains, in one place.

Second, today, one can buy tokens and increase their reputation and voting powers, which is unfair for those who worked hard to earn tokens. We would need a system to differentiate the 'Purchased Tokens' and the 'Earned Tokens.’

Every individual token has a history on-chain. This history could surface important information about its holders and how they received it. Earned tokens could be received in return for contributing to a network or community. Purchased tokens would be what they sound like: tokens purchased through any exchange or from another individual. Differentiating between these is a feature that I encourage every wallet to focus on.

Third, we need a way to differentiate "reputation tokens" from "salary tokens." For now, when contributors get paid in tokens for their work, there's no way to get cash them out or spend them without selling their reputation. The easy solution would be to create two tokens, one for paying salaries and rewarding community members and the other for governance power and perks within the community, but this solution poses its own problems. For these reasons, we need to find a clever and novel way to differentiate between these use-cases.

Conclusion

In Web3, people will use multiple wallets as multiple identities, and some identities will be made up of multiple people. With these new challenges, new wallets will have to adapt, and social tokens offer far more granularity in how we're measuring the quality of our online interactions than today's solutions.

I don't think future wallets should exclusively optimize for social tokens but rather incorporate them better to track the quality of interactions and use all the other available tools such as NFTs and POAPs as well.

Given the emergence of the metaverse, which will require identities to be moved from one area of the metaverse to another, it's essential to think thoroughly about these questions and analyze the possibilities of social tokens to measure experiences more in-depth.

As web3 has entered the mainstream consciousness, an entirely new category has emerged: web3 social.

Humans are tribal creatures. The desire to connect with each other and belong to communities is in our DNA. Web3 social fills the same human void as web2 social – connection. 

So what exactly is web3 social? It’s a new open model for social that is user-centric, not platform-centric. 

In web3 social, users own their identity, data, and the content they create for apps and protocols. Web3 social is a springboard into the world of DAOs (Distributed Autonomous Organizations), platformless social networks. Finally, it’s a new era for social media where users own the networks and protocols and create positive externalities for non-users.

Web3 social products leverage value propositions native to web3 such as user-ownership to empower users while leveraging familiar web2 social models to create a recognizable user experience. 

Leveraging Open Data

Humans are aggregating identity in their wallets. Wallets hold social club memberships, NFTs that reflect their personality, and cultural moments they’ve participated in. 

This trail of data travels with users and is also publicly available. App developers harness this data to build social graphs and reputation systems that form the connective tissue of web3 social apps.

Social graph: a map of connections between users

• Web2: users give up ownership of their data to centralized networks

• Web3: users travel with their data, and social platforms access on-chain data to connect users

Reputation systems: how platforms and networks allocate attention

• Web2: gaining “Followers'' and “Likes” is a feedback loop that incentivizes content producers to keep contributing to networks.

• Web3: social networks build reputation systems that interpret open data based on social media likes/comments, investing patterns, and/or participation in the governance of protocols

While the connective tissue for web3 apps is (currently) centralized, many apps are committed to allowing users to own the value they create. Users mint their profiles, reputation, and social graphs on-chain to be then used by other networks or DAOs.

Collective Ownership

DAOs are platformless social networks. They allow members to coordinate capital and resources to accomplish a mission. Two DAO use cases have emerged that emphasize socialization: Social DAOs and Investment DAOs.

• Social DAOs: Users form communities over shared sets of values and interests. Social DAOs give the community the ability to coordinate towards a mission, program roles, and incentivize contributors. One use case could be a Creator-fan club that co-creates content and grows brand value together. 

• Investment DAOs: Users truly own their assets in web3. DAOs allow groups of friends/strangers to own anything. Through investment and hence shared ownership, users play an active role in the growth of the products & communities they have a stake in. Communities coordinate group action, and communities emerge from group action.

Breaking down the web3 social landscape

Apps: interfaces, social experiences

At Metalink, users connect in verified gated chats, check floor prices, and (soon) trade NFTs all in one place. Metalink is combining various web3, social, chat and NFT-related features into one app.

Using Context, users see what’s happening on web3. They follow friend’s wallets to see what they are minting & buying, curate NFTs in order to share their aesthetic, and help their favorite creators reach more people.

Showtime is building an open social graph with NFTs. They help collectors showcase NFTs and discover rising Creators. Ultimately, every piece of content will be an NFT and Showtime aims to be the primary social media interface for it.

Prysm helps investors connect, squad up and invest together. They stitch together a familiar web2 social experience with the easiest way to start, manage and flex an NFT InvestmentDAO.

The .eth Leaderboard displays the top 200 followed users on Twitter who also have ENS names. This allows people who are active in web3 communities as well as those who are just starting out to understand the leaders shaping the evolution of the industry.

Eth.xyz is the universal shortlink for your web3 username, available for all .eth names. On Eth.xyz, you view the public ENS profile & NFT collection for any .eth name on a secure .xyz URL. 

Islands.xyz is building your passport to the metaverse. They help creators build their own NFT communities, thereby empowering communities of varying sizes to manage digital assets and pay projects & people globally.

PartyBid enables users to pool capital and bid on an NFT. They focus on a core principle of allowing internet strangers access to expensive assets while experimenting with different formats to make parties successful such as token gating, creator fees, and private parties. 

Another example is Koop, a platform allowing users to collectively own NFTs and projects, as well as generate a social reputation by becoming an investor, contributor, and/or collaborator. 

Myco helps communities grow into thriving ecosystems using novel social spaces and powerful ownership rewards. They are helping a new generation of social clubs launch themselves with a foundation for long-term sustainability.

Mirror’s crowdfunding capabilities allow for capital to form and back an ambitious mission early. Examples of successful Mirror crowdfunds that have initiated new projects and new collective ownership incentives include BLVKHVND, KrauseHouse, and even PartyDAO.

Protocols: protocols, smart contract building blocks that be used by anyone/any DAO

CyberConnect is a decentralized social graph protocol built with IPFS and Ceramic. It creates a data standard, storage infrastructure, and recommendation indexing system for social connections, providing a universal data layer for the next generation of dApps to create their own context-specific social functions.

Mem is building tools for the social layer of web3. On Mem, users own their friend graphs, explore the blockchain & earn by sharing knowledge.

Syndicate DAO is transforming how the world creates value by democratizing investing through an investing protocol & social network. Their first product allows anyone to start an investment club on Ethereum at extremely low costs, bootstrapping Investment DAOs.

Gnosis Safe is the leading tool to collectively manage digital assets on Ethereum. It’s a smart contract wallet that supports ETH, ERC20 (tokens) & ERC721 (collectibles, such as NFTs).

Juicebox is a community fundraising tool. It allows you to fund your project while giving ownership to your community by minting an NFT, and is combined with a primitive-like Gnosis to unlock mass capital formation and coordination. This combination was behind prolific cultural moments such as ConstitutionDAO. 

Public Goods: decentralized schema, storage, userowned identity

One of the building blocks of web3 social is ENS (Ethereum Name Service) -- a user’s web3 username. It’s the most widely integrated blockchain naming standard. It’s hard to connect with a 0x address so ENS humanizes wallets and is the crux of web3 social.

Ceramic is a decentralized, permissionless data streaming network. Users store streams of information, as well as files, onto the decentralized web. 

IDX is a new decentralized identity standard for connecting your digital identity, built on Ceramic. By giving users control over data discovery, sharing and permissions, IDX is helping to realize the vision of a user-centric web.

Ecosystem Growth

Other projects are catalyzing the growth of the broader web3 social network.

Seed Club is an incubator for web3 communities and DAOs. They provide mentorship, thought leadership, and programming to help communities bring the future value of their collaboration, creativity and connection into the present and turn their social capital into digital assets. 

Forefront is a social token community with the sole purpose to help tokenized communities thrive, and to ultimately be the leading platform for insight and development across the social token community.

Thank you to Mark Beylin, Jake Udell, Jihad Esmail and Nicole d'Avis for their edits and feedback.

Last week, for the second section of Forefront Digital Economy highlighting the most thriving Newsletters in the Web3 space, the ten nominees of the race accumulated a total of 37,235 votes, confirming our assumptions that there's a real craze around collaborative curation.

This project is centered around the $FF community. Curation is entirely in your hands, and we're excited to see the outcome. We saw a ton of activity around the Canon in the last two weeks, and we expect to see even more for this third section! Together, we can push forward at the forefront of community curation and tooling.

This week, we're releasing the third section of our Digital Economy Canon, showcasing the best Tokenized Communities. As communities are really at the heart of this revolution, we've decided to highlight 25 of them, organized into five categories (Social DAOs, Collector DAOs, Investment DAOs, Service DAOs, Up and Coming DAOs).

All these new communities leverage social tokens to facilitate collaboration and create trust between individuals worldwide and have the potential to revolutionize the way we work together.

Winning the race this week will be challenging, and we count on every $FF Holder to vote for their favorite ones, electing the five communities that will be showcased in our final report.

https://forefront.market/canon/communities

Let the Race Begin!

Every $FF holder can vote on their favorite community proportional to the number of $FF Tokens they hold. The five communities that will get the most votes will be highlighted in a final report along with the winners of the other categories and will receive a special edition NFT.

The vote will be open for a period of 96 hours starting on Wednesday, December 8th at 12:30 PM PST. Vote by following the link below.

https://forefront.mirror.xyz/token-race/bafkreihphp7h7l54sg2skngittwubzixerzqygvfc665i5swwwkbs5f2by

Let us know your thoughts by joining the Forefront Discord, discussing the canon in our public channel #📜-canon, and suggesting new items to include in future editions.

We are excited to have you with us and build this new digital economy together.

Something is happening to brands…

We’re seeing it in the marketing folks lurking in Discord servers, we’re seeing it in Gen Z aping into meme coins, we’re seeing it in beer companies launching NFTs and buying .eth addresses. Brands are starting to think about Web3, not only in the surface-level ways described above, but also in ways that are far more meaningful, regardless of whether they fully understand it yet or not.

This thinking is already buzzing throughout social communities like Friends with Benefits, Bored Ape Yacht Club, CryptoPunks and Nouns DAO, communities that are driving the concept of ‘brand’ as something more fluid, valuing authenticity over control and consistency. By their very nature, these brands are permissionless.

The concept of being permissionless is* the *most powerful bootstrapping tool for a brand. It’s the potential to redefine the anatomy of a brand itself, the ability for members to create value however and whenever they feel without permission, combining the attention and ownership economy to distribute a brand between an entire community that owns it.

To provide some historical context, modern brand communications began through a one-to-many broadcast medium, an authoritarian-like perception of brand through curated channels like newspapers, TV and adverts––a sort of psyops on the masses.

Then Web 2.0 and the introduction of user-generated content forced brands through the fractured lens of social media. Without this broadcast control, brands leaned into covert exploitation through social listening, pyramid scheme referral programs, and preying on cultural movements in the name of reach.

In this article, we'll dive deep into the issues that plague web 2.0 today, unpack a framework that defines three key principles of Permissionless Brands, and share case studies that are manifesting this potential. Then we'll wrap up with additional takeaways for how Web 2.0 brands can prepare themselves for a Web3 world.

Brands, Control and Culture: How community changed the brand

‘Brands’ have always had a tricky relationship with controlling their place in culture. In the early days of Web 2.0 (1996), an email campaign to boycott Tommy Hilfiger was sparked by rumors that the designer had made racist remarks on the The Oprah Winfrey Show, saying “If I had known that African-Americans, Hispanics and Asians would buy my clothes, I would not have made them so nice."

The rumor stemmed from the fact that wearers of Tommy Hilfiger couldn’t believe how a brand like Tommy Hilfiger, which made clothes for runways and the preppy elite, could accept their clothes being appropriated for streetwear. While these rumors have since been proven false multiple times, including confirmation that the designer was never even on the show, they still resurface on social media today –– decades after they never happened.

The persistence of this digital urban legend suggests two things: 1) there is a pervasive distrust in how brands control their image, compared to how they operate behind closed doors, and 2) brands rarely, if ever, have the final say in how their brands are integrated in the real world.

“A brand has no objective existence at all: it is simply a collection of perceptions held in the mind of the consumer.” – Susan Fournier, Harvard Business School

The concept of brand is, by design, a manifestation of the community which adopts it into their lifestyle. Without the community there is no brand. This truth has been relentlessly proven for brands like Clarks (utility wear), Adidas (sportswear), and even Brandy Melville (prepwear), which have been reappropriated for mod and punk, streetwear, and more recently, cottagecore subcultures.

Fast forward to the present day, and brands continue to force a broadcast approach through an even more fragmented digital realm, leaning on 360º integrated marketing plans, invasive targeted ads, user segmentation and multicultural marketing. In the ‘peak influence’ era, where social media was manicured and gentrified, brands felt they were able to control their place in culture by selectively partnering with the influencers who they thought could further their reach.

But the tensions between these relationships were becoming more evident. There’s the famous case of Abercrombie & Fitch offering money to Mike “The Situation” from Jersey Shore to stop wearing the brand’s clothing, as well as the dilution of the impact when mega influencers like Kim Kardashian work with so many brands their followers aren’t quite sure what they even stand for anymore.

And as influencers grew their audiences into communities and some became true content creators, something shifted: those who were previously paid to sell teeth-whitening products were now launching their own merch lines, licensing deals and building toothpaste empires.

By structuring a relationship between influencers and brands based on fees, brands adopted an approach of buying their way into communities. Ultimately turning the influencer into a contractor and establishing a dichotomy where the brand and influencer exist in separate realms with conflicting interests.

And herein lies the issue: brands thinking they can buy their way into others communities, rather than truly integrating and empowering a brand with its own community.

A Web3 Revolution

Web3 technologies have the potential to truly shift ownership through concepts like decentralization and transparency, challenging the broken relationship of control between brands and consumers. However, like all technologies, the morality of this tech is defined by how we engage with it.

So for web3-native brands, like Bitcoin, Ethereum and other nascent blockchains without any central CEO or marketing director, they used mimesis to create communities of brand maximalists, which could be easily remixed and ‘shilled’ into existence. Today however, while we're still seeing memes shilled into existence, we’re also seeing something new emerge.

Welcome to Permissionless Brands

Let's take a look at key features of those that are pioneering and defining this new landscape.

1) Adaptability

2) Humility

3) Decentralized Ownership

1) Adaptability = dynamic bootstrapping

For new brands forming in the Web3 space, being permissionless means the ability to bootstrap and adapt the brand at the speed the brand evolves. It’s the ability to level up as you go, a network effect that challenges the conventional model of external agencies, consultants or ‘in-house’ talent and emphasizes purpose, not perfection.

Through ‘in-DAO’ branding, we see realtime permissionless brand innovation. Members might create alternative logo designs, curate a DJ set, put forward a proposal for a growth strategy, and invite friends without anyone explicitly asking them to. Here, each iteration mutates the brand to reflect the personal tone of the member.

We’re seeing this in the hive mind of PHLOTE, where people are solving UX and logo design problems. It's cropping up in the Discord stages everyday, where over 100 people in the community are collaboratively working together using tools like Miro, Figma, Googlesheets. And we're putting it into practice at Protein Community with a series of workshops, progressively defining Good Growth through continuous collective refinement.

2) Humility = the community is always right

For too long, Web 2.0 brands have been ‘telling’ consumers what to buy and when to buy it, leveraging social listening and targeted ads in order to gain a competitive product-market fit.

However, web3 brands can leverage distributed decision making and collective steering in the form of open discussion around the brand, to lead to instant community market fit.

The idea of bringing power back to the community is the shift from "user-created content" to "user-owned content." It's the reason we've seen DAOs explode this year, whether that's voting collectively on the direction of the brand strategy, proposing strategic partnerships, or even debating the value of something going to a market.

The ultimate trend in DAO governance, however, is that more and more power is going to be placed in the hands of the community. Because when it comes to community market fit, the community will always be right.

3) Decentralized Ownership = tokens for everyone

Social Tokens are a type of this digital asset that are backed by the reputation of a community, individual or brand. We like to think of them as a tool for cooperation and coordination, where value is created through an individual's or community's interactions and reputation.

One form of social tokens are stonks (meme stocks). Something all too often forgotten is that publicly traded companies are owned by decentralized shareholders, with actual legal and social responsibilities to them. That said, most corporate accountability is almost nonexistent in 2021 as financial giants, legislation, and powerful boardrooms have spent decades conspiring to decouple the shareholder from their shareholder rights.

But stocks are just one method of achieving decentralized ownership that's been co-opted. What can social tokens provide when they're developed for the very communities that have been building the brands themselves, as in the case of Clarks and Adidas? How can we bring power and ownership to these subcultures and communities that have already brought the brand to new heights after claiming ownership over the brand themselves?

The reimagination of social tokens, digital currencies, and ledger-based social exchange are ushering in a revival of cooperative economics, wherein Web3 brands can, from day 1, integrate and distribute ownership to the early adopters and brand ambassadors shaping the brand.

Now that we’ve explored three key characteristics of Permissionless Brands, let’s look at some case studies:

Bored Ape Yacht Club

Bored Ape Yacht Club is a series of 10,000 unique NFTs, where each Bored Ape is “programmatically generated from over 170 possible traits, including expression, headwear, clothing" all associated with different rarities.

While at initial launch, Bored Apes sold for 0.08 ETH, six months later they were selling at a floor price of 39 ETH. At the time of writing that's roughly $180,000.

How? The answer is adaptability, ownership and community.

For owners of Bored Apes, they don’t just change the profile pictures because they want to signal their status to the brand; they also do it because it’s in their interests to promote it. Why? Because the NFT contract states the Bored Ape owner has full commercial rights for the apes that they own, and holders therefore own a small part of the entire Bored Ape ecosystem.

This recently released Bored Ape roadmap 2.0 shows the reach and fluidity of the Bored Ape Yacht Club brand vision, exploring trademarks for streetwear and mobile applications, and bridging their brand across different aspects of culture.

At the same time, because Permissionless Brands like BAYC grow through the community who hold Bored Apes, the brand itself is open for cultural observations from outsiders at a very personal level.

In cases like this, we’re seeing a perception of the brand that was unlikely intended by BAYC, but is a consequence of the status symbol and late capitalism, which it has created through its ownership. Either way, the BAYC community now has an opportunity to respond (or not) to this feedback and to rework its community structure (or not).

This is an example where a permissionless brand can exist, giving ownership and commercial rights to its members, but without full control of what others see when they look at those who represent the brand.

Friends with Benefits

Friends with Benefits (FWB) is a social DAO at the intersection of crypto x culture, a space for people to come together, hangout, and collaborate. While currently living primarily in a Discord server, FWB is constantly exploring ways to expand, whether that's creating City DAOs, IRL events, partnerships or launching products with instant Community-Market fit.

When FWB launched a year ago, the price of entry in the form of 75 $FWB was roughly $20. Almost ten months later (September 2021), that entry price was almost $14,000.

While this model for entry is being questioned by the community for its scalability and ethics, using a social token for access has created a powerful sense of ‘exclusivity’ unparalleled to most brands in culture. For those who are on the threshold of the 75 $FWB needed for entry, the social capital vs financial capital is a constant test of brand loyalty.

This intimacy between the individual and community makes FWB a pioneer in the model of Permissionless Brands. Its adaptability to build in the open leads to vision workshops with hundreds of participants and hackathons, where members launch projects in days.

It’s also through these kind of contributions that members are paid in a mix of $FWB tokens and USDC (a stablecoin whose value is mapped to the dollar), giving members more decentralised ownership and ‘skin in the game’ every time they create value for the brand itself.

Another example of FWB's approach is the evolution of its membership through its City DAOs and scholarship programs: new onramps that create a more accessible entry point for new members. The motivation to stay truthful to FWBs original perspective, being a diverse space at the intersection of crypto and culture shows the adaptability to innovate and the humility to listen.

While these examples show the potential of brands in the Web3 space, the incentive for permissionless brands can become a dangerous formula for brand confusion, disinformation and bad growth. Let’s explore how...

The Story of Loot, $AGLD, and Bloot

Loot is an NFT project made up of 8,000 text files, each containing a random set of ‘in-game items’ for a game that doesn’t exist yet.

When the project launched, Loot was able to be claimed by just ‘paying gas’ (small amounts of Eth needed for a transaction to be recorded on the Ethereum blockchain).

Within days, millions of dollars worth of Loot was being bought and sold. While on the surface, this price is pure confusion, but for those who understood...Loot was the holy grail for Permissionless Brands; a minimal foundation that allows others to build entire ecosystems on.

Almost immediately, the community members had released visuals, extensions and microgames to make the text files more tangible, expanding the Loot ecosystem. The most significant was a digital currency $AGLD, airdropped to all Loot holders.

While the originator of the Loot project (Dom) and the creator of $AGLD were not connected on the project, $AGLD (a digital cryptocurrency) at one point reached $5, giving roughly $50,000 USD to every Loot holder. This value creation for a brand and community, in a matter of days, showcases the extreme potential of Permissionless Brands in Web3. For $AGLD, it was the community – the Loot holders – who adopted it and made it real.

Then, in the flurry of expansion, variations on Loot started appearing: Loot for CryptoPunks, Treasure for Loot, and the infamous Bloot (not for weaks). Bloot quickly took hold as an alternative to Loot, with ‘armour’ like ‘silver nipple rings of gains’ ‘shitty shoes’ and ‘ball gags’.

While initially Bloot rode the brand hype of Loot, quickly inside the Bloot brand, the tone turned to toxicity and rivalry. While the Bloot value has since plummeted and the project pretty much died, the lesson is real; a brand is only as authentic and valuable as the community that drives it. In the nature of a Permissionless Brands, cultural hijacking can be very real.

Mapping Web3 onto Web2

For established brands, entering the state of permissionless is a harder journey. But don't worry — if you're reading this, you're still way ahead of the curve.

At best, the inevitable shift towards a Web3 world is an opportunity to scale your brand and build lasting relationships with your communities. At the worst, it means giving up some control, ownership and having to genuinely listen to your flaws while rebuilding with your brand champions. It’s ultimately about taking the features your brand has and putting them through the lens of adaptability, humility and decentralised ownership.

Braintrust

Brands like Braintrust have done just this. Their story began as any other talent network would, building up a community of talented freelancers, as well as a solid roster of clients in this age-old matchmaking scenario.

However, through the introduction of $BTRST, a DAO token, they’ve created a shared value system where talent is able to earn bounties or token rewards through strengthening their talent network, taking classes to learn more about the platform, referring more clients and even designing emojis and GIFs for the DAO’s Discord.

While the brand helped craft starter assets for the community to work with, determining the copy, tone of voice, and creative direction of onboarding new members was left almost entirely up to the individual. It was a much more dynamic and open-sourced approach than the endless rounds of feedback brands typically go through with micro-influencers creating a #SponsoredAd.

Going forward, members are able to initiate proposals and vote on important topics, including determining the commission fees that Braintrust should take in. They're ideating on new token perks (insurance for freelancers anyone?!). And the token's already been developing some new market mechanics––clients are able to buy $BTRST as a way to prioritize their job listings and cut through the noise.

In this case, the adaptability in bootstrapping their talent network, humility to allow their community to shape key decisions, and then decentralization of ownership through tokenomics has allowed Braintrust to do something that no freelance union has ever been able to before. They’re building a brand where their community can actually collectivize their participation and own.

The Hundreds

Another good example of mapping Web 2.0 onto Web3 is in the case of streetwear brand The Hundreds.

Bobby Kim, the founder, is no stranger to musings on blockchain technology. In past blog posts, he writes on the creative potential for minting NFTs as an alternative to courting art galleries and publishing houses, to put his photography work into the universe. The potential for Web3 was clearly brewing in this innovator's mind.

Then, on August 31st, 2021, The Hundreds decided to fully launch into the Metaverse, offering their community an opportunity to mint 25,000 unique combinations of their iconic “Adam Bomb” logo. They built in quirky personal touches that play right into the mimesis, scarcity and adoption of crypto, creating a mechanism where NFTs not sold at the end of mint period would “blow up”, marking a poetic execution of a fixed cap supply.

Similar to previous NFT examples, by joining the “Adam Bomb Squad” (ABS), community members were signing up not only for ownership into The Hundreds brand, but also for unique perks, including exclusive merch and early links to drops.

The whitepaper continues,

“We are working on technology to allow Adam Bomb Squad NFT holders to 1) buy The Hundreds clothing featuring their bomb, and 2) be rewarded for the sales on the clothing to others. We want The Hundreds to win, but there’s no reason why our community shouldn’t also partake in the upside.”

If there’s one thing to note, it’s that none of the mechanics outside of the NFT tokenomics are really groundbreaking to streetwear or fashion brands. The idea of exclusive merch, early access, and turning brand moments into collectibles is (for better or worse) native to what streetwear has become in the age of StockX, Yeezy drops, and Grailed.

Rather, what's unique is the ability to construct collective value and mutual interests through a digital NFT that positions The Hundreds and its community of ABS holders in the same boat. It’s a way of going public for a privately owned brand, along with the Discord and social mediums that facilitate participation, and begin to dissolve the split between brand and community, where the two are one.

These examples mark only the tip of the iceberg of how legacy brands can tap into tokenomics, NFTs, DAOs and blockchain to unlock the true creative power of community.

On Letting Go and Becoming Permissionless

As we’ve seen, what’s exciting about Web3 is that it’s a constant social experiment, permanently in flux. Brands that step up now will define the conversation for brands of the future and learn with their community as they go.

We advocate for ‘progressive decentralization’, or making a series of decisions that bring your brand closer towards community ownership. After all, it’s a big decision, and once you embark on this journey, you open the floodgates of philosophical questions regarding governance and voting rights to holders over its future.

It's not about dropping a shiny NFT collection or tapping into crypto slang like "gm" or "wagmi", but instead, this driving shift into Web3 will force brands to relearn and restructure the values and configurations of your organization altogether. In short, shifting into Web3 is not a marketing decision, it's a philosophy in practice.

Ultimately, it means letting go of the idea that you, and solely you, possess permission to tell others what your brand is. It means seeing misunderstanding, criticism and feedback not as an attack or assault on a brand you’ve worked so hard to create, but rather as a gift that someone cares enough about your impact on the world to try to help improve it.

It means seeing the dissolution between brand and community, where brand is community, and community is brand.

To help along with the journey to becoming permissionless, we've put together some Web3 thought-starters for brands:

• A fashion brand launching a competition for fashion designers pitching a new concept collection; each submitter receives tokens (which they can hold or sell after receiving), while the competition winner receives additional tokens and revenue shares for their design and sales

• A consumer tech brand could provide NFTs for each product purchase that provide holders the opportunity to propose new product ideas, vote for new product features, and tap into exclusive customer support

• A brand with a humanitarian lens could create funding pools through limited sales where community members could direct reinvestment into specific parts of the brand growth, community initiatives, or redistribution

• A brand with large global impact could publish on-chain proposals and updates to major brand decisions building history of documented transparency with community

Each of these examples create a long term relationship, where your community is involved in and can claim ownership over existing processes within your brand – from start to finish, and beyond.

So, as more folks from brands enter the Web3 space, we encourage you to think about this: What aspects of your brand's operations can you partition to the community? What aspects can they truly own and participate in?

To leverage brand jargon, Web3 permissionless branding is the ultimate flywheel, in which the communities participate in the flywheel, shape the brand, and then become the ultimate direct "consumers" of the brand.

Brands that continue to stick by their guns, touting "brand values" and campaigns over true decentralization, will be left in the past, while their communities which used to love them will move onto brands they can own and build – with or without their permission.

-- Fancy and Chu

Disclaimer: This article was originally written in October 2021. Some references and case studies may have developed new trajectories since original conception; but all principles remain intact.