Decentralized Community Building Guide

The author of this article is pet3rpan, founder of MetaCartel and member of the 1kx team, and it has been compiled by Gu Yu.

Decentralized communities are one of the most important driving forces in the crypto industry, and more and more projects are beginning to focus on building decentralized communities, but there are many difficulties and misconceptions involved.

Pet3rpan, founder of MetaCartel and member of the 1kx team, has written multiple articles on how to build decentralized communities. Chain Catcher has translated his latest article in full and supplemented it with content from previous articles, detailing how blockchain projects should establish a decentralized community.

Decentralized organizations allow work to be distributed among community members rather than being driven entirely by a top-down decision-making hierarchy. While tokens financially coordinate participants to contribute value to the network, grassroots leadership and ownership within the community make the long-term success of the token network possible.

Ownership is not cultivated through financial incentive design but through a long-term focus on community building. Without a sense of ownership, it will be difficult to attract the necessary contributors to operate different areas of a decentralized protocol, such as governance of the token network.

We can view the community building process as a funnel that takes potential members from the community discovery phase to ongoing active participation. In building this funnel, community builders should strive to achieve the following:

1. Create opportunities for intrinsically motivated contributors to discover the community

In the early stages of a token network, most of your focus should be on generating awareness at the "top of the funnel" to attract community participants.

This work may include:

• Community branding and outreach

• Content creation in media publications

• Token distribution and airdrops

• Collaborations and partnerships with other relevant communities

• Community events, such as hackathons, panel discussions, and community calls

• One-on-one outreach with potential relevant contributors

Your goal here is to primarily attract community members who are intrinsically motivated rather than those driven purely by external reasons.

Intrinsically motivated network participants are driven by internal reasons, such as alignment with the project's spirit, mission, or even other personal or professional goals. Intrinsically motivated community members form a strong community that can maintain their participation even in uncertain monetary conditions.

Extrinsically motivated network participants are typically driven by external rewards, such as financial gain or attention, and often optimize for short-term self-benefit. Extrinsically motivated community members form the foundation of weak communities and drive away other more intrinsically motivated participants. This is particularly common in bull markets, where you will notice an influx of extrinsically motivated individuals into your communication channels driven by token price fluctuations.

While people are often motivated by various reasons, the goal here is to be community-centric to attract and retain long-term intrinsically driven participants.

The biggest mistake projects make here is over-marketing around token incentives, such as liquidity mining programs or price fluctuations, which primarily attract the attention of extrinsically driven participants.

Instead, focus on creating awareness around the community's differentiators: the way products are built and designed, how to engage with the community, existing contributors, the people behind the project, its mission and values, narratives, memes…

2. Build relationships with new community members to cultivate minimally viable contributors

After attracting community members, the next goal is to understand what they want to achieve and then guide them toward their goals for minimally viable participation.

In the early stages, new community members are unlikely to be willing to invest a lot of time or energy, so they may not know their efforts will be well-utilized. The goal of minimally viable participation is to cultivate a relationship from which further trust and engagement can be built.

This process looks like:

1) Self-signaling by community members

Building relationships with every newcomer to the community is often impractical. Instead, you want to selectively focus your energy on those who want to meaningfully engage. One way to bring these people to the surface is to enable them to self-express their intentions.

This can organically occur through simple forms like "self-introduction," "I want to contribute," or "what we need," where community members can indicate their willingness to participate and express how they want to engage. This may take the form of rewards to attract open-source contributions or create structured grant programs to cater to developers or professional network contributors, such as liquidity providers, stakers, governance participants, etc.

For example, grants are more useful for those who want to contribute but don’t know how or where to start. Grant programs identify the work to be done and minimize the coordination overhead for those who want to participate directly.

The key is to ensure that calls to action are targeted at the different community contributors you want to attract, such as Gitcoin's Stewards program.

2) Building relationships and the success of community members

Once you identify community members who want to engage meaningfully, you want to better understand their goals and needs.

• What brought them to the community in the first place?

• What does their crypto journey look like?

• Are they aware of the different opportunities for participation?

• Is there anything they are particularly interested in?

• Are they doing anything else on their own?

The goal here is to first focus on building relationships, so you can better understand where someone can fit into the community and how the community can help them achieve their goals. This can be achieved through "new contributor" community onboarding meetings or one-on-one calls with your most actively engaged community members.

3) Guide community members to participation opportunities

With a better understanding of community members' contribution capabilities and preferences, the next step is to continuously share and create opportunities for them to engage and contribute. As each contributor invests more in the community, you need to match these efforts with relevant positive feedback—whether it’s social recognition, monetary token rewards, or more responsibilities.

You want to view monetary rewards as a means of recognizing the value community members bring to the community, rather than as direct incentives for participation.

3. Cultivate community ownership

Everyone wants to actively participate in community governance from the start, but the reality is that community members are only likely to develop a sense of ownership after they gradually become familiar with the community and invest enough time and energy.

Once you do this, most of the other things in between will take care of themselves.

Once community members are fully engaged in the community, your next goal is to create an environment where community members can safely express their voices and sense of ownership. This may include:

• Opportunities to influence and participate in important community discussions, decisions, and key forums. The key here is to ensure community members feel heard and empowered to have a real impact on the future direction of the community.

• Opportunities to take on increasing responsibilities through community leadership roles (e.g., running working groups), such as the Index Coop Biz Development Working Group, MetaCartel Paladins.

• Rewards for earned tokens/network ownership due to their work, commitment, and value brought to the community.

Being able to cultivate this sense of ownership is key to retaining key community contributors and participants.

4. Grant programs

At the core of grant programs is the process by which community members can request resources, funding, and support to carry out activities within the community.

Token networks require various contributions to function, including providing liquidity to funding pools, contributing to open-source software development, and even creating memes.

The core goal of community resource allocation strategies is to ensure that resources and token ownership are allocated to the most valuable and productive members of the network. Communities can achieve this goal in two ways:

1) Programmatic allocation is automatically based on pre-agreed actions and conditions, such as providing liquidity, governance voting, staking, or participating in chats/forums. Programmatic distribution requires minimal management overhead but lacks the human nuance and is often gamed to the detriment of the community.

2) Manual allocation requires community coordination and human decision-making to function, such as providing grants, hosting incentivized hackathons, managing contributor salaries/incentive programs, and grant programs. Manual allocation is operation-intensive and harder to scale but rewards the more nuanced human-oriented contributions to the token network.

We can think of grant programs as the core of how token communities manually allocate tokens and resources. They are often one of the first functional processes established within the community before taking on more complex coordination tasks.

While planned incentives are often needed to guide resources like liquidity, they are ultimately transactional in nature and cannot cultivate a community of intrinsically motivated contributors on their own. Without proper balance, programmatic distribution can severely skew network ownership toward short-term value-extracting participants, which may deter other more engaged community members from participating.

It’s best to view grant programs as tools that can be deployed both internally and externally to build the community.

• Internally: Use grants to retain existing community members, fund internal initiatives, establish working groups, and address community public goods needs.

• Externally: Use grants as a way to engage with new potential beneficiaries outside the current community, providing a platform for community members to elevate the status of beneficiaries outside the community.

Doers and leaders form the pillars of the community, and through grant programs, you can actively bolster their work and ensure they are empowered to do great work in the long term. Community building is about bringing together the best and brightest who believe in the project’s mission, and grants can play a curatorial role in this process (allocating token ownership, resources, funding, and social capital).

5. A misconception

Many times, audience builders are mistaken for competent community builders. While audience building is part of community building, it is just one component of the whole process.

Community is a long-term process. Creating temporary attention is one thing, but cultivating meaningful networks of relationships and uniting the entire community to contribute their time and energy over a period is another.

We can think of an audience as a group with "one-to-many" type relationships centered around a key figure, while a community looks more like a "many-to-many" network of relationships that is inherently more collaborative.

To build an audience, you need to be able to capture people's attention, but to cultivate a community, you need to create something that people are willing to invest their time, energy, and effort into.

In the context of a token network, if we purely build an audience network, we may end up with a large number of passive token holders. In most cases, this excessive focus will fade over time. Ultimately, those who stick around during tough times in a bear market are usually the true believers around the ecosystem.

On the other hand, if we focus on building a community of active contributors, we will ultimately have a decentralized network that can be managed and operated by a group of contributors.

We are still in the early stages of understanding how to properly build and fully leverage decentralized organizations.

Your community is the future of your decentralized network. If you haven't started yet, the best time to begin is today.