Why is it said that tokenized communities are the future of work organization?

Original Author: jihad esmail

Original Title: 《Tokenized Communities》

Compiled by: Amber, ForesightNews

Web3 introduces a new type of organization ------ tokenized communities.

While they share many similarities with more traditional organizations, the economic models driven by tokenized communities are fundamentally different from previous mainstream organizational forms.

For example, we currently value traditional companies based on their assets and cash flows. Companies with more capital, or those that have a clear expectation of accumulating more capital in the future, naturally receive higher valuation "ratings" than others.

However, this valuation method is one-sided. Jacob Horne pointed out in his article on "Hyperstructures" that certain crypto protocols are valuable not because of cash flows or the assets behind the protocols. The value of these special "organizations" actually lies in the shared ownership of the protocol by those who build and use it.

In this article, Jacob also emphasizes the "threat of fees." The level of fees charged by a protocol directly affects its attractiveness to users, which in turn directly impacts its value; rational token holders will not arbitrarily raise fees for short-term gains. In fact, adjusting the fee structure of a protocol is one of the most valuable rights in governance.

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

This article will explore what tokenized communities are, how the value of this new organizational form is generated, and why tokenized communities will bring transformative means of value creation and distribution.

What are Tokenized Communities?

Tokenized communities can take various forms, but they can be defined in the following ways.

1. Tokenization: Organizing and coordinating through on-chain consensus tokens;
2. De-platformed: Essentially not linked to any centralized platform or tool;
3. Self-governing: Leadership is distributed among multiple roles rather than concentrated in a specific individual;
4. Collective governance: Managed by all token holders;
5. Meme-driven: Spreading through memes based on consensus;
6. "Positive-sum game": Ensuring the economic model is sustainably expansive;
7. Aspirational: Actively striving to gradually achieve the first six standards.

In simple terms, a tokenized community can be understood as a "democratic," "self-governing" community organization form that uses tokens as the primary means of coordination, dedicated to the spread and development of consensus memes.

A tokenized community does not need to have centralized planning or task-driven initiatives from day one. Generally, tokenized communities do not require centralized "leaders," but rather develop and achieve new narratives through decentralized means.

Let’s take a closer look at each characteristic.

Tokenization

What does it mean for a community to be tokenized? Simply put, tokenization means that a community is using tokens as its primary means of coordination. Here, tokens can also refer to more influential memes or representations of value collections.

For example, FWB is tokenized. Membership is limited to token holders who exceed a certain threshold. Activities and various aspects of content within the community are directly linked to the tokens; in simple terms, life within FWB revolves entirely around the tokens, which are both the driver and the result.

In contrast, while TIME magazine has launched an NFT series, this does not mean that TIME magazine has become a tokenized community. This is because the user base of TIME magazine has not utilized tokens to drive any activities or organizations around the brand itself.

De-platformed

Tokenized communities are de-platformed social networks.

Since members of tokenized communities use tokens as their primary means of coordination, they are likely to resist being directly linked to or dependent on any communication tools or social media platforms. They are more enthusiastic about decentralized infrastructure solutions.

For most tokenized communities today, a good way to test this is to ask: If their primary communication tool (like Discord) disappeared, would the community still exist?

De-platforming means that tokenized communities can truly achieve globalization and openness.

Self-management

In self-managed organizations, leadership is distributed across various roles rather than being held by individuals.

In a community, there is not just one leader, but many. The hierarchy is dynamically determined based on the specific functions performed, the scope of decision-making, or the context of the work.

Tokenized communities enable us to organize and coordinate tasks among a group of unrelated individuals and achieve some goals.

Collective Governance

Tokenized communities are governed collectively.

This does not mean that token holders vote on every decision within the community. Rather, it means that the power of the DAO ultimately resides with the token holders.

Tokenized communities ensure that core contributors are elected in some manner and create, edit, and approve proposals for the entire community. The most common manifestation of this is treasury governance ------ members of the tokenized community have a say and voting rights on how the community treasury is allocated.

While leaders may drive the development of the community, the "supreme power" of the community always belongs to the entire community.

Meme-driven

Without a shared meme driving the community forward, collective governance is meaningless.

Tokenized communities strive to achieve a collective goal or uphold a set of shared values. In other words, the goal of a tokenized community is always to use tokens to coordinate various tasks, ultimately achieving the spread of the meme (consensus).

What I mean by meme actually refers to an idea or cultural element that evolves as it spreads throughout the network.

Here are a few representative examples of "communities":

• Krause House: Owning and operating an NBA team.
• Gitcoin: Supporting and funding public goods.
• Forefront: Supporting and building tokenized communities.

Meme-driven is a necessary component of tokenized communities ------ it makes "public sharing" valuable.

"Positive-sum game"

Tokenized communities are positive-sum.

Tokenized communities create value by establishing scalable value that aligns with community consensus based on existing protocols and information. Despite being open-source and having almost no "proprietary" resources, tokenized communities create value for the entire network through incentives for contributions from token holders.

Aspirational

Finally, tokenized communities are aspirational.

While using tokens alone does not make a community self-managing or decentralized, it is difficult to maximize value unless these principles are adhered to.

However, no organization will perfectly meet the first six standards from day one. The process of a community gradually striving to achieve the above standards is, in fact, the best illustration of "progressive decentralization."

The Economics of Community Tokens

Before discussing the economics of community tokens, let’s reiterate a point mentioned earlier: tokens are an investment in consensus. Tokenized communities aim to use tokens to coordinate the spread of a consensus.

This has profound implications for token economics.

As mentioned at the beginning of the article, the economic value of protocol tokens largely stems from the "threat of fees." Taking this idea to its extreme, a token's governance capability is characterized by ensuring "avoiding dictatorship." As a protocol builder, you must help ensure that you are not disqualified. As a user, you must help ensure that fees do not increase. As a passive investor, you must help ensure that the protocol continues to grow.

All these goals are achieved through a "positive-sum game," ensuring that the protocol remains open and valuable to everyone as much as possible.

Community tokens follow a similar path of value accumulation. While short-term value may accumulate on tokens through threshold restrictions (such as access to Discord, content, products, events, etc.), the long-term value of tokens will naturally arise when community members begin to deepen and spread consensus.

Community tokens serve as financial coordination tools in previously non-financialized communities.

So, how do tokenized communities achieve effective incentives? This is primarily a question of how individual members and contributors are compensated so that they are not forced to allocate their time elsewhere. Unlike protocols, people need to be rewarded.

I believe this question does not yet have a concrete answer, but we have seen many imaginative experimental solutions. Paying contributors with native tokens is one way, and I believe that in the long term, there will be more creative ways to use community tokens throughout the DeFi ecosystem.

However, a key point to note is that traditional pricing models that charge directly are not inherently bad, but they should be expansive: the value obtained should directly correspond to the value created. The economic model of tokenized communities should be viewed from the perspective of creating value for the community, rather than extracting value from customers.

One Token, Multiple Communities

If tokens are an investment in consensus, not every community necessarily needs to have or create its own unique token. Protocols have already solved this problem.

The most successful protocols are built on countless platforms. Two representative examples are Zora, which aims to create infrastructure that supports millions of NFT markets, and Uniswap, which was established to facilitate asset exchanges for various applications and wallets.

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

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

This is not the only path. If each tokenized community lacks some unique coordinating token, very opinionated token economics ideas may be stifled. The key is that if a community's token only represents consensus, then the form that "community linkage" can actually take may only be the use of the same token.

Rafathebuilder also mentioned this idea in his article on DAO leadership:

The last piece is crucial. The benefits of cultivating others increase over time, surpassing the initial investment required. Therefore, the most influential people in web3 are often those who help others become leaders. This may be the killer feature of DAO leadership: a mutual growth incentive. This self-reinforcing cycle becomes a recursive process.

The same applies at the organizational level. Tokenized communities become more valuable because they enable communities to form a synergy around a consensus and improve efficiency.

Just as the largest protocols have millions of platforms built on them to serve specific users, the most successful community tokens will have millions of communities built on them to serve specific subgroups and continuously bring in fresh blood.

Thus, community tokens can be divided into two categories:

• Network tokens: Tokens representing a shared meme, serving as a "signpost" connecting other communities, aimed at spreading this consensus in a specific way or for a specific audience.
• Membership tokens: Tokens representing the "identity" of belonging to a specific community.

The Future Belongs to Tokenized Communities

Like protocols, there will also be some "temptations" that emerge and attempt to lead community tokens astray. Today, issuing tokens is almost a "no-risk, high-reward" activity. Speculation is a powerful force, which is why we see so many tokens launched every day, along with numerous rug pull incidents.

However, tokenized communities are not protocols. At birth, tokenized communities are "one token and one dream." They are an opportunity and a mechanism for people to coordinate around a shared meme. They are primarily consensus, and only secondarily protocols or products.

As the ecosystem matures, communities will realize that for participating groups, leaning towards shared network tokens rather than minting their own tokens from scratch is mutually beneficial. Community tokens will serve as "anchors" for groups that advocate the same consensus, allowing them to build on existing economies without needing to recreate their own.

Tokenized communities are the future of organizational forms of work. Let us continue to build this future.