Decentralized Community Building Guide #5: Turn Members into Participants and Builders

Original: What We Can Learn from Decentralized Community Building[07/21/2022]

Written by: Bethany

Translated by: Misaki, Diamond, WhoKnows DAO

Although web3 has a data-first characteristic, community remains the spiritual pillar for builders; earlier this year, the Devconnect conference was held in Amsterdam at a pop-up shared office that accommodates more than 500 people.

In the era of ownership economy, whether members in web3 communities actively interact is as important as having users in the web2 era. Many builders and founders ask, "What is the web3 conversion funnel? How do I turn people from casual observers into community members, and then into active participants in the project?" While there are no astonishing answers to this question (just as there are no universal answers in the classic marketing funnel of web2), here are some findings I observed from my research project (and a misconception).

Understand Who Your Audience Is (and Who Isn't)

The most impressive communities I have seen clearly understand who their audience is. Crypto Coven exemplifies this—pursuing a "female" culture in the web3 world and defining itself as an "anti-crypto bro" culture. From the moment you land on their website, you are transported to a different place filled with witchcraft, folklore, and prophecy.

While you might intentionally target an audience for your project like the "High Witches" team of Crypto Coven, often the team naturally finds its target audience. Index Coop is an example of this; as each new product is launched, the audience of DeFi evangelists gradually becomes apparent. With each additional new product, a new sub-community niche market emerges on Index, each contributing to the DAO in its own way.

In contrast, the project Helium, founded in 2013 as an IoT company, has attracted many brand new crypto users. For many of them, Helium is the only crypto project they participate in, and the community style is influenced by the users in many ways. Due to the significant audience differences, it is impossible to find a one-size-fits-all approach to govern the community.

From the moment you land on the Crypto Coven website, you are fully immersed in another world. The self-selection mechanism helps them find and attract the members that best fit the community. Image source: https://www.cryptocoven.xyz/lore

Realize That the Most Passionate Members Are Willing to Work for Free

I once believed that most of the energy in web3 came from the intrinsic incentive mechanisms behind each community action. Whether you are claiming bounties, recommending new collaborators, or contributing in other ways, it seemed to me that all actions would receive some incentive or compensation in return.

However, the deeper I dug into the structures of these communities, the more I found that the effects of incentives are minimal, even in web3. One case is that hundreds of people donated to CabinDAO's initial vision to fund creative buildings for emerging artists, but individuals did not profit from the final outcome. 17,000 people contributed to the ConstitutionDAO's crazy crowdfunding campaign merely out of curiosity, with no hope for investment returns. But people invested not only money but also time. Danny Aranda, a core contributor to PartyDAO, started in the same way as other participants. He said:

"Like everyone else, I was a member of the DAO. I initially contributed to the project in a very organized way, completely voluntarily. Later, there was a governance proposal suggesting they should pay me to do more work, and from then on, I worked full-time for the community and got paid."

Danny provides a great example of how projects assess their market fit with the community: If someone is willing to work for free (at least initially), then you've found the hook.

Gitcoin surveyed a DAO with over 400 members, and nearly half of the respondents indicated that the DAO was not their primary source of income. (Interestingly, this proportion is the same as the ratio of those who say they have at least a year’s worth of savings, so financial security helps contributors to the DAO engage seriously in unpaid work). One of my favorite cases is Numerai's "Council," which also received no compensation, but as elders, they are well-known, and they indeed all have capes; the team wore capes at offline meetings and was incredibly excited.

It should be clear: I recommend paying members who work hard to contribute to the community. I am well aware that many projects have thresholds to transition from free labor to rewards, and finally to full-time paid work. I just noticed— even in the hyper-tokenized world of web3, sometimes you can buy some cool-looking capes for great people to do great things.

Numerai has been looking for unique ways to reward contributors to their project, including recently hosting events to give away free "NFTees."

Image source: https://twitter.com/NumeraiCoE/status/1547243673519214593

Focus on Small Core Builder Teams and Large Promoter Teams

For an external observer, using the total number of Discord community members as a measure of community activity is misleading. Even the Uniswap community, which has tens of thousands of followers, and the Helium community, which has hundreds of thousands of followers, have relatively small contributor teams. As a project leader, it is easy to be drawn in by the endless demands, requests, ideas, and suggestions from the community. However, only a regulated and constrained growth approach can guide you on the right path. For most projects, the size of the core contributor team in the community is much smaller than you might think.
The $WRITE Race by Mirror intentionally showcases a product-led community strategy, which is one of the best examples I have seen. Over six months, Mirror invited authors to submit content for that week’s competition, and token holders voted to decide on ten new members to include each week. They quickly became early users of Mirror, finding a sense of belonging in this high-quality writer community while providing a lot of information to the product and protocol development team.

Finally, I want to point out that some DAOs and many NFT projects can quickly find a simple and effective way to turn members into community promoters. This could involve encouraging them to actively showcase NFTs (like Bored Apes), funding projects while enhancing brand awareness (like Nouns), or even actively tweeting using memes and pfps. The main reason for choosing the Crypto Coven NFT project for research was that I received a high level of community outreach service from the Witches website during the initial Twitter community research.

Eye-catching collaborations and hype, such as promoting this inflatable Bored Ape for NFT NYC week, are popular strategies in the web3 community to increase project visibility.

Image source: https://www.wsj.com/articles/marketers-at-nft-nyc-upbeat-on-brand-building-in-the-metaverse-11656324000‌

Note: Facilitating Communication vs. Genuine Community Interaction

Going through the motions or simply mimicking the operational model of another DAO and crypto-native project is a mistake. The early builders of web3 communities are also users of Loot—Conway Anderson has observed this in many projects he has participated in. He said:

"If you just create a Discord and then funnel people in, nothing will happen. No one really knows what they want to do. The best DAOs/products in the field usually gather a group of people to do things, and then larger community members start thinking, 'What if… what should we do?' Usually, this is when thresholds for others to enter are set."

Achieving this level of user engagement relies on the unique aspects of web3 projects—elements that legitimately exist and are impossible in the web2 world. Rafa believes:

"I think what makes web3 special is that before its emergence, many protocols were not public infrastructure, just private. Building a community around 'private infrastructure' that is not merely a 'fan club' (like Apple) is indeed difficult, and maintaining this community based on private infrastructure is even more challenging. Today, the emergence of web3 gives us a unique opportunity to discover the power of community promotion. You can stay connected with many communities, customize messages, automatically translate, crowdfund, anyone can send money to others, and collaborate to gather resources."