Skin in the Game

The core value proposition of blockchain networks

Key Takeaways:

  • The world is rapidly moving to digital rails, changing how we work and live

  • Tokens enable new ways to organize and reward large groups globally

  • Incentive alignment creates powerful network effects through skin in the game

  • Traditional corporate structures are being replaced by more fluid, networked entities

  • In the attention economy, engaged participants become owners and growth drivers

We live in wild times. The US president launched a memecoin. His wife launched a memecoin. Everyone with minimum viable attention capture will likely attempt to launch memecoins.

The timing is perfect. The regulatory landscape for crypto seems likely to improve significantly going forward. And it will happen fast.

Sparks will fly, fuelling more innovation, experimentation and craziness that, in the end, will drive progress towards one thing: The world coming onchain.

Exciting times.

But let's take a step back and remind ourselves why this technology is so wholesome in the first place. It's easy to lose track of the bigger picture when shit's this wild.

The world is becoming increasingly digital every day. I see no reason for that to slow down or stop anytime soon.

We spend more of our time – both work and leisure – tethered to this vast, global space that is the internet. It's a wonderful invention that makes the world bigger and smaller at the same time.

Using myself as a beacon: Since going independent a few months back, only 10% of the work I do relates to my physical location. The rest happens online, with people and companies from the US to South Korea.

It's a lot of fun. And, I'd like to think, an early signal of what many more people will experience over the next decade.

As the time we spend and the work we do increasingly happens on digital rails, so should the way we organize efforts and value creation. That, at its core, is one of the key unlocks of tokens on blockchain networks.

We're so used to corporations selling their products. Power-concentrated, rigid structures that work in a top-down motion. But wtf? It doesn't reflect the ways we live our lives, nor how we contribute work hours, engagement and time.

Tokens are incredibly effective tools for orchestrating large groups of people and entities (companies, agents) at global scale.

The key word here is incentive alignment.

With tokens, we can create structures (post-corporations) that enable people to contribute to the success of a network and be rewarded with network tokens for the effort.

This creates a financial upside for each individual contributor. As the network value grows, so does your share of the network. And the more you contribute, the more you're rewarded for it.

Incentive alignment.

But also: Skin in the game.

Beyond the memecoins, the sentient AI agents and everything else, skin in the game is the novel idea.

Building companies as networks will enable new, fairer and more effective entities to grow and impact the world. A great example is Helium.

Imagine trying to build a mobile carrier network. That requires serious capital. Or not... Instead, you could let people pay a small upfront fee (few hundred bucks) for a wireless hotspot. If you have enough people do it, you can combine it all to form a mesh network.

You've now built a mobile network with very little upfront cost.

Why do people buy hotspots? Incentive alignment.

As customers sign up for the carrier service, part of the revenue accrues to the individuals that contribute their hotspots as nodes in the network.

New entities will find novel ways to compete with legacy businesses by building networks that leverage incentive alignment. This dynamic will play out with networks targeting other companies (or networks), networks targeting AI agents, and networks targeting humans. Allowing people, companies and agents skin in the game at each step of the way.

This will play out across many different industries.

Probably all of them.

I've written about the future of entertainment, IP and franchises before. I'm convinced that the next big entertainment franchise(s) will be built with this same networked approach. The franchise will offer fans ways to contribute, and a chance to be rewarded for their contributions – becoming owners of the networked franchise in the process, which further deepens their connection.

This creates a powerful, self-reinforcing incentive alignment flywheel.

Networked franchises (neo-franchises) will be successful because they will:

  • Have favorable attention economics as incentive-aligned fans become marketing channels

  • Retain more fan attention in their ecosystem through expansive second-order and derivative content created by fans

  • Grow to global scale faster than we've ever seen a franchise do before, because the network is internet native, not internet-retrofitted

It presents an interesting question. In the age of "abundant everything", attention is the scarce resource. Today, we pay for entertainment. But it's the attention we offer an entertainment property that makes it successful. So, there's an interesting trade-off. A space for incentive alignment.

There are many such interesting trade-offs in various parts of business and life. Entire value chains will be reimagined.

So as you look at the fluctuations of your $TRUMP coins – remember that there's something far more important at play here. Something that will have a much bigger impact.

Skin in the game for everyone.

As always, reach out to me if you have feedback or are working on something cool you want to discuss. (X, Farcaster, LinkedIn)