From Degen to Regen: How to promote Web3 to start a positive sum game?
Original author: Kevin Owocki, founder of Gitcoin
Compilation of the original text: Deep Tide TechFlow
Back in DeFi summer 2020 - long before the Web3 era - there was「Degens」this phrase. this memeGenerally used to describe Web3 enthusiasts who speculate on high-yield (APY) and high-risk projects.It's a playful term that also reveals the mercenary and self-interested side of the industry.
In the first two years of this decade, fueled by headlines, rising prices and FOMO, thousands of traders entered Web3 with the intention of making a quick buck. Despite a sharp sell-off this year, it hasn't stopped cryptocurrencies from becoming mainstream. Crypto ads popped up at the Super Bowl, as did news about banks using decentralized finance (DeFi). Yes, there is also, bad news about crypto companies going bust.
Sadly, with the collapse of custody systems like BlockFi and FTX, a lot of people lost their money. It's really bad for those who got hurt and it's devastating for this space.
Ever since Satoshi Nakamoto solved the Byzantine Generals Problem in the Bitcoin white paper, cryptocurrencies have experienced boom and bust cycles, which are similar to natural systems from an evolutionary perspective. In times of abundance, thousands of new projects blossom. In times of scarcity, projects fail. The survivors will become the dominant species in the next boom.
Survival of the fittest is a simple yet powerful mechanism that can be observed in the Web3 ecosystem - the fittest best meet the preferences of the market. This might explain why the Degens were only interested in short-term improvements rather than long-term successful projects, and this behavior led to their demise. It turns out that purely self-interested behaviors are inappropriate in Web3 (as they are in many places in nature).
In fact, the industry now known as Web3 has always had its other side, not just greed and profit. Cryptocurrency is a tool for building collaborative organizations and sharing resources — long-term trends that have been motivating participants.
Recently, people have become more and more aware and concerned about blockchain. A public good is something we all depend on (like open source software or privacy research), but are hard to maintain and fund.
regenerative economics "regenerative economics", the idea that money can be used to incentivize communities to solve systemic problems.Even if an open source project fails, that work can benefit other projects if everyone moves along the same axis toward social betterment. Innovate, iterate, evolve, repeat.
This is why, even in the winter of cryptocurrencies, 2023 is ripe for regeneration (Regen).
Degen to Regen
Degens came to Web3 looking for economic benefits. Regens are those who work or build in the regenerative cryptoeconomy. They have a long-term view of how Web3 can benefit the world, but not just in a financial sense.
Regens argues that the financial system can be designed to be a conduit for greater human prosperity, serving the needs of all humanity. My friend Gregory Landua, co-founder of Regen Network, believes that people have eight basic needs that can manifest in the form of capital. In addition to financial capital, there are our social, material, life, intellectual, experiential, spiritual and cultural needs.
With a programmable currency, we can program our values into our currency. Cryptocurrencies themselves have the ability to create systems that are just as exploitable and vulnerable as the existing financial system.
When a Degen makes a transaction, he is playing a zero-sum game - tokens leave his wallet and enter the opponent's wallet, and vice versa. But Web3 can also build more positive-sum protocols, expanding resource capacity over time.
A Journey Towards A Regenerative Crypto Economy
In regenerative ecosystems, there is a common thread that connects many people. They used to be Degens! Lured by the promise of a better economic environment for themselves and their families, they enter the ecosystem to make a profit.
Over time, however, they become seduced by the promise of collective action—often through contributions to a project or direct experience using it. Their attitudes and motivations changed. This is by design, built into the fabric of the cryptoeconomic system. For example, decentralized autonomous organizations (DAOs) allow people with a common mission to come together and pool resources—everyone involved is at least partially aligned in their values and commitments.
From Degen to Regen: How to promote Web3 to start a positive sum game?
Many Regens were Degens before them, and they took this path in the previous cycle, in 2017. And that's part of the reason I'm so optimistic about the future of regenerative systems. There are thousands of people who are relatively new to cryptocurrencies, have entered Web3 over the past year or so, and they may now be on the second step of their journey (aka the downside). They have made mistakes and learned from them, a knowledge base that can inform a more pragmatic approach to the next market cycle.
For those new to Web3, the window of opportunity is here to move to step three — finding the community and discovering regenerative use cases for cryptocurrencies. From there, they will build the next cycle of projects, many of which will have a positive and impactful impact on the world.
influence already exists
People sometimes say to me:"Hey Kevin, the discussion on regenerative cryptoeconomics is great, but are there examples of theory in practice? "
Regen isn't just talking. It's happening! In fact, Alejandra Borda and I wrote an entire book detailing 100 different examples of projects where people have used encryption to recreate the world.
To name a few: Proof of Humanity, Celo, Kolectivo, and Gitcoin are all doing meaningful things.
2023: The Year of Rebirth
During this down cycle, we have the opportunity to filter the noise from the signal and rediscover our purpose. Through decentralization and peer-to-peer technology, we can build a fairer and just financial system. We can bring more democratic and organic financial tools to the masses.
As individuals, we can find communities and join projects like DAO and BUIDL that can serve as the foundation for the next Web3 era.
To regain legitimacy, the Web3 ecosystem must find ways to divert capital, attention, and talent from those projects with the best Ponzi economics to those that will have the most lasting positive impact. We don't want "crypto is good for the world", we want it to be good for the world.
Many of today's most mainstream cryptocurrency projects have positive positive externalities.For example, OpenSea, the largest non-fungible token (NFT) exchange, lets thousands of artists monetize their work, a less extractive form of income than their Web2 counterparts.
Lens Protocol is a Web3 social media platform that is gaining more and more attention in the crypto space as Twitter changes. Lens allows people to truly own their data and save it for them, moving it from one site to another. Web3 social media has the potential to disrupt tech giants.
Proof of Humanity, a registry of 18,000 Sybil-resistant identities, is paying people stipends in UBI tokens. Gitcoin, a crowdfunding platform that has already funded $72 million worth of public goods, recently released a protocol that allows others to crowdfund their communities. Kolektivo is a set of protocols that allow local communities to start, finance and manage their own regenerative economies.
Web3 carbon credit systems such as KlimaDAO and Toucan Protocol allow for better, faster and cheaper carbon credit transactions. While carbon credits are not perfect, Web3-enabled systems such as Hypercerts allow users to reward projects with observable outcomes. Additionally, Hypercerts can be used in areas of impact beyond climate issues, such as education, healthcare, AI safety, and open source software.
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