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, the original author: Mason Nystrom, former analyst of encryption research organization Messari, compiled by Odaily translator Katie Ku.

By focusing on emerging trends in token distribution mechanisms and cryptoeconomic model innovations (two components of crypto business models), we can try to answer the question: where will the next wave of disruptive innovation in crypto come from?

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How do token distribution mechanisms and cryptoeconomic models drive innovation?

The blockchain network provides a "blank slate" for token distribution and cryptoeconomic models. Bitcoin's cryptoeconomic model, Proof of Work, has spawned various new PoW currencies, most notably Zcash and Ethereum. While Ethereum offers various technological innovations (i.e. Turing-completeness, smart contracts, etc.) ICO) uses smart contracts and the ERC-20 token standard to distribute tokens to participants without trust. This token distribution model is critical to the development of Web3, so we see further iterations of the core concepts: initial exchange offerings, initial DEX offerings, liquidity bootstrap pools (LBP), automated crowdfunding platforms (such as JuiceboxDAO), etc. .

NFTs are another interesting technological innovation, but it wasn’t until the deployment of NFT marketplaces like SuperRare, Larva Labs, and OpenSea that facilitated the transfer of on-chain royalties that NFTs really exploded.The next wave of Ethereum scalability solutions will be driven by design innovations in cryptoeconomic models that incentivize ZK sequencing, proofs, authentication, and network value capture.

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Economic models for the next wave of cryptocurrenciesEach wave of cryptocurrencies is dominated by new token distribution mechanisms and cryptoeconomic models, let’s examine three new emerging models:

Contract Secured Revenue (CSR), Nounish DAO and MEV Orderflow.

CSR is a cost-sharing model of the Canto network, which allows contract developers to earn income by taking a certain percentage of the transaction fees paid to the network when users interact with the contract.

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Contract Security Revenue Fee Allocation Model (CSR)

The contract security income fee distribution model means that part of the fee generated by using the smart contract is attributed to the NFT or address (such as the developer). On Ethereum, fees for interacting with smart contracts are burned, and protocols that generate usage receive no rewards for creating value, other than revenue from any application-specific transactions (such as NFT marketplace fees). L1s like Canto use CSR as a core element to coordinate developer and economic activity. Importantly, CSR NFT can extract certain fees from multiple smart contracts (such as smart contracts with different versions of the agreement).

Another L1 on Cosmos, Archway, also rewards applications on the network. Archway provides three configurable reward distribution mechanisms: Gas rebates (50% rewards to developers), inflation rewards (25% rewards to app developers), and smart contract premiums (such as custom fees).

What's more interesting is that this model can be applied to any type of application where a portion of demand or usage-based revenue should go to stakeholders such as creators, developers, and users. Imagine if TikTok’s Creator Fund (which is a big part of how creators make money) applied a CSR model that allocated a portion of inflationary rewards or ad revenue directly to content creators based on the number of views or watch time on the platform. CSR provides a business model that further harmonizes applications built on top of the protocol.

Nounish DAO distribution method

Nounish DAO auction mode - an NFT issuance method pioneered by Nouns DAO. The original method is to generate and auction a new NFT every day indefinitely. Recently, however, we have seen a wave of NFT projects adopting the Nounish distribution method, releasing multiple NFTs per day with no deadline. Such projects are of the Nounish DAO type.

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As NFT royalties face an uncertain future, two important questions loom: where will the steady income from NFTs come from, and what is the best NFT business model. Nounish DAO is a project that utilizes the Nouns auction model to continuously sell NFTs, providing a model for small communities within communities that are united by a common goal or that can coordinate around capital formation and distribution. The Nouns Generator allows anyone to create a Nounish DAO in minutes, and has supported the creation of dozens of new Nounish DAOs since its launch.

• Perhaps most notably, many of the early Nounish DAOs built with Nouns Generators were not focused on creating more Nouns memes, but instead found other outlets through innovation, as in the following three examples:

• ArtHaus - a Nounish DAO focused on working with artists, will be launched from ArtHaus DAO;

• Spores — a Nounish DAO focused on creating next-generation mixing devices for on-chain music;

BLVKHVND - The first DAO to be a professional world champion has now transitioned to Nounish mode.

The Nouns mechanism is not suitable for all types of organizations. Jacob Horne, co-founder of NFT marketplace Zora and Nouns Generator, hypothesizes that the Nouns model is most efficient when applied to general purposes rather than specific applications. A core component of this assumption is that Nounish DAOs are most effective when they can fund competing approaches to achieving broad goals, and are generally less effective when applied in specific ways for specific goals.

• Take the following examples of broad and specific goals:

• Adding Nouns meme VS. Making Nouns Movies

• Creating Renewable Infrastructure VS. Building Solar Farms

Carbon Consumption VS. Purchasing Carbon Credits

• Nounish DAO has some existing type use cases:

• Brands, Memes and IPs

• membership policy

• earmark or investment

As the Nounish DAO model has been modularized, it has started offering non-CC0 IPs (for other brands and IPs), minimum NFT purchases (for larger funding needs), Splits (for example to share funds between other DAOs), etc. . These additions and broader trials will expand the categories of communities and DAOs that utilize the Nounish model.

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MEV Order Flow/PFTF (Payment for Transaction Flow)

As MEV is split into multiple stakeholders (i.e. searchers, block builders, and proposers), applications that control users (and thus transaction flow) will be able to bundle user transactions and store them as private Meme Pool (memory pool) is sold to searchers and block builders.

MEV will be an integral part of the cryptocurrency. As applications and protocols take MEV into account when making product decisions, we may find that MEV becomes increasingly important as a guaranteed revenue stream and a core component of emerging business models.

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Towards a better Web3 business modelIn fact, Web3 has yet to standardize its epoch-making business model.Today's most successful applications rely on Web2's transaction-based model - DEXs, marketplaces, etc. These models are likely to remain popular and profitable, but programming and the ability to tokenize value also brings the potential for new business models.