How Nice Are Aligned Incentives?

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To get their first million or so customers, PayPal used a quite simple, but very efficient tactic:

They paid them!

PayPal used to actually pay new clients $10 to make use of their product.

(Which led to tens of millions of individuals utilizing it for eBay purchases, after which an acquisition from eBay themselves for $1.5 Billion).

Whereas this tactic has been used a ton since then (suppose: bank card firms or banks paying you a ‘enroll’ bonus), Web3 is uniquely positioned to reap the benefits of it.

For instance, Magic Square – who name themselves ‘the primary Web3 app retailer’ – simply introduced that they’d be committing $66 million value of their native SQR token for grants to tasks listed on their platform.

Right here’s why that is cool:

For one, offering grants to tasks who plan to be listed on the Magic Sq. platform is a large incentive for builders to begin constructing.

On the similar time, it helps Magic Sq. change into much less of a ghost city, and extra of ‘the place to go’ for anybody seeking to discover Web3 apps.

However crucial piece to that is the aligned incentives.

If a developer creates a killer app, and the one place to seek out it’s by Magic Sq., you’d anticipate tens of millions of individuals to go to Magic Sq..

The extra hype across the platform → the upper the SQR token is more likely to develop → the upper the worth of SQR, the larger profit to these firms who acquired grants.

That’s all a good distance of claiming:

Something attracts extra builders, the place the builders themselves may be rewarded — we’re all for it.

(If solely we might code).