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Today’s Web3 Communities: The McMansions of the Internet

Jarrod Dicker
Jarrod Dicker
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Brian Flynn
Brian Flynn
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Matt Stephenson
Matt Stephenson
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Jack Butcher
Jack Butcher
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Jonathanglick
Jonathanglick
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September 15th, 2021

We are entering the age of living online. An increasing number of people have employment that exists only online. We have meaningful relationships that are primarily or even only online. It should not be surprising that a growing number of us -- especially we who are most intensely online -- are embracing the concept of ‘owning’ online things. A belief in the value of NFTs is a logical extension of the vitality of online experience and existence. 

As with the ‘real world,’ the things we own enable important connections to other people. If we own related things, we may share similar personalities, interests or life situations. We may have a common vested interest in preserving or increasing their ongoing value. We may also be engaged in a kind of game with each other, competing to purchase more or more special versions of the item. We are bound together by economic commitments. 

The archetypal example in the physical world is real estate. Where we live is a huge part of our identity and, usually, our net worth. By owning property in the same neighborhood, we have committed, at least to some extent, to a shared destiny. When we volunteer, for example, for an event or organization that makes the block a nicer place to live, when we organize or sponsor services that enrich the area, it enhances the value of everyone’s home. As the value of the neighborhood increases, we benefit together, both in terms of status as well as financially. As our relationships and sense of self become more embedded in the neighborhood, we become more attached to the property, deepening the connection and spurring active engagement. In healthy neighborhoods, all residents benefit from this ‘virtuous circle.’ Ownership leads to meaningful engagement which leads to increased desirability.. 

NFT collections, and especially the latest wave of ‘avatar communities’ aka PFP collections, have the potential to mirror this healthy dynamic. When we own a SupDuck or Cryptoad, we have a motivation to engage in behavior that makes everyone’s ownership more significant. As ‘residents’ of that virtual neighborhood, we all have an interest in broadening the list of ‘stuff you get’ as part of your NFT. And yet, the vast majority of these projects pay only lip service to that potential. The vast majority of projects offer only hand-waving assurances of future amenities. Rather than investing in genuinely valuable services for its community, the focus tends rather to be on shilling and stunts to generate FOMO. 

Let’s take a stroll down memory lane. In the 1990s and early 2000s, the mortgage bubble made home ownership more affordable. Builders responded by investing a lot of money to purchase land in areas that allowed for mass development of residential neighborhoods. There was so much money that developers built entire neighborhoods in the middle of nowhere with hopes of driving individual interest and eventual communities. Twenty five years later, some people still live there, some projects are completely torn down and one thing is for certain; none of them were built to last. These homes weren’t built in places that were convenient or around major metropolitan cities or downtowns driven by existing communities and culture, they were built where land was cheap. But people were like whatever. And eventually there was a huge market flippening in these spaces. 

Most of today’s Web3 virtual neighborhoods are following the history of the physical world’s McMansions; building 10,000 ‘homes’ in the middle of nowhere hoping people move in. The awareness that needs to take place in order to avoid a mass flippening is the approach Web3 takes to constructing neighborhoods. Instead of just finding land, developing homes and hoping community fosters through a shared space, developers need to invest in making sure individual buyers get value out of their experience. This means making sure that every single day, there is something happening in the community. NFTs communities can be awesome, we just need to start building shit inside of them. 

A community first approach to neighborhoods. 

In order for virtual neighborhoods to be long lasting, attention needs to move from owning space and land to developing robust services  within the areas where people live. If NFTs get you into the club, what happens once you’re in it? One likely way this question will be answered is to focus the collection community on a particular shared interest. When members share values, it becomes vastly easier to determine and develop the benefits that they will consider valuable. 

What sort of shared interests might be well-suited to token-communities? Unlike Web media, NFT communities are participatory environments. It’s not about passively consuming but actively participating with the content and community directly. Content takes on an entirely new role of creating virtual space, like physical space is a venue for cooperation and collaboration. So they can be smaller in total audience size than those required to support an ad-based business, provided the members’ commitment is sufficiently intense. So there’s no shortage of potential interests that might be addressed. 

Communities can be built around professional networks, for example. Picture an NFT collection celebrating and welcoming designers or teachers or security experts. Another possible focus could be causes, like the climate crisis or free speech. We might also see cohesive communities around hobbies (fashion! surfing! hunting!) or fitness/wellness activities (crossfit! fasting! meditation!) 

But we need to be realistic about the effort needed to create compelling experiences with these ‘neighborhoods.’.  Web3 communities need programming. In an era where NFT drops serve as a catalyst for community building, there is a tendency to hope that  individuals will  build the culture and activities of their collection This does happen but is probably insufficient for lasting value. The reason why traditional media has done a good job for decades of readership is that there is a content cadence that drives discussion, consumption and community engagement. But the real opportunity for Web3 to break out is the reverse incentive of the contribution of work. Today’s creators deal with a sort of volunteerism where the small percentage of individuals who do break through actually make money. Authenticity is lost in exchange for trying to grasp an audience, and free labor often results in… free content. But looking outside of the media to build Web3 communities is a catalyst for innovation, where content becomes the space for activities, participation and relationships. For example, in the physical world, SoulCycle has built an entire culture around physically working out but then digitally learning how to eat better and meet like minded individuals who want to live a similar lifestyle. Individuals reside in these “neighborhoods” because there is constant programming to keep them engaged and incentives to build the community up to better themselves and those around them. Purpose is driven through the development of content, and Web3 communities must proactively work to make the places where people reside a daily habit. It is important to invest in the ability for individuals to get value out of their experience, that every single day there is something happening. 

Good things cost money, and you can’t get valuable experiences without investing in the community to build them. A worthy investment for NFT projects is around education. A key value of communities and neighborhoods is that individuals are able to teach one another. We are starting to see this foster in Web3 through community driven discords, telegrams and WhatsApps but oftentimes, this is happening outside of the project owners themselves. Arguably, this is a feature not a bug as the community is free to build on top of the IP distributed by the origin creators but as we think about lasting value, there needs to be an incentive to cultivate contribution through shared learning from one another. This means that it should be instilled at a foundational level that then bubbles up through the community regardless of which platforms they are spending time with one another one. 

Putting interests at the forefront of infrastructure. 

Today’s Web3 neighborhoods are mostly being built around financial interests. And the promise of getting rich does lure people to these neighborhoods---the 10,000 houses may well be occupied, at least for a while. But we’ve seen this play out IRL, with gold-rush Boomtowns from the 1800s becoming today’s Ghost Towns, having failed to attract real residents and establish a culture. Visit one of these places today and you’ll see they didn’t get much built beyond a saloon, a place to meet up and talk about finding gold. Visit the discord of a forgotten PFP project from July and you’ll see something similar--a now abandoned general chat, containing little but a discussion of prices and sales. \n \n But there were exceptions--- some Boomtowns attracted families and developed a thriving culture, becoming San Francisco, Chicago, Denver. The great HBO show Deadwood is the story of how a historical Boomtown developed a culture and transcended the speculative interests that drew people to it in the first place. Its creator David Milch felt that a true society often starts with a “symbol agreed upon”. For Milch this can be a cross, but it can also be gold (or perhaps even drawings of apes.) And it’s that agreement that liberates individuals to participate and find their “identity in the collective.” For Milch, you can start with speculation but you can’t stop there. 

Deadwood posits that if a lasting culture is to form, it will be aided by spaces, artifacts, rituals, and symbols. And with NFTs and DAOs we might be seeing the emergence of the digitally native forms of these essential human primitives. But it’s up to these nascent Boomtowns to use them, with success being observed with the deepening the group’s interactions and the expansion of their interests and reach. Certainly beyond the narrow motives that drew people to them in the first place, but beyond crypto as well. 

On the flipside, building for interest groups has its challenges that will need to be met. By building neighborhoods around a particular interest, we are deliberately constraining the market size which will slow down value and decrease speculation. It becomes a stabler, yet less exciting investment. Why it’s critical to incorporate both financial and societal interests to maintain the right balance.

New communities are emerging on the internet by way of NFTs, giving individuals an opportunity to stake land and foster community in designated spaces constructed through residential avatars. But the approach of building communities this way is fragile. With unlimited space online and a gold rush to occupy mass areas, builders are overlooking the need for community in exchange for ownership. And that method, while momentarily successful when individuals have money to spend, deconstructs in the long run. 

NFT communities today are rewarding individuals for buying land and naming the sub-development versus what should be the true promise of crypto which is rewarding individuals that make the neighborhood flourish. It’s not the local mortgage services or banks that make a strong community, it’s the artists, restaurants and families that do. Today’s Web3 communities are building neighborhoods to attract community versus building communities to foster neighborhoods. This needs to change. 

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