Something Isn’t Working
by pfitzy12 – originally shared on Medium
Despite our best efforts to view the progress of crypto through rose-colored lenses, it’s clear that something has gone wrong. It’s not necessary to discard our conviction in software as a potential solution to large-scale coordination problems, but it does require us to reckon with the fact that it broadly isn’t right now. Some people resign themselves to protecting the hive from criticism, while outside observers lob wholesale critiques based on the actions of a few. Neither are a healthy camp to be in. What if we stopped being so defensive and actually made some changes?
We posit one overarching goal:
We need to find a stable way to build networks on the internet.
I think many of us have the intuition that the corporation is somehow anachronistic to the logic of the internet. The corporation surely differs in the bloat of middle management, the often in-person nature, control of and secretiveness around IP, but above all, the corporation differs in that it acts as though it is independent from, not dependent on its environment.
The theories of strategic management give great insight into this independent nature, specifically Porter’s Five Forces. Michael Porter teaches us that it is not how high tech an industry is or how fast it grows, but a company’s position that determines its profitability. Barriers to entry (moats), supplier and buyer power, the number of substitutes and the state of existing rivalry can either bolster or erode a profitable position. But it’s all adversarial. The corporation is completely content to raise the drawbridges and leave all outside its moat in the profit desert. It’s no wonder investing models seem slightly misplaced in the crypto era.
In stark contrast, open source software, and even more so crypto software, is dependent. We are reliant on sustainable models to fund the blockchains, infrastructure projects and other integrations we rely on. If they die, a part of our product dies. We are tied in a large web of dependent APIs. In addition, the extremely weak barriers to entry given the forkable nature of the software prevent extraction outside of the strongest of network effects.
As the legal bureaucracy of corporations repelled us, this led us to the DAO, or decentralized autonomous organization. There was an energetic spirit in the air as we collectively realized we could combine an organizational structure with payments and operate autonomously on the internet. However, the short time horizons and lack of corporate oversight led to a lot of cash grabs. Even for honest teams, the tools of liquidity mining, airdrops, governance voting cartels and other perversions of the original spirit have led to unsustainable and unaccountable DAOs. You get the feeling that many projects had no intention of lasting much longer than the time it would take to extract some wealth. Our current situation is we have many open source projects who sit at the extremes of the binary between venture-funded flash in the pan and community led and poorly funded labors of love.
Crypto is all about coordination, not competition. It’s about what we can create together that we could not do alone. It’s about user-owned networks, where the distinction between user and owner diminishes as they are properly compensated for their contribution to the value they provide to networks.
So is there a way to have less volatile tokens? Internet organizations built to last? Open source projects with embedded incentives to create network effects? Large scale coordination towards pressing societal problems? Sustainable go-to-market and growth strategies without reliance on airdrops or ponzi referral programs? We think RevNets are the answer.
RevNet is an organizational technology for internet networks. We align users, investors and teams with programmable incentives to build open source software built to last.