Web2 has strained communities and app builders alike. The Web2 user experience presents one problem—community members are not rewarded for their contributions and may be less likely to remain loyal to the app over time. Meanwhile, developers are left with the choice of fewer and fewer successful business models. Premium models, ecommerce, and disruptive advertisements remain, though community members frequently perceive these choices to be disruptive or even extractive. What’s more, Web2 leaves developers with few fundraising options, and many traditional apps choose to sacrifice equity to obtain the capital required to fund their projects.
Aligning Communities & App Builders
Web3 offers a remedy to these issues—token economies can align incentives between community members and app builders. Through this mechanism, apps can reward their communities with branded tokens for positive behavior and contributions, catalyzing engagement and loyalty while providing communities with skin in the game.
Further, token economies can facilitate new community-led governance models, paving the way for higher engagement between the developer and their community, while bolstering the community’s loyalty to the app. Community members have the opportunity to use their tokens to vote on changes to the app, resulting in better alignment with the app developer. Developers can also use tokens to unlock new business models that share financial upside with their community, making use of perks, ecommerce marketplaces, staking, and token swaps for liquidity. In short, token economies provide a host of highly sought after benefits that Web2 has failed to produce.
RLY Protocol Helps Developers
Launching a Web3 token economy comes with three major challenges: the skills are limited to a few, technological development is costly, token liquidity can be elusive, and achieving a critical mass of a new token economy is challenging. RLY Protocol—an open source, permissionless, no-fee, multi-chain developer suite for launching and growing token economies—offers a solution.
- Easily launch branded tokens. Developers can seamlessly launch branded tokens for their app to reinforce their brand. The Protocol’s robust Developer Resources and open source libraries make development fast and easy, allowing app builders to focus on other priorities. RLY Protocol’s middleware solutions enable developers to realize their vision on multiple chains.
- Launch sub-tokens. With bonded sub-tokens, developers can create a token economy with a sub-economy without sacrificing liquidity. For example, a gaming platform could have its own token—GAME—with sub-tokens for each of the individual games offered on its platform, such as CHESS. CHESS would be ‘bonded to’ or tradeable for GAME, which, in turn, would be bonded to RLY token, thus tapping into its liquidity.
- Instant pricing. Token price discovery is a key challenge for new economies. RLY Protocol makes use of token bonding curves which establish a functional relationship between the supply of an app token and its price, dynamically adjusting the price of the token as its supply increases or decreases. This results in instant pricing.
- Immediate liquidity. Launching a token economy without liquidity is challenging for new token economies. RLY Protocol’s token bonding curves act much like an Automated Market Maker by providing a counterparty for community members who wish to trade or liquidate an app’s token. This means developers are no longer reliant on centralized exchanges and liquidity pools for market-making and achieve immediate liquidity from launch.
- Opportunity to earn RLY Rewards. App builders have an opportunity to earn cash flow for their project via RLY Rewards. Developers can earn RLY straight into their Web3 wallet as their app grows, providing them with a new form of revenue that’s aligned to community growth. Likewise, developers can instantly liquidate their RLY on the open market to bolster their operation, rather than selling equity.
Developers, Start Building With RLY Protocol
RLY Protocol makes it possible to build a future internet where developers and communities are aligned rather than at odds. Communities can govern, build, and share in the financial rewards of the projects to which they contribute, while developers gain a more sustainable business model that provides them with new forms of revenue and value.
To learn how RLY Protocol can help you launch a token economy for your app, check out our Developer Resources to start building.
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