A phenomenon that started with NFTs was community gating. The value of a gated community was lost of me initially. Early on I was involved in many un-gated communities and they were fun, however as I got older and had a family priorities changed. Soon my incentive model was away from social activities but focused on work and family. I still socialized but the context changed and was focused on networking or the brief leisure time I had.
When I got involved in NFTs initially it was purely driven out of interest of figuring out how they increase in value. I found myself socializing more in these groups than before and I wondered why? I realized that the NFT I bought may have nothing sustaining it’s cost other than access to that community. Through a financial incentive I was being incentivized to help grow the community. Over time people started forming bond within this group and coming up with new ideas. Now there was value based in social activity, the access to smart people and their networks. It became almost like a Web3 club that was open to anyone who could pay the price for the gated access.
Country clubs have an oddly similar feel and from that revenue they can give not just access to social activities and networking but they can provide benefits back to members. These gated web3 communities feel similar but with a DAO you add the ability to share assets in a treasury and the ability to self-govern. As capital accumulated the question was what to do with it? People weren’t wanting to pay out payments to people directly as that may set an unsustainable precedent. Rather the questions move to “How can we add benefits to our members?” and if done sustainably could demand for membership even more.
So now you started to see these groups commissioning artwork, funding projects, giving loans. All of these services now add value to membership. The floor price starts to rise and now the group has a reputation, which became a form of social prestige that just being a part of you share.
When people meet you their first impression is the prestige of the community.
That’s powerful and forms something people want to be a part of. Ungated communities may be able to do some of this but the incentive model is no where near that of gated communities because the moment value is added people come for that value then leave. There is no incentive to build value other than personal interest, but if that fades or people are incentivized to spend their time elsewhere then the ungated community slows.
While I subscribe to a view that ungated communities are the virtue we should work towards in practice I am not sure if current incentive models are there to make them work. If we want these ungated communities to work we need to identify incentive models that offer more value than their gated counterparts.