“By believing passionately in something that still does not exist, we create it.”

The Web3 space is one that revolves around creating and retaining value around networks of stakeholders. Of course, moats in the space are hard to build, particularly because of how code is often openly available, and communities and technologies are forkable (existing blockchains increase by blocks, and forks are where a particular point or block is picked where an alternative network is copied from an existing one). Essentially, any community can be copied in many ways extremely rapidly. Given that it also tends to be extremely easy for users to shift from one protocol to another, building a community that is committed with their attention and money is more challenging than in most other industries. Still, there is deep value in building communities and cults around, and it is often the main determining factor between the survival or death of an organisation in this industry. I cover why it’s so very important in my previous article.

Now that we have established that this is a high stakes and incredibly challenging task, I will proceed to bring you through the cross section of how an ideal community would be like, and how firms in this space should go about navigating this complex challenge. As per usual, I will bring in topics and business cases of past successes that I have personally encountered in the space, so that we can document the evolution of business strategy from the Web3 context.

Traditional

In the traditional space, we often think of brand and IP primarily as centralised silos. It tends to be something that is specially created, deliberately angled to mean a certain something to its consumers. This is an extremely top down approach to a community, and this works when it places a significant amount of distance between the producer and the consumer. The consumer benefits from the status and lifestyle the brand signals, and in return the brand is able to charge prices far in excess of their cost. With media content, studios would create that through writers and actors, and consumers in consuming the content gradually build parasocial attachments with the brand and IP.

In part this largely top down, either interact or leave perspective is extremely important to the formation of cults and communities, as users are taught to not question but blindly follow and consume. However, where it can lack fundamentally is in the ability for the community to move beyond one sided consumption. Conversely, creators have little input over the directions they choose and actually do not have a lot of room for error (since they are to be seen as perfect and are supposed to choose perfectly).

Analysing Web2 communities

As we move from traditional media and brands to Web2, we see a gradual shift towards more community centric models of interaction. While for the most part, especially for more famous creators, a lot of community interactions tend to be completely parasocial (aka one-sided, top down, etc.), but the existence of communities and the interaction between the broader community and the creator affords for some degree where there consumer is able to direct the creator. Creators can easily run polls where their community votes on things the creators would work on next, and often communities / other creators can co-create content that is built off the original content made. This allows for content and IP to be fairly community directed, where the original creator might be in a situation where their content is being utilised heavily by a decentralised community of consumers and creators (e.g. reaction videos, memes, etc.).

This is a classic case of a how wildly different a transit from traditional media to Web2 is like. While it is typically the case where music tends to still be heavily driven by establishment (traditional) studios and brands, Web2 communities provide the opportunity to facilitate moonshots like this. The context of this particular situation is that Oliver Anthony, an independent unsigned musician and song writer, who was pretty much a nobody blue collared worker, managed to produce and launch a song that topped charts in the US. This was his first professionally recorded song, and it was recorded by a tiny little YouTube channel that focused on small time unsigned musicians like him. Within the first 3 days, the video garnered over 5 million views (107 million now), and it begun spawning an absolute deluge of reaction videos.

Of course, the heavily libertarian leaning lyrics and passion spoke very much to me, but more so than that, the content of the lyrics resonated very much with many Americans. Their support and consumption of the content allowed for it to “go viral” without big studios and branding to push the song onto radio stations, and allowed the content to be rapidly shared and consumed. The reproduction of this content into other forms (reaction videos, advertising, etc.) allowed more content to be layered upon this, spinning the brand of the music to be leaning towards being a kind of country music that is disappointed and withdrawn about the modern world. While Oliver Anthony’s music isn’t only about that, the content that is made on top of his is heavily focused around that image. As one would be able to tell, this is incredibly similar to how a decentralised DAO might function in Web3!

New independent creators these days understand this paradigm well, especially with the rise of TikTok / Douyin as a means of rapidly consuming and discovering music as a part of everyday media consumption. This very new creator, tuki., a high school girl from Japan, targets this very intelligently by including her high quality instrumentals recording (with no vocals) in the music video’s description box (the dropbox link). She wants people to create content with her content (music covers, clips in TikTok videos / YouTube shorts), so that people can accidentally stumble upon her music from a decentralised community of creators. By willing to invite co-creation, she opens the doors to much broader channels, allowing her content and brand to evolve with her community.

Similarities between Web2 and Web3

Looking closer at Web2 communities, I think there is already a lot in there that can be great lessons for how we approach communities in the Web3 context. Looking back, a lot of the pre-2021 NFT (non-fungible token - tokens that are unique from each other and can be identified as such on chain) driven communities in the Web3 space were a big blend between Web2 and Web3 communities. While it is not unique to Web2 that humans come together, what it enabled was a greater, more global community of people who could come together to towards contributing to a common goal. Being able to draw upon the abilities, content and intelligence of a collective is what Web2 communities enable, and this has formed the basis upon which distributed work has been achieved.

4chan is a message board that is infamous as an internet cesspool. It is home to some of the most right winged and incel (involuntary celibate - it is a group of people who feel that they cannot form a relationship with the other gender, and incels are usually men) communities. However, this distributed community of people has also been known to have accomplished some incredibly amazing things. Many memes that exist as a part of Web2 community culture actually have its roots in 4chan, and 4chan is the most prolific and influential platform when it comes to producing memes. Beyond memes alone, 4chan has also managed to achieve more collectively, for instance with the “Capture the flag” incident. Shia Labeouf was leading protests against Trump during his presidency, and given the 4chan is a community with many right leaning users, they naturally targeted this campaign. So when Shia created a project where he live streamed a flag that said “He Will Not Divide Us”, 4chan crowdsourced the location of the flag by analysing contrails and flight patterns, celestial navigation, Shia’s tweets and a guy driving around a car and honking in the general vicinity (if the honks are heard on stream, the flag is extremely near), taking down the flag and ending the project.

The greatest accomplishment of 4chan however, is not this insane flag capturing game they played, but the development of an entire, extremely highly rated full visual novel game that is completely free to play, with zero monetisation. In that time period, visual novel games pretty much only existed commercially in Japan, so fans of that game style had to crowdsource translations or extremely simplistic self-produced visual novels. 4chan stumbled upon a translated concept page (an additional page or omake from a self-published manga) for a dating simulator visual novel game where all the love interests are disabled high school girls. The community quickly became obsessed with it, discussing at lengths about how the different characters might be. An entire game studio of amateurs with zero experience with building visual novel game emerged from this community, who worked as a decentralised team for years on end for no pay. 4chan was used as a beta testing ground too, and the community gave great feedback that allowed the team to adjust and redo big parts of the game. Team members came and went, but when it got down to it, 4chan essentially launched some of the most enjoyed visual novel games to exist in that era of Web2.

Crowdsourcing of information and funds is not limited to 4chan of course. Aside from crowdfunding of products, OSINT (Open Source Intelligence) is the other really interesting development to come out of the Web2 space. In recent times, there have been considerably more large scale conflict than in the past few decades, with the wars in Ukraine and Israel, and many of the civilians and soldiers have never been more connected with a global community. With OSINT, platforms and communities help to consolidate data shared from different platforms and social media communities, presenting a distributed perspective of the wars. These data points assist anyone who is interested in understanding any global conflict to unveil the fog of war that typically prevents the formation of up-to-date and reliable understanding of theatres of war.

Web3

In terms of Web3 communities, you would have realised that they draw heavily on Web2 ones. Many would argue that the lines are so incredibly blurred that it challenging to understand where the Web2 ends and where the Web3 begins, and in many ways I don’t disagree. However, I think there exists a fairly clear line where Web3 communities start to separate from Web2 ones.

Community ingredients

To begin with, we will need to analyse the ingredients that Web2 community platforms are made of - Social Capital, Utility and Platform Dynamics. I took some inspiration from the amazing Eugene Wei for this analysis.

Social Capital: Web2 community platforms tend to be a status as a service business, where people use platforms to help build status in a way that they often are unable to in real life. Status and identity (crafting how people perceive you) building is a huge part of the human condition, and as social creatures, this is often what determines how we might navigate human relationships. In modern society, working adults often derive much of their identity from their station in life, be it from being a high flying executive, to a humble preschool teacher. As such, it tends to be that Zoomers (I’m one) and Millennials use social media more so than most others, as they often do not have much status in the world. In a way, it is a means of rejecting an existing paradigm that will only include them at the bottom, in a very slave morality-esque way (rejecting something as bad / inferior because you can’t get it yourself - e.g. classifying working in a corporate job as “wage slavery” VS being an influencer).

This is still exceeding relevant or even more so in the Web3 space. For the most part the political leanings of early Web3 is extremely libertarian (myself included, which was what drew me into the space in 2016), and this small group of people felt very excluded from the typical society and economy. Proto-Web3 communities like those on Bitcointalk essentially brought this group of people from around the world together, and people (many of whom are anonymous) built their identity in the space from scratch by being contributors to code and the community.

Utility: Social media platforms are also used as tools beyond status and identity building. People used Instagram for photo editing in the past for instance, Facebook or Meta for keeping up with friends, TikTok for keeping up with trends, Snapchat for the Zoomers to keep up with friends. Eugene’s articlethat I’ve also linked above does a great job describing the difference between Snapchat and Facebook / Meta and why Facebook ended up with a largely older crowd.

I would argue that in the Web2 context, we are still very much dependent on social media communities for entertainment as well, which I would subsume under the category of utility. For the most part, the primary business model of these Web2 platform communities is in the brokering of attention, and as a result content that engages tends to be what is peddled as a form of utility.

Platform Dynamics: In terms of this category, communities usually tend to vary from platform to platform. For instance, a Tripadvisor’s network effects and required components would vary vastly from that of a TikTok. I will explore this in a later piece, possibly in the one I have planned for moats. For this particular Web2 community metric, I think we can break it down into three components (based around a16z’s piece on network effect dynamics): Community Purpose, User Supply Demand Dynamics and Market Competition.

1. Community Purpose: This is what the community platform does for its users. If it’s Tripadvisor, you would likely need robust geographical user coverage to provide broader ratings and reviews that would then help to onboard new users globally. It is likely that you would achieve saturation in some jurisdictions (e.g. an additional review on a place that already has thousands isn’t going to provide much value) while failing to achieve adoption in others. For other communities like Twitter or X, users tend to use it to curate a more public status / identity, so it tends to be that saturation point for users would be more two tiered (big public influencers and attention providing users), where too many big public influencers would mean insufficient attention going around and the converse is also true. Moreover, too many influencers / attention providing users could also result in big clashes over differing opinions, which might drive up usage metrics temporarily, but can also make users avoid the platform over time.

2. User Supply Demand Dynamics: Using the same companies of Tripadvisor and Twitter, we can explore how the supply (e.g. of content) and the demand (e.g. user quality) could affect how a platform can function. For instance, if Tripadvisor only covered tourist destinations, there would be quite a big limit on how far that kind of content would continuously engage. This is especially so as these tourist destinations tend to be fairly static. However, by their gradual expansion to topics like restaurants, they are able to create a broader, more differentiated portfolio of content (better supply side). On the demand side, Twitter, especially CT (Crypto Twitter), is often flooded with “pollutants”. Tweeting about anything related to cryptocurrencies on CT (even now) can easy attract the attention of bots which would spam you with scam links and content (see the screencap below for an example). While these types of users do help to drive activity, it would also take away from the experience of using the platform and thus devaluing the platform for actual contributors and users.

3. Market Competition: For the most part, Web2 communities overlap quite significantly. If you have Twitter, you are also quite likely to have another social media platform like TikTok or Instagram. It’s easy to switch from one platform to another, with the main barriers to entry being rebuilding your community on migration. Moreover, it is also simultaneously extremely common for platforms to share similar content styles (e.g. you can quite easily tweet on Twitter how you would update your status on Facebook), so there can be quite a bit of overlap between platforms. There also tends to be quite a number of people, especially influencers and organistions, who would multi-tenant across multiple platforms, often posting the same content to extend their reach and prevent their followers from missing out on engagements.

Crystalising value

I think where Web3 communities differ greatly is that there is a shift towards attempting to crystalise value in social capital, utility or platform dynamics. By attempting to attach value to some of these community components, Web3 communities aim to create economies and more sustainable flywheels around communities. For the most part, a lot of what a Web3 community means is still at a very nascent, experimental stage. However, the general trend is shifting towards allocating economic value and thus decentralising ownership over a platform and community, with proto-Web3 communities shifting into more established Web3 ones we see today.

Proto-Web3 communities for the most part piggybacked off of existing Web2-styled communities, but attempted to integrate some degree of economic incentivisation for adoption and valued contributions. This effectively created the first differentiating factor that would be made increasingly complex and in-depth over time, encapsulating more and more of the various factors that make up a Web2 community.

Case Study: Bitcointalk

Many of the earliest communities in the Web3 space arose on the basis of Web2 communities. Bitcointalk for instance, an OG platform where the cryptocurrency community used to coalesce around, would arguably be one of the first Web3 communities to actually exist. While at the heart of it, Bitcointalk is just a Web2 type forum community, it also had primitive economic incentivisation mechanisms. For instance, there were faucets that paid out free BTC to people who would sign up on the forum (not anymore). People got what was the equivalent of airdrops of BTC to incentivise participation in the community. While this gave little ownership over the Bitcointalk forum platform in of itself, part of the platform dynamics was incentivised by providing greater utility to its users (to get and participate in the BTC network).

As we move from these proto-Web3 communities, we gradually see a move towards airdrops and participating in bounties for airdrops. For much of the 2013 and 2017 cycles, the Bitcointalk forum became sufficiently mature, morphing into one of the key fixtures in the Web3 community landscape. As such, a lot of new projects started piggy backing off of the forum, launching airdrop and bounty campaigns for users who interact with their projects and protocols. These formed the next wave of what Web3 communities were like. For the most part, most projects used airdrops to greatly enhance the utility their community offered, while also utilising those airdrops to incentivise improvement of their platform dynamics (onboard genuine users, generate relevant content / user input). In my time at an ICO advisory business with friends and later in a large regional exchange (Quoinex, later Liquid and then FTX Japan) where I helped them raise one of the largest ICOs in Japan, I worked along and facilitated such industry dynamics. Initial adopters of Web2 platforms enjoy an easier path towards accruing greater social capital, which might be able to be monetised down the line. In the Web3 space, adoption is usually directly rewarded, and users can choose to continue holding the rewards in hope of future gains or take profits and leave.

That being said, this is still an incredibly primitive means of integrating incentive and economic models around sustainable flywheels and communities. Control is largely centralised, and for the most part, the stake users get in the success of the community was often not directly linked to the tokens they got for their efforts.

Decentralised Autonomous Organisations (DAOs) are usually what people think of when we speak of a “modern” Web3 community, even though I would argue that the category is much larger. In DAOs, certain stakeholders are given the power and responsiblity to collectively decide on what the organisation does via voting, which represents a deep shift from how a Web2 platform would function (ownership wise).

DAOs probably also had their initial ties from Bitcointalk, with the BTC core development community. While many of these developers do not actually gain a stake in BTC’s success just because they have made contributions to the BTC core project, they are actually able to contribute to the code base of BTC, discuss and collectively make decisions. I believe this decentralised community, much akin to the Four Leaf Studios / 4chan game development case study shared above, was where DAOs found their roots. Moving from foundation type opensource and distributed development work, ETH was probably one of, if not the first, to attempt a DAO that we would more commonly recognise today. It was called “The DAO”, and was supposed to act like a decentralised venture capital fund, a concept similar to some of the DAO funds we do see in the space right now. The DAO raised funds in ETH and gave out LP shares-esque (Limited Partners - people who fund private funds get shares in return to represent the stake that was purchased) tokens that would have allowed holders to vote on fund allocations towards various investment opportunities. While a hack that exploited a smart contract vulnerability did result in The DAO shuttering and causing a massive rift in the ETH community, this became one of the key moments in Web3 history that moved the needle on what a Web3 community could be.

With this important context, I think the biggest development for Web3 communities thus far would be around identity and crystalising status as a form of currency. Moving beyond solely just being a voting shareholder or someone who gains cryptocurrencies for communities, identity and status allows communities to engage with users and build culture and branding on a far more personal level. In Web2 communities, the idea of what status and identity represents is incredibly abstract and often ephemeral. While it is completely possible to build a personal brand and status over time, it is often not directly monetisable or transactable. Where it differs wildly in the Web3 space is the attempt to not only give users a slice of the pie, but to also build a space within which they can attach market value to identity in the form of NFTs (Non-fungible tokens - tokens that can be distinguished from one another). Conversely, people are also encouraged and sometimes even expected to attach and grow identity and status around those assets. This allows for virtuous flywheels that is centred around distributed brand image development and value creation.

Now that we understand how Web3 communities have come to be, we can look closer at how businesses and protocols in the space should go about building great communities and even cults. Let me preface this by saying that there is no one way or method to build communities. Different products and brands would require different types of communities. Even for the same products and brands, there are many pathways towards successful, strong communities. My objective here is to provide a basic framework that you and leaders in the space can utilise to understand how to position and plan for community building from a macro perspective, complimented with case studies from the space and playbooks on what can be done.

To begin with, we should once again juxtapose Web3 communities with Web2 ones. In Web3, we crystalise value for users more so than in Web2 ones, and build virtuous flywheels around brand creation to enable distributed IP building. However, this is not necessarily a good thing! Pure decentralisation might increase a network’s ability to tolerate faults (malicious actions, etc.), but often require more resources and time to make the same decisions as a more centralised network structure. When work is done in a more decentralised manner, there is considerably more continuity challenges as turnover tends to be more significant and more challenging to manage. A distributed ecosystem of users and contributors is, also likely to have challenges in terms of working together on an operational manner. For the most part, decentralisation brings considerable friction by design, so acknowledging the tradeoffs and deciding where decentralisation fits would provide for a more balanced and effective communities.

Balancing the foundations

This is the most challenging development phase of any community. At the initial phase, communities tend to be centralised and somewhat formless. There is very little culture, and no history upon which communities can understand how to behave. While a blank slate gives a great deal of creative freedom, I would posit that the ideal means of growing a community is more contingent on being very specific and almost picky about how they would want the community to be like.

Here are some of the key points to look out for when building out the initial community base:

Be extremely precise in targeting the “right” kind of users

Decentralisation comes with many frictions. Couple that with a nascent community and platform / product, and you would expect that the user experience to undoubtedly be fairly poor when juxtaposed to the eventual vision of how it would be down the line. As such it is important to actually focus heavily on streamlining the purpose of the community and attract the most extreme users that fit that purpose well, as they are the only ones who actually care enough to ignore the poor user experience. They are also the ones who are most likely to actually be deeply interested in the subject matter to attach and build their identities within and around the community. These people would form cornerstones of the community, and would take a big stake of influence on these platforms.

Typically these folks also end up shaping a big part of the culture of the community, as they are the ones who often would be contributing content and their personalities, as well as participating in the early history of the community. These would tend form the bedrock of what the community would mean to users moving forward into the future and would tend to be incredibly difficult to move away from. With this in mind, it becomes even more important that initial users should be almost curated by the founding members of the community / team.

Create micro-niches for culture and identity alignment

Culture of course is another critical point to take into consideration. While it is quite easy for anyone to set hard rules, the soft, implicit rules and guidelines that make up culture is considerably harder to navigate. Ideally, great culture could emerge organically without prompting, and it would be a sign of a truly amazing community. However, the reality is that communities, especially decentralised ones, are going to be chaotic and messy. Culture tends to be pushed by people nearer to the fringe (just like how 4chan generates a significant proportion of memes that enter mainstream culture), so decentralised communities can easily result in the culture of the community being pulled in multiple directions. DAOs in general do enable subcommunities to emerge that engage in more specific topics, but it must be noted that this can also result in emerging factional differences and conflict. Fundamental disagreements can cause rifts in communities and cause significant damage.

I first dived into cryptocurrencies and Bitcoin specifically in 2016, but that was also the year of the DAO hack. While I did briefly explain about the DAO and what it was for while sharing about Web3 communities , I did not explain how things broke down in the ETH community.

Before the space got as corporate as it is right now, the Web3 community is largely a very anarcho-libertarian one. I will explain why in the follow case study, but for the most part, most of the community truly did believe in the concept of “code is law” and to a further extent, immutability (one of the big features of blockchains is the difficulty of changing what is recorded on them) of blockchains. To a certain extent I am in this camp, and it is the idea that cryptocurrencies fundamentally transcends centralised authorities, thus making only the code (or how the cryptocurrencies and its smart contracts function) the only thing that dictates the outcome of everything in the space. Why this is important is because the DAO hack arose from a vulnerability in the smart contract, allowing for the hacker to drain the DAO of a third of its assets.

By the “code is law” logic, the hacker is entitled to the funds that he drained, because the DAO failed to secure its own assets properly. However, because the DAO held ~14% of all ETH coins issued, a failure of the DAO could signify a big step back for the chain. Since the hacker would get almost 5% of the circulating ETH, they could also have material impact over the price of ETH for a long time to come. As such, part of the community decided to do a hard fork of ETH (a hard fork is to make a copy of a blockchain) to before the exploit. The “old” chain became Ethereum Classic or ETC. Supporters of either could sell the “wrong” Ethereum, and today ETH is the far more relevant Ethereum.

These fundamental differences between deeply held values can very easily divide a community, and can result in these groups of people going their separate ways, splitting up the community’s economic potential.

While frameworks for this extremely broad topic is likely to be unhelpful, I do think that there are two key principles that should be kept in mind:

1. Obsession - Finding users with deep interest was mentioned in the point above, but DAOs should itself be incredibly obsessed with a very specific direction. Big ideas that may seem very lofty is still fine, but being extremely specific about what the community is supposed to be is extremely critical and will set the foundations for what the community culture would come to be. The community’s obsession would then help to signal for more users that fall in this category, thus allowing for them to self-select for the “right” users. To build cults, this has to be turned up to the extreme, and ideally, the users should also be guided in rejecting any external ideas and communities that might contradict with the obsessions, usually through an us VS them dynamic.
2. Reputation - A big part of communities is the identity and status that can be created by users. Making the product and service that the community is engaged with integral with reputation would help to provide more ways in which users’ repute will have value. Moreover, by having repute be something that is or seems to be important for operations (hard and soft standards), communities also provide more concrete incentives for why users should put in the effort to build their identity and status in the community. By putting in proof of work, users would be more attached to the community, but also simultaneously contribute to improving the community.

Come for the tool, stay for the network

The ideal initial community is built is one that would be quite niche and deeply focused around a very specific type of user base. However, this naturally lends itself to a community that has a very small TAM (Total Addressable Market). While the community is small and strong, it is unlikely that it would be able to grow merely by attempting to attract the same type of users. Communities will have to contend with expanding the type of users that they are able to attract and retain.

The typical playbook employed by communities take a “come for the tool, stay for the network” perspective. The idea behind how this works is that community provides some form of obvious value to its users, and in so doing provide an attracting and onboarding point upon which users would be brought into the fold. While the users are unlikely to be fanatics of the community, they are far more likely to be attracted to get to know the community in the first place. In the context of the Web3 space, being able to provide means with which users are able to make more money or improve revenue drivers and fundraising (specifically for users who are protocol / startup founders). Naturally, when there is an obvious and very direct economic sense to engaging with the community via the tool, users would automatically have a big push factor to become a long term part of the community.

Gitcoin is a community that is built around supporting the growth of digital communities. In some sense it is a bit like what one would imagine a non-profit incubator might seem to be like, but in the Web3 context. Gitcoin DAO is a perfect example of the “come for the tool, stay for the network” playbook in community building. The community starts off as a place where public tools and infrastructure is supported and built, which is incredibly important in this industry but tends to be ignored (tragedy of the commons). The vision of Gitcoin is to mitigate that problem with incentive models, but in order to bring people and projects on board in the first place, they give out to them first.

Gitcoin has a comprehensive grants program and tools for projects and people to manage decentralised communities and identities. It is easy to tell from a glance, that the core team working for the Gitcoin DAO is very focused on first pushing for value to be provided to newcomers and people seeking to build in this space. This I think, is particularly complementary for Gitcoin, given that it focuses on leveraging on a strong community centred around giving back. Those who have found the grants and tools that Gitcoin has provided are far more likely to also give back to the community, and Gitcoin thus far has indeed managed to secure many donation matching partners from a huge variety of large foundations and organisations in the ETH space.

Tangible culture and cultural artifacts

As a community matures, more tangible culture tends to form. In its most casual form, it usually comes in the form of memes or inside jokes. In Web2 and specifically Web3, it is definitely represented by memes and memetic language. Memes allow for users of a community to share humour about a particular part of a community, be it its history, its people or its ideas; find common ground between members in the community; and replicate / iterate on that content and idea in the meme. This creates an avenue where people can not only build social connections and relationships within the community (and thus improve user stickiness), but also be able to be entertained and engaged. While people are themselves engaged, they are also inadvertently iterating and propagating the ideas and content relevant to the community internally and externally, effectively acting as a flywheel for distributed advertising.

Aside from memes, having a central character around which the community can revolve around is also a great way of adding thematic unity and to provide an avenue in which users are able to build social interactions and relationships around. This can be in a form of a simple character or a mascot, but having that central identity can also help to add a bit more personality and informalise the project and community (which can encourage participation).

This is a more recent ecosystem that has popped up over the past 1-2 years, around a new Layer 1 (L1) blockchain (think of L1s as a blockchain with its own base architecture), and it is probably one of the best run and marketed community in its vertical. It is quite clear that the team is still incredibly centralised at this point in time - quite necessarily so. However, they are able to lean into leveraging heavily on memes and mascots to make community building and participation a truly Web3 one.

It is precisely because of how the team has curated the ideas and tools in the community that drives the kind of participative flywheel that Web3 is well known for, resulting in a community that communicates and broadcasts about Monad. In addition, the community culture being deeply steeped in wholesome meme culture also results in an incredibly visual experience within the community and externally. For a new L1, Monad has, through intelligent curation of community culture and cultivation of cultural artifacts, managed to capture mindshare far beyond its short history, small team and new brand.

Communities that get to this point tend to be well established. There is usually already a pre-existing culture which is very unlikely to shift drastically at this juncture. The community should already have established a raison d'etre, usually around providing some specific source of utility or social capital to their communities. This is where teams might get comfortable with the community that has been built so far, but often communities that have gotten to a certain size suffer from a great deal of dyssynergies arising from the growing number and interests of the community.

Maintaining a clear value proposition

As communities grow and interests are less focused and more diversified, it is likely that the decentralised community of members would spin off into different interest groups and contribute with different content and value. If not managed well, this can easily fragment communities over time, and make the value proposition of the community to be unfocused. It is critical here, more than ever, to be able to clearly show how the asset holders in the ecosystem can stand to benefit from their continued support and participation. This should also continue to be linked closely to flywheels that incentivise future community building behaviour. Ultimately, the clearest value propositions will form the deepest moat.

Adjusting decentralisation

With communities that are growing and in flux, it is also important for there to be operational changes. A sprawling community often requires extremely participative direct democracy-esque DAOs (vote on all actions, ideal but fairly impractical) or elective democracy-esque DAOs (vote on only critical directions, everything else managed by elected employees). Choosing and adjusting to the right amount of centralisation necessary to properly maintain and grow a community is important to ensure continuity. While decentralisation can increase the fault tolerance of a community, it can also make the community experience a lot poorer (thus causing the community to weaken anyway). Similarly, a very centralised team might function well in supporting and growing a community early on, but the exponential growth that usually comes with scaling ecosystems would mean that teams like these are not able to keep up even if they hire more employees.

Providing the right tooling

As members contribute to whatever they are interested in, they bring in a lot of value into the community, while simultaneously also spinning off the community into various directions. Members join and leave over time, leaving half-finished work and abandoned initiatives. This type of fragmentation and attrition can slowly sap a community of resources and funds without actually generating resources that helps the community in the long run. As such, the community should think of how it can develop and utilise tooling and infrastructure hard points to support task breakdown, delegation and iteration. At the operational level, roles should be more properly defined and tasks broken down into bite sized parts. Tasks should be structured in a way that can support multiple iterations done by different parties (e.g. tools for proper documentation). These can help steer the community towards more resilient initiatives and more consistent growth and development.

ARC is an Asia focused community that is gated by both NFTs and member curation. Naturally, this lends itself for a community that has a stronger member base who are more committed to the community to begin with. In order for it to function, it has pretty much relied heavily on a small centralised team. This worked well initially, as improvements to the community and tool development could be managed well.

Over time however, ARC grew in size, and people were gradually adding to the community in their various ways. This is a sign of a healthy community, but it can also easily result in an uncoordinated and unfocused mess of initiatives, some of which would inevitably fall to the side half-finished as enthusiasm wanes and other “real life” commitments take over. While these efforts are great, they are wasted if not properly supported over a longer period of time, and brought into the fold for the benefit of the broader community.

ARC’s team chose to shift towards a more sustainable direction, where they chose to increase the amount of decentralisation of the community, passing on more responsibility to the community to create greater value. Moreover, they also chose to focus heavily on onboarding the right scaling tools that would enable the ARC community to more easily curate and manage longer term, niche groups within the community. This allows for a more sustainable and reliable option of supporting decentralised initiatives that tend to see ebbs and flows in interest and support. While this transition is still underway, the rest of the community (myself included), are excitedly observing and participating in this change.

Ultimately, each community is very different, and you would likely be able to tell that some strategies would fit better than others in community building. With this rough model however, I hope that it would be helpful for builders in forming structured thought and strategies about how one might approach the formidable task of community building, by demystifying how communities come to be and providing some frameworks and examples of how to succeed.

I think that it is also incredibly important that while we think from a more macro perspective, to keep in mind that community building is an intensely operational and ground level task. You need to be participative, you need to be on the ground and engaged with the people you serve. Strategies would not survive without input from the community and the broader Web3 ecosystem, and being flexible enough to appropriately account for and react well to the ebbs and flows of the space is critical. You cannot afford to be out of touch in this space, or your community and team is unlikely to survive in the longer run.

Having been a part of and played roles in building communities, it is important to note that this is an incredibly challenging and taxing task. From an operational perspective, it is fairly critical to continuously engage the community, or at a minimum, ensure that they are engaged continuously. Failing to account for the tools and resources you might need to support such endeavours will also likely result in communities failing to form or failing altogether.

Should you be embarking on this arduous journey, I wish you the best of luck, and I hope that you can enjoy the journey and friends you make along the way. I will very much look forward to far more vibrant and amazing communities forming and adding to the eclectic canvas of the Web3 community I call home.

Writers note: Special thanks to Brian from Certik, Andy from Meta and Kari from ARC for your invaluable insights and for the fruitful discussions about building communities.

Based on feedback on the previous piece, I increased the amount of media / visuals in the post to help break up the monotony of long articles! I think I will break up articles like these into 2 to 3 parts in the future to make it more digestible. Happy to take more feedback as always :)