Startup Funding Espresso – Using Tokens As Incentives

Using Tokens As Incentives

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Tokens bring a new layer of value to the internet startup.

Startups can provide incentives to their prospective users to help grow the startup’s network and provide value.

In the Web2 world, the startup founder must solve the chicken and egg problem by attracting users to the network before there’s a network to join.

These companies offered free services and products in exchange for user engagement.

Over time, this could grow into a bigger network providing more value to the user.

Network effects and their benefits kick in after the network gains scale.

In the Web3 world, the startup can provide tokens at no cost to the user to join.

This accelerates the growth of the network by giving users something of value at no cost.

Unlike the Web2 world, Web3 provides tokens in return for the user’s engagement.

The token incentives give the user some value that they can retain and use after they’ve joined the network.

The Web2 world depends on people giving their time, content, identity and other assets in exchange for a short-term use of the product.

Web3 layers a new level of value into the process by giving a token which the user maintains even after they’ve joined.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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