As we rapidly approach the quarter-mark of the 21st century, it is hard to downplay the effects of global digital migration on our lives. Many areas of life and society are conducted at least in part — and sometimes entirely — online.
The Rise of Digitalization
According to recent statistics, the global average internet penetration is approximately 67.5%, while digitalization has happened at lightspeed in the European Union, where 93.1% of households are connected to the internet (Source: Statista). Far from slowing down, this trend seems to be picking up pace and is now evolving toward its next milestone: Web3.
The Uneven Power Balance in Web3
While Web3 offers numerous advantages, it also raises significant concerns and unresolved questions — chief among them being the imbalance of power between creators and consumers. Although Web3 was initially designed to be decentralized, creators are increasingly developing protocols that are often, at best, exploitative or manipulative, consisting of pump and dumps. At worst, they are illegal scams and frauds.
In the United States alone, $5.6 billion was stolen from investors through cryptocurrency scams in 2023 (Source: Federal Trade Commission). Power is becoming concentrated in the hands of a few creators, and the only way we can combat this is by giving strength back to the many.
The Need for Decentralized Governance
To facilitate decentralized governance and a safe, equitable transition to Web3, we need tools built for the blockchain to democratize the digital society and allow collective decision-making among general populations to mirror real-life social behavior. If developed correctly, memecoins, otherwise known as ‘community’ or ‘culture’ coins, present a key tool for achieving this.
Memecoins: A Key Tool for Decentralized Governance
While frequently lacking traditional utility, memecoins are usually designed exclusively to serve the communities they emerge from. Recent initiatives like the new Stellar initiative crowdsourcing ideas for Web3 innovation (Source: Stellar) demonstrate the potential of memecoins in driving community-driven development.
However, memecoins are susceptible to manipulative pump-and-dump projects in many current forms. Events like this have harmed most coin holders while favoring select and limited insiders who are privy to certain information surrounding the memecoin cycle.
The Problem with Crypto Manipulation
Bad crypto typically has a messianic leader and a flock. Yet, this power dynamic is unsustainable and contradicts why crypto was created in the first place — to give people a voice in governance. Overcoming crypto manipulation requires developing memecoins underpinned by community-empowering infrastructures.
The Solution: Decentralized Autonomous Organizations (DAOs)
Combining a DAO with a meme/community coin means that holders of the coin have built-in rights to collectively govern within the remit of the DAO. Only people with a stake in the memecoin have such privileges, meaning the holders’ interests are placed firmly in the center of voting and governance systems.
The Power of DAOs
DAOs are already changing the face of decentralized finance. Uniswap DAO has been working toward expanding its $6 billion treasury — a treasury that uses its DAO to vote on what it should do with the capital (Source: Uniswap). Although this technology currently has a novel use case, its application also has the power to change how we view money and who can access it.
The Future of Web3
Whether it be a small group of African entrepreneurs looking to build a liquidity pool or a group of residents in Ohio raising funds for a school, the power of digitally administered democracy is the global breakthrough that will redefine the current state of crypto and finance. This momentum and support will only continue under US President-elect Donald Trump’s administration.
Conclusion
Web3 has the potential to transform everyday life and is developing rapidly, but in its current form, it is at risk of abuse by a small number of malicious creators. We must proceed cautiously to protect Web3 and ensure it delivers on the promise of decentralized finance and decentralized governance. The best option is to take measured steps to develop community-driven infrastructures and systems like community coins.
It is time for the industry to give power back to the community. By doing so, we can create a more equitable and democratic digital society that benefits all stakeholders — not just a select few.
Call to Action
Join us in our mission to build a more decentralized and democratic Web3. Together, let’s create a future where everyone has a voice and an equal opportunity to participate in the digital economy.
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