No-Token apps: an alternate vision for the blockchain
The technical design of Ethereum doesn’t require that every app built on the chain have its own proprietary token. However, such tokens—as part of ICOs in 2017, or Web 3 in 2021—have been the focus of immense activity in the Ethereum ecosystem.
Proprietary tokens essentially create an internal economy within an app. The speculation this enables is often unhelpful. I can’t imagine that Youtube would be better off today if there was a YoutubeCoin that viewers and creators were always trading as part of their personal net worth.
Related Web 3 concepts like DAOs (‘decentralized autonomous organizations’) are very abstract and probably unnecessary for most software.
My hope is that, going forward, entrepreneurs explore the idea of building Ethereum apps where the only financial instruments involved are Eth itself, or perhaps stablecoins if necessary.
In fact, NFTs are such an ecosystem—most NFTs are directly on the Eth chain, and are bought and sold with Eth. The largest marketplace, OpenSea, simply takes a cut of the transaction.
What else can be built this way?