No-Token apps: an alternate vision for the blockchain | Hacker News Reader

No-Token apps: an alternate vision for the blockchain

firasd.substack.com

32 pointsfirasd30 comments

"My hope is that, going forward, entrepreneurs explore the idea of building Ethereum apps where the only financial instruments involved are in Eth itself, or perhaps stablecoins if necessary."

Yeah, but then how would "innovators" maximize their grift?

There are plenty of no-token and even no-crypto apps (primarily leveraging just signing, but instead of forcing people to use PGP they just use wallets because their target audience already has that, instead of something that failed to get that critical mass for 25 consecutive years)

The tokenized ones are actually the survivorship bias! As you can't even think of the non-tokenized apps because they don't have the advertisement, rapid fan base, ways to incentivize humans, or the charts that get people's attention.

OpenSea is a good example. One of the most successful dApps that doesn't have a token.

Uniswap, arguably THE most successful dApp, has a token that's hardly used and doesn't accrue any value. It was arguably released to gain a competitive edge when Sushi was still strong enough, but now its neglected and the dApp can exist without the token.

Most token-focused narratives have failed. Governance is a sham and value accrual runs into a host of legal issues the moment the project becomes large enough for regulatory scrutiny.

Removing tokens from dApps will also help solve many of the current problems of speculation, leverage, and straight up scams.

Uniswap/Sushiswap uses ETH token…

That's what article is advocating (using ETH directly, rather than inventing some bespoke token on top)

Opensea is not a dapp though, it’s as centralized as they get.

That's likely the future of dApps. The blockchain will only be used as a data storage and transaction finality layer. Consumers eventually won't even know they're using a dApp.

Eventually they will realise that no one really cares about blockchain anyways and they'll remove that part too.

If consumers won't notice that they're using a dApp, then why put your stuff on a blockchain?

KarmaCall was built on nano and so was FynCom. Building apps without tokens removes the speculation [ and the volume of activity associated with it :( ] and lets you focus on your core business models.

At a recent online event, I was asked to talk "what is the riskiest thing about building on crypto". The answer I gave was "it can distract you from your core business model, from making your customers happy".

EDIT: I echo your sentiment though. I wrote something supporting your thoughts (I think?) a while ago. Do you think this is a similar sentiment? [1] [1] https://www.linkedin.com/pulse/using-crypto-tool-investment-...

Totally agree.

I am considering this exact point in a business decision.

It comes down to the use of the token. If the token is being used to capitalise the business activity then it is better to be a mature and compliant financial instrument, rather than a roll your own token.

It is a tough decision though.

Wasn't the original idea that tokens would 'fund' the project without requiring external venture capital etc? The problem was the speculation part of the equation began to dominate the underlying story about building decentralised processes and that's when the media smelled blood.

It was also a way that enabled new entrants to be competitive against larger business with network effects, by using a win-win structure of incentives (the earlier you join the community, the more you gain if the community takes off). If not tokens, I’m curious what else could fulfill this function.

That structure leads to pump-and-dump behavior; it's far from win-win.

There should be SOME way to get a win-win from the situation. Some way to disincentivize specultation somehow while still retaining the beneficial effects of tokens??

Yeah, I meant the goal was good, even if the current implementations didn't work out as expected (at least, as far as I know). But if not the token economy, what other advantage can new entrants offer to compete with the network effects of larger companies?

The goal wasn't just to replace the existing winners with others, but to do so in a way that ensured the gains of the enterprise would be more equally shared with the community. If the token economy can't do this, might there be another way? Or should we declare this a utopia and give up trying?

When creating a startup, you have to solve a problem for your users. When creating a token, you now have two problems — solving your users' problem, _and_ launching a new currency.

This is what bitcoiners have been saying for years. Most apps don't need to be decentralized, and those that need, don't need a blockchain. There's only a very narrow scope for apps which actually benefit from a blockchain.

This is also a major differentiator between web3 and web5[0]. Web5 has the idea that identities can be decentralized with Bitcoin blockchain, but everything else is basically old-school P2P. If needed, incentives and payments can be done with bitcoin.

There's apps like fountain.fm[1] which allows people to easily spend and earn bitcoin. Such apps don't even need to be decentralized, but can benefit from the properties of digital currency.

Trustless financial apps will be possible on Bitcoin too, when RGB or Taro are released. Some financial apps are already possible, such as Itchysats[2].

[0] https://developer.tbd.website/blog/what-is-web5/ [1] https://www.fountain.fm [2] https://www.itchysats.network

What happened to web4?

Can you explain a little more about the differences between Web3 and Web5?

It's all there in the link. I'm not sure that web5 as proposed by TBD is the actual best way to do things, but I think it's a step in the right direction.

My alternate vision is a future with decentralization without tokens or blockchains.

That exists since at least 2016. Nano uses decentralized block lattice tech. Near instant, fee-less, no tokens.

One objection I've heard to this idea of mine is that proprietary tokens are like coins at an arcade, etc--reducing transaction fees. But I think there are probably ways to get around this by preloading Ethereum or other stablecoins into your account. And governance tokens like DAOs etc are probably way too avante-garde a structure for most software production.

True. The tokens can also be used to own the arcade, recieve a portion of the revenue and make decisions for the direction of the Arcade.

Not every app needs a token. But it's an alternative way to fund a project, one that any dev on earth can do, and any investor on earth can fund, and the team can remain anonymous if they want. Not passing judgement on whether this is a good thing, I'm just stating how it works.

Tokenomics create a micro-economy complete with speculators, bad faith actors and legit users. Like economies, this can run well for a while and then completely collapse.

I just don't see why so much complexity is required. I want to help an initiative, not get burned because of rampant speculation.

Skiff [0], ENS [1], etc are great examples of this.

[0] https://skiff.org

[1] https://ens.domains

Thanks, added these example projects to the post

The issue is that if one launches a non-token app someone will just fork the project and add on a token and out compete by offering airdrops and other incentives. Definitely an unfortunate part of the crypto ecosystem.

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