Crypto-Native Business Models

A recent AVC post this past week got me thinking about the power of innovative business models to create massive value. We’ve all heard of the slew of unicorns applying tech to solve problems across virtually every industry. Many big winners of the web 2.0 era have been crowned and it is getting more and more difficult to build new companies from the ground up that can achieve the size of of the big tech incumbents (see: GAFA).

Enter crypto. Digital, scarce assets have been around for a decade now and represent a breakthrough that was not possible to leverage previously. With the market coalescing around bitcoin as a store of value alternative and ethereum leading the way toward web 3.0, crypto assets have the potential to unlock many business models that weren’t possible before and represent a greenfield opportunity for entrepreneurs looking to build the next big thing. While it is still early days and a lot of piping and basic infrastructure needs to be optimized, the future of business model innovation powered by crypto assets is fascinating.

Below is a list use cases that founders are experimenting with. However, this list just cracks the surface of what the future holds. As entrepreneurs continue to experiment new playbooks will be written – I’ll aim to update this list over time to reflect this.

Earning Crypto

Coinmine

  • Plug-and-play hardware that helps non-technical people mine a variety of cryptocurrencies. Also makes for a nice conversation starter in your living room.

DADA

  • Digital art platform where users can get rewarded with ether for creating art and also build upon others’ artworks.

Earn

  • Platform that lets users earn bitcoin by responding to inbound messages. Acquired by Coinbase in 2018.

Helium

  • Launching the world’s first P2P wireless network, specifically focused on low bandwidth IoT use cases. Anyone can purchase a Helium Hotspot hardware device and earn Helium tokens in exchange for providing bandwidth to their local area.

Lolli

  • Rewards application that provides money back in the form of bitcoin for purchases made with their retail partners.

Numerai

  • Crowd-sourced hedge fund that uses AI to choose the best trade ideas. Anonymous data scientists around the world compete to create the best trading algorithms, with the best submissions rewarded with a higher position on its leaderboard, which correlates with how much of the protocol’s native token (Numeraire) they get rewarded with. In order to participate, users have to stake Numeraire.

Steem

  • Blockchain that powers social platforms where users get rewarded in the platform’s native token for posting good content, as judged by users who can upvote or downvote each posting. Voters can get rewarded for upvoting content before it becomes popular, in essence acting as a curator. This model takes today’s User-Generated Content model a significant step forward by financially rewarding users.

Continuous Payments

Sablier

  • Ever wonder why payroll payments are generally processed every two weeks? This practice could become a relic of the past due to services that allow an employer to continuously pay employees a certain amount split up over a set frequency (ie., by the minute, hour, day, etc.).

Micropayments

Unlock

  • Enables content creators to fully customize how they monetize their content through seamless micropayments. Referral incentives can also be introduced to encourage consumers to suggest content and help creators monetize even more.

Savings

PoolTogether

  • Similar to no-loss lotteries/prize linked savings, this platform allows users to participate by purchasing tickets with DAI for a chance to win the jackpot, which is just the interest earned by the pool of DAI collected from the participants. Those who don’t win, get their money back. While this model is possible with legacy financial systems, when it is built on crypto rails it is instantly global. Thus, this company or one like it could be a prelude to the world’s next largest money market account, dwarfing Alibaba’s Yu’e Bao.

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