Empowering Communities to Shape the Future of Cryptocurrency

The Rise of Global Digital Migration

As we rapidly approach the quarter-mark of the 21st century, it is hard to play down 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. This phenomenon has led to a significant increase in internet penetration globally, with approximately 67.5% of the world’s population now connected.

Uneven Power Balance: A Growing Concern

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 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. 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. This requires the development of community-driven infrastructure and systems that empower holders, rather than favoring select insiders.

The Role of Memecoins in Decentralized Governance

Memecoins, or ‘community’ or ‘culture’ coins, present a key tool for achieving decentralized governance. While frequently lacking traditional utility, memecoins are usually designed exclusively to serve the communities they emerge from. However, current forms of memecoins are susceptible to manipulative pump-and-dump projects, which have harmed most coin holders while favoring select insiders.

The Dark Side of Crypto Manipulation

Events like these have harmed most coin holders while favoring select and limited insiders who are privy to certain information surrounding the memecoin cycle. 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: The Importance of DAOs

The key to overcoming crypto manipulation from a small group of bad actors is to develop memecoins underpinned by community-empowering infrastructures, including 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.

The Power of Decentralized Autonomous Organizations

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. 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.

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.

Web3: A Double-Edged Sword

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 Future of Web3: Community-Driven Infrastructure

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.

Conclusion

Zach Burks is a blockchain developer and the CEO of Mintable. Zach collaborated with the Ethereum Foundation on improving ERC-721 and is the author of ERC-2981. This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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References

• Stellar initiative crowdsources ideas for Web3 innovation
• Uniswap DAO expands its $6 billion treasury

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