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Network Effects, Moats, & the Business of web3

web3 with a16z crypto

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Value-Creators Drive Platform Success

Successful platform launches necessitate a nuanced understanding of supply and demand dynamics, moving beyond the simplistic approach of prioritizing one over the other. The crux lies in identifying who creates the most value on the platform and strategically subsidizing them to kickstart strong network effects. Engaging initial developers or liquidity providers with incentives such as discounts or early access can spur user attraction and participation. As the platform evolves, the roles of users and their payment structures can change, shifting from subsidies for key contributors to a model where many users pay for access. Ultimately, the platform's success hinges on recognizing the varying contributions to value creation and fostering an ecosystem where those who generate the most value are incentivized to engage, thus accelerating growth and sustaining demand.

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