The Rise of Stakehodlers: User-Ownership in Web3 Networks
In the world of Web3, where blockchain technology is revolutionizing the way we interact with the internet, the concept of user-ownership is gaining traction. Jesse Walden, co-founder of Variant Fund, a leading Web3 venture capital firm, has been at the forefront of this movement, advocating for users to become owners of the services and platforms they use.
Walden’s journey into Web3 began during his time as an artist manager in the music industry. He noticed that musicians were often at the mercy of major labels and had limited control over their own work. Inspired by the potential of blockchain technology, Walden founded Mediachain in 2014, a blockchain data solution aimed at helping creators get paid for their digital assets. While Mediachain wasn’t widely adopted at the time, many of its core concepts are now commonplace in the NFT market.
After a stint at Andreessen Horowitz, where he helped launch its first Web3 fund, Walden founded Variant Fund in 2018. His experience in the music industry and as a media entrepreneur shaped Variant’s thesis that Web3 has the potential to turn all online creators into owners. Whether it’s through music, code, or content on social media, Web3 empowers individuals to monetize their work and have a stake in the platforms they use.
This shift towards user-ownership raises important questions about how businesses and leaders should respond. In traditional corporate circles, the concept of “stakeholder capitalism” has gained traction. It advocates for companies to consider the interests of their customers, employees, supply chain partners, communities, and the environment. However, Web3 takes this a step further by turning users into stakeholders themselves. To reflect this new paradigm, Walden coined the term “stakehodler” to describe an internet user who owns digital assets and earns a fair share from their online creations.
The emergence of decentralized autonomous organizations (DAOs) is another significant development in the Web3 landscape. DAOs are internet-native organizations built on a model of token ownership, where users have a voice and a vote in the network’s governance. While DAOs may seem technically complex, they share a fundamental principle with Silicon Valley startups — the power of ownership to incentivize and motivate individuals. Walden emphasizes that compensating talent with ownership stakes is a key factor in attracting the best minds to work on ambitious projects.
Wikipedia founder Jimmy Wales offers an example of the potential of DAOs. He envisions a peer-produced film where people from different countries can participate and earn a fair share through a DAO. In a Web2 world, this would be nearly impossible due to legal and logistical challenges. However, in a DAO, ownership and compensation can be seamlessly managed, enabling global collaboration and rewarding contributors.
This transformation to a user-owned, Web3 ecosystem disrupts traditional business models. In the past, VCs and founders held significant control over investments and operations. However, in Web3 networks, the majority of token holders are often users themselves, with VCs and founders constituting a smaller minority. This shift challenges business leaders to reexamine their role and consider the implications of shared ownership.
The rise of stakehodlers and the proliferation of DAOs represent a profound disruption to traditional business structures. As Web3 continues to gain momentum, leaders are faced with tough decisions and a myriad of unanswered questions. The quality of their questions and their ability to navigate this new landscape will determine their success in this evolving digital frontier.
