Tokenisation & The Empowerment of Communities: Web3 Community Building

Web3 can be defined as a decentralised version of the internet that can be used to empower users and communities. A core underlying concept in Web3 is tokenisation, a process that converts rights to an asset into tokens on a blockchain. This mechanism is transforming traditional financial systems but can also play a crucial role in the empowerment of communities. 

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Understanding Tokenisation

Tokens can represent anything from physical assets like real estate and commodities to intangible assets like intellectual property, services, or even social influence. On a blockchain platform, these tokens can be traded, sold, or transferred, allowing for greater liquidity, transparency, and accessibility to name just a few benefits

In the context of community building, tokens can represent membership, governance rights, or rewards for contributions within a community. This not only incentivises participation but also aligns the interests of community members with the long-term success of the project itself. As communities transition from centralised platforms to decentralised networks, tokenisation is becoming a powerful tool for shared value creation.

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How to Build a Web3 Community Through Engagement

Given the innovative and often complex nature of many DeFi projects, building a community is not just beneficial. It is essential to ensure that the project evolves in a way that meets the needs and expectations of the people using it.

Engagement plays a critical role in the construction of a project’s community, especially during the early stages when concepts are still being developed and refined. As these projects progress and achieve significant milestones, the value of the platform can increase substantially. This makes early and consistent community involvement vital, as it ensures that the direction of the project aligns with the collective will and input of its users. This initial engagement is essential for building a community, but continuous engagement is what sustains it. Regular communication, and responsive feedback loops help maintain interest. By adapting to community needs projects can keep members engaged and invested over the long term. This sustained engagement is crucial for retaining members and ensuring the community's growth. 

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Building a Vibrant Web3 Community with The GIFTED Strategy

In order to build a community, a project must entice users and then keep them engaged. The strategy that most aligns with the values of Web 3 is typified by the acronym GIFTED.

Governance (Facilitation of Governance)
Governance tokens can be distributed to community members, granting them voting rights on project decisions. This ensures that members can influence the platform's direction. 

Input (Encouraging Users to Engage)
Tokens can be used to reward members for their contributions, such as engaging in discussions, creating content, or onboarding new users. This approach can help to develop a more committed user base that can also be encouraged to be active on social media on behalf of the project.

Feedback (Communication Between Users and the Project)
Engaging in an ongoing conversation with the community can provide feedback loops that allow the project to adapt based on user input, improving overall satisfaction and support.

Trust (Building an Honest and Sustainable Relationship)
Trust is fundamental to any successful community. By consistently demonstrating transparency and fairness, the project can build and maintain strong trust within its community.

Education (Providing Resources and Content)
Education is vital to ensure all community members can participate effectively. Providing accessible resources and information helps users understand the benefits, risks, and technical aspects of the project. Educated users can contribute more effectively, provide better feedback, and engage more deeply, enhancing the community's sustainability.

Dialogue (Open Communication)
Regular updates, clear information, and satisfactory responsiveness ensure that users feel their voices are heard and valued, enhancing engagement and support.

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Defactor & Libertum Community Engagement 

Defactor's ENGAGE tool provides a seamless and user-friendly experience for individuals looking to stake their assets and participate in governance. Through ENGAGE, users can easily stake their tokens with just a few clicks, monitor their rewards and performance in real-time, and actively vote on key governance proposals within these networks. Libertum is transforming real estate investment by tokenising assets with its $LBM token, aiming to democratise access to real estate investment and eliminate traditional barriers. Libertum has integrated our community engagement tool ENGAGE to allow users to earn rewards through versatile staking options. This collaboration supports the Libertum community's mission to increase liquidity and accessibility in real estate. 

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Challenges and Considerations

While tokenisation offers significant benefits for community building, it also presents several challenges that must be carefully managed.

While failure to effectively manage a community will lead to the failure of the project, issues in areas like technical complexity, inclusivity, accessibility, and security can severely damage a project's reputation, community standing and future. While Web3 aims to be inclusive, the technical barriers can exclude non-technical users, making education a vital requirement for participation. A complex or poorly designed UI can significantly hinder user engagement and satisfaction. Users may already be navigating a highly technical and unfamiliar landscape, a convoluted interface can exacerbate confusion and frustration. If users struggle to understand how to interact with the platform, they may be deterred from participating altogether, which undermines the project's goal of building a community. Education is undeniably important in helping users understand the concepts and benefits of RWA tokenisation. However, even the best educational resources won't fully compensate for a poor UI. Furthermore, security risks, including hacking and fraud, must be managed to maintain trust. A compromised reputation due to any of these issues can lead to a loss of user confidence in some cases overnight.

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Conclusion

Tokenisation is a powerful tool for community building, offering new ways to encourage participation, enable governance, and create economic opportunities. Projects can build a more engaged and committed community, better equipped to thrive in a decentralised world. However, to fully realise the potential of tokenisation, communities must also play their part. By doing so, they can help to create a more sustainable ecosystem and hold a stake in the project’s success.

This article was inspired by a recent X space featuring Defactor, For more information on upcoming spaces, Follow Defactor.

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