The Real Cost of Fake Exclusivity in Web2

Platforms like Apple's App Store and Google Play extract a 30% tax on all digital transactions, a direct tax on innovation. This creates misaligned incentives where the platform's profit is prioritized over developer success or user experience.\n- Value Extraction: Platforms capture value without adding proportional utility.\n- Innovation Tax: High fees stifle experimentation and new business models.

Your social graph, content, and digital identity are platform assets, not user assets. Deplatforming, algorithmic demotion, or a simple TOS change can erase your digital presence. This centralizes control and creates systemic risk.\n- Asset Lock-in: Data and reputation are non-portable and non-composable.\n- Single Point of Failure: User agency is contingent on a corporation's goodwill.

Every platform (TikTok, Instagram, YouTube) operates its own closed-loop attention market, forcing creators to re-build audiences and optimize for opaque, changeable algorithms. This fragments effort and commoditizes creativity.\n- Algorithmic Serfdom: Success depends on pleasing a black-box curator.\n- Inefficient Discovery: Valuable content is siloed, reducing overall network utility.

Apple and Google enforce a 30% commission on all digital transactions, creating a toll booth for the entire mobile economy. This isn't a fee for distribution; it's a tax on innovation, forcing developers to inflate prices or sacrifice margins.\n- $100B+ in annual fees extracted from developers\n- Zero negotiation on terms for most developers\n- Arbitrary enforcement leading to sudden app removals

Twitter's abrupt API policy changes in 2012 and 2023 destroyed a $40B+ valuation ecosystem of third-party clients and tools. This demonstrated that platform 'partnerships' are unilaterally revocable privileges, not rights.\n- Overnight destruction of businesses like Tweetbot\n- Centralized control over all client innovation and UX\n- Monopoly capture of all advertising and data revenue streams

TikTok's opaque 'For You' page algorithm determines economic survival for creators. Success requires constant adaptation to unknown rules, creating permanent insecurity. The platform can demote or shadowban any creator without appeal.\n- Zero algorithmic transparency or consistent rules\n- ~99% of videos receive negligible distribution\n- Creator revenue entirely dependent on platform whims

AWS's dominant market share (~33%) creates systemic risk. Migrating away requires multi-year, multi-million dollar re-architecture efforts. Outages like us-east-1 can take down major portions of the internet, proving centralization is a single point of failure.\n- Exponential egress fees punish data sovereignty\n- Proprietary services (DynamoDB, Lambda) create hard dependencies\n- Single region failure can cause global cascading outages

Google and Meta capture ~50% of global digital ad revenue. They set the rules, own the user data, and charge publishers for access to their own audiences. This turns the open web into a feudal system where publishers are serfs on rented land.\n- ~$300B in combined annual ad revenue\n- Publisher RPMs (Revenue Per Mille) have collapsed by over 50%\n- Complete lack of auditability in ad auctions and payouts

Web2's 'exclusive' platform access is a liability, not an asset. Users and builders invest time, data, and capital into systems that can change rules or revoke access at zero cost. This fragility is the core innovation attack surface for decentralized protocols like Ethereum, IPFS, and Farcaster.\n- Platform risk is non-diversifiable for Web2 businesses\n- Switching costs are deliberately engineered to be prohibitive\n- True exclusivity requires verifiable ownership of assets and logic

Platforms like Facebook and Twitter monetize your user graph and data, then charge you 30%+ fees for the privilege. This creates a zero-sum ecosystem where platform growth cannibalizes developer revenue.

• Cost: $100B+ in annual developer revenue siphoned.
• Risk: Instant obsolescence via arbitrary API changes or de-platforming.
• Result: Innovation is stifled at the adjacency to the core platform's business model.

Centralized data custody (e.g., AWS, Google Cloud) creates single points of failure. A ~4-hour AWS outage can paralyze 35% of the internet. This isn't resilience; it's fragility by design.

• Vulnerability: DDoS attacks, regulatory seizure, and insider threats.
• Lock-in: Proprietary formats and egress fees make migration a multi-year, $10M+ project.
• Opportunity Cost: Data cannot be composable, preventing novel cross-service applications.

App store gatekeepers (Apple App Store, Google Play) enforce ~30% transaction fees and ~7-day review cycles. This turns rapid iteration into a bureaucratic crawl, killing product-market fit discovery.

• Speed Tax: ~2-week delay for critical bug fixes and A/B tests.
• Innovation Tax: Entire business models (e.g., NFT marketplaces, alternative payments) are banned.
• Result: Markets are defined by platform policy, not user demand or technical merit.

The antidote is permissionless infrastructure where the rules are code, not policy. Ethereum, IPFS, and Farcaster demonstrate that open networks out-innovate and out-scale walled gardens over a 5-year horizon.

• Composability: Protocols like Uniswap and AAVE become Lego bricks for new apps.
• Aligned Incentives: Value accrues to builders and users via tokens, not just platform shareholders.
• Real Resilience: ~13,000 globally distributed nodes secure Ethereum, not a single AWS region.