Why Your Followers Should Be Your Shareholders

Users generate immense protocol value—billions in fees and liquidity—but are mere renters in the system. This misalignment leads to mercenary capital and protocol fragility.

• Value Leakage: Fees flow to passive token holders, not active participants.
• Security Risk: Users have no skin in the game, enabling cheap governance attacks.
• Growth Ceiling: Community growth is transactional, not foundational.

Embed ownership directly into the social or usage graph. Each user's influence or activity is tokenized as a direct financial stake.

• Direct Alignment: Creators and curators profit from the ecosystem they grow.
• Capital-Efficient Security: Stake is provided by the most engaged users, not mercenary LPs.
• Viral Onboarding: Ownership becomes a feature, turning users into evangelists.

Move from ad-based models to stake-based curation. Attention and influence are financialized, creating a native Proof-of-Stake for social graphs.

• Sybil Resistance: Spam is expensive; meaningful interaction requires stake.
• Quality Discovery: The best content rises via economic signaling, not opaque algorithms.
• Protocol-Owned Liquidity: Fees are recycled into a treasury owned by the staked user base.

Standardize composable ownership stakes. ERC-7007 (AI Agent NFTs) and similar frameworks allow reputation and influence to be portable, programmable assets.

• Composability: Your stake in one app (e.g., Farcaster) can grant access/rights in another.
• Programmable Cashflows: Automate revenue sharing and fee distribution via smart contracts.
• Verifiable Legacy: Onchain reputation becomes a durable, transferable asset class.

Airdrops to followers create a massive incentive to farm fake accounts. This dilutes real users and undermines governance integrity from day one.

• Sybil-resistance is the core unsolved problem.
• Legacy models like Proof-of-Humanity or BrightID add friction and centralization.
• Without a solution, governance is captured by the largest bot farm.

Your most valuable followers are now monetizable assets. Competitors can directly poach your community's equity with a better token offer.

• This turns community management into a continuous liquidity war.
• See the precedent of Sushiswap vs. Uniswap.
• Forces protocols into unsustainable inflationary token emissions to retain holders.

Granting financial equity for a non-financial action (e.g., posting, liking) blurs the line into security territory. The SEC's Framework for 'Investment Contract' Analysis is a direct threat.

• Followers expect profit from the managerial efforts of creators/protocols.
• Creates a permanent overhang of regulatory risk that stifles innovation and adoption.
• Contrast with pure utility tokens like Filecoin (storage) or Helium (coverage).

Follower-shareholders are not long-term LPs. They will sell at the first sign of downturn, creating reflexive sell pressure that crushes the token and the community's perceived value simultaneously.

• Combines social sentiment with token price into a single, volatile metric.
• Terra/LUNA demonstrated the catastrophic failure of reflexive systems.
• Erodes the very social capital the model seeks to monetize.

Followers optimize for viral growth and short-term token pumps, not protocol sustainability. This leads to governance proposals that sacrifice long-term health for ephemeral hype.

• See Compound's failed governance proposals driven by mercenary capital.
• Creates conflict between shareholder value and user experience.
• Undermines the progressive decentralization roadmap of serious projects.

To mitigate the above risks, founders will be forced to retain excessive control (e.g., multi-sigs, veto power). This defeats the purpose of decentralization and recreates the traditional corporate structure with extra steps.

• Vitalik's 'DAO is not a corporation' warning becomes irrelevant.
• Centralized curation of 'legitimate' followers is inevitable.
• Results in a worse user experience than Web2 platforms with clearer terms.