Mahatma Gandhi changed the world. He led non-violent protests that catalyzed a generational movement for Indian independence. He said:

Be the change you wish to see in the world.

He meant that people should take action in their own lives to change things they felt should be changed. If the world does not conform to our expectations, we should take action to make it so.

The world has changed since then. The global population has 4x from 1910, and cities are ever more densely packed as we transform into the Information Age. People live more and more of their lives on the internet, interacting with thousands of people every day. But the human brain can still only maintain about 150 different relationships.

We exist in larger spaces with only the same limited capacity for relationships. So non-human behavioral incentives presented to us influence us more. Rational actors follow incentives, therefore designed incentives can change behavior. Web3 supercharges this cycle.

We can use DAO structures to crowd-source desired behavior changes. We can rapidly allocate value for influencing human action through on-chain democracy and even apply the results outside crypto. We can incentivize the change we wish to see in the world. 👏👏

Inhuman influence

Under conditions where people collide more but don’t have relationships with their collisions, the invisible influence of incentives drives humans to optimize behavior. If the optimization requires new behavior, we call it behavior change.

Incentives don’t require direct interaction between individuals to change behavior. Molecules in Brownian motion spread in random directions, like herding cats. Instead of containing random molecular motion, what if we could direct it instead?

Incentives are soft redirections influencing behavior without putting up walls to block actions. For example, we could reward individuals for depositing recyclables in proper bins on the street. This immediately granted reward could later give credit on a utility bill. Individuals can choose not to recycle, but the optimal choice is there.

We allow people to choose and have ownership of their choices, but incentives increase the value for the individual for one action over another. We direct individual action (random movement) towards a single action that will benefit the whole; incentives create a channel to keep the majority moving West.

For example, we want to reduce carbon emissions. Tax credits show a measurable effect on electric car purchases. We can add economic value to bolster individual decisions while still allowing everyone to have autonomy.

Deciding on incentives

Token communities like DAOs are structures for deciding which behaviors to reward. Research shows that positive rewards drive more behavior change than punishment. Game systems simplify reward systems and we see the gamification of everything.

Token incentives have been used for user or liquidity acquisition, but that is not the only use. Regenerative Finance seeks to use financial means to reduce carbon emissions and regenerate the Earth.

Many organizations in web3 align with ReFi. These Impact DAOs allow token communities to vote on how to allocate their capital as incentives and change human behavior. They are vehicles for crowd-sourcing behavior change.

Gamification and web3

Gamification and theming fun experience point systems for task completion provide the instant reward that cements relationships between actions and rewards. But if rewards are useless, then the whole system falls apart.

Web3 is bursting with tokenized point systems full of utility. Crypto tokens can be directly financialized through creating liquidity pools, borrowing or lending, or trading.

Web3 is the next iteration of the gamification of workplaces. Incentives + rewards for work AND voting structures to flexibly realign those incentives over time. Work, earn tokens, financialize them in DeFi, and vote to incentivize behaviors with more tokens.

Above anything else, rational actors follow the incentives. Incentives drive behavior, especially as humans collide with each other more online. Design incentives to reinforce behaviors that will result in the desired outcome. Web3 allows us to crowd-source and democratically decide on the best ideas for achieving those desired outcomes. In short, DAOs unlock the ability to:

Incentivize the change you wish to see in the world 🌍

Notes

iSpeakNerd is an educator, wordsmith, and DAO techie at Bankless DAO. He is the creator of Fight Club’s contributor onboarding process, is the Content Director of Bankless Academy, and helps with Operations and tooling for multiple DAOs. His background is in physical science and education.

This is essay 2 of 4 for the BanklessDAO Writers Cohort