The Internet has transformed the way we communicate, access information, and engage with others and the digital world. However, a few social and content platforms have emerged as dominant gatekeepers, accumulating and monopolizing large user bases and data silos. This situation is required to sustain the prevailing business model that relies on monetizing user data through advertising. This model, in turn, was brought about by the lack of a native value transfer mechanism on the Internet, a constraint that left companies with few other revenue options. Users found themselves commoditized and locked in walled ecosystems, unable to move freely across platforms and retain ownership over their digital identities and assets.

The key insight of mechanism design is that the outcome of a system is shaped not only by the participants' actions but also by the rules, incentives, and constraints that govern their interactions. In this case, even if web2 companies were to try to change direction, they would still face hard systemic constraints, which would make it a challenging task without undermining their product and financial viability. In fact, the opposite is often the case. As competition fires up and new players emerge, incumbents inevitably move to defend their market share. Like quicksands or knots, the more they move, the more entrenched they get, and the outcome is almost inevitably a tighter and more extractive system (see, for example, what recently happened at Reddit or Twitter as they tried to protect their positions).

Mechanism design’s goal is to design rules or mechanisms that align individual incentives with socially optimal or efficient outcomes. Web3 is promising because it’s founded on a completely new set of incentives and constraints, signifying a transformative shift and offering an alternative vision for the Internet. By integrating decentralized technologies like blockchain and smart contracts, web3 platforms can leverage a native value transfer mechanism. This shift in infrastructure aligns incentives with user ownership, openness, and interoperability, enabling applications to interact and enhance each other's functionalities and developers to leverage existing building blocks to create new experiences. This permissionless and modular approach reduces dependence on single platforms and fosters healthy competition, driving innovation and value creation.

It's time to set off on a journey where the Internet serves as a tool for empowerment, creativity, and collective progress. With web3, we have the chance to reset the rules and build a better digital world for generations to come.