This article originally appeared in PrimeDAO. It is my answer to the question of why liquidity at very early stages of the innovation can be a feature rather than a bug.
This process of owning the tokens of your competitors lead to win-wins for those playing the game, but bad outcomes for other stakeholders who are not in the game. In some fields e.g. scientific research this sort of collaborative outcome may be socially desirable, but in many other markets this kind of collusive behaviour leads to anti-competitive practices. If Doudna and Zhang pool their resources rather than starting competing firms using rival IP, they could drive up the price of liscensing CRISPR and make us all worse off. https://www.tse-fr.eu/sites/default/files/TSE/documents/sem2015/io/schmalz.pdf.pdf
Very fair, but I guess the tension between these two things comes from whether we feel the organizations or participants in the game are the right size. If the reputation system in science was shifted towards groups, then you might want all groups to be fully competitive with each other. Basically I think the degree you want shared ownership stems from how optimally distinct the groups in a system are. And I strongly believe science has too many small groups (aka individuals) and in an entirely new ecosystem (like web3) I might argue the same as well. But in an established industry, I think the opposite would be true. That's why to me this is about situations where the failure case is the dominant outcome.
This process of owning the tokens of your competitors lead to win-wins for those playing the game, but bad outcomes for other stakeholders who are not in the game. In some fields e.g. scientific research this sort of collaborative outcome may be socially desirable, but in many other markets this kind of collusive behaviour leads to anti-competitive practices. If Doudna and Zhang pool their resources rather than starting competing firms using rival IP, they could drive up the price of liscensing CRISPR and make us all worse off. https://www.tse-fr.eu/sites/default/files/TSE/documents/sem2015/io/schmalz.pdf.pdf
Very fair, but I guess the tension between these two things comes from whether we feel the organizations or participants in the game are the right size. If the reputation system in science was shifted towards groups, then you might want all groups to be fully competitive with each other. Basically I think the degree you want shared ownership stems from how optimally distinct the groups in a system are. And I strongly believe science has too many small groups (aka individuals) and in an entirely new ecosystem (like web3) I might argue the same as well. But in an established industry, I think the opposite would be true. That's why to me this is about situations where the failure case is the dominant outcome.