I thought about controlling speculation and improving Pareto in web3.
Balance between intentional speculative nature and speculative nature of results.
Good morning.
Mitsui from web3 researcher.
Today I will write about my personal thoughts on the "My Number Authentication Function of Chichemie" that was announced yesterday.
*This is neither a PR article from Chichemie nor an introduction of a new feature.It is only a discussion article to organize and introduce what we have thought about using this function (idea) as a hook.
🎟️ Chichemie Announces My Number Authentication Feature
💰Controlling speculative nature in web3
🤝Permissionless importance and Pareto improvement
💬web3-like Pareto improvements are nice.
🎟️Chequemy Announces My Number Authentication Feature
Although we say this is not an introductory article, we need to introduce what kind of content was announced to lead to later discussion, so we will start by introducing the new features.
In the words of the announcement, Chichemie, the provider of the NFT ticketing platform, has introduced My Number Authentication.
To quote the press release.
In order to make personal authentication easier and more reliable and to strengthen safe and secure ticket transactions, including the prevention of unauthorized resale, Japan's first (*1) NFT ticket platform "TicketMe" operated by CHICEME, Inc. will be linked with the "Digital Authentication Application" provided by the Digital Agency,The company has announced that it will use the My Number Card for personal identification and authentication within its services.
The use of the My Number Card, an official identification card with a retention rate of over 70% (*2), will allow us to provide a more reliable ticket service.
This is intended to prevent excessive purchases for resale, which I personally found to be a very good new feature.
💰Controlling Speculativeness in web3
Now, I personally thought the "my number authentication feature of Chichemie" was very good.(I don't know the true intention behind the implementation, please, but this is just a third party's opinion.)
The reason is that "It allows for speculative control.
One of the major challenges of NFT tickets is "resale.While NFT is said to be introduced to prevent resale, it is difficult to control resellers with a completely anonymous public chain.The issue of resale here means that there are people who intentionally buy up the shares to raise the price and resell them for the purpose of reselling them at a high price.
I think that the authentication of my number is an effective way to solve this problem.
I think that a good web3 mechanism can be abstracted as how to build "incentives to cheat < incentives to follow the rules," and my number authentication reduces the incentives for resellers to cheat.I don't know how the technology is implemented, but there is a risk that individuals can be identified, and it is almost impossible to apply from multiple accounts in the first place.Thus, the return on the man-hours and risk will not be commensurate, and as a result, the incentive will be reduced.
I believe there are two types of speculation: "intentional speculation" and "speculation of results.In the case of NFT tickets, resellers are "intentional speculation," while reselling tickets that you bought purely as a fan but can no longer afford to go to the show or that become scarce after the artist becomes famous five years later are "speculation of results.
This balance is important, and as an NFT, the element of "speculative nature" cannot and should not be removed.And if "intentional speculative nature" accounts for the majority in this balance, it will become a bubble, which will soon burst.Therefore, I think it is important for the balance to be mostly "speculation of results" in order to function in a healthy manner.
So how to do this?
As I wrote earlier, web3 is an incentive adjustment.We can reduce the incentive (cost-effectiveness) for intentional speculation.In the case of the Chickemie example, with my number authentication, even resellers can purchase tickets.However, if they can only purchase up to one ticket, the return they get back will be less, so fewer man-hours can be spent on it, and fewer resellers will be able to resell it. it will not be zero, but the speculative nature of the result should increase.
What I personally think is important hereis to keep the incentive adjustment permissionless.
🤝Permissionless Importance and Pareto Improvement
I consider web3 to be one of the essential elements of permissionless.The characteristic that anyone can freely participate in a web3 project without permission is essential to the web3 project.
And, as we have discussed, one way to control the speculative nature of the project is to limit the number of participants.
For example, limiting who can buy with NFT certification or proving that they have not resold unfairly in the past is a good form, but I do not think centralized censorship should be done as long as it is web3.(This is my personal philosophy.)
It is important to find the right balance between maintaining permissionless and adjusting the incentives for cheaters, thus improving the ecosystem.
And the important thing to remember is that this is a Pareto improvement.
A Pareto improvement is "a change that can increase the utility of at least one person without sacrificing anyone's utility"means.
In other words, even if fraud is reduced by adjusting incentives, if it is to the detriment of other stakeholders, it is not a Pareto improvement.It is important to maintain a comfortable relationship with all stakeholders involved, so forcing everyone to endure in order to prevent fraud is not a desirable improvement.
In this sense, I thought the my number authentication feature of the Chichemie was a good strike.
It will help prevent fraud, and if fraud is reduced, the probability of real fans winning will increase.It also improves the credibility of the ticket-maker's platform.In addition, when it is only true fans, there will be no more abnormal reselling, the secondary distribution market will be more acceptable to both fans and creators, more people will have new options, and a new revenue stream will be created for fans, creators, and the Chickemy side.
💬Nice web3-like Pareto improvement
What I want to say in this article is that I have thought about my personal ideal way to improve web3.
In summary
web3 should be permissionless
It is desirable to have a healthy ecomomy without limiting the number of participants by reducing the incentives to cheat.
However, no one stakeholder should be disadvantaged in doing so.
Pareto improvement should be made.
It felt right to verbalize it again.
This is just my personal value system, so I am not particularly looking for agreement, but I hope it will be of some help, and I have written an article about the considerations.
Surprisingly, I feel that there are many improvements without Pareto improvement in mind, and if this continues, the economy will gradually stop working because it will be wrinkled somewhere.It also seems to stop without knowing the cause because the part that used to function suddenly stops functioning.
However, it is actually due to the accumulation of the fact that in improving some part of the system, you are revamping some other part of the system.
However, I think it is difficult to implement.
The above is the article "Using "Chichemie's My Number Authentication Function" as a hook, I thought about controlling speculativeness and improving Pareto on web3!
We will continue to research and consider various hypotheses!
Disclaimer：I carefully examine and write the information that I research, but since it is personally operated and there are many parts with English sources, there may be some paraphrasing or incorrect information. Please understand. Also, there may be introductions of Dapps, NFTs, and tokens in the articles, but there is absolutely no solicitation purpose. Please purchase and use them at your own risk.
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mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.
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The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:
Telegram：@mitsui0x
*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.