Pioneering Economic Practices for AI and Web3 Creators - An In-depth Look at the MyShell Badge System

I’d like to express my gratitude to Ethan (MyShell) and Chris Lu for their continuous support and invaluable assistance with this article. The MyShell fam group chat has always been a significant source of inspiration for me. >3

On January 26, MyShell introduced a badge point system that has transformed all AI agents, chatbots, and apps on the platform into openly investable assets. The team is currently hard at work iterating on the product and economic system, so let me start the discussion.

If you’re new to MyShell, I encourage you to visit the official website to explore and engage with the product. In essence, it’s an AI agent/app creation platform that incorporates both major proprietary models and numerous open-source models, making it the most user-friendly and comprehensive platform in both the Web2 and Web3 spaces.

I want to reiterate that MyShell is, first and foremost, a practical AI creation platform with an open creator economy. While this article mainly focuses on the economic system from its Alpha testing phase, I highly recommend that anyone interested in the platform try it out. By creating your own Agent/APP/Bot, you will experience firsthand how an advanced web3 economic system can enhance excellent AI products.

In this article, I will focus on three main topics: 1) The badge point system in the MyShell Alpha release; 2) An analysis of how this model benefits the creator economy and reflects the team’s commitment to long-term planning; 3) Speculating on the future development and expansion of this economic model and its ecosystem.

1. Analysis of Badge Point System

Agent/APP is the core interest-earning asset on the MyShell platform, every interaction with the Agent/APP consumes “power” (which is a kind of paid points). Each Agent/APP will charge different power for each interaction based on the language model, speech model, and picture model it uses. For example, an ordinary chat robot (which only uses GPT3.5 and the author’s fine-tuned model) only consumes 1 power each time; and a picture generation robot uses other open source language models and the official TTS voice. Model (OpenVoice) consumes 13 batteries each time it is used. In this regard, MyShell implements pricing for Agents/APPs and their interactions on the platform. Each publicly released Agent/APP is effectively used 10 times and can be assigned 100 shell points. These points will be distributed proportionally to agent creators, model creators, and agent investors.

For creators 1) Agent and APP creators can not only use a variety of models on the platform to create extremely easy-to-use works, but also directly obtain the first share (worth 10 Shell points) and future long-term interactions after publishing the model. income. 2) Even if the author of the open source model does not need to come to MyShell to build the product, as long as it is inherited, he can directly receive points rewards from MyShell, and hundreds of thousands or even millions of real users can actually use his model. 3) The returns obtained by creators in the above links can be used to purchase pass cards to gain more opportunities to create public Agents/APPs, creating new assets worth investing in for the platform; or they can be used to invest in other Agents/APPs and become investments. By.

Specific investment process 1) Buying: The initial price of each Agent/APP is 10 Shell points. Every time one more person buys this asset, the price will increase by 10 Shell points. In order to prevent wash trading and malicious price manipulation, investors can only buy one Agent/APP per hour, and a user can only make three purchases on the same Agent/APP.

2) Earn: During the process of holding an Agent/APP, all investors can equally share 40% of the income generated when it is used by other players. The longer the holding period, the more returns investors accumulate on it. Investors’ return cycles are different. Because some people buy at 50 points, and some people buy at 500 points.

3) Sell: When the user decides to sell, 90% of the cost can be redeemed, plus the dividends received during the holding process. In addition, the early investor’s quota will be vacated. The price of this quota is often half the current price of Agent/APP or lower. Other investors may discover and seize this opportunity in the market at a favorable price.

Therefore, the entire investment process can be summarized as: buy a potential Agent/APP, actively promote it and let more people interact with it. Then wait until your passive dividends exceed 10% of the cost, then you can start earning net profits. When you feel that profit margins have declined or you want to invest in other new potential products, you can choose to sell and take away 90% of the cost + all dividend income. When other investors discover your favorable cost price, they will choose to invest in this asset and promote it again, allowing it to gain a new round of popularity and dividends.

Next, I will explain how this economic model motivates ecological participants.

2. Characteristics and Advantages of Economic Models

MyShell’s entire economic model design is based on its purpose. Rules are not enough to highlight the health and long-termism of its economic model. Below, I will summarize the design intention of this economic model through my personal impressions and what I have previously communicated with the team. These design intentions are closely related to the team’s long-term vision, and we hope readers can feel the team’s persistence in values ​​and mission.

1) A mildly improved version of the bonding curve - giving investors more room for rational thinking and a cornerstone for long-term holdings MyShell currently has nearly 500 public Agents/APPs, each with different personalities, fine-tuning, underlying models, and functions. Investors have too many choices. They can make rational judgments and long-term investments based on the popularity and frequency of use of the Agent/APP, and join in the process of promoting it. Instead of being kidnapped by the bonding curve and numbers that rise at any time, make quick/disorganized/illogical investments.

2) Not to earn interest differentials, but to earn dividends - implement long-term investment concepts and empower products. The price of Agent/APP will rise as more people buy it, but if the Agent has not interacted with more users and generated dividends, investors will not be able to gain income. If you regret leaving the market at this time, not only will the investor not be able to earn interest from the price, but 10% of the principal will be deducted as a handling fee. Therefore, early entrants need to grow the pie together with late entrants, but cannot divest and leave the market to harvest late entrants. The correct investment thinking is: the design has ensured that investors can redeem 90% of their principal, the investment risk is very small, and once the Agent/APP becomes popular, it will be greatly upside. Therefore, you should choose a low-value & high-potential Agent/APP, promote it after buying it, and obtain dividend income from the interaction by promoting the asset. To a certain extent, this kind of investment is actually more like staking. If you believe that good Agent/AI has long-term demand in the market, you can buy it with peace of mind, avoid frequent transactions, and share the profits in the long term.

The profits earned by investors only depend on the frequency of agent use, not on the number of buyers. This further provides more opportunities for price recovery across a wide range of assets, whether they have experienced the hype or not. People will believe that the once popular Agent/APP perfectly meets the needs of a small group of people. Even if it has been dormant for a period of time, it will be discovered by another small group of people with the same needs and become popular again. Rick bot on the MyShell platform (fromRick and Morty) is the best example. It was popular when it was first created, and now it is popular again because of the investment gameplay. It proves that a high-quality Agent/APP can take on all the new attention brought by product updates/capitalization, and in Different time periods are loved by different user groups.

3) Diverse games help value discovery and encourage the emergence of new assets with high potential Participants in the economic system may have these thoughts: Because the entry cost price is different, but the design of equal sharing of dividends means that when the price of the same Agent/APP is too high, it needs to generate more interactions to recover the cost. For example, for a 50-point purchase and a 500-point purchase, the former only requires 10 points to start earning net income, while the latter requires 50 points to repay the capital before starting to make any income. Therefore, there will be games and thinking among investors:

• Choose classic Agent/APP. This type of asset can maintain a high frequency of use every day. Although it has been hyped to a higher price (such as 500 points), you can earn more points every day.
• Choose an emerging Agent/APP with a lower price (such as 50 points). After investing, actively promote the bot so that it can interact more with people.

Such a trade off will make more people hope to explore emerging agents. There will be more demand for new assets in the market, causing newly released Agents/APPs to receive attention and hype from investors. High-quality works will find value in this process, even flipping those older classic Agents; while flawed Agents will expose their shortcomings after a wave of popularity, and their investors can encourage creators to improve.

In addition, the “grabbing discount” mechanism for early investors to exit is also very interesting. Early investors step aside, allowing new investors to invest in an asset at half the current price or even less. This mechanism actually stimulates a small number of new investors to quickly snap up an old asset in order to maintain the total value of the asset and avoid the price decline and death spiral that appear in the bonding curve; as more new investors join, they can regain It plays a role in promoting assets and can repeatedly stimulate the process of value discovery-promotion-hype-calming-rediscovering value of an Agent/APP.

“Grab the deal”

Last but not least, in order to protect the hard work of the team & creators and the normal operation of the ecosystem, MyShell will definitely protect the interests of ecological contributors and crack down on profit grabbers who maliciously open and interact with others.MyShell will implement strict risk control and anti-cheating mechanisms. Users who want to invest in the creator ecosystem and can grow with MyShell for a long time are welcome. Inorganic abnormal interactions will have a higher risk of being banned.

3. Long-term expansion of the economic model - building an ecosystem, not a model

1）Agent/AI-native APP as investable asset

Why is the logic of investing in Agent and sharing dividends successful on MyShell, and can MyShell optimize and amplify FT-like betting gameplay?

Let’s get back to the essence of MyShell as a creator tool platform and Agent/AI-native APP as investable assets – that is,Irreplaceable tool platform，Excellent native content supply，AI agent asynchronous interactivity，Convenience and long-term investment。

Investors who are active in various new points-based systems in web3 may be used to short-term bubbles stimulated by various FOMO and wealth effects. After friend.tech, there are actually many point-based products, maybe chatting with others, maybe live broadcasts and small Although the game can complete the cold start through the points system, the product itself has the following four pain points:

• Tools lack irreplaceability(Can be replaced by traditional social media or APP, such as X, Telegram, Twitch);
• Non-nativeness of content(More information may be spread on other social media such as alpha group, rather than a new APP);
• Interaction lacks asynchronicity(Hosts must be online to answer questions);
• Convenience and long-term investment are weak(Householders and investors are required to conduct frequent transactions and operations, and investors have higher financial ability requirements).

Simply put, MyShell has created a strong moat through integration and tool polishing: creators must create here, users must use products here, and investors must invest here. Moreover, its investment is more suitable for widespread user participation. This is irreplaceable by any other low-cost short-cycle products and mass social media, and with the establishment of the growth flywheel and ecology brought about by the Web3 open economy, it has become an even more difficult barrier to overcome.

2) Help small AI startups raise funds and launch products, and use the economic and ecological flywheel of Web3 to solve the problem of difficulty in commercialization, financing and exit of AI in traditional industries.

“A small AI startup and a web3 project launched through IDO or DEX share many similarities.” -Ethan (Cofounder of MyShell)

Ethan and I once had an interesting brainstorming idea that small AI products = $MEME, because they all have the following characteristics:

1. The amount of funds is small (the cost is low with the open source model);
2. The product pace is fast (the development time is short, the product is delivered within a week, and there is no time to talk about financing/finding a lawyer/dealing with legal terms);
3. Short life cycle;
4. Be able to become popular quickly, and need to make enough money within two weeks of becoming popular (to cover development costs + develop the next product);

We are familiar with short-term popular products, such as “Miao Duck Camera” or “Cat Girl Girlfriend Simulator”. They all took advantage of the first wave of popularity to immediately start subscription/buyout/advertising to make money, but the cash flow is not sustainable. Behind these survivors are countless small AI teams and startups:

There are 300% more small AI products in the first quarter of 2023 than in the fourth quarter of 2022, with an average of 100 AI products released on Product Hunter per month, but the number of AI startup companies has dropped by 70%, and 83% of these companies There are less than ten employees. (source：Sortlist）

The above data illustrates that in the field of AI and even broader post-AI era applications, small entrepreneurial teams (or even individual entrepreneurs) have emerged, while the number of large-scale companies has plummeted.

In the context of the emergence of a large number of entrepreneurial products from small teams, changes in liquidity and commercialization paradigms have also followed. The vast majority of VC funds have gone to giant companies, while more small AI companies may use their own funds or be able to obtain angel/seed round investment, but subsequent PMF and commercialization will become huge problems. A large number of small teams are still exploring PMF, and only a handful of them briefly became popular through short video media, but they missed the heat before they could be commercialized.

Therefore, the paradigm innovation of AI entrepreneurship requires matching liquidity and commercialization support, namely the Launchpad model and IDO model.

Now, imagine aIt provides most open source models and mainstream closed source models, allowing developers to quickly get started with the platform of making and delivering products; it also has native currency and a large number of individual investors, which can provide financial support in the early stages of the product; and there is a certain probability that the product will become popular. After that, you can get liquidity injection and speculation from the 24/7 financial market. - This kind of launch platform for innovative and entrepreneurial products is exactly the role MyShell will play.

By then, the value of MyShell will be the sum of all AI products. Just like Valve is to independent games, Kickstarter is to consumer products, Product Hunt is to mobile Internet products, but it is more than that. It has the traffic of Apple Store and the capital and liquidity of Launchpad/DEX.

3) More to come: Explore and experiment with the AI ​​agent market and more valuable agent-related topics. Due to limitations of space, product stage, confidentiality, and not wanting to distract readers from the alpha stage economic model, there are many economic models and ecological possibilities (already in the pipeline) that are difficult to discuss here. I look forward to meeting readers in future research articles. Such as:

• Agent market on the whole chain
• Trading agents with different strategies and personalities
• Game agent (helps you optimize game strategies and hang up, and even bribe other agents)
• Calls and interactions between agents
• …

All these powerful functions will be integrated into the huge user ecosystem and economy in the future. For a team with strong research and technology implementation, it is a very inclusive/experimental/stable ecosystem. The release of the alpha version of the economic system does not mean the end of the product, the MyShell ecosystem has just begun;D

Epilogue

In the past year, many AI and IP teams have approached me, and they are all curious about the creator economy brought by web3 (such as Web2’s largest GPT Prompt community and well-known animation IP). However, they don’t know how to integrate web3’s funding/investment features into their community and products in a comfortable and secure way. I’m glad to see MyShell taking the lead and embedding this into their ecosystem. With the development of the ecosystem and product iteration, this problem will be solved and become a pioneer in the future development of the creator economy. You never know until you try.

In many of our previous discussions, we’ve gone back and forth on combining the hyped nature of web3 with creators from web2, and the possibilities that come with that combination.

We know that due to the strong stimulus effect of web3’s economic system, many teams have become short-sighted and eager for quick success. However, only those teams that truly care about the creator ecosystem and products will be willing to spend time building an economic system that satisfies all “needs and needs” and tries to allow all participants in the ecosystem to contribute and receive the rewards they deserve. .

To this point, the MyShell team’s answer is consistent. They firmly believe that moderate growth and revenue sharing can bring longer-term and more stable growth momentum. From day one, their goal has been to create a truly powerful AI tool that rivals the web2 giants, while sharing the revenue with creators and the entire open source community. I’m excited to see them deliver on their promise through countless product iterations and economic system exploration.

Finally, if you like the content of this article or are interested in any AI+crypto cross-field/economic system design, please follow MyShell’s official Twitter, you are also welcome to follow and send me private messages @0xAikoDai。

MyShell is hiring, welcome to contact the founder Ethan Discuss future career development.

Disclaimer: Folius Ventures, the company Aiko works for, invested in MyShell.

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