2 minute read / Mar 21, 2022 / crypto /tokenomics /
The App Store Model Comes to Web3
Six months ago, I wrote about how the cap tables of crypto companies have approached the structure of web2 startups. Recently, EVMOS, a web3 project, pushed forward an important innovation for the web3 ecosystem. EVMOS enables Ethereum’s virtual machine on the Cosmos chain.
The EVMOS token model innovates on its predecessors by introducing the App Store dynamics to web3. In Apple’s app store, users pay Apple to access apps and developers receive a revenue share. This doesn’t happen today in web3. Except on EVMOS.
When users pay gas fees (transaction fees) to use EVMOS, 50% accrue to developers building applications. The other 50% rewards validators. Governance token holders may vote to change the 50/50 split in the future.
Gas sharing rewards developers for writing popular applications on EVMOS. Developer evangelism underpins healthy L1 chains: without applications, the underlying database of much value, no matter how sophisticated the technology. A stadium without entertainment sells no tickets.
Historically, web3 companies have paid developers fees from their treasuries or dedicated ecosystem funds to build applications atop chains. While this technique may achieve the same results initially, developers may not stick around after the check hits the bank (or the tokens appear in their wallet). The EVMOS model better aligns current and future incentives of the L1 and the developers. In addition, ecosystem development is no longer a series of one-time expenses for the treasury, but an ongoing shared cost.
To make the math work, the EVMOS token model reduces initial community ownership to 10%, which furthers the compressive trend observed late last year.
The EVMOS token model may be one of the most influential innovations in web3 developer relations in a long time. After all, this concept has dominated the mobile app ecosystem and powered Apple and Google’s multi-billion dollar revenue streams from app stores.
Web3 finds itself at a moment where the innovations in infrastructure have outpaced those in applications. To attract the next billion users to web3, the great pendulum of technology progress must swing towards applications. The EVMOS app store model might be the insight to compel tens of thousands more developers to swallow the web3 red pill.