Optimisation Theory: Investing more than just capital into these networks.
Decentralised networks need investment, but they also need “participation”. This is because the networks are meritocracies that encourage contribution as the basis for advancement, rather than connections, status, or power.
At their core, it is the cryptoassets that are the reward to incentivise participation in a network. Specific design elements influence the behaviour of network actors and encourage communities to cooperate and create value.
Participation can take many forms, from securing the network, validating transaction and voting on proposals to the contribution of myriad resources or “work”. For active investors, these reward mechanisms, hard coded into the protocol, provide the ability to earn additional crypto assets beyond the capital appreciation of the underlying asset. ID Theory will securely mobilise cryptoassets where there is an opportunity to derive this type of return for their investors; a value add that is tangible and measurable in nature.
Leveraging Incentive Design:
Incentive mechanisms sit at the core of blockchain development giving this technology such exciting potential. Their design encourages the formation of highly valuable decentralised networks. To fully capture this value, participation in these incentive systems are of paramount importance. Furthermore, ID Theory believe passively holding assets will become increasingly unattractive as networks optimise to encourage broader participation.
Our strategy has a focus beyond direct investment in cryptoassets as we endevour to play a role in the support and growth of these decentralised networks wherever possible.
This network participation has two clear benefits:
Acquiring additional native assets from
the inbuilt reward mechanisms of a
Directly supporting the growth of
the networks we invest in. After all
with no network participants there is