Traditional Web2 freelance and recruiting platforms are criticized for high transaction commissions of 10-30%. They have also been monopolizing data and preventing users from escaping them.
Is it possible to decrease the cost by 10 times and shift the data ownership from the platforms to the users? Or are we talking about a Warp drive engine from the Star Trek movie? It is nice to have a “Warp engine”, but unfortunately it exists only in science fiction books and movies. At the first glance, it seems that high fees are inevitable.
Both Web2 and Web3 platforms bear the same burden, such as:
- Customer Acquisition cost,
- Customer Retention cost,
- Maintenance and support costs,
- Platform development cost.
Are Web3 developers/marketing/sales teams cheaper than Web2? Certainly, they are not. Web3 professionals are more expensive, in general.
And how can a Web3 company achieve fees 10 times lower than a Web2 company? How to solve an equation: Customer Acquisition Cost + Customer Retention cost + Maintenance and support cost + Platform development cost < Web2 Fees / 10?
If the costs are the same or higher, it’s not possible from a mathematical perspective.
Digital assets are the silver bullet to solving the issue.
So, are we dreaming about a “Warp Engine”? No! Web3 has a silver bullet for the seemingly unsolvable problem. The name of the silver bullet is “Digital Assets”. As soon as this variable appeared in the equation, everything changed. Instead of compensating costs with fees, it is better to increase the value of digital assets.
Now our equation looks in the following way: Customer Acquisition Cost + Customer Retention Cost + Maintenance and support cost + Platform development cost < Web2 Fees / 10 + Values of Digital Assets!
The unsolvable problem has been converted into a quite challenging and ambitious but realistic objective. How can we create/buy and sell Digital Assets? What are Digital Assets for freelance platforms?
First, they are valuable users’ data:
- Profile with contact information,
- Professional skills,
- Personal job/employment history,
- Contracts history.
Data becomes valuable when it’s reliable, evaluated, and not distorted. When we look at somebody’s CV, in most cases, we don’t believe what we see. That is why both employers and employees must spend a huge amount of time on endless interviews. If we have reliable/proven data, its value is comparable with the cost of interviews.
So, the first step to Digital Assets is to digitize existing data, evaluate it and put it in a blockchain. Also, the owner of the data should provide access to their data and monetize it. The owner of the data should have a digital token that confirms the ownership.
This is an obvious example of digitalization. If we think about all services involved in the freelance market, it seems all of them can be digitized.
A business model multiplied by digital assets.
The Web2 business model is also based on data monetization. Transaction fees or entrance fees allow monetizing data that is created by people but belongs to the platform. The platform itself is also an asset. But assets created both by the users and the platform are not digitized.
Indeed, people sell/buy accounts on the Web2 platforms, but there is no market for the assets even inside these platforms, and sometimes these operations are prohibited by them. By contrast, the Web3 platforms should allow their users to create their own businesses inside the Web3 business.
Below, there are some examples of how new business assets in freelance businesses can be created.
Recruiters:
- A respectful recruiter has long-term relationships with a group of professionals, for example, QA engineers. How can these relationships be monetized?
- Here, the Web3 platform should provide the service when a recruiter launches their own website (for example MyRecruiter.com) but with the same functionalities the platform has.
- Then, when engineers register on MyRecruiter.com, the recruiter will get earnings from providing potential employers on the platform with access to QA engineers’ data.
Employers:
- An employer has a long and interesting history of jobs/vacancies published on the platform.
- Here, the Web3 platform should provide the service when an employer launches their own website (for example MyBusiness.com) but with the same functionalities the platform has.
- Then, when engineers apply for new jobs/vacancies, they may have to pay for their skills assessment or even for access to an interesting job or vacancy.
- Data on the platform proves how good an employer’s history is valuable for potential employees.
Employees/Freelancers:
- When an Employee/Freelancer has passed a professional and personal skills assessment by the standards of a well-known employer and paid for such service, they can sell access to their own data. Other employers are eager to have access to highly-qualified professionals.
We can continue this row of examples, but all of them lead us to the same conclusion. Web3 platforms should be a tool to allow and encourage people/companies to create their own digital assets. Web3 monetization should come from participant monetization instead of transaction fees. Web3 platforms create new digital assets and share both costs and profits with their participants.
Technically, selling or buying digital assets should be as easy as transferring a digital currency from one wallet to another.
Technical Architecture Requirements.
What is the major advantage of the Web3 business model?
A flattened hierarchy, where all participants are equal, and each of them can get different roles in the system:
- No middlemen. It means no one but the data owner controls access to data.
- Earning depends on created values – digital assets.
- Share profit scheme between participants creates digital assets.
- Based on existing digital assets, it is possible to create new digital assets.
Major Web2 platforms have a multi-tier architecture. The simplest one is:
- Frontend level or Application Level – through this level, users have access to the platform.
- Backend level or Level of Business logic – the level of business processes.
- Data level – the level where data is stored.
A decentralized flattened hierarchy business model requests a decentralized Technical Architecture with flattened layers:
- Blockchain level – data and smart contracts. All access to data should be controlled only by smart contracts. All digital assets should be put in the blockchain.*
- Frontend level – should be easily scaled up, just download the frontend from the public repository and set it up.
As we said before, a decentralized flattened hierarchy business model requests a decentralized flattened hierarchy Technical Architecture. And this is quite a challenging and grand job to develop an application for the market that doesn’t exist now. This is not only program code development, but also business development. And it makes the Web3 platforms even more attractive. Software development means business development and vice versa.
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