This article is the speech delivered by Mr. Xiaofeng, chairman and general manager of Wanxiang blockchain and co chairman of the board of directors of yuancosmos 30 people forum, at the second global yuancosmos conference and the founding meeting of yuancosmos 30 people forum. It is reproduced from the wechat official account [yuancosmos 30 people forum].
Warm congratulations on the official establishment of the yuan universe 30 forum today. The topic I want to share is called "ten economic rules of the yuan universe". We all know that the meta universe should be a small lotus. Now we are discussing the economic rules of the meta universe. There must be a large part of conjecture. Therefore, there must be many things that will prove wrong in the future. But I firmly believe that the economic rules of the meta universe will be different from those of the Internet, just as the economic rules of the Internet are different from those of the manufacturing industry. We all discuss the differences together.
First of all, from the perspective of property right system and capital income distribution system, we can roughly divide the past into three modes. The industrial economic model or manufacturing economic model is called the "main street model". The main street originally corresponds to Wall Street, which is financial capital, and the "main street" is industrial capital and industrial capital. The "main street model" is centralized from the perspective of property rights and equity, and the income of capital is exclusive. At that stage, there will be many big capitalists, such as Ford, Carnegie, Rockefeller and other big capitalists in the main street. However, when it comes to the Silicon Valley model, which can also be called the information economy model, the property rights are decentralized. The founders, a, B and C round of financing. At the same time, a lot of equity is allocated to employees in the form of employee options. Because its ownership structure is decentralized, there will be no big capitalists in the Silicon Valley model. Most of them are professional managers. With founders and professional managers, it is difficult to have big capitalists such as Carnegie and Rockefeller. From the perspective of capital gains, it has also changed from exclusive to shared, which is a decentralized capital structure and shared capital gains.
In the meta cosmic economic system, the so-called equity system has been dissipated and does not necessarily exist, or even if it exists, its value has been greatly reduced. From the perspective of capital gains, it is a sharing model. All contributors and participants realize large-scale collaboration through smart contracts in the form of stakeholders' organizations, so as to share the value realized by the meta universe. This is what I want to say that the capital system may be different.
Second, from the law of value creation. Manufacturing economy, Internet economy and meta universe economy are also different. In manufacturing economy, the law of value creation is to maximize the value of the company. In the Internet age, it is no longer the pursuit of maximizing company value, but the pursuit of maximizing network value. Kevin Kelly cited an example called the "fax machine effect". 200 dollars to buy a fax machine, which is the cost, but you join the fax machine network, you can send a fax to others, others can also send a fax to you. The value of the network you enjoy may be worth tens of billions of dollars, far more than the cost of buying a fax machine. The Internet first pursues "network value maximization", so as to realize your own value maximization.
In addition, if you buy a fax machine in the morning and another group of people buy a fax machine in the afternoon, the value of the fax machine bought by that group of people in the afternoon will also increase because you have more choices to send faxes. The fax machine effect explains the Internet very well, and everyone pursues the maximization of network value.
In the meta universe, the meta universe is a spatial concept, including digital space, virtual world and parallel universe. On the basis of pursuing the maximization of network value, it further pursues the maximization of the whole space value. Especially in the virtual space, there is no limit by many physical rules, so there is more room for development. We should try our best to create value in the virtual world, digital space and parallel universe, and pursue its value maximization.
Third, from the perspective of value distribution. Manufacturing industry has the characteristics of high fixed cost and increasing marginal cost. Therefore, the marginal cost of each additional vehicle is increasing when one vehicle and 100 vehicles are built. Therefore, the pricing model of the manufacturing economy basically uses cost plus and profit margin to price the products of the manufacturing industry. We can call it the "charging model". It is impossible for the manufacturing industry to have a free model. It must be a charging model, or a charging model as the core model. In the Internet era, the "free model" is the main model, because the Internet economy has high fixed costs, but its marginal cost is basically zero. So you can put the wool on the pig and the dog will pay for it. It seems free, but in fact, free things may be more expensive, which may be even more expensive than the "rare things are more expensive" manufacturing rules. The maximum market value of manufacturing enterprises is hundreds of billions of dollars. In the Internet age, there can be trillions of dollars in market value, because your marginal cost is zero and you earn more.
Is the metauniverse such a model? No. Due to the dissipation of capital, yuancosmos shares capital income and all participants share it. Therefore, the meta universe is a combination of producers and consumers. Therefore, I borrowed a very popular word "x to earn" in the current metauniverse business to earn money while playing, while exercising, etc., and transformed it into "player to earn" players, participants or "stakeholders" to earn returns and jointly distribute the value of the metauniverse.
Fourth and fifth, from the perspective of the "player" of player to ear and the "ear" of player to ear, the player is the stakeholders in the meta universe economy, including developers, creators, contributors, consumers and investors. All participants are the players of the meta universe. NFT is a symbol of all assets of the meta universe, a general equivalent. When NFT is created, issued, operated, used and traded in the meta universe, it is actually player who operates this asset in the meta universe. Operating the assets of the meta universe is what player does in the meta universe, operating NFT assets to make money.
How to define "earn"? Player creates, operates and uses meta universe assets to earn returns. The earned returns are expressed in the form of tokens, so the earned returns are tokens. The basic business logic of the whole metauniverse is "player NFT", and then earn (earn) token. As a distributed ledger, blockchain is used for such play to earn bookkeeping. We have seen some application scenarios of "player to earn" appear, but only Xiao He shows his sharp points. I think the metauniverse is basically such a core business logic.
Sixth, from the perspective of the capital market of the meta universe, the capital market of the meta universe is completely different from the familiar capital market. There will be two sets of capital market systems in the world in the future. The first set is shareholder capitalism based on the equity system and capital income distribution mechanism of industrial economy and Internet economy. Based on shareholder capitalism, we distribute our own equity through the joint-stock system. Therefore, we have established a good stock market. In the future, under the capital system of stakeholders of the meta universe, we will share these property rights and share these capital gains. Based on the blockchain distributed ledger, digital wallet, smart contract, NFT and token, we will establish another capital market that can adapt to the meta universe in the form of programmable currency and programmable assets. That capital market is called "defi".
Seventh, from the perspective of the company's organizational structure, the company's organizational structure is gradually moving towards the meta universe decentralized autonomous organization Dao. The decentralization of enterprise organizations is a trend, which is to build external market functions into commercial institutions to reduce transaction costs. Transaction costs include search costs, matching costs, logistics costs, payment costs, etc. In the workshop era, the exchange was entirely dependent on the external market. Therefore, its transaction cost is very high. Finally, with the company, the main function of the company is to build many market functions into the enterprise. Later, we found that the company's architecture is also moving towards distributed.
When the company first got up, the U-shaped structure and the structure of centralized decision-making from top to bottom gradually led to the emergence of the business division because of your diversification. At the same time, because of your globalization, there are regional headquarters. The division and regional headquarters have gradually decentralized their powers, dispersing many of the group's rights, thus creating an M-type enterprise organization. "Dao" establishes business institutions and engages in business activities through smart contracts. In fact, it inherits the trend of the company from a centralized U-shaped structure to a distributed M-shaped structure, and finally to a decentralized structure. The purpose is to internalize the functions of the external market. The biggest advantage of "Dao" is that in addition to the function of market commodity exchange, Dao has built-in currency system, financial transaction system, value settlement system, clearing system, etc. through digital currency and digital assets, so its friction coefficient will be smaller. This is from the perspective of commercial organizations.
Eighth, from the perspective of decision-making mechanism, it is often said that blockchain and metauniverse are decentralized decision-making mechanisms. I believe that the future will be a combination of centralization and decentralization. The centralized decision-making mechanism is an efficient decision-making mechanism. It is very efficient to make decisions from top to bottom or from one center. Therefore, when efficiency is needed, the centralized decision-making mechanism is useful. The decentralized decision-making mechanism emphasizes democracy, fairness and consensus decision-making. I believe that in the future, more business scenarios in the meta universe should be to find a balance between extreme efficiency and extreme democracy and fairness, and between centralization and decentralization to adapt to specific business scenarios. I believe this is the process. In the future, there will also be a good combination of centralization and decentralization in the meta cosmic economy.
Ninth, from the perspective of products and services, metauniverse is also different from the Internet. When commenting on blockchain, people always asked: what is the killer application of blockchain? Indeed, compared with Internet applications, blockchain seems to have no killer applications. The Internet is a protocol stack. The so-called tcp/ip model is a stack of several layers of protocols. All the Internet is open source and open, and there is no way to capture value. Therefore, some people say that the Internet is "thin protocol and fat application". As for the so-called "fat applications", we have seen the emergence of a trillion dollar large Internet platform, which is of great value in the application layer. However, TCP, IP, HTTP and SMTP protocols are open source, open and do not require licenses. The Internet makes many "fat applications" on the basis of "thin Protocol".
Like the Internet, blockchain is also a protocol stack, but the protocol stack of blockchain has built-in currency system and value system, which has become "fat protocol and thin application". The bitcoin protocol is a case in point. Such a blockchain protocol is worth trillions of dollars. The blockchain protocol with built-in currency system and value system is a "fat Protocol". The protocol layer itself can capture value, which is the biggest difference between blockchain and the Internet. The blockchain protocol is valuable because the blockchain protocol has built-in currency system and value system. Finance itself is built into the protocol, and the internet protocol, whether IP protocol, HTTP protocol or SMTP protocol, has no built-in currency system and cannot capture value.
To metacosmic economy, the possible result is "fat protocol, fat application". Because the underlying infrastructure agreement of the meta universe also has a built-in monetary system and financial system, its agreement is a "fat agreement", realizing value and realization at the agreement level. The application of metauniverse will combine many digital technologies in the future. In one space, its application should be larger than the Internet, so it may be "fat protocol, fat application".
Tenth, digitalization and virtualization have greatly subverted the manufacturing industry, which will eventually have a "fax machine effect". There is a high fixed cost to build a car. To produce 100 cars, each car also has its marginal cost. High fixed cost and increasing marginal cost are the characteristics of manufacturing industry. The characteristic of the network is that the fixed cost is very high, but the marginal cost is decreasing or even zero. The design and development of a software requires a high fixed cost, but after the software is made, it is used by one person and onemillion people, and its marginal cost is close to zero. Without digitalization and virtualization, the manufacturing industry cannot have network effect. However, when the manufacturing industry is sufficiently digitized and virtualized, in fact, the manufacturing industry is also gaining the Internet effect of decreasing cost of scale and increasing return to scale. Another example is that after all the cars are connected to the Internet, buying a car will have a "fax machine effect". You buy a car and join the Internet of cars with great value.
These are the ten economic rules of the meta universe I share. Making predictions about the future is a thankless task. What I said may not be right. But I still want to emphasize one point: the economic rules of the meta universe must be different from the Internet, just as the economic rules of the Internet are different from the manufacturing industry. Thank you!