January 8, 2024

In recent years, a variety of financial innovations enabled by Web3 and blockchain technology have emerged as transformative forces, aiming to challenge the status quo and address the systemic inequities ingrained in traditional financial systems. These innovations are decentralized, have transparency built-in, and enable the conversion of assets into digital tokens (tokenization).

Why does this matter? Decentralization removes the need for traditional legal and financial intermediaries, along with the gatekeepers that determine who has the power to design and organize financial products and investment vehicles. The secure and immutable nature of blockchain records ensures that financial transactions and data are visible to all participants, increasing accountability and reducing the possibility of fraud or manipulation. Tokenization unlocks the potential for fractional ownership of assets, easier access to liquidity, and more efficient fundraising mechanisms. It also provides the ability to assign value to and offer compensation for participation, intellectual property, and other contributions.

Web3 can increase access to capital, democratize financial design and decision making, and empower communities to pool assets and collectively determine how to manage and invest their resources. It enables communities to come together in new ways and decide what they value and how value creation is rewarded and incentivized. In short, Web3 has the potential to transform community finance and the broader financial system — as we know it.

Our latest report, supported by the Menzies Foundation, aims to explore that potential and the possibilities for Web3 to radically shift who holds power in the design of financial innovations. It examines existing and hypothetical applications ofWeb3 for community finance; analyzes the power dynamics at play within Web3financial innovations; outlines specific strategies for addressing those power dynamics, with examples of transformative projects underway; and offers recommendations for potential next steps.

This work is based on the premise that a more just future will not be achieved through innovation alone but relies upon a dedicated commitment to recognizing and addressing how power operates in the existing financial system and in the design of new solutions. We invite you to join us in making this commitment.

No items found.

Interested in getting involved with Criterion Institute?

Our work depends on an ever-expanding community of team members, advisors, donors, and other partners who help us demonstrate our theory of change and ultimately achieve our mission. Learn more about how you can become more engaged in our work.

Invitations to Engage