MARCH 202319The 10 Design Principles for Open Networks 1. Foster Trust among the Members For an open network to be effective, its members must trust each other so that the trust can eventually lead to transactions. Platforms invest in building trust as trust translates into more customers. Customers trust an Amazon or an Uber. In open networks, endorsement of members by an independent agency can enhance trust. 2. Optimize Flow through the Network Networks are susceptible to congestion due to seasonality, high demand, special occasions, and more. Choice of network topology and its ability to transform based on situation (or context) can enable flow. e.g. ecommerce platforms temporarily increase their capacity during the festive seasons. 3. Build for Reliability & Resilience Reliability and resilience have a direct impact on the user experience in a decentralized setup. An unreliable network that's not resilient can lower user engagement leading to irreversible consequences. 4. Ease & Low Cost of Entry & Exit Frictionless onboarding has a compounding effect on user engagement, leading to stickiness. While platforms have mastered the art of onboarding, the same can't be said for offboarding. Open networks must enable seamless onboarding while keeping the costs reasonable. The traditional and prevalent incentivization model of cashback won't work. 5. Promote Permissionless Innovation at the EdgeInnovation in a platform is fuelled by availability of venture capital (often Infinite). In an open network, innovation is scattered amongst the member nodes - at the edge. Tapping and scaling `innovation at edge' should be a network feature sans capital. 6. Incentivize Creators who Create Value for the Network The power of open networks is determined by its members and their engagement with the network. When members in open networks create value for other members, they enhance the network's power.
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