Networking Theories: Human Connectivity in Web3

^Abstract

^{This paper explores how foundational networking theories — including Small World Networks, Dunbar’s Number, Granovetter’s Weak Tie Theory, Structural Holes, and Metcalfe’s Law — may apply to Web3 as a decentralized and trust-based ecosystem. By examining these theories in the context of business and technology, we argue that network effects not only shape the growth trajectories of projects and protocols but also influence the success of individuals active in this space. In other words, the success of projects, professionals, and collaborations in Web3 hinges on leveraging the power of relationships and networks. Furthermore, we highlight how strategic positioning within these networks can amplify opportunities and drive human connectivity.
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^{Key insights reveal that weak ties are essential for accessing new ideas and opportunities, while individuals positioned in structural holes gain strategic advantages by bridging disconnected groups. Similarly, the limitations imposed by Dunbar’s Number emphasize the importance of building meaningful, prioritized connections within the constraints of human cognition. Metcalfe’s Law and the notion of preferential attachment further underscore how the exponential growth of network value further enables growth, allowing projects and individuals to scale alongside one another while maintaining Web3’s collaborative ethos.
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^{By synthesizing these theories with the decentralized nature of Web3, this paper offers insights for professionals and others looking to enhance their strategic positioning within the ecosystem. In doing so, we aim to highlight the transformative potential of networks; not only for individual success but also for the collective growth of the Web3 industry. We conclude that despite cognitive and temporal limitations inherent to human networks, the decentralized and collaborative ethos of Web3 offers great potential for meaningful connections through clever networking.}

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Introduction

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In the expanding Web3 ecosystem, what sets truly successful projects apart? The latest fashion in the decentralized tech stack? Funding by a Tier-1 VC? Winning massive grants? At Thrilld Labs, we believe it’s not just technology or capital; it’s actually the power of relationships that reinforces everything else.

Our experience taught us that when you're securing investments or attracting users, building relationships – both personal and professional – is now more critical than ever. As the pool of projects, investors, and applicants grows, having a personal stake in a relationship is much more likely to leave an impression, or even open that door. Indeed, Web3 thrives on the energy of community discussions, partnerships, and collaboration.  At the heart of this? A solid network.

Maybe you are still asking why you even need a network in the first place? And why would you care about positioning yourself strategically?

Of course, the standard process of following an application, doing cold outreach, or researching for opportunities is always available, but it will be much more efficient and worthwhile to work through your network rather than around your network.

Additionally, it is not a surprise that networks are key in an industry with a techstack so much characterised by network effects.  Indeed, in an article by Chainlink on "The Importance of Network Effects in Web3" it is emphasized that, "[...] the Web3 ecosystem is built upon the foundational values of decentralization and trust-minimization, [and] network effects play a key role in determining the success or failure of many Web3 projects, such as DeFi protocols, blockchain games, decentralized organizations, NFT projects, and metaverses."

More generally speaking, it can be argued that network effects in Web3 go beyond impacting projects but rather determine the success and growth of individual participants – such as builders, investors, and other (aspiring) industry participants. The more connections you have, the more successful you are, or so is our thesis. We were curious if at all – and if so, how  – one can leverage standing and proven theories about networking and networks so that these theories provide benefits to (aspiring) Web3 professionals.

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Leveraging Networking Theories in Business & Web3

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“What city you live in. Who you date or marry. Which job you choose. What clothes you wear [...]”. All these matters are determined by networking effects. According to an article by James Currier, “Your Life is Driven by Network Effects”, people's lives, while seemingly composed of independent choices, are actually guided by a powerful networking force. The idea here is that a mathematical pattern called “Zipf’s Law” drives many interconnected factors and hereby actually influences a person’s biggest decisions in life. In essence, our choices often follow a path of least resistance—guided by the networks we’re part of. This is what Currier refers to as the network effect: the idea that the connections we form shape both the ease and direction of our decisions.
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The idea is that these networking effects shape both personal and professional choices and ultimately place us in environments similar to other people in our network. Currier explains that network effects are especially powerful when people experience frequent, repeated interactions with a group of individuals, particularly in environments where people are open to change and identity shifts. When there is “[...]a context for frequent, repeated interaction with a new group of people, a high degree of overlap, a transition period where people are open to changing or evolving their identity, a high density of people in geographic and network proximity, and going through something hard together”, people can most significantly reinvent or solidify their network. Thus, the effects of networking are crucial in determining the ease and direction of an individual’s major life decisions.

The same holds true in business, where connections drive growth and success. In any business context, individuals or companies with closer, stronger networks often have the advantage, whether those networks provide resources, opportunities, or influence. The success of many ventures hinges on the network effect—the more people involved, the more valuable the venture becomes, often accelerating its growth and impact.

Now, consider the relevance of this dynamic in the Web3 ecosystem, where network effects operate similarly. Just as close connections in your personal life shape major decisions, the relationships and trust built within Web3 networks can determine the success of collaborations, innovations, and ventures within the space. Ultimately, Web3 is, at its core, a decentralized network of networks, so the connections we form — whether through shared projects, interests, or communities — play a crucial role in determining how we grow, develop, and interact with others.
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In both business and Web3, understanding and leveraging these network effects is key for identifying opportunities. The following section will explore foundational networking theories and how they may be applied to business challenges and opportunities in the Web3 space.

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Small World Networks

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It is often stated that Web3 is a small world. If you have the right connections, excellent. If not, things are tricky. Can we link this real-life notion to an academic theory? Arguably, yes. The notion of “six degrees of separation” is the idea that “[...] any person can be connected to any other person through no more than five intermediaries [...]”. Hungarian author Frigyes Karinthy was the first to purport this theory through a short story published in 1929 called Chains. In the story, someone suggested, “[...] bet that we could name any person among earth’s one and a half billion inhabitants and through at most five acquaintances, one of which he knew personally, he could link to the chosen one”. This idea began to quantify the distance and the idea of having a “chain of connections” between people.

The general implication is that people are much more connected than we realize. In a paper on the notion of “Small World Theory”, Watts and Strogatz created a model that demonstrates how people may actually be very close to one another. The model describes a person’s networks in terms of a graph: “highly clustered, like regular lattices, yet have small characteristic path lengths, like random graphs”. A lattice is a regular, ordered grid-like structure, where each node is connected to its neighbors, forming a highly structured network. What matters is this: combined with random graphs, the path length—the distance between any two people—shortens. As you see, networks can form specializations in regions or nodes while also sharing a distribution across the entire network.

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Small-world network clustering

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As for Web3, we can argue that links between people are very short, not in the last place, because most people in this industry share, by their very nature, an interest in this specific niche that Web3 ultimately still is today. Indeed, most individuals in the Web3 space are connected with one another, if not directly, then through a number of ‘frens’, acquaintances, or individuals met during an event, online, or through communities. Because the industry currently consists of only “about 10,000 companies” whilst only about “200,000 people [work] with crypto worldwide” (K33 Research, July 2023 (read more about employment in the space in our article Working in Web3: Actual Strategies for Landing that Dream Job in the Industry)), many people are extremely well connected. We dare to pose the notion that Web3 is not only a small world with lots of opportunities to connect with others — either directly, or through a range of online or offline introductions — but given that the path between any two participants in the network is likely surprisingly short, collaboration is also better enabled. In sum, short ties may translate into bold opportunities. If leveraged and handled well.

Let’s look more deeply into the theoretical and actual workings and implications of these ties and how to manage them.

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Dunbar’s Theory

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Can we network endlessly? And if so, should we? Probably not. Dunbar’s number measures the individual’s cognitive limit to how many people they can maintain a stable social relationship with. British anthropologist Robin Dunbar introduced the concept in the 1990s, observing correlations in nonhuman primates and predicting an average human social group size using a regression equation. It reflects the number of stable social relationships that the primate brain can track and maintain, and the limit is defined by “Dunbar’s number” at roughly 150. This theory, along with the social brain hypothesis is often studied from the perspective of evolution, in which cognitive ability is expected to adapt to increasingly complex social situations. The cognitive capabilities imply that “[t]o maintain group cohesion, individuals must be able to meet their own requirements, as well as coordinate their behavior with other individuals in the groups”. Dunbar’s number thus suggests that the limitation on cognitive ability results in a limitation on the number of social relationships people can maintain.  
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In an article titled “‘Dunbar’s Number Deconstructed,” the authors observe real-life examples of Dunbar’s number in communities with roughly 100-200 members, including hunter-gatherer communities, military units, businesses, and 18th-century and Neolithic villages. The authors even considered information from the Domesday Book and Christmas card networks. A notable case is the Swedish Tax Authority, which “[...] restructured their offices to stay within the 150-person limit, with the implicit but hopefully unintended assumption that their employees have neither family nor friends outside work”.  
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The significance of this number comes in its limitation. If our ability to build social relationships is limited, then who we are connected with and who we decide to add to our network becomes increasingly important. In an article by Clare Jackon, she writes, “your chances of becoming obese, giving up smoking, being happy or depressed, or getting divorced are all influenced by how many of your friends do these things”. Indeed, when building a network, being strategic becomes vital. We’d argue that this especially applies to business and in Web3, where maintaining cohesive and effective connections becomes ever-more important as your network grows. At the same time, one’s time allocation for managing said connections remains roughly the same.

So, if the number of strong relationships is in fact rather predetermined as Dunbar’s number suggests, then how can one maximize one’s connections within the boundaries of this limitation?

Your Life is Driven by Network Effects

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Granovetter’s Theory & Structural Holes

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Interestingly, Granovetter’s Weak Tie Theory suggests that the most valuable connections in a network are often the weakest ties — those between acquaintances or groups that do not interact frequently. While the bonds in close-knit groups are strong, it is the weak ties that can facilitate the exchange of novel ideas and information across different social circles that otherwise remain disconnected. In other words, weak ties link networks that would not otherwise intersect, allowing information to flow between them. These weak ties thus serve as bridges between otherwise isolated groups. In Web3, individuals with numerous connections may occasionally prove to be extremely valuable. Weak ties can open doors to otherwise hidden opportunities. Therefore, with the limitation of Dunbar’s number, you may want to consider setting up many “weak ties” with people.
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In a similar vein, sociologist Ronald Burt’s Structural Holes Theory posits that gaps or “holes” in a network create unique opportunities for individuals positioned in these gaps whom Burt refers to as “SH spanners”. These individuals have access to multiple, distinct groups and thus become pivotal in controlling the flow of information between them. While weak ties provide access to new information or connections, SH spanners thus have a competitive advantage: they can broker exchanges and negotiate deals, making them not only information hubs but also powerful influencers in the network. In the context of Web3, we suppose that individuals or entities that can connect or aggregate different communities, countries, or ecosystems play key roles in value creation. They are crucial conduits for information, resources, and collaboration across the decentralized landscape. If one wants to be more actively and cleverly engaged in networking, one can seek to position oneself as an SH spanner, bridging gaps in the ecosystem.
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Together, these theories highlight that weak ties are crucial for accessing new ideas and expanding one’s network, while individuals in structural holes can leverage their position to control, negotiate, and unlock new resources, opportunities, and knowledge that would otherwise remain hidden or siloed within disconnected groups. Henceforth, engaging with lots of individuals, communities, and stakeholder groups can open new doors across the Web3 space, and positioning oneself more actively as an SH spanner may prove to provide even more access to opportunities down the road. Does that imply that one should simply network 24/7? No, arguably, strategic positioning remains key, given the various cognitive and temporal limitations discussed above.

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Metcalfe’s Law & Preferential Attachment

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What happens if you are very well-connected, know many individuals, and bridge various ecosystems and communities? We propose that individuals develop themselves into supernodes, aggregating ever more power and opportunity.  This idea is reflected in a concept proposed by the co-founder of Ethernet, Robert Metcalfe, who stated that “the value of a network is proportional to the square of the number of connected users to devices in the network”.  What has developed into a concept called Metcalfe’s Law further states that “the value of a network provides both additional value and a competitive advantage”.  The importance of the value of the network thus also arises from the competitive advantage flowing from your (seemingly) so valuable network.

In Web3, we see this playing out in the growth patterns of certain protocols or key stakeholders, where popular entities tend to attract more developers, users, and investments, further consolidating their position in the network. At times, the accumulation of power leads to a winner-takes-all mentality, or cumulative advantage, or simply, the rich get richer (which is arguably rather contradictory to the whole idea of decentralization, but not less true nonetheless). Simply put, the more connections or users in a network, the more valuable the network becomes. Interestingly, this notion is reflected in the theory of preferential attachment; for instance, Will Bryan writes that “[t]he more connected a node is, the more likely it is to receive new links”, which might indeed appear to be a slippery slope.

Does that imply that networking in Web3 is a zero-sum game? No. We’d argue that while in the basic economics model of supply and demand in a competitive market, a smaller supply will result in a high price (reflecting its value as a limited good or service), the small world of Web3 still leaves enough space for others to grow and add value alongside one another.  Moreover, while the world of Web3 is also arguably characterized by libertarian notions of freedom and autonomy, most individuals in our industry remain extremely forthcoming. After all, we build change together. In conclusion, we would therefore pose that on the one hand, individuals may strive to ‘become’ preferential (super)nodes for all sorts of different reasons. Yet, on the other hand, many professionals in our industry continuously breathe the importance of being open, helpful, and kind to others, regardless of the other’s position, connections, or (perceived) power.

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Spreading the Net: Networking and Web3

As simple as it sounds, networking and building professional relationships is a skill that many struggle to master without knowing the theoretical underpinnings of various networking theories. Even for company leaders and those with years of experience, forming purposeful business relationships can at times feel impersonal and even phony or fake. What do the various networking theories discussed above contribute to possible intel about how people form a solid network and professional relationships that build meaningful and practical applications? Let’s deduce some final tips.
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On the one hand, when glancing at various networking theories like Metcalfe’s Law, structural holes theory, and preferential attachment, one supposes that the very dynamics of connectivity and networking can fuel the growth of new opportunities, communities, and collaborations. In other words, clever networking and managing connections well can unlock massive value creation.

How?
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By actively managing one’s network, particularly by diversifying and reaching out to outlier communities, one can access more benefits, as explained by Granovetter’s Theory and the Structural Holes Theory. While Dunbar’s number limits the number of close relationships a person can maintain, the Weak Ties Theory shows that even distant connections can offer valuable opportunities, linking individuals to new communities and collaborative possibilities. So, go out there, talk to strangers, and don’t become a total stranger to them afterward.

The Small World Theory and the concept of six degrees of separation further suggest a sense of ease in accessing opportunities through a shared human network. However, Dunbar’s number and the inherent limitations it imposes on our ability to form deep connections highlight the challenges within networking. Despite these limitations, the theories explored — from Structural Holes to Metcalfe’s Law — underscore the importance of the types of nodes within a network, which ultimately determine its value and trajectory. Hence, once you are a well-connected ‘node’, more chances and opportunities will likely flow towards you.

Finally, many shall acknowledge that as a global ecosystem, Web3 is rather unique in terms of its nature. Web3, with all its builders, projects, investors, enthusiasts, and narratives can be considered as a global, fluid decentralized network on its own. Interestingly, the concentration and distribution of resources and connections – also according to the theories described above – goes somewhat against the very ethos of decentralization that Web3 inherently promotes. That is a discussion that goes beyond the scope of this article and has been discussed elsewhere, yet deserves to be mentioned nonetheless.
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While it is clear that networking effects have significant effects on the success of individuals in our industry, a question that finally comes to the surface is how to effectively manage and grow a powerful network. One way to network in Web3 and build new connections in a streamlined way is to join Thrilld, which is an open-access and streamlined networking solution for Web3 professionals who want to save time while enhancing their value in Web3. On Thrilld, one can create a personalized profile and connect with Web3 professionals across the world, or meet them during events. We casually suggest that when applying the insights from the various theories discussed above (including Dunbar’s number) to platforms like Thrilld and the rest of the networking world, Web3 professionals can overcome some of the inherent challenges of connectivity and instead form meaningful, diverse relations that push both individual and collective growth in the decentralized space.

Read more about Thrilld and how to set up a customizable profile here, and get started with forming new human connections now.

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^References

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^{Granovetter, M. S. (1973). The Strength of Weak Ties. American Journal of Sociology, 78(6), 1360-1380. [The seminal paper that introduced the concept.]}

^{Metcalfe, B. (1995). Metcalfe's Law: A network becomes more valuable as it reaches more users. InfoWorld, 17(40), 53. [Discussion of the law's applicability beyond telecommunications.]}

^{Watts, D. J., & Strogatz, S. H. (1998). Collective dynamics of 'small-world' networks. Nature, 393(6684), 440-442. [Pioneering study on the small-world phenomenon.]}

^{Burt, R. S. (2004). Structural Holes and Good Ideas. American Journal of Sociology, 110(2), 349-399. [Explores how individuals who bridge structural holes can generate more and better ideas.]}

^{Dunbar, R. I. M. (1992). Neocortex size as a constraint on group size in primates. Journal of Human Evolution, 22(6), 469-493. [The study that led to the formulation of Dunbar's Number.]}

^{Barabási, A.-L., & Albert, R. (1999). Emergence of Scaling in Random Networks. Science, 286(5439), 509-512. [Describes the mechanism leading to scale-free networks.]}

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