The Interplay of Attention and Capital

To understand the necessity of City Protocol, one must first understand the broken market dynamics of the current Web3 and digital economy.

1. The Macro Divergence

The Capital Dilemma: Defensive yet Desperate for Relevance

We are seeing increased volatility in global markets. However, crypto has been one of the most volatile asset classes. There aren’t many safe and defensive plays in the crypto universe offering users a stable and sustainable yield product. We think that as crypto matures as an asset class, a variety of products are built on top, and we aim to offer more bespoke yield products in the RWA space to the crypto world. In Real-World Assets (RWAs), the product universe is broader, offering plenty of opportunities to enjoy secure, stable, and predictable yields.

Even if these opportunities are plentiful, without distribution, it is difficult to bring them to users to enjoy. Currently, capital attempts to "buy" this attention through inefficient, opaque advertising intermediaries or by speculating on volatile meme assets. A lot of the attention is short-lived. We aim to build distribution through an attention economy, which in turn brings in more capital into the RWA ecosystem.

The Attention Paradox: High Visibility, Low Liquidity

Simultaneously, we are in the age of AI-driven content abundance. Attention is the scarcest resource, yet for those who capture it, including projects, creators, and on-chain assets holders, it is notoriously difficult to monetize. But in crypto, where attention is everything, we can channel users' attention to projects. In return, projects offer incentives such as token airdrops to users.

A project can build massive "Mindshare" (social sentiment, viral reach, relative level of attention across market) through offering incentives. This attention can then bring long-term trading volume and TVL to crypto projects.

Nevertheless, the question come downs to the allocation of capital. People demand an effective way to raise capital and allocate capital transparently for the attention to be engineered. Often, attention and capital are segregated; neither can generate capital, nor can they be valued fairly. This is exactly why we need to build an asset infrastructure, with attention to financing and acceleration.

2. The City Protocol Solution: The Dual Flywheel

City Protocol resolves this paradox by building the financial rails that allow Capital and Attention to exchange value directly, trustlessly, and efficiently. We do not just connect these two forces; we create a compounding cycle where one fuels the other.

This is the City Protocol Dual Flywheel:

Phase A: Capital Powers Distribution

1. Input: Defensive Capital enters City Protocol seeking safety. It deposits funds into City Vaults (backed by RWAs like concert revenues, private credit, and luxury assets).

2. Mechanism: These Vaults generate sustainable, high-yield returns (e.g., 15% APY).

3. Catalyst: Projects that Viral City onboarded will provide an incentive for users to generate content for boosting attention. The same applies to City Vaults, where additional rewards will be given to those who generate content bringing more distributions to the vaults themselves.

4. Result: This lowers the cost of customer acquisition, creating a virtuous cycle between attention and capital.

Phase B: Attention Unlocks Liquidity

1. Input: Users interact with assets in Viral City, generating onchain proofs of engagement (via City ID).

2. Mechanism: This activity transforms vague "hype" into verifiable Mindshare Data. We can quantify an asset's traction.

3. Catalyst: This data acts as a signal to the market. High-mindshare assets are flagged as high-potential opportunities.

4. Result: Liquidity flows from the sidelines into these validated assets. The asset grows, the distribution is strengthened, and the flywheel spins faster.

In the City Protocol ecosystem, Capital engineers Attention, and Attention secures Capital.

We create a sustainable economy where projects get the visibility they need, and investors get the returns they demand.