Looking at the future of the creator economy from the Web 3.0 native creator economy stack

Last week was of great significance to the creator economy. First, Visa paid more than $150,000 for jpeg NFT. A more subtle statement is that the cryptopunk community now sees Visa as one of them. Visa also released an 18-page report on NFT and how the company has evolved to adapt to the new paradigm.

This is more interesting than a corporate blockchain or a bank providing cryptocurrency to users, because it marks a huge payment network that recognizes that our concept of “value” is evolving. On the other hand, some surprising news made me think about the development trend of the entire Internet.

OnlyFans, a platform that allows creators to sell personal content subscriptions, has moved to prohibit adult content. I find this surprising, because most of their business comes mainly from the purchase of adult content by individuals. reason? Payment network. For a long time, players such as Visa and Mastercard have been pushing creator platforms to review uploaded content to check the authenticity of creators. Mastercard requires written consent from the adult website of the performer displaying the content in order to process these payments.

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Onlyfans economic indicators

The adoption of adult content and the development of the Internet have gone hand in hand in history. Demand drives innovation. Middle Men, published in 2010, perfectly described how the adoption of digital payments will soar, partly because of the adult entertainment industry. If you want to watch Middle Men this weekend, you can do it on Netflix. Onlyfans is at a similar turning point in history. This platform marks the arrival of an era in which anyone can sell their subscription content. In terms of scale, Onlyfans has more than 300 creators with an annual income of at least US$1 million, and approximately 16,000 creators have an annual income of more than US$500,000. To date, the platform has paid more than $3.2 billion. Half of the platform’s revenue comes from subscriptions-most of which are repeated monthly. Onlyfans’ unit economics post analyzes the income of creators on the platform in detail.

According to Axios, part of the reason Onlyfans switched to banning adult content is that as the company attempts to scale up, continued scrutiny by payment processors could bring disaster. Especially if the regulator chooses to target the platform. On the other hand, payment processors would rather stay away from supporting the platform, because if an investigation finds that unauthorized adult content is hosted on Onlyfans, they may be liable.

Creator Economy and Web 3.0

I found Onlyfans’ actions very attractive for several reasons. On the one hand, the company must be very good in terms of cash flow. The core asset that Onlyfans owns is the IP and hardware needed to provide services to more users. Both will not increase exponentially in terms of cost. The parts that make the platform valuable are its creators and subscribers. This is a powerful moat. In the past five years, Onlyfans has made it “acceptable” to subscribe to authors with a credit card. Demand-side behavior changes can take several years to establish, because adult content can be accessed for free on the Internet. It takes the same time to establish a supplier. Individuals who are willing to spend time creating content. The loneliness caused by the lockdown will only encourage more people to register and use the platform.

So why does Onlyfans stop providing adult content? In my opinion, this boils down to payment flows. If the platform is unable to obtain recurring payments from the global user base through credit cards, it will bear more responsibility (in potential litigation) than cash flow. Staying away from adult content is about legitimacy and scale, while maintaining a channel to bring money to the platform.

But there are reasons to be shocked here. It marks the era in which financial intermediaries determine the nature and form of online shared content. If tomorrow the financial intermediary threatens to stop providing services to the news media because the media’s statement has angered those in power, we will give up freedom of speech. This has happened in the past, when Visa or MasterCard no longer serve WikiLeaks. In an era when misinformation and algorithmic information cocoons are common, this is an imminent threat. More importantly, as employment becomes more and more digital, giving financial intermediaries the power to decide who should receive services may deprive millions of people of services.

Today, a person as long as 18 years old has the opportunity to create content and sell it to a global audience. The most privileged people a few decades ago might have been trying to do something in their entire life. Creating tools that enable people to create, distribute, and profit from their creations is essential for creating fair opportunities on the Internet.

As of today, the size of the creator economy is between US$50 billion and US$100 billion. It has nearly 50 million employees from all over the world. Due to the monopolistic nature of the platform, the government is busy arguing whether it needs to regulate the platform, but some of these companies are creating unprecedented economic opportunities. However, like most gig economy platforms, relying on the platform’s algorithm distribution and review strategy, creators may be controlled by the platform, and may even encounter the risk of title closure. One way that regulators can mitigate these risks and empower creators is to rebuild the platform and empower those who contribute. This is not aerospace technology. The foundations are already there, and we can see their effects on Web 3.0. Platforms like Mirror.xyz allow creators to be paid directly in Ethereum to sell partial ownership of an article. Axie Infinity creates a play-and-earn mode that allows gamers to spend as much time as possible on the platform to own part of the network.

Most of the content we see in the form of yield farming in DeFi is a means of creating partial ownership for the most active users of the platform. Users build skins in the game, paving the way for better stakeholder-driven governance. Redesigning the creator economy is not about promoting crypto-based payments without banks facilitating transactions. This is about rethinking the future of the Internet’s incentives and stakeholder alignment. Supporters of web2 platforms such as Facebook and Instagram have publicly stated that the incentives on their platforms are inconsistent with user interests. Hackers design them to create sticky behavior and get users back. Rebuilding the creator economy gives us a chance to solve the problems of the Internet 15 years ago.

In order to avoid forcing a solution when there is no problem, I broke down some of the problems I see in the creator economy and how the native alternatives to Web 3.0 create modular solutions for them. (Note the term “modular solution”-we will discuss further below). Any meaningful Internet entertainment should start with understanding that users do not expect to jump on a new platform. Most Web 3.0 platforms lack the network effects of products like Facebook or Whatsapp. Users insist on using Instagram, even though they are tired of watching what others eat for breakfast, because their social chain already exists. If we go back to the era of the rise of p2p file sharing in Napster, we might find clues about what prompted users to switch platforms. Easy to use and motivating. At the time, users could buy albums offline, but local stores were unlikely to have as extensive catalogs as Napster. Every new platform launched in the native way of Web 3.0 will have an inflection point. At this inflection point, switching is more meaningful than maintaining. We saw this when users switched from MySpace to Facebook. The same goes for BlackBerry messenger to Whatsapp. But to achieve this transformation, we should pay attention to the needs of creators today.

  • Ownership-When Thomas Friedman thought about where globalization could take our economy in the 20th century, he hardly thought of what role platforms would play in the distant future. Apps such as TikTok are tools for spreading culture on a global scale, but the results are often unbalanced. The prejudices we hold in real life are often translated into digital channels. This means that the source of dance steps, music or artistic works may have smaller requirements for ownership. Earlier this year, black creators on TikTok triggered a strike to show this. NFT has exploded in the hearts of the public because it links ownership with individuals, which first created a work. In the context of de-platformization, lack of ownership will bring complex risks. Creators who find themselves unable to export their content may find that their years of work have been wasted with little display. Ownership under Web 3.0 will have two balanced perspectives. One is the intellectual property behind the work, and the other is the ownership of the platform itself.
  • Decentralization-Today’s democracies face risks in two ways. On the one hand, the platform has the right to decide who can access which types of information. In other words, they can limit the distribution of content to create imbalance. Even more dangerous is that they can sell the data to counterparties who abuse the data. The Cambridge Analytica incident is an example of social network data being used to tear apart society. On the other hand, it gives the government incredible powers in censoring dissidents. In terms of deletion requests and Internet-based censorship, India is one of the best. Ideally, the decentralized creator economy under Web 3.0 should ensure that consumers and creators have a say in censored content and content that remains online. I don’t think that complete anti-censorship or tamper-proof is the ideal state of decentralization. Especially when pornography or intellectual property is leaked. The decentralized platform in the context of Web 3.0 will need tools to minimize censorship, while creating tools to regulate the platform. One way that has happened online is through voting-based systems, such as those on Reddit and Hackernews. These have their inherent flaws. In the context of Web 3.0, another perspective of decentralized platforms is data ownership. In an ideal world, users should have the right to export, allow, and track access to their own data sets
  • Governance—Individuals who are concerned about emerging creators are giving something they cannot redeem in the future. Their time. Creators know this well and use audience input to iterate the content they create. With the expansion of individual creators like MKBHD into their own brands, it becomes important to create a system that allows each party in the value chain to obtain fair value. The creator economy is very similar to start-ups, because there are inherent risks, there is no upper limit, and as creators take off, many people can contribute through professional skills. DAO is a way to solve this problem. Allocating part of the ownership of a creator’s work is a way for individuals to distribute the content they created, and is a different mechanism for rewarding what individual contributors bring. We specifically discuss DAO in the context of venture capital and SaaS business.
  • Financialization-The Internet currently uses the number of views, likes, and retweets to measure the success of individual creators. Creators are motivated to make things that attract the lowest common denominator in understanding, and use the titles with the highest click-through rates to attract attention. One way for creators to circumvent this is to focus on earning revenue from the audience. Substack writers like Packy have launched their venture funds. Selling merchandise is another way for creators to generate income. There needs to be channels for creators to financialize what they are doing to help individual creators get scale income. Selling part of the future income to sustain themselves until they become meaningful audiences may solve this problem. Fan tokens and social tokens are early variants. Platforms like Rally will inevitably make it easy for everyone to successfully finance themselves, but it will take some time for regulators to clarify the nature of these tools.

I began to think about how to build the native creation economy of Web 3.0 under these problems. At the beginning I could see some inherent flaws. For example, I still don’t know how content removal and review happen. In addition, I am quite confused as to whether every user on the Internet wants to participate in the governance and trading of creator content. 90% of Internet users are lurking, only 9% are contributors, and 1% are super users who create most of the content. Finally, I am not entirely clear about how regulators will respond to the rapid decentralization of the Internet. For them, what is desirable and undesirable is equal. Although unregulated platform monopoly will have undesirable consequences, if there is a problem, it can also be connected to the company. How does this work for a completely decentralized network? These are all questions that I am still thinking about. If you have been thinking about it, I would love to hear from you. If there is enough interest, maybe I can set up a club to discuss this issue.

The model shown below is heavily influenced by the convergence stack created by Lawrence Lundy. I am very happy to work with him early in my career. I also got help from Mason Nystrom’s recent NFT market chart. Also, be sure to read Kyle Samani’s article on the Web 3.0 stack from the Multicoin website. He wrote as early as 2019.

A creator economy stack native to Web 3.0

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Back to the beginning of this article. A stack that enables creators around the world to create, deploy, and distribute content without interference from financial intermediaries. The market map listed in this article is by no means comprehensive. Its purpose is only to list the conditions needed to create a truly decentralized creator economy. Since stakeholders are very different, each layer will have a completely different incentive model. For example, Arweave provides storage and aims to reward miners by providing storage space. On the other hand, platforms like Mirror only focus on people who create content, so they don’t reward individuals who connect hardware to the network. Similarly, each of these layers will have different applications based on use cases and requirements. For example, in the interface category, there are hardware authorization systems like HTC’s Exodus, and there are browsers like Brave. I will explain why in each part.

hardware

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AWS has played a key role in enabling companies such as Facebook and Instagram to expand. The AWS of the blockchain is still AWS. My reasoning for this argument is the current number of network nodes that already exist on AWS. The new generation of enterprises in the ecosystem is solving the problems that AWS cannot solve today in terms of decentralization and censorship resistance. The storage systems provided by Storj, Filecoin, and Arweave can provide non-tamperable file storage for developers seeking storage at a competitive price. Golem allows individuals to rent out idle computing power to earn tokens from the decentralized network. However, these are still in the early stages of the hardware market stack. There are currently about 783 providers on the Golem network, and they have a total of about 31.68TB of memory for computing. On the Filecoin network, there are approximately 776 suppliers with 3,000 miners operating. In my opinion, contrary to most people’s opinion-the problem is not on the supply side of the hardware market, but on the demand side. Developers may avoid using decentralized alternatives unless they know that costs and uptime can be predicted reliably. There may be a small layer here as a market for decentralized hardware vendors. If you want to do this, please write to me.

The internet

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Once we have a fairly decentralized network of hardware suppliers, we need to protect the network that transmits information between them. If you are surprised that India is eager to delete content on the Internet, then there is also the fact that 70% of the world’s Internet shutdowns occurred in India. So this is a very important thing for me. Shutting down the Internet is seen as a tool to reduce dissent during riots and make it more difficult for protesters to cooperate. However, not only state actors have an active interest in shutting down public networks, but also criminals on the Internet. In 2016, a botnet called Mirai was used to shut down the Internet in Liberia. Web 3.0 native companies are also slowly decentralizing systems here. In an ideal utopian world-we have satellites to transmit free, uncensored Internet to the world, but we are still far from there.

Helium Network is an important project supported by Khosla Ventures, SV Angels and Multicoin, and it encourages the establishment of local hot spots to spread the Internet. At the time of writing, they claim to have nearly 150,000 hotspots in 13,000 cities in 119 countries. Effectively make them the largest LoRaWan hotspot network.

Helium focuses on creating a decentralized network, while Handshake focuses on the domain name system. Every time you enter a website on the Internet, you use the domain name system to redirect network traffic to the appropriate source. These can be reviewed or deleted at will. More importantly, at this time they are managed by a centralized company like Google. Handshake allows the creation of a distributed, consensus-based domain name system to prevent unilateral closure of the website. An in-depth understanding of the technical aspects of how it works may distract this article, but you can refer to their documentation for more details. If you have time, consider playing Handshake and Blockstack this weekend.

application

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Once the network and hardware layers are protected and decentralized, people will look for interfaces that enable users to interact with the new Internet. This can take many forms. Brave is a browser-based interface, and Trust is a mobile application that can access various DeFi projects today. It is very common to see content entering your wallet interface in the future. Super apps such as WeChat in Asia have shown that this is a possibility. A single application that securely combines payment, services, content, and e-commerce makes it easier for users to interact with the new Internet. In my opinion, this is one of the ways in which the new Internet penetrates into the hands of ordinary users. Hardware will also play a key role here. HTC’s Exodus device and Ledger’s software integration through Ledger Live are two examples of the separation of hardware vendors from other vendors. Finally, the interface can be distributed through a small layer on today’s distribution network (such as Twitter). Mask.io allows users to publish encrypted content that only people with the necessary permissions can access.

The new Internet also needs an authentication and identification layer that allows individuals to have pseudonymous identities. Depending on the nature of the application and context, these will take completely different forms. Shyft Network enables users to port their actual AML/KYC files to an on-chain authentication system. They are already negotiating with the exchange to use it. On the other hand, Netki and ENS are systems that allow wallets to be identified by human-readable names, while Bloom focuses on verifying financial documents. Today’s identity verification systems on the Internet increasingly tend to single sign-on, which in turn provides companies such as Apple and Google with incredible power and insight into user behavior. The pseudonymous authentication system allows users to participate in content without revealing too much information about themselves. We have seen early variants of this on Reddit, Discord, and Telegram, where people know the user’s nickname ID better than their real-life identities.

Finally, a specific payment network is needed to transfer value between consumers and creators. Depending on the use case, these may be completely different. Flow and Ronin chains are now focused on specific consumer use cases, and the cost is almost negligible. Polkadot and Biconomy and other players across the chain are more concerned about liquidity, while Arbitrum help DeFi application expansion. Traditional fintech tracks are rarely customized, depending on the nature of the application. In other words, we use some similar payment methods for everything from Twitch streaming to money transfers. The Web 3.0 native payment system creates new use cases by subverting the way these systems work. Superfluid is an example. They are a token standard that allows cash flow to be described in order to program it. Sablier enables you to transfer funds within a given period of time. Creators and freelancers will mix them in unique ways to process payments in the next decade.

Finance layer

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Creating meaningful employment requires a sufficiently strong financial level. I know that readers may think that the gold channel and the wallet are the same. I have classified them differently, because deposit channels usually require users to convert fiat currencies into digital assets. This is more or less like an investment. Even through airdrops or free gift tokens, you can use the wallet-based interface. One of the things I thought about when I was writing was whether financial intermediaries can use the gold channel as a blocking point. My conclusion is that as long as the regulator does not announce a complete ban, it cannot prevent users from purchasing digital assets. The intermediary is not responsible for the use of these assets in the user’s wallet. I saw this in India, and the Reserve Bank did have a motion to prevent banks from allowing users to conduct transactions related to digital assets. A year later, the Supreme Court asked the Reserve Bank of India to change its strategy to allow users to perform this operation. As we move towards the future of the Internet, the separation of platforms and financial intermediaries may help. Why?

Because the nature of financial instruments in the creator economy will be more than just payments. Platforms such as Rally, Mintbase, and Mintable allow individuals to create and sell digital goods associated with NFTs. That is cash flow. Cash flow can be securitized and sold to individuals like any business. Creators are likely to want to provide loans, crowdfunding, or distribute revenue to their audience. Centrifuge allows users to create custom debt instruments that can be sold today. In the future, the income stream of investing in creators may not be unimaginable. Just as being an early investor in Uber or Facebook today has become a status game, becoming a supporter of outstanding artists and developers in the future may be a very proud thing. In turn, these tools will be traded so that backers can exit in time. This is where platforms such as Rarible, Niftex and Uniswap come into play. Inevitably, at some point in the future, we will see the integration of DeFi and the creator economy.

distribution

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Like most other content on the Internet, users need to find audiences and interact with them. In its current form, Web 3.0 has two ways to interact with users. Through information flow (such as Mirror and ShowTime) or through markets such as OpenSea and Zora. These distribution channels capture the public’s psychology by letting celebrities and famous brands issue assets on them. In March of this year, Time released 3 NFT series, covering several major issues. Mike Shinoda of Lincoln Park has been issuing NFTs on and off. The public recognition of celebrities gave these platforms much-needed credibility. As more and more creators consider better monetizing their audiences, users will gradually join in. Once you arrange the incentives, the creators will transform and work with them to transform their follower base. The challenge I found here is discovery. How do you truly distribute content from news sources without monitoring user data? What will an app like TikTok use to determine if the user is interested in the upcoming video clip? Frankly speaking, I don’t know. One method is to cluster transaction data and determine whether a user might be interested in a certain piece of content. For example, if I complete a deal on NBA TopShots, then I might be interested in videos from basketball-related creators.

About platform modularity and DAO

All platforms will not be decentralized from the beginning. Depending on the use case, different aspects of the enterprise will promote decentralization. One way that has emerged is to use NBA Topshots. The website and general user experience are off-chain. The core assets used for trading on the platform have been chained. Hardware and network-based limitations have not yet affected developers trying to extend the application. The vast majority of “blocking” we see is on public blockchains trying to enable transactions. When someone tries to build a completely decentralized Youtube or Instagram, we may see the limitations of decentralized storage and computing power. For now, it can be said with certainty that the Internet is moving towards a period of modularity. Developers will mix and combine different parts of the stack shown above. The platform may also gradually become decentralized. They initially put only part of it on the chain, and eventually tend to be completely on the chain, and community members own it. This reminds me of the creator economy.

Packy McCormick described cryptocurrency as currency in the game in an article. As one of the most prolific creators on the Internet today, he writes it from the perspective of someone who is constantly creating. I am thinking about how a truly decentralized Web 3.0 creator economy will allow everyone to play unlimited games on the Internet. When someone consumes content online, they will exchange intangible assets (time) for content. It doesn’t have to be so. Users can and should be rewarded for the time they spend on the platform. This will increase engagement and attract support from people who really care about the platform. The game played by Axie Infinity to earn money is an example of this. Instead of spending money to buy assets (such as GTA 5), gamers spend money to play games. Suddenly, this shift has changed from pure consumption to partial ownership. How will the owners coordinate? In the form of DAO. This may sound far-fetched, but publications like Bankless DAO have been transformed into community ownership.

I envision that more creators will allocate resources, sign contracts and distribute rewards entirely on the chain in the future. Each creator’s piece of work can be distributed through a modular interface unlocked by token-based payment. The ideal creator economy of the future is not based on blind consumption, but on the basis of joint efforts to build a better future. This transition is worth fighting for.

Original link: https://www.decentralised.co/what-the-future-of-the-creator-economy-looks-like/

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/looking-at-the-future-of-the-creator-economy-from-the-web-3-0-native-creator-economy-stack/
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