Today, anyone can be a creator or influencer on the Internet. All you need is a smartphone and you can instantly reach billions. Read on to learn more about the intersection of web3 and the creator economy – and how you can capitalize on this evolving trend... (thread)
2/ Whether it is TikTok introducing Pulse to share ad revenue or YouTube introducing Shorts, the creator economy has seen a significant burst of energy during the pandemic due to increased digitalization and Internet use. However, big challenges remain for centralized platforms.
3/ Creators are held hostage on platforms that lock their content with proprietary algorithms that limit reach. 96% of Spotify artists only make $36 a quarter per quarter. Most creators fall into the "middle class" of the creator economy rather than those that reach stardom.
4/ So how does web3 fit into the equation? Non-fungible tokens (NFTs) allow creators to own and monetize their digital content without the use of traditional platforms. This decentralization is essential in democratizing access and power away from Big Tech.
5/ In the past year, some web3 brands have adopted the Creative Commons Zero license (CC0). A CC0 NFT is a type of NFT with a copyright through which the owner allows the NFT to be used by anyone for commercial purposes. But why to CC0s matter?
6/ This article from @a16zcrypto explains CC0s in more depth: tinyurl.com/27uh8c8x. You can also check out their GitHub repository here: tinyurl.com/43spd6tf.
Why NFT Creators Are Going cc0 - a16z cryptoNFT creators are increasingly choosing “no rights reserved” licenses such as Creative Commons “Zero” (cc0) for their projects.https://tinyurl.com/27uh8c8x
GitHub - a16z/a16z-contracts: a16z Contracts is a library for solidity contracts, including licensesa16z Contracts is a library for solidity contracts, including licenses - GitHub - a16z/a16z-contracts: a16z Contracts is a library for solidity contracts, including licenseshttps://tinyurl.com/43spd6tf
7/ NFT-powered brands allow owners of NFTs to commercialize their intellectual property (IP). In other words, holders of the NFT can then create, sell, and earn from derivative work. This process fosters downstream innovation that can help brands achieve long-lasting value.
8/ One example of this is @nounsdao, which built a $34M brand and allowed Bud Light to use the Nouns NFT IP in commercials during the Super Bowl. Because this was a CC0 project, Bud Light didn't have to collaborate with Nouns directly. This was a completely open-source project.
9/ Moving forward, brands will be less inclined to work with creators on a project-by-project basis, rather choosing to establish pools of creators through decentralized IP.Creators will be incentivized by tokens and royalties to earn a share of revenue generated from content.
10/ It's a win-win deal for both brands and creators. Creators will act as extensions of the brand by constantly being in tune with new trends and tastes from the wider community. Neither creators nor brands will have any need to interact through a centralized platform.
11/ User-generated content (UGC) is a popular marketing strategy where content is created by users of a product rather than the brand itself. 60% of consumers believe that UGC is the most authentic form of marketing, but most UGC is created for free.
12/ In late 2022, @Nike introduced the Nike Swoosh Marketplace – a platform for creators to build blockchain-based virtual goods around the Nike brand. Anyone can become a creator and create virtual shoes and jerseys while also earning royalties on these products.
13/ Nike's Swoosh Marketplace is just one example demonstrating that even large corporations are leaning into web3 as a decentralized source of innovation that allows them to build stronger brand engagement while also benefiting from diverse talent outside of the office.
14/ We've also seen an explosion of decentralized autonomous communities (DAOs) over the last year. DAOs like @FWBtweets gained popularity as they offered creators avenues to earn tokens by providing value directly for digital communities.
15/ The "hybrid DAO" model will continue to grow in the coming months and years as legacy brands utilize decentralization to empower their customers to co-create future products and policies by owning tokens that give them voting rights while retaining traditional governance.
16/ According to Accenture, brand communities are essential to improving customer retention.Research shows that 80% of Gen Z consumers desire to drive change through the brands they interact with while mobilizing through online communities that democratize access.
17/ Hybrid-DAOs offer low-risk hubs for testing and iterating new products and are great sources of customer data and real-time feedback. Through tokenization, they also leverage the concept of brand communities through genuine ownership.
18/ Recently, @NYXCosmetics, one of L'Oréal's brands, launched GORJS – the world's first DAO dedicated to 3D creators with a focus on digital make-up. Through a tokenization mechanism, GORJS empowers the community by allowing fans and artist to influence NYX's mission.
19/ "What the brand wants to do is to become the first ever decentralized record label for creators in web3," said Asmita Dubey, the Chief Digital Officer at L'Oréal. By experimenting with DAOs, L'Oréal can better understand customer behaviors to support product development.
20/ According to McKinsey, consumers develop permanent favorable associations with a brand the more they feel ownership over the future development of the brand itself. By involving consumers in topics they are passionate about, brands can develop long-lasting relationships.
21/ According to Forbes, 92% of consumers trust an influencer more than an advertisement or a celebrity endorsement. Influencer marketing has an 11x higher ROI than traditional forms of marketing. The concept of the "Networked Product Influencer" is driven directly by web3.
22/ Last year, crypto influencer @gmoneyNFT released @9dccxyz, an NFT project which was a collection of "networked products" – clothing items derived from NFTs. Customers minted an NFT and received a shirt outfitted with near-field communication (NFC).
23/ Through NFC, users could scan a chip to verify ownership and be instantly connected to the 9dcc community. Each chip comes with its own Proof-of-Attendance-Protocol (POAP), which is essentially an NFT that verifies being present or participating in an event.
24/ Currently, the relationship between brands and consumers ends at the point of purchase. Gmoney's conceptualization of networked events was inspired by a desire to allow brands to tap into the network effect by empowering customers to act as brand ambassadors.
25/ Customers can use their NFC chips on their 9dcc shirts to establish verifiable social connections. Anyone wearing the shirt can let whomever they meet tap their phone on the shirt's embedded NFC chip to receive a free POAP.
26/ As the wearer gives out more POAPs, they are building out a digital network of connections of individuals they have met in the real world – all recorded on a public blockchain. As such, tokenized connections are revolutionizing what it means to be an influencer.
27/ The tweet below captures 9dcc’s networked products in action at the Art Basel Miami event in 2022:tinyurl.com/yc2zzsuz
28/ Now, you no longer need a large social media following to be an influencer. Owning and distributing the product is enough to be considered a "connected product" influencer. Networked goods are paving the way for digital and physical "wear-to-earn" products.
29/ "Play-to-earn" refers to a type of monetization where players can earn real-world money by playing a game and earning in-game items. This can include digital items such as accessories, skins, and garments for an avatar.
30/ Web3-native brands such as @Akingsnft have been pioneering the concept of wear-to-earn. This refers to brands compensating customers for wearing their designs in virtual environments through additional merch or tokens.
31/ Fashion brands are currently trying to make digital fashion interoperable across different virtual worlds and environments – a key source of innovation in the web3 space today. In fact, the notion of interoperability also aligns with the broader mission of the metaverse too.
32/ Karen Shen further elaborates on this topic here:tinyurl.com/2p973k7j
33/ By leveraging networked products, brands can provide a solution to this challenge by giving influencers virtual and physical products they can flaunt. Influencers can then distribute the brand through active participation rather than passive content consumption.
34/ Networked products provide a multitude of benefits for brands. Through network effects, brands can leverage connections created by influencers as an extension of each product and tap into this network to distribute content and exclusive benefits.
35/ These product-centered communities can be used to expand the brand's circle of influence by encouraging audiences to be directly engaged in the brand's narrative while gamifying behavior. This is vital for building buzz, driving revenue, and generating super-fans.
36/ Brands can verify the distinct value of each influencer. Every product owner who shares a single POAP could be recognized for the reach they provide. If that reach leads to a purchase, it can be verified on the blockchain and they can be rewarded for facilitating the deal.
37/ Given the enormous impact that web3 will have on the co-creator economy, brands will have to establish comprehensive guidelines and governance surrounding CC0s and decentralized IP to adjudicate differing interpretations from individual token holders.
38/ Because web3 is powered by publicly accessible blockchains, each user will have a unique Internet identifier. Platforms like @LensProtocol are building decentralized social networks that allow users to fully own their content and ensure its interoperability across chains.
39/ Many of these trends will also impact the e-commerce space as creators develop their own token-gated communities. They will require the necessary web3 infrastructure to handle and earn money from their digital assets while seamlessly connecting with their audiences.
40/ Finally, DAO creators will have to deliberate thoughtfully regarding various legal implications such as determining the appropriate domestic entity structure, delegating decision-making authority, and protection of IP. Keep in mind that DAOs are still a nascent technology.
41/ Special thanks to @nonieengel, @danxtao, and @mtangarova2 for providing feedback on this piece!Are you interested in reading more content from the@chapterone researchers?Check out more content from us here: tinyurl.com/bdfr798j