“Hey guys, welcome to my chain!” — A web3 alternative for the creator economy

Ekin Genç
August 3, 2022

“If Instagram or TikTok disappeared, as a creative who uses these channels to create content or share your work, you would lose what you built, your audience, and your work created on those platforms.” Protocols like the402, Glass, and Zora are working to change this.

One of the defining aspects of web2 is the creator economy: digital natives producing content on anything that attracts an audience, and with that, opportunities for monetisation and the chance to make a living based on your craft. 

The digital creator industry was only a niche side gig less than a decade ago. But as content creation has grown to be an indispensable part of the online experience, it has also taken a professional turn, with at least 2 million content creators globally now earning six figures a year.

Yet these content creators remain at the mercy Big Tech social media companies like Alphabet and Meta, through which almost all of their traffic flows. The Silicon Valley companies own Google and YouTube, and Facebook and Instagram, respectively, and are commonly criticised for running the platforms without meaningful input from those creating content, while profiting from their work by taking a huge cut of advertising.

Zora's manifesto embodies the spirit behind the web3 creator economy.

“If Instagram or TikTok disappeared, as a creative who uses these channels to create content or share your work, you would you would lose what you built, your audience, and your work created on those platforms,” Yana Sosnovskaya, Head of Marketing at the creator economy protocol Zora, tells Culture3. That makes creators – and the revenue they generate – dependent on the platforms, who use their power to extract large portions of the revenue through high take rates.

Meta’s Horizon Worlds metaverse claims a 47.5% take rate on all creator revenue, YouTube takes 45% of all advertising spend on creator videos, whilst only a handful of the biggest accounts on TikTok or Instagram receive anything at all, even though it's user-generated content that makes the social media apps attractive.

For many, this is not a bug, but a feature – a feature that underpins the web2 model, which lets creators essentially 'rent' space on platforms rather than own it. By contrast, web3 offers content creators an alternative model that is more suited to helping them pursue non-advertising revenue by building deeper relationships with their communities.

Developers are flooding in to make that happen. Ravi Bakhai wanted to build a protocol to “help those who provide beauty and value to the world, but repeatedly get the short end of the stick.” His solution is the402, a protocol that makes it easy for creators to earn a living from their craft. If we can build new systems to enable more creative freedom and sovereignty, then I think it’s just a massive win.”

But protocols like his face an uphill battle when the core of the creator economy relies on network effects for content discovery, virality rather than community building, and also content moderation in the face of regulatory pressure. “I think in the mid-term web2 platforms will still be the way for mass distribution until there is a web3 alternative, but creators will be able to drive their engaged web2 audience into web3 and build a flywheel,” he said, adding that he believes “traditional larger media platforms will have less overall control as creators have more optionality around monetisation and ownership of their fan graph.”

In its current form, the main differentiation in the web3 creator economy is tokenisation. Glass, another protocol, lets creators tokenise videos as NFTs and sell them to fans — or investors who believe they’ve found someone who’s going to make it big. Tokenisation finds a middle ground between paywalls and resorting to advertising; the content is still available for everyone to enjoy, but a creator's biggest fans can use NFTs to gain access to a deeper community and, if the artist becomes successful, go on that journey with them and benefit from their early conviction.

“Creators will be able to drive their engaged web2 audience into web3.”

— Gabriel Haines, a crypto video creator

YouTube is one of the most popular sites in the world, but 97% of creators on the platform make under $12,000, less than the US poverty line. That's generally taken to be anyone who receives fewer than 1 million views per month. Dayo Adeosun, founder of Glass, argues that “video creators are faced today with either putting videos on social media and getting less than 2 cents per view, or going into debt to make a video that never breaks even.” 

Dayo explains that Glass creators can make ten to a hundred times more with their videos compared to YouTube and TikTok. That’s all contingent upon willing buyers, of course. It’s not that web3 makes your videos more popular, it’s that it gives the creator more options on how to distribute their content, and thus more of the upside when they succeed. Gabriel Haines, famous for his entertaining and exuberant crypto videos on Twitter, alongside his educational content on YouTube, made 0.05 eth from selling one of his videos through Glass.

Glass' purpose is simple: video, owned by you.

That might not seem like a lot of money when compared to some of the sky-rocketing NFT sales, but the ambition of Glass is to help a large number of creators make a living, rather than helping a smaller group make millions. Even so, for Gabriel, 0.05 eth, which is about £70 / $85, equals three months of his YouTube ad revenue. Despite hours spent on content creation, he tells Culture3 that “most of the value accrues to the social media company, (whereas) web3 allows an audience to support their favourite creators directly.”

A common criticism lobbed at web3 is that it financialises everything, and the tagline that web3 can bolster creator revenue only strengthens that claim. But in reality, the internet was already financialised. The difference is that web3 makes this public, and gives more options in how you spend your assets, whilst web2 models are opaque and inflexible, hidden in the servers at Alphabet and Meta.

It is all at the experimental stage at the moment, and the web3 alternative is not a substitute for web2. On the contrary, it is a complement; it has to be, given that so much of the infrastructure still relies on web2 providers. Blockchains can easily accommodate textual data, like links to files, but storing anything above small-sized pixelated images on-chain is technically difficult.

“Web3 allows an audience to support their favourite creators directly.”

— Gabriel Haines

Decentralisation does not require on-chain storage, of course, and there are decentralised peer-to-peer file storage networks like Filecoin or Arweave. But they are often financially prohibitive. Hosting a 1gb video costs £7 / $8.50 on the decentralised storage platform Arweave, according to Arweave Fees. Convenient though it may be, the current reliance on web2 for content storage is a fundamental problem in the long-run. Web2 runs on centralised servers, a single point of failure orthogonal to the purpose of decentralisation.

By giving you ownership of your content, your audience, and your fan graph, web3 can remove this dependency. Zora has a different perspective. As Yana puts it, “web3 provides creators with tools that allow for the transparent and direct ownership of the channels where they share their work with their audience.” Indeed, with tools like Cosmos built for the creation of application-specific blockchains, future creators could build their own community ecosystems, welcoming newcomers with “Hey guys, welcome to my chain!”

It might just take a bit of time.

“Video creators are faced today with either putting videos on social media and getting less than 2 cents per view, or going into debt to make a video that never breaks even.” 

— Dayo Adeosun, founder of Glass

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Ekin Genç
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Ekin Genç is a freelance writer and consultant based in the UK. He's been writing about all aspects of crypto and web3 since 2020 for the likes of CoinDesk, Decrypt, and VICE. Ekin actively participates in DeFi and NFTs, which informs and shapes his writing about this experimental industry that's also deeply experiential. He's a graduate of the University of Oxford and the London School of Economics.

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