A rewarding ecosystem enables monetizing passion in web3 | Opinion
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We are nearly halfway through what’s being called a problematic year for Big Tech. Threats of TikTok bans, headlines reporting Facebook data breaches (again), news of Big Tech platforms colluding to trade and sell user’s data to one another (again)… the list goes on. However, the latest earnings report from the most prominent tech platforms suggests the opposite.
Fueled by the rise of user engagement and brand adverts, Big Tech’s top five have posted profits upwards of $100 billion. Unfortunately for the creators using these platforms, less than 0.5% are estimated to be earning decent revenue for their contributions and regular engagement, earning less than $10 million collectively. Compare this figure to the hundreds of billions that Big Tech is racking in, and we see how broken the current creator monetization system is.
However, there is hope.
The creator economy is projected to double in size over the next four years—even outperforming the surging global growth rate of gaming. There is a bright future for creators, no doubt, but there remains an issue of imbalanced revenue distribution within the Big Tech/Content Creator ecosystem. The current landscape reflects an oft-witnessed real-world scenario of the top 1% profiting from the activity and input of the rest of the 99%.
Outside of the top-tier full-time influencers, the vast majority of creators are often relegated to the bottom of the pyramid. This is something that needs correction, considering the intense amount of effort creators put in daily, with each post and engagement contributing to the collective social economy. From ideating fresh content to staying up late decoding user analytics, adapting to ever-changing algorithms, and finding social validation, being a creator is no cakewalk. In addition to this, there is the uncertainty of your account getting shadowbanned or losing all your IP for violating hidden or obscured policies, and it’s clear that being a creator is not the glamorous and easy ride that it sometimes appears to be.
Can web3 retrofit social media?
The concept of building loyal communities to fund your creativity is not a new concept. It existed in Shakespearean times, and it exists today; in the form of crowdfunding campaigns and community-based platforms. So what can web3 offer anew?
While much has been written about the hegemony of social media platforms, the truth remains that tech is highly cost-intensive, especially when dealing with UGC and multimedia, which involves numerous moving parts. Companies need to hedge against a multitude of risks, which includes investing continually in varying aspects of cybersecurity, regulatory compliance, R&D, product development, and, of course, the astronomical costs of cloud storage. Not to mention the need to hire world-class talent to deploy scalable systems and processes. Social media giants may thus have their reasons for parting with a smaller share of earnings, but that doesn’t mean creators have to lose out on potential earnings.
If revenue distribution is the key to increased user participation, then decentralization holds a strong value proposition. We are already seeing creators pivot from the uncertainty of brand partnerships to focus their time and energy on building their own communities, which respect and pay for the novelty of creativity and personal connection.
That’s truly where web3 SocialFi systems are making a difference. The idea of enabling ownership through token-gated access and then tying this token’s intrinsic value to a creator’s digital equity makes for a thoughtful and lucrative ecosystem. An ecosystem where every interaction builds upon the creator-user synergy and rewards each person, adding value to the digital ecosystem.
SocialFi platforms are pioneering the fundamental shift from Big Tech’s dominance to a more creator-owned model, leading the way in regards to the democratization of monetizing digital content. Their tokens offer a sort of social currency and have been met with mixed success overall, but the initial excitement witnessed in onboarding new users shows the vast untapped potential.
The impact of crypto summer on web3 creators
With Bitcoin (BTC) and other cryptocurrencies gaining mainstream attention globally, one cannot ignore the significant number of web3-focused creators that have cropped up in the last few months. Still, web3 is a foreign concept to most, even to digital natives.
Thankfully, digital creators are exerting their influence across platforms such as X, Telegram, and even Instagram and YouTube to educate and grow their brand value while spreading the word about the benefits of web3 and cryptocurrency.
While revenue-generating opportunities have emerged on these platforms, the prospect of decentralized projects with innovative web3-focused communities and tokenized ecosystems is an exciting proposition for all creators.
Many users today want to be more than just passive participants in one-sided engagement. They want to connect with creators and be rewarded in the process. This is where tokenized platforms add massive value. By enabling a model of engagement and monetization where loyal communities can be built, SocialFi platforms provide a wide range of token utilities that benefit both fans and creators. This 2-way engagement that tokenization facilitates allows creators to provide an experience and value system that results in users feeling acknowledged and thus involved in a creator’s growth and success.
Making monetization transparent for all
A major challenge of building such a democratized earning system is keeping all parties incentivized. A balanced reward system will need to be transparent, as well as think beyond token utility to consider the quality of engagement value. To be sustainable and have longevity in the industry, platforms will need to set proper frameworks that keep the creator’s priorities at heart without devaluing user engagement and, of course, keeping engagements human and bot-free. Another critical requisite is the need to constantly upgrade features and build in-platform tools that advance the web3 aspect of a SocialFi platform.
Ultimately, it is the management and vision of the founding team, along with meticulously developed tokenomics that will allow this sector to thrive. There have been many cases in recent years of seemingly promising SocialFi platforms losing favor due to poorly designed tokenomics, unviable airdrops, and subsequent sell-offs. Despite these token-specific setbacks, the immense interest among early users reflects an appetite for such creator-focused platforms where both sides of the user spectrum benefit.
In the web3 era, social earnings will mean different things to different users. How incentivized every digital user feels, especially creators and their followers, will make or break platforms developing in this new era of social engagement—a much-needed one built on the promise of monetizing your passion for greater financial independence.
