A rewarding ecosystem enables monetizing passion in web3  | Opinion

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As an analyst with a background in tech and economics, I’ve witnessed firsthand the growing disparity between the immense wealth generated by Big Tech platforms and the meager earnings of creators. It’s disheartening to see that less than 0.5% of creators earn substantial revenue from their contributions, while these same platforms rake in hundreds of billions of dollars.

This year has been challenging for Big Tech, with numerous issues coming to light such as potential bans of apps like TikTok, repeated data breaches at Facebook, and allegations of collusion among big tech platforms for trading and selling user data. However, recent financial reports from the leading tech companies paint a contrasting picture.

Driven by surging user interaction and advertising revenues, the profit margins of the Big Five tech companies have soared beyond the $100 billion mark. Regrettably, only a minuscule fraction of content creators – less than 0.5% – are reaping significant rewards from their involvement, accumulating combined earnings below $10 million. In stark contrast, consider the colossal fortunes amassed by Big Tech, amounting to hundreds of billions of dollars. This disparity exposes the deeply flawed nature of the current monetization model for creators.

However, there is hope. 

As a researcher studying the creator economy, I’ve discovered that this sector is expected to more than double in size within the next four years. Surprisingly, its growth rate may even surpass that of gaming, which is experiencing a significant surge globally. The future looks promising for creators, yet there remains a pressing concern: an uneven distribution of revenue within the Big Tech/Content Creator ecosystem. Regrettably, this trend mirrors real-life scenarios where the top 1% reap the majority of the profits, while the remaining 99% contribute the lion’s share of effort and input.

As a researcher studying the social media landscape, I’ve noticed a concerning trend: the vast majority of creators, outside the elite full-time influencers, are often overlooked and undervalued. Despite putting in immense effort daily – from brainstorming new content to analyzing user data late into the night, adapting to constantly shifting algorithms, and seeking validation from their audience – being a creator is anything but an easy job.

Can web3 retrofit social media?

The idea of cultivating devoted fan bases to finance your creative pursuits is by no means a novel notion. It was prevalent during Shakespearean epochs, and it persists today, manifested through crowdfunding initiatives and community-centric platforms. However, what makes web3 distinctive?

As an analyst, I’ve observed that despite the widespread discourse about social media platforms’ dominance, the underlying reality is that technology comes with significant expenses, particularly when managing user-generated content (UGC) and multimedia, which encompass numerous complex components. Companies must mitigate various risks, such as investing continuously in cybersecurity, regulatory compliance, research and development, product innovation, and cloud storage’s exorbitant costs. Additionally, securing top talent to build scalable systems and processes adds to the financial burden. Social media behemoths may have compelling reasons for retaining a smaller portion of their revenues, but it doesn’t mean creators should forego potential earnings. Instead, they can explore alternative revenue streams or partnership models to monetize their content effectively.

If the way income is shared significantly impacts user engagement, then decentralization offers a compelling argument. Creators are increasingly shifting their efforts from potentially unpredictable brand collaborations towards cultivating their own fan bases, where uniqueness in creativity and genuine connections are valued and rewarded financially.

As an analyst, I’d put it this way: Web3 SocialFi systems offer a unique advantage by allowing individuals to own tokens that grant them access to exclusive communities. The value of these tokens is linked not just to their market price but also to the digital equity created by the content producer. Every interaction within this ecosystem strengthens the bond between creators and users, with rewards flowing both ways, thereby enriching the overall digital landscape.

SocialFi platforms represent a groundbreaking transition from Big Tech’s control to a more creator-driven economy. They are paving the way for the widespread monetization of digital content through a democratic approach. These platforms’ native tokens function as a form of social currency, albeit with varying degrees of success. The initial buzz surrounding user adoption underscores the immense potential yet to be unlocked.

The impact of crypto summer on web3 creators

As a researcher exploring the dynamic world of cryptocurrencies, I can’t help but notice the surge in web3 creators joining the scene with Bitcoin (BTC) and other digital currencies making waves globally. However, web3 remains an enigma to many, including those considered digital natives.

It’s fortunate that content producers are expanding their reach on various channels like X, Telegram, Instagram, and YouTube. Through this, they are not only teaching and enhancing their reputation but also advocating for the merits of web3 technology and digital currencies.

For creators, the potential of monetizing on these platforms through new revenue streams is intriguing. Yet, the possibility of being part of decentralized projects that boast vibrant web3 communities and token-driven ecosystems holds equal appeal.

Modern users crave active involvement and mutual benefits in their interactions with content creators, rather than being mere spectators. Tokenized platforms offer significant value in this regard by establishing a reciprocal engagement and monetization framework. SocialFi platforms employ token utilities to foster dedicated fan communities, providing rewards for both creators and fans. This two-way interaction enabled by tokenization empowers creators to offer unique experiences and recognition systems that make users feel valued and invested in the creator’s journey towards growth and achievement.

Making monetization transparent for all 

Creating a democratized earning system presents a significant hurdle, ensuring all involved parties remain motivated. A fair compensation plan must be transparent and extend beyond token benefits, focusing on the worth of user interaction. For long-term success in the sector, platforms must establish guidelines that prioritize creators without diminishing user involvement or authenticity. Additionally, maintaining a human connection and preventing bots is crucial. Regularly enhancing features and developing internal tools to strengthen the web3 component of a SocialFi platform is another essential requirement.

In the end, the success of this sector relies on the leadership and strategic plans of the founding team, as well as carefully crafted token economics. Sadly, there have been numerous instances of SocialFi projects faltering due to flawed token designs, unsustainable airdrops, and subsequent price crashes. However, the early adoption and enthusiasm from users demonstrate a strong demand for these creator-centric platforms that offer mutual advantages to all participants.

In the world of web3, the concept of social earnings takes on various meanings depending on individual perspectives. As a crypto investor and active participant in this digital landscape, I can attest to the significance of feeling incentivized – be it as a creator or a follower – in shaping the success of emerging platforms. These new social engagement platforms, which hold the promise of monetizing our passions for greater financial independence, hinge on the strength of this incentive.

Dave Catudal

As a researcher, I’d describe it this way: I’m an international entrepreneur with a focus on technology and wellness, and I’m the co-founder of Lyvely. This innovative company operates in the social media sphere as a SocialFi platform, providing rewards to both creators and users through the use of in-platform exchange traded tokens named $LVLY.

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2024-05-12 17:38