Tokenising Content

Building content creator economies using Web 3.0

A main driving force for Web 2.0 was content creation by individual users of platforms who, in turn, drove platform engagement, and built the usual tech megaliths. For creators, the beauty of web interconnectedness was finding a niche audience that was interested in our content, and as platforms and systems matured there were payment models that came with — these have taken a quantum leap with Web 3.0.

The difference between Web 3.0 content creation and Web 2.0 is that the potential to share your creativity with your audience is still there, but it’s done within the context of a token economy or a token community who supports, bootstraps, and ultimately benefits from the joint creative endeavor.

We are still in the early days of Web 3.0 and it is clear — just from watching the NFT space, that content creation is very much alive. And, engaged and productive communities are emerging almost spontaneously, as content creators test out the potential to raise funds for projects via NFTs and communities.

Content Creator Platforms in Web 2.0

But what about moving beyond the singular community model into genuine content creator platforms, that engage millions of users, and millions of creators into a large scale token economy?

To dive deeply into this topic, we first need to understand the old Web 2.0 content creation model — the old model where the platform is the main beneficiary and plays the role of matchmaker between the content creator and the content consumer.

Image: Author

Pictures are more useful than words, but let’s explain the steps in the diagram below. The blue circles are entities, and the yellow diamonds are actions.

1. Content creators publish content into two different areas, a public space, and a private space. (There may also be some overlap in these spaces, like with Medium and Youtube.)
2. Content consumers, well, eat content in either public spaces. Engagement in public spaces creates an in built validation engine that supports the creator to “get out there” and build an audience.
3. Finally, the content that is private, and behind a paywall, is paid for by the user.
4. In some models, there is the possibility to tip the creator — so, for example, creators adding their patreon details or ETH wallet addresses to the bottom of an article.

Now, this model works pretty well, for bloggers and for porn (amongst other things) in the world of Web 2.0. The serious question is how to adapt it so that there is more of a shared benefit between early community, content creator and platform. So, let’s talk about content creator models in Web 3.0 which I have spent a lot of time thinking about as a token engineer — and would love to share with you.

Content Creation in Web 3.0 — Value Streams

In a Web 3.0 setting, the platform, content creator and audience all work together to build value streams: The platform supports the content creator to publish, and to manage the exchange of value through the creation of private markets (where you can buy NFTs for example) and public access points.

Value streams are measured in the form of tokens, and agents who allocate value or exchange value, or wish to speculate on potential future value use tokens to manage these behaviours.

There are various ways in which platforms, content creators and audience token holders can engineer their token systems, but the basic (abstracted) value flow is very similar — there’s just an intricate rewards layer in the middle.

Image: Author

Let’s work through the diagram above — step by step.

1. The starting point is that the content creator pushes information to a publication system (an NFT marketplace for example, or a YouTube channel) that is public or possibly private access.
2. As content accumulates in the public domain, users consume the content and an access counter keeps a record of how users have engaged with the content over time — think of it like Medium keeping track of the number of articles you’ve read for free in a month.
3. The access data is pushed into a metrics system that puts a token value on the content consumer behaviour. So suppose you read an article, liked it, commented on it and then retweeted it, and somehow this can be “known” without compromising on data and identity sovereignty (we’ll figure this out). By doing this, you’ve acted as a certifier and vetted the quality of the content for other users — this adds value for the platform and the content creator.
4. The difference between Web 3.0 and Web 2.0 is that using a tokenised system, you can receive a reward for your engagement: And, based on the feedback from early adopters both the creator and the audience, and ultimately the product can benefit. Early users break the path for later users and token systems connected to measurement can help reward this. There is a split in rewards between platform, creator and consumer at this step. Now what?
5. As more users find out about the creator — through the engagement process reward tokens start to dry up creating scarcity. Users entering the ecosystem pay a late premium and since the content behind the paywall is more valuable as, more people have vetted it, this is justified economically.
6. Content consumers, creators and the platform now have a choice. Do they use their accumulated tokens to access private content, or do they monetise them by cashing out to new users? Of course, creators and the platform earn back tokens through the pay wall too, and this helps them to stay funded, which means more content.

This is the heart of it — I won’t bore you with a mathematical and technical implementation (that’s for a future article), but the basic strategy works for tokenising individual creators, single-token platforms, and NFT with linked tokens too.

Web 3.0 is about shared economics and shared value, but this is realised through creative token engineering and value allocation systems which reward all stakeholders. I trained as a mathematician, wrote about the connection between payment systems and networks, and have consulted to a number of (mildy) successful Web 3.0 startups. Working and participating in Web 3.0 is a privilege, and a lot of fun — don’t believe the naysayers. And, don’t forget to buy a Gorecat.