Co-founder of Variant Fund: The Golden Age of Web3 Revival Content

Li Jin, co-founder of the Variant Fund, recently announced that Web3 will bring developers a golden age of content. His article describes how the internet web2 has changed the way we market, and the rise of web3 marks the impact of web2, shifting the balance of developers. Here is the full text.

In January 1996, Bill Gates published an article ("Content is King", Content is King) which would become one of the first classics of the Internet. In it, he describes the characteristics of the Internet, which will be the basis of creative marketing. He wrote that "One of the strengths of the Internet is that anyone with a personal computer and a modem can publish the content they create," he wrote.

Gates' article recalled his visionary vision for Internet guidance, but less is known if he also warned that "the efforts of service providers should bear fruit." for the Internet to prosper. "sau." The long-term outlook is good, but we expect a lot of disappointment in the short term. "

Gates' preliminary examination of his time. The internet allows almost anyone to post content online, but 25 years after the publication of "Content is King", it is generating significant income as content creation turns into complex achievements.

Here's the real producer experience: 90% of Spotify streaming royalties go to the top 1.4% of music. The top 1% of total streaming revenue represents more than half of Twitch's total revenue. 1% podcast anchors make up the majority of podcast ad revenue. Speaking of Spotify's streaming revenue, the musician told The New York Times, "For me, it's not in development yet." "From a musician's perspective, our staff is in decline." This is not an exception, and it is not a unique phenomenon for newcomers. It affects 99% of developers, including those with millions of fans. Even when they are trying to survive online, there are some bogus issues standing in their way.

The Internet must lead to the golden age of advertising, a world of infinite richness where everyone can create what they want and where everyone can find what they want. While Gates' prediction of making money online from content is true, most of the income goes through the creators of the content and turns into pockets on the platform.

web2 It's a story about how the internet affects the business model, and the emergence of web3 means the demise of web2, and the equation is tilted on the tsim. The Internet web2 does not have a native design framework, and its basic business model is opaque, advertising-based, and reliant on closed networks, which is beneficial for the platform. In the future, new business models and technologies will have to open up business and management, bringing a golden age of creativity to artists and producers.

The first sin of interest in business and the Internet

At the heart of the story of how the internet broke the marketing model was the simple fact that the internet was not designed to increase revenue. Payments were not developed for the Internet infrastructure and are considered very risky. Marc Andreessen calls this "the main Internet crime".

The reason the Internet is paid for by advertising is that there is no payment. You don't want users to take out a debit card and write information on your website, you can get money for your users straight away without any hassle. Pay users for their interest, other property, not money. As a result, the momentum has shifted from former media users, who are in charge of the production and distribution of content such as advertisements, archives and expanded film companies, to the power of attracting the big guys. consumers.

Ben Thompson of Stratechery has written several articles on how the platforms he calls “aggregators” aggregate claims to win the consumer war and generate large, impactful revenues. YouTube has over 2 billion monthly users. Facebook has around $ 3 billion. Spotify has 365 million. With such a large audience, huge ad revenue. In fact, Google and Facebook alone account for more than half of digital ad revenue by 2020.

The model of the advertising industry has had a huge impact on the way platforms develop products. Views are flocking to already popular content and creators, creating an energy distribution division. User preferences and behavior data is the platform's most valuable assets, thus shutting down the ecosystem and locking users into the network, accumulating the largest body of proprietary data.

The monetization of ad-based models also has a major impact on content developers. Developers need to find the widest possible audience and create content that advertisers are interested in. These business models (or the lack thereof) have a profound impact on the way designers live and the content they create. The biggest impact of web2 Internet may be the non-existent developers and the developers who have not developed due to the lack of business models.

From the state economy to the entrepreneur

The platform-driven, ad-centric industry may have won the era of the Web2, but it's certainly not an exception or a last resort. We've written before that developers are patient with weak platforms in the rapidly evolving context of legitimacy. I'm starting to ask if the platform is right to pay for their work, their relationship with their fans and their freebies. controls a lot.

At the same time, a new generation of technology has emerged, which should change the balance of power of the manufacturer.While the pre-Internet / Web1 era preferred advertising and the Web2 era preferred platforms, the next generation of innovation (aka web3) has changed the balance of power and buy-in for developers and users.

There are four main ways.

Introduction to digital scarcity and reform of producer rewards

As a developer, you promote behavioral capital, not altruism

Distribute wealth across manufacturing sectors by introducing new business models

More importantly, it paves the way for developers to have not only the content they create, but the platform itself as well.

Essentially these four changes bring a new era, new incentives to reward new attitudes, opportunities for the internet to come together and hit the "back" button, to move on to the value equation.

We take turns teaching them.

1. Introduction to NFTs and low power digital devices.

Despite the low awareness, it is not that consumers have no choice but the power of manufacturers, this designer can make a lot of money by his creation. There is no danger in today's world of unlimited content as a platform. Content is the ultimate selling point of social platforms. A video is pretty much the same, a song like this, and the content can be easily downloaded online. Developers sometimes make inaccurate estimates per membership or digital purchase (for example, selling eBooks, albums, or subscriptions), but the content below can be copied and rather endless. Lack of resources leads to problems with illegal publication and distribution of content by producers, directly affecting attempts to achieve results.

One of the reasons that non-fungible tokens (NFTs) are so popular the use of technology is that they allow manufacturers to take back control of their content and replicate less powerful ones that make money. silver. When signing their contract as NFT, the developers created an ID with member information and history. The end result is a unique digital tool that allows the artist to follow. The fans dedicated to the maker were willing to pay more for this standard process, so the designers were able to capture all the fans willing to pay. The final impact cannot be predicted. Content creators don't need millions of fans to live, but can count on a few collaborations to survive.

The popular NFT music industry has seen this impact in practice. On streaming platforms, each stream of a song carries the same income (around $ 0.004 per stream on Spotify), regardless of the fan favorite for the artist. In contrast, on platforms such as Catalog or Audio, superfans can buy NFT music for thousands of dollars per person, while producers can earn the income they previously needed that has been played for tens of millions. of times. Brett Shear, an NFT author who owns 45 songs, told Time Magazine. . "

Buying NFTs is like collecting real merchandise, allowing fans to get closer to the artist and have rare properties such as “non-fungible super-like”. The rare digital and the originality not found in the Internet web2 is achieved by the blockchain, which offers creators a new economic model and reduces the economic control of the platform.

Fortunately, NFTs' reporting of deficiencies does not mean that access to community media is restricted, such as paywalls or paid digital downloads. Real news that supports NFTs can always be good citizens, and anyone can use it for free. People who think this makes up for the lack of NFT ("right click and save") miss it.

2. Support: We support developers with investments, not mistakes.

In '100 Fans of Iron' it is explained that manufacturers can take advantage of fan selfishness to benefit from higher prices. By providing significant perks and benefits, manufacturers can make money and live better lives with fewer fans.

This represents the transition from a free model (users pay for developer benefits) to a value model where users are willing to pay more for the benefits they provide.

Web3 takes this idea to the next level. Because all tokens are investments, they benefit not only their developers but also their holders as their prices rise. Jesse Walden defines "support" as meaningful support, a phenomenon expressed by the tokenization of membership. Without a registration of ownership, such as an NFT or social token (consider trying to resell a TikTok video downloaded from an app), web2's capital is impossible.

What is an example of "sponsorship"? Earlier this year, GP Mario Gabriele funded 20 ETH to help a group of analysts conduct an in-depth study of Coinbase with a photo with this quote on it. Crowdfunders received a certain percentage from his presentations and activities, all of which were reported in NFTs. NFT's total revenue from sales was 28.6 ETH, with the crowd returning 43% within weeks.

Other benefits besides support and investment are part of the team's interest. Many successful financial services and NFT sales in the crypto space are driven by the desire of users to participate in the community, which is constrained by token members. This describes an event I wrote about in the "100 Iron Fans". “People are willing to network with contract partners and pay a premium price for unique and differentiated content. "

For fans, the revenue potential will boost their momentum to support producers. Interestingly, it introduces speculators to the Creators Trail, a completely new part that web2 doesn't have. Since all of these users own tools that match developer success, it's important to get inspiration to help them measure developer success.

3. New programmable economic model

A fact of the business enterprise is that manufacturing is generally collaborative. YouTube creators create videos on their own. Musicians draw their inspiration and inspiration from their work. TikTok videos typically contain works (often invisible) from multiple producers: music from one producer and choreography from another.

Unfortunately, the web2 system is not configured to reward or track such collaborations. In the world of win-win algorithmic platforms, the cost often falls simply on the creator of the virus, ignoring everyone involved in creating the jobs. . This has led to protests and discontent from developers who feel their involvement is not being recognized.

The promise of tokenization in web3 means that the benefits are in place and all the benefits come from the partnership. Early examples of this include the shared capacity of the Mirror and the Foundation, which received funding for multiple locations in Ethereum to support the project.

You can imagine that any digital business can take advantage of the content of the global media library and benefit from the distribution of income and resources. Nir Kabessa writes about the “MEME industry”, where the exchange of ideas on the Internet can be the foundation for innovation.

The famous GIF meme is tied to the NFT address, so if someone mentions the NFT first in their post, they can remove the address from the channel. This is strong for memes because it allows you to expand characters and themes across all platforms. Thus, all functions of the NFT meme can be accessed, read and used on almost any platform. All contests, exchanges and transactions are added to the NFT metadata.

With the exception of memes, if a creative activity is related to the base file, the work can be tracked on the internet, and the developer can use it later in his work to benefit from it.

4.DAD and community ownership

In this article, we believe that the root causes of disparities in the manufacturer market are the platforms that over-govern manufacturers and their position through ownership in how content is created and distributed. The most direct way to oppose this control is to change the owner of the product.

Decentralized Autonomous Organizations (DAOs) and other joint ventures have developed a way to break the centralized regulatory environment of the platform by allowing developers to participate without an external guardian signaling the terms of participation. In the DAO, the management is decided by the members and there are no external members to benefit from it. On the other hand, in the design of the DAO, the owner is responsible for the production, distribution, use and enhancement of the content.

A prime example of a development platform improvement is SuperRare, an NFT company that distributes tokens to artists and collectors who will manage patches, DAO chests, and instructions in the future. Other community organizations and key symbols: ElektraDAO is a community of 42 musicians, visual artists, producers and professionals who have created “choice options” consultations in the musical environment (they venture) of web3 games. ObscuraDAO has projects to help photographers create visual, community, financial, and educational resources to help them explore NFT video.

The DAO's commitments are to eliminate the need for incentives and eliminate the costs of potential beneficiaries. The result is independent, informative content that puts developers in control of their business, how it's distributed, and the value of their work.

In addition to DAO, the integration of web3 allows the closure of the platform to be less annoying than that of web2. The atomic unit of web3 is the account, and the user controls the account through a key pair, accessible by any application or protocol. Because every smart contract is transparent and can be accepted by the public, it is more difficult to do the unreliable and unreliable afterthought. Although in its infancy, the web3 world is evolving towards a more open concept, based on models, which benefits both developers and users.

Powerful and creative creator

When the Internet was born, thinkers and academics described the utopian vision it would bring, especially in the media. This utopian vision was not true. At least not yet.

In the past, membership was returned to the old process and all other conditions flowed from these events. Members decide to support. Decide on your schedule. It decides how and for whom financial matters arise. Over the past decade, we've been in an era where members are in a more fundamental technological process with information, end-user relationships, content distribution, and revenue streams. While user content creation has exploded during this time, it has left most developers in the hands of new admins, resulting in a lack of resources and resources. The market is not stable.

Fortunately, the next improvement will indicate a change in the energy balance of conception. With the important new functionalities of which web3 is capable (digital production, dual support, business modeling and community membership), we are at the forefront of new ideas on the Internet. I think web3 can bring huge benefits to anyone who participates and grows on the internet. This is the real golden age of the content we need.