The Web3 creator economy refers to a growing trends among creators using decentralized technologies to build new applications and services on the internet. Powered by a combination of blockchain technology and other decentralized tools, the creator economy allows creators to have more control over their creations, how they are distributed and monetized. This helps brands build a climate of trust with their users, which in turn leads to greater brand loyalty and higher levels of engagement from their existing customers.
What the Web3 creator economy brings in for users and brands?
In a creator economy, freedom and autonomy are the keywords. The matter is whether the Web3 will alter this economy approach, and if creators and brands are required to adapt, modify, or even start from scratch. The point now is to delve into the possibilities the Web3 creator economy unlock for its users and how brands can profit from it. The fundamental idea of the Web3 economy is that it is based on the notion of decentralization:
- Removing any middlemen between content makers and their admirers
- Granting creators full control of their data, identity, and creations
- Ensuring that the financial aspect is clear and accessible
- Encouraging originality instead of relying on advertisements
Years ago, if somebody had proposed exchanging virtual gold which was supported by physical gold to purchase a product or allowing someone to have partial ownership of artwork as a payment for a service, it would have been thought as impossible. Although the rate of exchanging value between two parties has improved, the amount of value going to the creators as opposed to the businesses is also increasing. Additionally, since the value of something is determined by the individual, there will be a shift from payments in official currencies to tokenized assets of various types.
Moving away from the traditional way of making money
On regular creative platforms such as YouTube, creators are compelled to deal with a plethora of advertisements to collect profits from their work. Sponsoring a content can raise some issues because it disrupts the flow of the content. However, creators have to do so to make money, even if they are not comfortable with doing so. Additionally, it can reduce the quality of the creativity process since the creator is essentially a representative for products or services the audience may not even be interested in. This is where the Web3 changes this paradigm.
In the web3 creator economy, audiences may treat creators/brands with direct payouts for the work they appreciate, removing the middleman from the equation completely. Web3 encourages true creativity as opposed to being motivated by ads. Through this technology and infrastructure, creators or brands and their community can trade without the need for a go-between. The goal of the Web3 creator economy is basically to create a more open, decentralized, and equitable internet where creators can thrive and innovate without the need for centralized intermediaries.
Subscribing no longer means just giving away money
Audiences are rather valued members of the community with something to gain as creators can use these means: make their fans part-owners of their content by sharing the gains with them, offer incentives to their audience for participation and investments, using social or rewards tokens, staking their creations so that fans get access to exclusive experiences.
Receiving compensation for a piece of creative work- Royalties in the Web3 creator economy
Bringing in returns from a piece of work is not so common in the current web2 monetary system. A lot of adjustments need to be done, and it is still quite challenging to follow and keep up with. Cashing out of a work of art is generally tied to the time of sale of the work, and certainly not to its resale. Lots of creations have suffered from it. A craftsman will sell a work for for much less than at resale and will not benefit from the higher resale price. This is because his creation became the sole property of the individual who bought it. In the case the underlying deal is hundred times inferior to the exchanged price, the creator ultimately loses out. That is the issue royalties tend to fix in the Web3 creator economy.
Royalties allow creators to retain a portion of their work over time and receive a percentage of money on it. Creators in the Web3 can even use it for things outside the creative realm and smart contracts help automate the collection of additional earnings from each resale.
Ownership in the Web3 creator economy
In the Web3 economy, ownership is to a new level and and helps get rid of middlemen. It’s no longer just about money, but revolutionizing how people work and get compensated and develop brands, create communities, and more. Everyone involved benefits in a mutually beneficial manner.
Currently for instance, social media networks owners have authority over the content created by users. The Web3 creator economy can enable users to not only hold ownership of the content they make on existing platforms, but also give them a stake in the platform they are distributing their content on. Non-fungible tokens as a case in point offer a way to prove ownership of content and also confirm its credibility. At some point in the future, content developers may be able to possess and regulate the interactive sites they participate in, depending on elements such as their followers and the excellence of their material. This could be done through Decentralized Autonomous Organizations where members own part of the platform rather than having a single leader or ruling entity.
Ownership of the digital social outlet would be indicated by tokens that would be given to producers as a representation of their significance and effect on the website. Programmers can use blockchain technology to devise fresh kinds of games, operated by community players. Players can become creators and tailor or construct their digital resources, while the early creators can appreciate what has been made, exchange and sell them in a secure fashion. It is a way for users to have greater power over their inventions.
The Value creation in the metaverse
The Web3 economy is typically transitioning to a value creation, necessitating a new set of regulations that give creators access to resources and reward value creation. It means the definition of “value” has become more malleable. This technology provides a novel way of connecting people online, allowing them to conduct economic transactions, exchange currencies, assets, and valuable data with each other without the involvement of any third-party institutions that impose fees, set regulations, or ask for personal information.
In the near future, most resources apart from intellectual and human capital will be commoditized. Creative industries, being producers of knowledge-based assets, are set to become the major drivers of economic growth worldwide. Consequently, the focus on creative industries and designing the most advanced decentralized protocol for the creator economy is to be done. The Web3 is to unleash the full potential of creators in the future metaverse.
New Commercial Possibilities in the Web3 and the metaverse
The Web3 economy is to enhance economic effectiveness and allow for the development of new business models that were previously inconceivable. It may even cause an overhaul of existing brands. At its center, a business is basically a network of agreements: with staff members, investors, banks, clients, and the government.
In the Web3 creator economy, all of these can be implemented on trustless and permissionless smart contract blockchains, which are both more cost-effective and quicker. Those smart contracts are comparable to robotic vending machines. The transactions are managed automatically according to a criterion that cannot be violated. This brings in a type of autonomous value creation in metaverse interactions where users are more active than before. By introducing the Play-to-earn gaming for instance, users can have control over their creations and be compensated for it. In this type of gaming, people can gain cryptocurrency by playing specific games, though there are still obstacles to overcome.
Programmers can generate income by selling tokens to their platform such as digital costumes and land. Investors and corporations can regard metaverse property and currency as a new form of investment. Developers can mint NFTs on a blockchain, ranging from digital art to virtual homes and other items, that customers can buy. If a metaverse platform gains traction, the value of governance tokens may rise.
Web3 has taken the advantages of Web 2.0 and equalized the access for all involved. This allows everyone to benefit from their contributions to the network. Additionally, it simplifies the process of exchanging value. This has opened up a new economy of value transfer. It has no boundaries and is secure. Most importantly, it is just beginning and will shape the internet for a long time.
Although the combination of the creator economy and Web3 is in its early days and the potential outcome is yet to be determined, if performed correctly, the Web3 belief system and upcoming technologies could have far-reaching effects, not only for creators/brands/users, but also for the future as a whole.
To learn more on the Web3 and trends to follow the year to come, read WEB3 TRENDS: 9 TO WATCH FOR 2023
For more, download our white paper ENTERING IN THE WEB 3.0 – A GUIDE FOR LUXURY FASHION IN THE METAVERSE