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As with most groundbreaking innovations, there is a mix of excitement, speculation, and confusion about the role Web3 technologies will play in the evolution of our digital lives. For Web3 evangelists, the technology promises to help people take back control of their data and monetize who they are and what they know and do in new and exciting ways.
As a result, Web3 has attracted billions in venture capital funding for projects and startups spanning its various components, including blockchain, cryptocurrencies, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), AI, and the semantic web. . And for creators, the size and scope of the investments in these new developments is exciting news.
What is Web3, anyway?
Before moving on to what it means for creators, it’s good to have a working definition of Web3. IDC defines it as “a collection of open technologies and protocols, including blockchain, that support natively trusted storage and use of decentralized data, knowledge, and value.”
If you’re a creator, that definition should be music to your ears. With the issues of control, privacy, security, ownership, and trust continuing to plague the current iteration of the Internet, Web3 offers a beacon of hope. Reading between the lines, what IDC is saying is that Web3 will offer a better dynamic between those who create and those who consume. It will enable the seamless, transparent and profitable interactions and transactions needed to grow the creator economy.
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The problem of centralized platforms
As it is, the current ecosystems that most creators are nurturing are completely centralized. And while some creators have made a living from these platforms, in the end, it’s the platforms themselves that make real money. Take YouTube for example.
According to Statista, during the first quarter of 2022 alone, YouTube’s global ad revenue reached $6.9 billion, up 14% year-over-year. Yet despite this success, many YouTube creators can’t quit their day jobs. According to a report from August 2022, 97.5% of YouTubers do not earn $12,140, the recognized poverty line in the US.
To be fair, YouTube is not the only platform with this dynamic. Despite popular platforms generating billions, the vast majority of creators struggle to make a living. Linktree data revealed that of the 200 million people who participate in the creator economy, only 12% of those who do it full time earn more than $50,000 per year. The company also found that 46% of full-time creators earn less than $1,000 a year.
Most creator platforms own the audience, data, and revenue. The main way for creators to make money is by securing sponsors or attracting a large number of fans and followers to ads placed by a platform’s algorithm, which is seen by some to favor certain creators over others. Web3 essentially cuts out these middlemen and allows creators to connect directly with their audiences and earn most of the revenue themselves.
In essence, the mantra of today’s creator ecosystems is that creators create the content and companies make money. At any moment, these ecosystems can change their algorithms and rules and seize the audience (and monetization) that a creator has painstakingly built up over the years. And if a creator decides that he wants to take his audience to a new place, he can’t. They do not have access to the data necessary to directly connect with their audience outside of the platform environment.
Web3 is set to change the current dynamics of the Internet by allowing creators to monetize their work directly, without the interference of a third party. But you might be wondering, “How, exactly, does that work?”
Putting Web3 to work for creators
The key to leveraging Web3 as a creator starts with finding the right platform. And the most important thing is to stay in full control of your content and the income you earn. It’s also important that the platform you choose provides the tools and services you need to run your business. That’s the approach we’ve taken at Kajabi, and according to a recent study, Kajabi customers earn an average of $30,000 per year.
The Rarible NFT market is another good example when it comes to keeping tabs on how much money you and your team make. With Rarible, if you have a team of collaborators, you can add their wallets to the smart contract and share the royalties from future sales. That way, the earnings equation is completely transparent and no one is left out.
Another model to consider comes from a company called Rally, which allows creators to launch their own creator coins. These fungible tokens are an exciting way for creators to monetize themselves and their work with their communities by building an economy around everything they do. Essentially, fans and investors can buy their creator coin, sell it, and use it as currency on platforms that are built on that blockchain.
Decentralized social platforms like Mastodon and Diaspora go one step further. With these platforms, creators retain full ownership of their content and identity, and can monetize through their fans, not advertisers. Fans invest in their favorite creators and each account has a monetary value that can go up or down. Furthermore, what is owned on these platforms goes with the holders from one platform to another.
We are in the early stages of Web3. And just as artists help revitalize neighborhoods, creators will power Web3. Without creators and their supporters as early adopters, Web3’s growth will stall and the centralized Web will only become more controlling. That’s why there’s no better time than the present to start the Web3 journey.
Sean Kim is President and Chief Product Officer of Kajabi
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