The Future of the Creator Economy: Web3 vs. Web2
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Chapter 1: Understanding the Creator Economy
The prospect of Web3 brings a wave of excitement, promising a more open Internet, the decline of surveillance capitalism, and secure financial technologies that protect our information. However, one crucial aspect often goes unnoticed: the Web3 Creator Economy.
What distinguishes this new landscape from its predecessor? How will it reshape opportunities for creators?
In essence, value emerges whenever an exchange occurs, even in the realm of information. Social media platforms, for instance, have reached valuations in the billions—there’s undeniable worth in this engagement. But a pivotal question arises: who ultimately reaps these rewards?
In the Web2 environment, the lion's share of value typically funnels to corporations, which monetize user engagement through rampant advertising and data exploitation. While some creators thrive on Web2 platforms, they are far from the majority. Consider these eye-opening statistics:
- Only 0.33% of YouTube creators earn a full-time income.
- A staggering 94% of Medium writers earn less than $100 per month.
- The top Medium earners took years to reach their current income levels.
- Merely 0.3% of Patreon creators boast over 2,000 patrons.
- A significant 96.3% of Fiverr freelancers earn less than $500 monthly, with 70% making under $100.
- Only the top 1% of authors on Amazon can claim $1,000 in earnings in a single month.
Why are these figures so disheartening? The overwhelming majority of wealth is concentrated at the top. These platforms excel at facilitating creativity but excel even more at siphoning off value. The billions that inflate stock prices should belong to the creators who generate the worth—yet, it is the corporations that profit the most.
The traditional flow can be summarized as follows:
Creator → Company → User
As long as creators depend on intermediaries, they will struggle to capture the full value of their work.
Section 1.1: The Liberated Creator Economy
In the Web3 landscape, creators have the opportunity to receive equitable compensation for their work through decentralized networks like Ethereum or Polygon.
The most exciting part? If the value of their work appreciates and a fan resells it, the original creator earns royalties. By eliminating the need for exploitative middlemen, crypto fosters a more equitable relationship between creators and their supporters.
Fans benefit significantly as well:
- Investment: Individuals can invest in their favorite creators, supporting their endeavors while also sharing in their success.
- Data Ownership: The era of surveillance capitalism comes to an end. Companies will need to devise new strategies to market unnecessary products.
We are all familiar with the Web2 creator economy, which has been in existence long enough to observe its mechanics. Here’s a common trajectory for creators:
- Hobby: You start creating content for enjoyment, centered around a passion.
- Slow Growth: It typically takes a year or two to cultivate a dedicated audience, and even then, growth can be painstakingly slow, leading many to abandon their efforts.
- Creator Market Fit: Over time, you refine your craft and equipment, beginning to earn a tangible income.
- Explosive Full-Time Growth: You become a prominent figure in your niche, making enough to leave your job and pursue your passion full-time, enjoying the fruits of your labor.
Section 1.2: Discovery in a New Era
While big tech holds a distinct advantage over Web3 in terms of recommendation algorithms, which drive user engagement by personalizing content, this is a double-edged sword. These platforms gather user data, leading creators to feel expendable as their contributions can easily be replaced.
However, in Web3, creators who are generating income often have established relationships with their audience. There is currently no centralized platform for creators in this space, which means that discovery is reliant on external means. If your presence is limited to a blockchain explorer like Etherscan, your visibility may suffer.
This shift also opens up new possibilities for impactful change. In the restrictive confines of Web2, creators are largely confined to entertainment and commerce, with limited avenues for genuine societal impact.
Chapter 2: The Web3 Revolution
The real beauty of Web3 lies in its ability to foster innovative incentive structures and organizations. With the right approach, creators can instigate significant change. Here are some tools available in this new landscape:
- Tokens: Establish a currency that aligns with your mission, fostering financial incentives for participation.
- DAOs (Decentralized Autonomous Organizations): Create inclusive entities that empower all supporters to engage in your mission.
- NFTs (Non-Fungible Tokens): Transform any digital asset into a collectible and tradable item.
Various Web3 projects, such as UkraineDAO, EcoDAO, and DeveloperDAO, have already made notable contributions. This technology provides immense power to effect meaningful change.
The traditional creator economy has often been a façade, a mechanism for large tech firms to exploit creators for their benefit. Even successful creators frequently see a majority of value siphoned off by corporate executives.
Let's envision a brighter tomorrow—one that prioritizes creators and users alike. A future where individuals can freely pursue their creative passions, and the value generated by their work flows directly to them.
In this video, "Breakpoint 2023: The Creator Economy in Web3 vs. Web2," we delve into the contrasts between the creator economies of these two paradigms and explore the opportunities that Web3 presents for creators.
Watch "Building for the creator economy, from web2 to web3 - Ev Tchebotarev" to understand the transition from Web2 to Web3 and how this evolution empowers creators and reshapes the landscape of digital content.