The Creator Driven Community

it's me

**Our premise moving forward…**

We all agree Web3 has the potential to offer some pretty cool new opportunities.

I’m talking about new models of ownership. New ways to connect with our communities.

And let’s not forget, new ways to make a living as Creators.

But adopting this technology means we’ll have to find solutions to a lot of problems.

Some of these problems, like writing and managing Smart Contracts, will be new. Most of them, like finding and communicating with our customers, will be same problems business owners have always faced.

In these cases, the solutions will be new.

**Rubber, meet Road.**

I’m finally getting getting back to the project that led me down this rabbit hole to begin with.

All the research I’ve done on Web3 started with a search for the solutions I need to make my project work.

Now it’s time to stop solving these problems in my head and start putting all the things I’ve been learning into action.

I’ll share more details about what I’m building in my next post. But the specifics of my project aren’t important. Most of the problems we face are the same.

Fortunately, I enjoy solving problems.

So I’m going to approach this as merely a list of problems looking for solutions.

**What I need from you…**

Your job is to send me some problems **you** are trying to solve.

Then we can solve them together.

I’ve already done this with a few people via email. It’s a lot of fun. And my brain thrives on the interaction.

So send me a message and maybe we can add your problem to the list.

If it helps, you can consider it the cost of your subscription.


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I think it’s helpful to break the list into the two types of problems I mentioned above… New Problems and Old Problems.

# New Problems

These problems tend to be “Chicken or Egg?” in nature. Each choice effects all the others. So, if you’re not already married to a particular solution, it’s best to explore each problem on a surface level and then decide which is the most important for your project.

Once you make this first decision, you can start looking for solutions to the rest of the problems in this group.

## The Blockchain Problem

This is akin to choosing an operating system. Which chain should we choose? Why would we prefer one over the other?

**Spoiler Alert**: I’m convinced an EVM (Ethereum Virtual Machine) chain is the best way to go right now.

So if you were hoping for Solana or Cardano specific solutions, you may be disappointed.

## The Wallet Problem

Wallets are a bit of a hassle now, but they are the future of online identity.

We need to know how people will get them, how they will use them, and how they will them safe.

This is the foundation of interacting with Web3, so it’s up to us to make sure we recommend the best option.

## The Sovereignty Problem

Crypto evangelists see self-sovereignty as one of Web3’s greatest strengths. But sovereignty is a double edge sword.

In most of the western world, taking on more responsibility feels like more risk. Which creates more than just a little bit of fear.

What solutions are available to address these fears?

## The Treasury Problem

If you’re considering setting up a DAO, or some other form of distributed organization, there will probably be community controlled money involved. We need to think about how we’ll protect the treasury.

If you plan to keep some of your money in crypto currencies, you’ll need to think about this as well.

## The Voting Problem

What rights will we give to our members? Will they have control over how the treasury gets spent? How will these decisions be made?

## The Contract Problem

Will we write our own smart contracts? What questions do we need to ask if we go with a third party? Are there no-code or low-code solutions we can use?

## The Environment Problem

How will we answer concerns about the environmental impact of the tech? What options are available for those of us who want, or need, to offset the environmental costs of our work on the blockchain.

**Hint**: The successful completion of the Ethereum merge last week was [huge for the environment](https://www.theverge.com/2022/9/15/23354619/ethereum-cryptocurrency-merge-energy-electricity-greenhouse-gas-emissions-reduction) **and** the future of Web3.

## The Skeptic Problem

How will we respond to people who might need our products, but don’t trust the technology?

We can all look to the [Starbucks Odyssey](https://stories.starbucks.com/press/2022/starbucks-brewing-revolutionary-web3-experience-for-its-starbucks-rewards-members/) program for some insight on this.

## The Education Problem

Once we’ve dealt with the Skeptic Problem, how will we teach our customers to use Web3 Tech?

# Old Problems

## The Communication Problem

How will we reach our holders? Should we choose crypto friendly Web 2 platforms? What about Web2.5 options? Can we go all in on Web3?

## The Community Problem

Web3 will find mass adoption through the communities organized by people like us.

Where will these communities gather? How will we manage them? And how can we monitor their health?

## The Content Storage Problem

What are our storage options for free content? What distributed solutions can we use to store gated content?

## The Content Access Problem

Once the content gate is locked, how will we manage the keys?

## The Payment Problem

How will we get paid? How will we pay others? What are the best practices?

## The Tax Problem

Where is tax policy headed? How can we keep track of what we might owe? How will we protect our projects from the volatility of the crypto market?

**Obligatory Disclaimer**: I’m not a tax professional or a lawyer. It takes a small miracle to get my taxes together before the annual deadline. And I’m based in the US, so I can’t even begin to speak to the rules other countries might have. So any time I dive into these waters it will be from a platform of curiosity, not expertise.

## The Art Problem

What resources are available to create and manage all the art we need to represent each of our digital assets?

## The Marketing Problem

What marketing tools does Web3 have to offer? And how will Web3 change the ways we reach potential new members of our communities?

## The Event Problem

How can we use Web3 to help us manage IRL and virtual events?

## The Credibility Problem

AKA: The Social Proof Problem - How can we use Web3 tools to gain and maintain credibility (of ourselves and our community members) on the web?

# The Most Important Problem

## The “Rented Land” Problem

I saved this one for last because we need to be considering this with every decision we make.

Most of us don’t even hold the keys to our own communities. We’ve been lured into the Web2 trap by convenience and “affordability”.

Web3 gives us a chance to escape.

But we don’t want to scale the garden walls of Web2 only to find ourselves drowning in a Web3 moat.

What are the questions we should be asking when evaluating these new products?


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## On a personal note…

I’ve found myself feeling like I have to choose between “Doing the Thing” and “Writing About the Thing”.

But my goal is to be “Writing About Doing the Thing”.

Maybe you can relate.

I’m hoping the transition from theory to reality will help me break out of this state of productive procrastination.

That’s it for this edition. Thanks for reading to the end.

What's the Problem?

# Welcome to Issue #13

If you live in the U.S. I hope you are enjoying your holiday and the unofficial end of summer.

This is the issue that keeps getting put off by the fact that it will never be complete.

I want to give you ALL the ways you could turn an NFT project, like a game, into a business. Every angle needs to be considered. Every idea has to be actionable and applicable to whatever project each of us might be working on. Oh, and they all have to be original.

But that’s not realistic.

So it’s time to quit stalling and give you everything I’ve got so far.


---

## Adding Value (and Revenue)

## Premium Tracks

This is pretty straightforward. We start with a solid collection of free tracks to provide immediate fun and get our players using the game. But there also need to be premium tracks that users can only access for a fee.

## Make it More Like the Real Thing

**Race To Win** - Racing cars in the real world has costs and rewards. For those who want it, our game should offer the same. This means that there are real competitions with prizes for the winners and entry fees for the organizers.

It also means that there are costs to racing beyond the cost to enter a race. Tires need to be replaced. Oil needs to be changed. Careless drivers can cause crashes that cause damage to their own car and those of others.

**Create Opportunity Costs** - It takes labor to swap out parts. This could be represented by a royalty when players buy and sell Cars or upgrades. But it would be more interesting to allow the players to trade inside the game for free, and charge a tiny “labor” fee to install or remove each of those upgrades for a race.

All of these costs might make the game too much trouble for an average user, but they make the game that much more fun to someone looking for a greater challenge.

[Star Atlas](https://staratlas.com) is building these features into the universe surrounding their space exploration and combat game. Players can choose from three distinct zones of the game. The “Faction-Secured Safe Zone” gives users a chance to learn and make mistakes without any real risk to their assets. The “Medium-Tiered Safety Zone” lets them stretch their wings by making their assets susceptible to damage as well as wear-and-tear without the risk of permanent loss. While “The Wild Frontier” lets users play for keeps. Losing a battle in the frontier can mean your crew is killed or forced to abandon ship in escape pods while your craft is reduced to scrap.

**Build Something Bigger** - Some users might excel at the skill of driving while others have the strategic minds required to build a team. Why not create a space for users to play out those roles?

## Vertical Markets

While we earn a fixed royalty on secondary sales through NFT trading sites like OpenSea and LooksRare, we can offer our players several benefits if we build our own internal marketplace.

* **Save on sales commissions** - OpenSea collects 2.5% on every trade made through it’s market place. LooksRare is a little lower at 2%. This is all on top of our own royalty. If we offer a marketplace where we only collect our royalty, our players will save 2-2.5% on every sale.

  NOTE: The recent debut of [SudoSwap](https://sudoswap.xyz/#/) has exposed the fact that royalties are challenging to enforce. Their 0.5% fees are also hard to beat. In the end, our vertical markets will be forced to match these rates AND provide a tailored experience. Which leads us to…
* **Better trading experience** - OpenSea is optimized for *their* business model. By building our own marketplace, we can design a branded trading experience that blends seamlessly into our game.

The [STEPN](https://stepn.com) Move-to-Earn game is a good example of what this looks like in practice.

Users need to buy a Sneaker NFT in order to play the game and earn GST, the native utility token. They can also boost their earnings by adding upgrades to their Sneakers in the form of Gem and Socket NFTs.

It’s difficult to tease out the marketplace fees from the revenue created by users minting additional Sneakers. But the game’s co-founder, Jerry Huang, [told TechCrunch](https://techcrunch.com/2022/05/22/play-move-to-earn-solana-stepn-gamefi/) in May of 2022 that the 6% per transaction trading fees inside their marketplace are generating between $3 million and $5 million in net profit EACH DAY.

## **Sponsors**

Early on, Play or Move-to-Earn NFT projects missed a huge opportunity to add value to their economy by partnering with sponsors in the industry. If an IRL brake manufacturer releases a revolutionary new design, they could pay you to air drop it into the game. You could offer it as a prize for entering or winning a race.

If a car maker wants to promote the release of a new model, they could be introduced as well.

Sponsors who want to support the game, but aren’t in the racing industry (think lifestyle brands like RedBull and luxury goods like Rolex) can pay for winners prizes as well as random drawings for race entrants and spectators.

A word of caution… The Web3 ethos dictates that projects and users share in the value they create together. So it’s important that we create, and communicate a revenue sharing system for all proceeds that feed into the game from outside sponsors.

## More Cars and Upgrades?

It might seem like the easy solution is to create and sell more assets. But we’ll need to be careful here. If we drop a bunch of new items into the market, our players will roast us for diluting the value of their existing NFTs. So we’ll have to come up with entirely new types of assets. We’ll also have to find a way to release them that benefits both us and the existing players.

This option is one we should hold off implementing until we’ve got the game running smoothly and we’re ready to introduce new users.

## Growing the User Base

If our game is popular, it will attract more than our initial 10,000 users. We need to have a plan in our roadmap to add additional Drivers. This plan should be made clear to prospective buyers from Day 0.

Adding drivers poses the same risk as adding more Cars and Upgrades. Existing users who may have made a serious investment will feel short-changed if you devalue their assets by minting more.

So why not cut them in on the profit?

If we want to 10X our project and go from 10K to 100K players, why not evenly Air-Drop 40,000 of the additional 90,000 Drivers, Cars, and Upgrades to current holders on mint day? Yes, we’ll be giving away almost half of the asset value of the expansion to our users. It’’ll be up to them to decide whether to sell or keep their new assets. Either way, they’ve got more incentive and capital to put back into the game.

## Defeating Pay-To-Win

One of the loudest and most common objections gaming companies hear when they talk about  introducing NFTs into their games is Pay-To-Win. This is the very real fear that players with deep pockets will buy up all the best assets and keep regular players from winning.

Do we want to allow this? One of the biggest features of Web3 is the idea that it’s permission-less. People can pay whatever they want for the things they buy. And they can use them as they see fit.

In the real world this dynamic is already in play. The race team with the most money could just buy the best of everything and destroy the competition.

But they don’t let Ferrari enter NASCAR races. It’s not fair, or all that interesting, to put a truly stock street car up against a Formula One racer.

Instead, races are organized according to class and car type. We can do this in our game too. Drivers with more basic cars and basic capabilities can enter races that exclude higher performance cars. This keeps things more competitive, and more fun.


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This is a short list based on a look at the racing world viewed through the lens of the current state of Web3. New opportunities will continue to present themselves as this technology matures. The possibilities here are endless.


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**Thank you** for reading all the way to the end.


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## Was this newsletter shared with you?

If so, you can [Subscribe here.](https://paragraph.xyz/@CreatorDriven/embed)

All the Problems

Another busy week here. Doctors appointments. Back to School. Life.

Also work.

More on that soon…


---

No new subscribers this week. But we did get a share.

I want to officially thank **Jim MacCleod** for sharing this newsletter on [his Twitter](https://twitter.com/JimMacLeod). Jim creates an info-graphic that summarizes the content from one of many marketing podcasts each week. It’s called The [Marketing Podcast Recap](https://jimmacleod.substack.com) and you should go subscribe.

Hey Jim! I hope it’s ok that I outed you as a subscriber. You shared publicly, so I just assumed it was ok.   🤷🏻‍♂️

I’ve got [a Kudo waiting for you](https://mintkudos.xyz/claim/2095).

Was that my first ad?

“Will write for shares”…?

You could share this newsletter. Maybe you’ll get a mention and your very own Kudo too. Why don’t you try it and find out.


---

## Everything Old is New Again

I’m not that smart…

…or original.

I know this. But maybe you didn't. You’ll learn.

Case in point… This week I discovered that [animoca Brands](https://www.animocabrands.com) (I know… the ‘a’ should be capitalized, but this is how they do it on their site), has already built, and [shut down](https://www.animocabrands.com/f1-delta-time-to-cease-operations-announces-rewards-for-supporters), an NFT-driven car racing game. F1© Delta Time was killed by that little ‘copyright’ symbol when they couldn’t renew their license with Formula One.

So I’ve fallen down that rabbit hole…

Building an entire franchise on the back of a license they couldn’t control might have been a bad idea. But animoca pivoted easily. They built a collection of other racing titles inside the [REVV Motorsports](https://revvmotorsport.com) ecosystem. Now that the Formula One version is dead, owners can trade their cars and other assets for replacements. The new NFTs have the same rarity and can be used in the other racing titles animoca owns. And the in-game token, REVV, has always been valid in the other games.

I’m still working on the final installment covering the monetization of our little racing game. But now I’ve got to compare my ideas to what REVV is already doing.


---

# Stuff that caught my interest this week…

## Payments - [Cask Protocol](https://www.cask.fi/)

* Add crypto payments to your existing site with their widget
* Scheduled payment management (subcriptions)
* Instant settlement - No chargebacks - This is important when selling items on a block-chain because NFTs cannot be clawed back - Returns have to be agreed upon mutually.
* Supports free trials for your customers
* Supports “Pausable” subscriptions
* No gas fees on subscription payments

  Customers deposit funds into a smart contract. An agreed upon amount (less protocol fees) is transferred to the creator at regular intervals. Soon, customers will be able to earn interest while their money is locked in the contract.
* Creators will eventually be able to reduce their fee rates by buying and staking\* (locking up) the CASK governance token.

  \*Staking is a mechanism used to make a token more scarce and, therefore, more expensive.

Earning interest on money that is set aside to pay for subscriptions sounds like a good deal. But the interest has to come from somewhere, which means there’s a risk loss. Since that deposit is your future earnings, they will be at risk as well.

And they’re planning on taking plenty of risk.

The [example they gave in their docs](https://docs.cask.fi/protocol-operation#reserve-assets) uses a “Vault Reserve Factor” of 0.8. This means they’re going to expose 80% of customer and creator deposits to some sort of risk by way of other interest bearing protocols. The recent collapse of Terra, and the chain reaction of failures that followed, should remind us that the risk of loss is VERY real.

## Creator Communities - [CreatorDAO](https://creatordao.com/)

> We’re creating a decentralized community that invests in creators and gives them the tools and operational support they need to accelerate their careers.

* Recently completed a $20m seed funding round
* Building a Community of “Top” Creators
* Apply to join. But there’s a token, so do I have to buy it to get in?

> members that join all contribute something to the DAO - be it capital, collabs, mentorship, etc. and the entire community benefits from those contributions

They’re currently recruiting for a 6 week YouTube excelerator program called Creator Launchpad. If you get in, your membership is paid…. But 15% of your future revenue goes into the community treasury.

15%… Of all revenue… Forever?

## NFTs X Events - [Secret Walls Rewards Program](https://secretwalls.world/pages/syla-tour-free-mint)

[Secret Walls](https://secretwalls.world) began with a mission to get local graffiti mural artists off of the streets and onto a stage. Their live illustration battles turn street art into competitive performances.

They have recently expanded their competitive categories beyond only black and white, physical murals. They now include full color and digital creations. To promote the new mediums and their new tour, they’ve created a block-chain driven NFT loyalty program.

> As we build the Secret Walls Universe for the years to come, it's important we put our community at the core of everything we do, aligning our goals as a brand with the dreams of our fans. We truly believe to be a fan powered company that fuels live arts entertainment to new levels.

The psychology of this rewards program fascinates me.

First you can [mint a free NFT](https://secretwalls.world/pages/syla-tour-free-mint) and get some free SYLA (Support Your Local Artist) tokens. The NFT can be upgraded by attending a live [Art Battle](https://secretwalls.world/pages/tour).

You can earn more SYLA tokens by following and promoting the project. Coin holder benefits start at 10% off in the merch store and escalate to free merch->studio tours->artist access - Benefits are gated by the quantity of SYLA tokens you hold.

I minted one one of their free NFTs and immediately found myself checking on battle dates near me. Then I linked my twitter account and picked up some more SYLA.

BTW - I’m considering the [September 13th show in St. Louis](https://www.etix.com/ticket/p/6936804/secret-walls-support-your-local-artist-stlouis-red-flag-mjp) if anyone else is interested in attending.


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## Getting Meta

Subscriber Count: **69**

Total Alpha Claims: **20**


---

## Was this newsletter shared with you?

If so, you can [Subscribe here.](https://paragraph.xyz/@CreatorDriven/embed)

\


Creator-Driven - Issue 12

Welcome to Issue #11

This week didn't turn out to be a good one for long form writing.

But that doesn’t mean I quit working!

We’ll pick up with The “(Token) Game Theory” series again soon. I promise. But this week, the Alpha is the best I can do.

And let me say ‘**Welcome!**’ to the one new reader who slipped in under the wire when they subscribed last night (and from Yale.edu to boot!).


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Do you know a **creator** who wants to learn more about **Web3**? If so, please **share this newsletter** with them.


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## Welcome to the Alpha!

This is where I gather up all the things that were on my radar during the past week. If I feel they’re worth passing on, they end up here with a few thoughts of my own.

Usually, you have to follow a link at the bottom of the newsletter to get to this content. But some weeks, it’s the main event.

## From The Map is Mostly Water

[Start With Creation](https://simonsarris.substack.com/p/start-with-creation)

Simon Sarris shares some thoughts to consider…

**On waiting for permission**

…it is an error to wait around for inspiration, or to demand some feeling of readiness for an undertaking, or for a teacher or some other golden opportunity… stop waiting for others—for either their permission or instruction—and instead begin on your own, fumbling through, regardless of how ready you are

**On courting failure**

…there is value in pushing *learning* and *doing* as close together as possible… Failure is something you want to tempt... A meaningful first project should have sufficient difficulty that there is some real chance of failure… A chance of failure ensures your hands are firmly touching reality, and not endlessly flipping through the textbook, or forever flirting only with ideas.

**On building in public**

…if you are creating while learning in public, you may find others who come along and help you… People are *much* more willing to take an interest and help you along if you have already put in work yourself to show for it. It is annoying to humor someone dancing around the edges of creation, because most people never take any real steps, or worse, simply want you to do the work for them. On the other hand it is inspiring to help someone who has begun… Enthusiasm is contagious.

## [Dune Analytics: A Guide for Complete Beginners](https://mirror.xyz/phillan.eth/17VAXsMPpwJg4OQNBHKTYAQTWfJMwFuXZQDAxPStf0o) by [0xPhillan](https://mirror.xyz/phillan.eth)

In [last week’s newsletter](https://paragraph.xyz/@CreatorDriven/token-game-theory-part-1-launch) I mentioned [Dune Analytics](https://dune.com/). Here’s a guide if you want to learn more about the site and how to build your own dashboard.

## [Async](https://async.art/) Now Open to Everyone

* Full featured - No code NFT launch platform.
* Previously open only by invitation
* Create generative art pieces from individual elements
* Rarity controls
* Async takes 10% on the primary sale, 1% of all secondary sales (through their market)
* Creator royalties are automatically set at 10%

## MailChimp(Intuit) De-platforms Crypto/Web3 Writers

from [Decrypt](https://decrypt.co/107099/intuit-owned-mailchimp-is-banning-crypto-content-creators)

Many notable and popular crypto and Web3 newsletters got caught up in the sweep.

* Messari - Crypto analytics
* Edge - Wallet provider
* Decrypt - Crypto newsletter

It didn't stop at censorship. They completely locked the writers out of their accounts.

> Not only was there zero warning, we can't even access our subscriber lists.

Wow. I’m glad I chose a censorship resistant platform like [Paragraph](https://paragraph.xyz/@CreatorDriven/writing-with-paragraphxyz).

## Bored Apes are Going Vertical?

MagicEden, a popular NFT marketplace that came up inside the Solana block-chain, has proposed the building of an ApeCoinDAO Marketplace. Trades made inside the marketplace would be charged 0.75%. This is much lower than the 2-2.5% fees charged on OpenSea and LooksRare.

This is an incredible effort to under-cut MagicEden’s biggest competitors, not by simply offering a cheaper rate, but by also creating a more immersive experience for ApeCoinDAO members.

Look for this type of vertical integration to become a standard for larger projects in the near future It’ll be a white label product for everyone else not long after that.


---

## Getting Meta

Subscriber Count: **69**

Total Alpha Claims: **20**


---

## Was this newsletter shared with you?

If so, you can [Subscribe here.](https://paragraph.xyz/@CreatorDriven/embed)

Alpha - Week Ending Aug 14, 2022

# Welcome to Issue #10!

**I made it to 10!** - #SmallWins!

**3 new people** joined us this week. Howdy!

2 or 3 new people a week doesn't seem like much. But my family gives a little “Woo Hoo!” every time I announce a new subscriber.


---

# Not an Ad

One day I will figure out a way to get some outside funding for this project. Until then, this newsletter is sponsored by me.

If you’d like to show your support, there are a few things you can do:

* **Share this newsletter!** Twitter, LinkedIn, Instagram, your favorite Discord server…
* Reply to this message with your questions, comments and thoughts. I’d like to open up a little space for this community. But I’m not gonna do that until I know there’s someone at the other end of the line who wants to talk.
* Reply to this message and give me your advice on how I can make the newsletter more valuable. (I appreciate those of you who have been generous enough to do this. I’m doing my best to put your suggestions into action.)

If someone shared this with **you**, thank that person for me, and then [subscribe here.](https://paragraph.xyz/@CreatorDriven/embed)


---

## Web3 - ELI5

**Doxed** - This is when the identity of a previously anonymous or pseudonymous person or team is made known to the public.

Web3 makes it pretty easy (for those who want to) to operate anonymously. Many times a person or team is doxed against their will. This can happen because their project is extremely successful. But in most cases, it’s because they’ve done something bad and the general public wants to know where to assemble with their pitchforks and torches.

When a team doxes themselves willingly, it’s seen as a sign of good faith. It’s meant to help build trust between themselves and their potential customers.


---

[Last week](https://paragraph.xyz/@CreatorDriven/its-all-tokens-part-5-erc-1155) we explored how ERC-1155 tokens could be used to create a token design for a Web3 racing game. This week I had planned to brainstorm some of the ways our game could drive revenue after launch.

But then I got to thinking about the launch itself.

This is such an important part of any project. It deserves a little more attention. And, of course, I have some ideas about how things could be done differently.

## Pre-Launch Signaling

In addition to marketing, there are two main concerns we should address before launch. First, we want to alleviate any fears of a [rug-pull](https://paragraph.xyz/@CreatorDriven/rug-pull). Second, we don’t want to be accused of being a Ponzi or an unregistered security.

\- Obligatory Disclaimer -

Before we go on, I feel like I should remind you that this is a fictional project. **We hired fictional lawyers**.  If you’re working on a *real* project, you should hire a ***[real](https://twitter.com/mitchjackson)* [lawyer](https://twitter.com/mitchjackson)** who understands Web3, NFTs and Crypto so you can get some *real* advice.

\-End Disclaimer-

Back to the game.

We decide the best way to create trust and stay on the right side of the law is to have a fully functioning game on launch. Our NFTs are the access keys to the ecosystem, not a speculative investment in the company. As soon as our users buy their NFTs, they can start racing. In fact, as part of the marketing campaign, we sent out some “Qualifying Passes” to our biggest pre-mint supporters so they could try out the game (and tell everyone else how great it is).

As far as we’re concerned, $FUEL is a utility token that players can use inside the game to buy, sell, and trade NFTs. If they decide to create secondary markets outside the world of our game, that’s their business and their right.

The product is real. The tokens have utility. Let’s sell some NFTs.

## Launch

This is where most projects bring in the lion’s share of their revenue. The initial sale of their NFTs brings in a lump sum that can repay the founders and developers for all their hard work.

This is the goal of our launch. so how do we reach our goal in a way that leaves everyone happy at the end of the day?

Let's look at some scenarios.

**Scenario 1** - “A La Cart with a Side of Anarchy”

When it comes time to launch, we could release all the NFTs at once. But that would be complete chaos. People who don’t even have a Driver NFT would be minting Cars and Upgrades. And there would be Drivers with no Cars.

People would be pissed. Let’s not do that.

**Scenario 2 -** “Everything A La Cart, but One Course at a Time”

The first course would be the Driver mint. The current formula dictates that this would be a random mint with traits that appear at different levels of rarity. But we’ve built rarity into the system by limiting the availability of different cars and performance upgrades.

So why not let each user create a custom Driver NFT? It’s not to hard to make this happen. The [Song-A-Day DAO](https://songaday-world-6s59be49p-songadao.vercel.app/mint-pfp/) is working on just such a concept. When we mint our PFPs we’ll have a chance to choose between several options for the Background, Face, Head Shape and other embellishments. Once a combination of these traits is claimed, it can’t be minted again.

This allows each of the certified members to create a unique membership card in the form of a PFP. It also leaves the door open to adding users in the future without effecting the rarity of each player’s Driver NFT.

Once each player has a Driver, they’ll move on to the Car course. Then the Upgrades... And at the end of the process we’ve made all the basic assets of the game available to the users.

This strategy has its own problems.

* **It feels extractive.** We’ve just opened the doors and we’re already nickel and dime-ing our customers. That’s two separate purchases just to get basic access to the game.
* **Mint fatigue.** Asking people to return for mint after mint will drain their enthusiasm. And some buyers may get locked out of game-play if they can afford to mint a Driver, but not a Car.

I think we can come up with something better.

**Scenario 3 -** “All Inclusive”

Why not throw in everything you need to play at the beginning?

Once our users mint their custom Driver NFT, they get airdropped a “Garage” randomly filled with cars, upgrades and an equal share of the in-game currency, $FUEL.

Why would this work to our advantage?

* **It Feels Like a Good Deal -** Instead of buying a Driver NFT just to gain the privilege of minting the rest of the assets, you give people access to every feature of the game (even the premium ones) from the start.
* **Kickstart the Game Economy -** By giving each player a car, a collection of upgrades, and a little spending money, you’ve given them all the tools they need to start playing the game. And by playing I don’t mean just racing. The car in their garage may not be the one they were hoping for. Or maybe the cosmetic upgrade doesn’t suit them. An equally exciting aspect of the game will be finding and trading for the perfect setup.
* **Royalties -** ERC-1155 supports royalties. This is the first source of ongoing revenue. On the surface, giving away all the extras might seem like a lost opportunity. After all, buyers who are content with the NFTs they get from the mint will just head to the track and start racing. And we plan to include few tracks that can be used for free. So this will be the path that some players will take.

  But those extra assets will have value to the other players. If a basic game player doesn’t care about a cool paint job, or is content to drive on the included tracks with a stock Car, they can sell their unwanted Cars and Upgrades on the open market. As drivers trade to build the perfect car, we collect a little off the top to help keep things running.

## Loot for Adventurers

If you're skeptical that a strategy like this would work, you should look into the [Loot Project](https://www.lootproject.com) by [Dom Hoffman](https://twitter.com/dhof).

Loot Bags were a free-to-mint project that were intended to be a seed for an on-chain role playing game. Each NFT contained a randomly generated list of eight items you might find in a fantasy game. It was left up to the community to figure out how they could be used.

And the crowd went wild!

The average sale price of a Loot NFT peaked at just over $75K USD within a week of launch and has since leveled off at around $6000. According to this [Dune Analytics Dashboard created by @timshel](https://dune.com/timshel/Loot-Ecosystem), the loot ecosystem has generated 5.6 Million Eth in trades since it was launched.

The Loot community has only recently decided to collect a 5% royalty from these trades. If Dom had done this from launch, he could have collected more than 284K Eth or $454 Million USD as of August 2022.

## What now?

We built the game. We sold the NFTs. Our players are playing. And thanks to our token design, they’re also trading, which is already generating royalties. As long as the game is played, the royalties will come in. But what started as a flash flood will eventually calm to a gentle stream. It’s going to take more than that to keep the game running.

How will we pay for our web servers? Our community moderators and support staff won’t work for free.

Next week, we’ll explore some of the ways we can build a recurring revenue stream. We’ll look for a solution that makes us happy and adds value to the player experience at the same time.


---

**Thank you** for reading all the way to the end.

If you are thinking about launching an NFT project and need help with your token strategy, I’m available for consulting.

Just reply to this email and let me know you’re interested in a call.


---

This week’s [Alpha](https://paragraph.xyz/@CreatorDriven/alpha-22-08-06) covers a range of subjects.

* Frictionless NFT credit card sales
* Community dashboards
* Thread on the emerging Community Designer role
* Legal playbook for DAO token design and how Creators should be thinking about the “Dewey Test”
* New Web3 Analytics Platform
* Community engagement in the world of Web3


---

## Getting Meta

Subscriber Count: **68**

Total Alpha Claims: **20** (Someone’s been reading the back issues. I’m impressed!)


---

## Was this newsletter shared with you?

If so, you can [Subscribe here.](https://paragraph.xyz/@CreatorDriven/embed)

 (Token) Game Theory - Part 1 - Launch

## Welcome to the Alpha!

This is where I gather up all the things that were on my radar during the past week. If I feel they’re worth passing on, they end up here with a few thoughts of my own.

## Frictionless NFT Credit Card Sales - [Paper.xyz](https://paper.xyz)

I attended a demo that was co-hosted by ThirdWeb and they were able to build a very basic NFT project, launch it and make it payable by credit card in about 20mins. This is a big unlock for creators.

* Customer can bring their own wallet or a wallet is created for them as a part of checkout
* Wallet seed phrase is securely held by [Magic.link](https://magic.link/connect) until the owner decides to claim it
* Paper provides an NFT friendly interface for users who don’t have their own wallet
* Can pay with credit card or crypto
* Paper takes 1% fee on top of credit card processing cost - No charge for Crypto payments (except gas, which goes to the network, not Paper)
* Users can pay with CC or ETH and you’ll be paid in whatever currency your contract requires.

## Dashboard for Your On-Chain Community - [Atomize.xyz](https://Atomize.xyz)

* On chain alternative to “link in Bio” solutions except for projects
* Requires an ENS Domain
* Add the official links and contract addresses to your projects profile and mint it onto the chain
* Atomize creates a visual dashboard that tracks the on-chain activities of your project
* Share your Atomize link “app.atomize.xyz/myname.eth” and followers can have faith that the info in the profile is verifiably linked to the project.
* Can only be changed if but the

## [A thread by Greg Isenberg](https://twitter.com/gregisenberg/status/1553742250848419840?s=20&t=IuZ3pbwm3TWzodMfuw9ZKQ) on Community Designers

* What is a Community Designer (CD)?
* Why does my company need a Community Designer?
* What is the difference between a Community Manager and a Community Designer?
* What does success look like for a Community Designer?
* What is community/market fit?
* The new 2022 marketing playbook

## [Sufficient Decentralization: A Playbook \n for web3 Builders and Lawyers](https://variant.fund/articles/sufficient-decentralization/)

By [Marc Boiron](https://twitter.com/boironattorney), Chief Legal Officer at dYdX Trading

24 pages focused on what DAO’s (and other large organizations) that are issuing tokens can do to prevent being labeled an unregistered security. The short answer is “avoid centralization.”

But if you’re a creator, centralization is impossible to avoid. What’s a creator with a coin or NFTs to do?

Regulators will apply the “Howey Test” to your tokens (remember, “It’s all Tokens”). And they’ll want to know if you can answer “No” to any of the following questions?

* Does your token involve an investment of money?
* Will many people buy it?
* Does it create an expectation of profit?
* Is the value of the token something that the buyers do not control?

The best hope you have, as a small creator, to avoid failing this test, lies in the answer to the third question.

Make your tokens about utility, not speculation.

This was NOT LEGAL ADVICE.

# New On The Radar

## [Cookie3](https://cookie3.co/)

**Google Analytics for Web3**

Web3+Cookies = Cookie3… Get it?

Alright, it’s not that clever, but their products are.

* AI powered engagement analytics = smarter allowlist selection and air drop qualifications
* Individual wallet analytics = major unlock for marketers to target specific customer profiles without necessarily violating privacy = the return of targeted ads
* Wallet based personalization

## [Socios](https://www.socios.com/usa/)

**Block-chain based fan loyalty, engagement, and rewards management platform**

Already forging major partnerships with teams and leagues in:

* MLSoccer
* Multiple International Futbol Clubs
* E-sports
* Mixed Martial Arts
* Motorsports
* the NBA
* the NFL
* the NHL

You and I are probably too small to even be considered as a client by Socios. BUT… There’s no reason we can’t learn from their play book.

\


Alpha - Week Ending August 6, 2022

# Welcome to Issue #9!

And welcome to the newcomer who is building the dip with us!

Remember… **Sharing Is Caring**. 

Don’t keep this newsletter a secret.


---

## The Semi-Fungible Token Standard

**ERC-1155** expands the utility of NFTs by combining the functionality of ERC-20s and ERC-721s into a single token standard. Let’s review…

**ERC-20** - A single contract is used to create multiples of a token that all share the same TokenID (the contract address). Each coin is exactly the same and is fully fungible.

You can get a little more detail on ERC-20s [here](https://paragraph.xyz/@CreatorDriven/erc-20).

**ERC-721** - A single contract defines a group of tokens. The contract address defines the group, but each token in the group gets a unique TokenID. Each Token is unique and non-fungible and, therefore, a true NFT.

I covered ERC-721’s in more depth [here](https://paragraph.xyz/@CreatorDriven/erc-721) and [here](https://paragraph.xyz/@CreatorDriven/erc-721-variations).

## **Best of Both Standards**

With **ERC-1155**, one contract defines multiple groups of tokens. Each group is described by a unique TokenID.

If the group has only one token in it, it’s treated as an ERC-721. It is unique and non-fungible.

If the group contains multiple tokens, then the tokens in that group are treated like ERC-20s. Each token gets the same TokenID and any token from that group is completely interchangeable with the other tokens in the same group.

## Built For Fun

I should probably provide a point by point rehash of all the capabilities of those other tokens.

Yawn.

This standard has gained the most traction with on-chain games. So let’s build a token model for a car racing game.

## The Tokens

The assets used in the game are all NFTs. Let’s take look at what tokens we might use to describe  the game.

* Drivers
* $FUEL
* Cars
* Cosmetic Upgrades
* Performance Upgrades

Now let’s take a look at how we might use a single ERC-1155 smart contract to create all these tokens.

## Drivers

To play this game, you need to own a Driver NFT. Since each player of the game will have a different style of play, we want to make sure each driver is unique.

Let’s assume we’ve decided to limit play to 10,000 drivers.

To create our Driver NFTs we’ll need to put a single Driver in each one of the first 10,000 groups/TokenIDs. Since each TokenID is connected to a single Driver, each Driver is treated as an NFT.

At this point we’ve used TokenIDs 0-9999. Now let’s create a utility token that can be used as currency inside the game.

## $FUEL

It takes energy to race a car. So were going to run this whole ecosystem on $FUEL.

$FUEL should behave as a fungible token, so we’ll need to assign the entire supply (let’s say 100 million) to the next available TokenID (number 10,000).

## Cars

You gotta have a cars if you want to race. For the purposes of this game, we’re going to allow our drivers to choose between 6 different cars.

I know. This isn’t very realistic. When you build your racing game, you can add as many as you like.

Some cars are more common. Some, not so much. We represent this rarity by minting each type of car in differing quantities.

So we’ll create our Car tokens like this:

* TokenID 10,001 → 10000 Ford Mustangs
* TokenID 10,002 → 1000 Toyota Supras
* TokenID 10,003 → 500 Chevy Corvettes
* TokenID 10,004 → 250 - Porsche 911’s
* TokenID 10,005 → 10 - Acura NSXs
* TokenID 10,006 → 1 - Lamborghini Huracán ([before they blew it up](https://twitter.com/SHL0MS/status/1494446592463720448))

In this example each model of car is distinct from the others.  So inside the game, each model can have its own set of specifications. The Corvettes are going to perform differently than the Acuras.

But, inside each model type, the individual car tokens are completely interchangeable. The game treats every Supra the same way. It can only tell it’s **your** Supra, because it’s in **your** wallet.

So each of the car models gets treated as a fungible token except the Lambo. It’s the only token assigned to that ID, so it’s a true NFT.

## Cosmetic Upgrades

Since each car inside a model type is exactly the same, they create a blank canvas for a driver to express their style. No one wants to drive the same boring car as everyone else. So, much like Fortnite, our game will offer skins for the cars.

These could be as simple a basic paint job, or as ridiculous as turning your car into a galloping unicorn.

If we’re talking about paint, each color or design would get it’s own TokenID. The quantity of each would determine the rarity of the skin. 

## Performance Upgrades

Since all of the cars inside a model group are fungible, all the Mustang NFTs will perform the same way. But, if you add an Engine Upgrade Token to the wallet holding your Mustang, you might be able to outrun a Porsche.

There are thousands of real and imaginary ways to change the performance of a car. Each one will need it’s own TokenID, but inside that TokenID, you could create as many copies of the upgrade as you like.

The combination of upgrades is limitless. So each driver has the ability to build a truly unique car.

## Bottom Line

The ability to mint multiple token types in a single transaction is the feature that sets ERC-1155s apart. But there are a few other features to consider.

* 1155s are cheaper to move because the standard allows for batch transfers of tokens.
* Just like ERC-721 NFTs, the creators of 1155s can code royalties into their tokens.
* Shared TokenIDs can make token gating more difficult. So you’ll need to make each of your token groups distinct enough to sort them the way you like. As an alternative, you could use the combination of different token types to create a more exclusive gating structure.

ERC-1155 has struggled to gain mainstream adoption. But if your project requires a token model that is a little more complicated than a Social Token or a PFP Collection, it’s worth your time to take a look.

## You might be interested…

… in this week’s [Alpha](https://paragraph.xyz/@CreatorDriven/alpha-week-ending-july-23-2022)


---

## Getting Meta

Subscriber Count: **65**

Total Alpha Claims: **17**


---

I had a lot of fun writing this week’s issue. Please let me know if you enjoyed it.

Next week I’ll be exploring all the Web3 ways we could turn this game into an actual business.

**Thank you** for reading!


---

## Was this newsletter shared with you?

If so, you can [Subscribe here.](https://paragraph.xyz/@CreatorDriven/embed)

\


It's ALL Tokens - Part 5 - ERC-1155

## Welcome to the Alpha!

This is where I gather up all the things that were on my radar during the past week. If I feel they’re worth passing on, they end up here with a few thoughts of my own.

## **Programmable Cashflows** - [Superfluid](https://www.superfluid.finance/home)

* Send tokens from one wallet to another via a continuous flow over time
* Create an “Agreement” for payment and the money will stream from one account to another each fraction of time you designate. Send 1 ETH over the course of the year… One second/minute/day at a time and it’s all handled by a single transaction. Save’s a TON of gas for subscription payments.
* Also works for reward distributions. Can send regular rewards to multiple accounts with a single transaction
* Balances update in real time without transactions
* Terminate a stream at any time
* Or whenever the balance of the payor account goes to zero
* Have to send ERC-20 payment tokens into a smart contract to be wrapped for use
* Will run on any EVM (Ethereum based) blockchain - Still in Alpha release

Surfaced by LocalTourist

## Web3 YouTube comes to Lens? - [Lenstube](https://lenstube.xyz/)

* Lens App optimized for video
* Shorter videos stored on IPFS
* Longer videos stored on Livepeer
* Free to post
* I’ll be definitely be taking a closer look
* Not the first Web3 enabled video sharing site… but it’s the first to be connected to a social network.

Surfaced by LocalTourist

## **Building a Better Internet** featuring **Li Jin** on [Tokens, But How](https://podcasts.apple.com/us/podcast/tokens-but-how/id1612691876?i=1000571467080)

I’m pretty sure Li Jin coined the phrase “Passion Economy”. Li was a partner at the VC firm Andreesson Horowitz, and is now the founder of her own firm [Atelier Ventures](https://www.atelierventures.co/team). In both roles she was/is focused on investing in Web3 and other Crypto projects. She’s putting her money behind startups that she thinks stand a great chance to support creators in Web3. So I try to pay attention to anything she puts out.

I recommend listening to the entire episode. But I wasn’t compelled to jot down some time stamps until I was about half way through. The times are rough… My dog and I were out getting some exercise.

* 38min - They begin a discussion about Web3 business models
* 45min - We won’t be able to rely solely on tokens. Most creators will need to layer new, Web3 business models on top of traditional ones.
* 48min - The challenge of owning your audience data outside of the context of where it was acquired.
* 57min - Li’s recommended reads.

## Minecraft Bans NFTs - [Minecraft.net](https://www.minecraft.net/en-us/article/minecraft-and-nfts)

* Minecraft is bound to reverse this decision… eventually.
* Any least one Minecraft-X-NFT project, [NFT Worlds](https://www.theblock.co/post/159002/nft-worlds-to-have-plan-of-action-by-end-of-week-following-minecraft-nft-ban), was effected by this decision
* NFTs can protect you from platform risk, but not if you build them on someone else’s owned platform.

## Web3 Chat with [WalletConnect](https://medium.com/walletconnect/say-hello-to-chat-a-first-look-at-our-new-api-f706ebf63a28)

WalletConnect is a tool that helps you connect any of the growing number of crypto wallet manager apps to a Web3 enabled site. Now they’re bring wallet to wallet chat functionality.

* Messages can be exchanged between any two wallets on any chain or device.
* Chat is an Opt-in feature
* All Messages are encrypted
* You can send money and messages together
* Does not use your actual wallet keys

Wallet messaging is one of the major unlocks to making Wallets the future of identity on the web. WalletConnect scored a big win with this.

## Mirror launches a paid subscription feature - [Mirror.xyz](https://dev.mirror.xyz/Jn62zF5n62BfowdaFgm3uIx3Fgp2vIR7b-HTSxKVXqk)

If you read [last week’s issue](https://paragraph.xyz/@CreatorDriven/writing-with-paragraphxyz) you know that Mirror is one of the few Web3 based blogging platforms. This feature moves them into the newsletter space. I’ve subscribed to their blog, so I’ll let you know how it works as soon as they make another post.

Alpha - Week Ending July 23, 2022

Even though there are basic standards in place, the code that governs these tokens is constantly evolving. Development teams are always looking for ways to customize the code to meet the unique demands of their project. Anything that increases utility or decreases computational cost draws attention. And the open nature of block-chains means that new ideas are quick to spread. These are some of the more popular, and sometimes controversial adaptations.

**[721(a)](https://www.azuki.com/erc721a)**

* Allows users to mint multiple NFTs in a batch transaction
* Created by the developers of [Azuki](https://www.azuki.com/)
* Creates a HUGE gas savings

**[721(s)](https://ethereum-magicians.org/t/erc721s-lockable-nfts/8800)**

* Creates a mechanism to secure NFTs by locking them into a wallet
* Keep NFTs in hot wallet for easy access, control lock from cold storage
* Opens doors for NFT lending, buying on installments, NFT sharing

**[721(r)](https://erc721r.org/)**

* Returnable NFTs
* Reduces purchase risk
* Makes Rug Pulls more difficult
* Funds are locked until refund period ends
* Critics claim it will not prevent “Pump and Dump” schemes

\


ERC-721 Variations

This is the original standard for NFTs. Each NFT minted requires a separate transaction on the block chain. Each token is completely unique. Even if every other aspect of the token is exactly the same, each one must have a unique TokenID.

Unique TokenIDs allow for tokens from the same contract to have different attributes, which leads to the concept of rarity within a collection.

For instance, as each token is minted, TokenIDs are assigned starting at zero and increasing by one with each mint. Lower numbered TokenIDs might be more valuable because they were minted first.

Creators can also create rarity by assigning various traits, with different levels of frequency, to each token at the time of mint. This is popular with PFP projects where the art is generated by layering different features over a basic form.

ERC-721s are also useful when you need to create an NFT that represents a real world asset. That means you could mint an NFT to replace the deed to a piece of real estate. You could also use them as provenance and proof of ownership/authenticity for a rare piece of art or luxury good.

Much like minting, each transfer of a 721 must be a separate transaction in the block chain. This can add quite a bit of cost if you ever have to move your NFTs between wallets.

* Non-[Fungible](https://paragraph.xyz/@CreatorDriven/eli5-fungible)
* Cannot be divided (only [Fractionalized](https://paragraph.xyz/@CreatorDriven/eli5-nft-fractionalization))
* Can be more expensive to mint
* More expensive to move multiples between wallets
* Possible Royalties
* Proof of ownership can be useful for token gating

## How can they be used?

Much of the utility of ERC-721 tokens is the same as [ERC-20](https://paragraph.xyz/@CreatorDriven/its-all-tokens-part-2)s. The big exception is gas. I haven't come across a blockchain that accepts NFTs as payment for using their network.

There are infinite ways to use NFTs as part of a creative project. But you need to find the combination of utility that resonates best with your community.

## Store of value

Since they are rare (in some cases one-of-a-kind), many NFTs are treated as pieces of art. Some people use "Blue Chip" NFTs like those from the [Bored Ape Yacht Club](https://boredapeyachtclub.com/#/) or [MoonBirds](https://www.moonbirds.xyz/) to store their wealth.

## Trade

Until more recently, the high cost to mint and transfer ERC-721s on Layer 1 blockchains like Ethereum has made it hard to treat NFTs like currency. But the lower transaction costs of Layer 2 chains and alternative Layer 1s has made this easier to do.

Gary Vee used this concept when he airdropped 125,000 BookGames NFTs to promote sales of his latest book. Once his fans had their tokens they could redeem them for prizes ranging from sports collectables to other NFTs. The token/game theory of this launch is fascinating. I'm already researching a writeup for you on this one.

## Initial Funding

When ICOs died, NFT drops eventually took their place. An NFT speculation bubble started in 2021 and ran well into the first months of 2022. Hundreds of projects raced to launch NFT collections during this time. Some had well defined roadmaps for the utility their NFTs. Others didn't bother with much more than a Twitter account and a mint page.

Something interesting happens when NFTs are used to bootstrap a project. It reverses the model of a creator building an audience before monetizing their content. The NFT becomes the test of product-market fit. If it’s successful, the creator can move forward with an actual product. Grass-roots marketing campaigns are essential to this model.

Liquidity can be lower with NFTs. It depends on the popularity of the project. But marketplaces like OpenSea, LooksRare and MagicEden simplify the process of buying and selling.

A word of caution… There have been just as many (or more) [rug pulls](https://paragraph.xyz/@CreatorDriven/rug-pull) in the NFT space as there were at the peak of the ICO craze. Be sure to do plenty of research before you buy in.

## Rewards

A reward NFT can be as simple as an on chain recognition of someone's contribution or as valuable as a cash bonus. NFTs are used to reward a wide array of behaviors.

* Promoting projects to other communities
* Being an early user of a product
* Proof Of Attendance/Participation (POAP) at both live and virtual events
* Loyalty programs

## Ownership

Because each ERC-721 is unique, they can be used as proof of ownership for both digital and physical goods. Some NFTs get their value because they prove you are part of a community. Others might be a certificate of authenticity that comes with a luxury good as well as a digital twin that can be worn by your avatar inside a digital world.

The uniqueness of each token makes it easier to market them as membership cards. This helps them avoid being classified as an unregistered security.

## Governance

Many projects decide not to launch a coin (ERC-20 token) at all. Possession of an NFT is what grants voting rights. Just as with ERC-20 tokens, some projects will grant one vote per NFT while others limit each owner to one vote.

## Access

The addition of traits to tokens opens up new ways to gate access to your community and your content. Instead of using the number of tokens to grant access to different tiers, projects can use the rarity of the NFT to determine what level of access you’ll have.

## Belonging

I could have included this in the access category. But I think it warrants it's own header.

The smaller number of available tokens, and the art that is associated with them, is a natural community builder. With the possible exception of official blockchain tokens (think ETH for Ethereum or SOL for Solana) ERC-20 tokens don’t seem to have this effect. This is one of the reasons I recommend NFT’s as a starting point for Creators who want to build their communities with Web3 tools.

## Passive Income

NFT holders who are committed to owning a project can generate income through a mechanism known as **staking**. In exchange for locking their NFT into a smart contract (and removing it from the market), they receive payments from the project. This reduction in supply drives up the price of the remaining NFTs along with the valuation of the project.