The Creator Driven Community

it's me

# 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.


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# 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)


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## 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.


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**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.


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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


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## 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.


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## 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)


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## Getting Meta

Subscriber Count: **65**

Total Alpha Claims: **17**


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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.

ERC-721

Ethereum modeled ERC-20 tokens after Bitcoin. ERC-20s are the most basic tool used by modern blockchains to create value and utility. And from the beginning of Web3, it was assumed that people and projects would create and trade their own ERC-20s. These tokens might function a lot like Bitcoin, but they can be used on a massive network full applications and communities.

ERC-20s are:

* Fully [fungible](https://paragraph.xyz/@CreatorDriven/eli5-fungible)
* Can be divided into (and moved in) almost infinite fractions
* Can be used to represent anything that needs to be counted on-chain
* No Royalties

## How can they be used?

## **Store of value**

Since the creation of Bitcoin, digital currencies have gained popularity as the ultimate self sovereign store of wealth. Some tokens, like Bitcoin, have a total circulation that is capped and an issuance schedule built into their code. Others plan for a small amount of inflation to provide for the security of the network (see below). Either way, the code may be completely  immutable or changeable only by a community vote. This level of stability has attracted many investors fleeing faster inflation or debasement of their national currencies.

Though ERC-20 tokens came several years after Bitcoin, their programmability and fungibility have led crypto investors to treat some of them as a store of value as well.

## **Trade**

Before Bitcoin became a store of value, it was meant to be a currency. And in May 22, 2010 Laszlo Hanyecz made the first peer to peer token transaction when he paid 10,000 for a pair of pizzas. A meal that cost him about 40 bucks at the time would be worth about $285 million today. The purchase is so infamous, May 22nd is now known as Bitcoin Pizza Day.

In Web3, ERC-20 tokens can be used for any number of transactions. They can represent points in a game or measure of your contributions inside a community. Tokens that can be used within a community to purchase goods or services are often referred to as utility tokens.

## **Gas**

Most blockchains have a native ERC-20 token that is used to pay the operators for processing transactions. This token is the fuel that keeps the system running.

These network operators  are in continual competition to receive newly minted tokens and gas payments to add the next block in the chain. As one is awarded a block, the others are paid to check the work and ensure that the data stored on the chain is valid.

Gas prices rise and fall with traffic on the network. This adds to the concept of these tokens being used as a store of value. As a network is more widely adopted and use goes up, the gas token becomes more valuable.

## **Initial Funding**

Some projects choose to raise funds through the sale of tokens. Much like an IPO on the stock market, Initial Coin Offerings (ICOs) are a public sale of tokens to the investors and the general public. ICOs were quite common until they reached their peak in 2017.

There was no regulation in place to protect investors and the market was full of retail investors hoping to get rich quick. Scam projects were everywhere. After several public rug-pulls and increased scrutiny from regulators, ICOs quickly fell out of favor.

As the ICOs slowed down, venture capitol moved into the space. And the VCs were happy to take up the slack.

When an investor is ready sell their position in a successful project, tokens provide a level of liquidity that is hard to match.

## **Rewards**

Many projects use some type of token as a reward for using their product or service. It has become an expectation by early adopters of Web3 projects to receive rewards in the form of air-dropped coins. The term "airdrop" refers to the fact that projects drop coins into the users wallet. Since the project is the one initiating the transaction, they cover the cost. As gas prices have risen, many projects have opted for a claim method that requires the user to pay the gas to receive their tokens. Most users are willing to pay the cost. Especially if they think the coin has or will have value in the future.

Another reward method involves making regular payments to users for holding on to their tokens. This inflates the coin supply. But, by holding the tokens, they are making them more scarce. This drives the cost of the coins and the valuation of the project up.

An interesting side effect happens when you combine the openness of blockchain with people's desire to get something for nothing. Vampire Attacks occur when the competitor of a more successful or established project uses free tokens to draw in new customers. This tactic has been shown to produce mixed results for the projects. But it always seems to benefit the customers. They end up with free tokens and, occasionally, a better product or service to use.

## **Ownership**

In the US, the SEC has made it crystal clear that projects cannot sell tokens as a share of ownership to "unqualified" investors. But project tokens that were either earned or given to users can be purchased on any number of decentralized exchanges. When someone who isn't a pure speculator holds a token from a project, they begin to feel a sense of ownership. And as they begin to feel like an owner, they begin to act like one. The goals of the holder become aligned with the goals of the project in a way that rarely happens with users of web2 products.

## **Governance**

Many of the projects being built in Web3 are owned and operated by the community members who own the tokens. Most of these communities require that you own some amount of tokens in order to vote. The requirements and the voting power of your tokens will vary from project to project.

* You might only own a fraction, but most projects require that you hold at least one whole token to vote.
* Weighted voting gives large investors more voting power. One token = one vote.
* Some projects are more egalitarian. One owner = One vote, regardless of your level of ownership. This protects the community from a hostile takeover.

## **Access**

Many projects require you to hold tokens as a means gain access to their community or exclusive content. This is also known as Token Gating. Some token gating requirements are as simple as holding a single token. Others offer multiple tiers based on how many, or the total value, of their tokens you hold.

ERC-20

# Welcome to Issue #8!

Did you miss me last week? I sure hope so. If not, then I’m doing something wrong.

I went on vacation with my family. It was our first in several years.

I packed my tablet and a very rough draft of this issue. I had every intention of finishing it up and sending it out.

But our vacations have a tendency to be… well… exhausting.

There were mountains to climb, waterfalls to discover, and rivers to paddle. Between all the adventures and the crazy heat, I didn’t have much energy left at the end of each day.

So this issue is a week late. But it covers a topic that many of you have asked about. I hope it was worth the wait.

We picked up two subscribers in the last two weeks. Slow growth is still growth. :)


---

## Paragraph.xyz: Web3-Ready Newsletters and Blogs

**#NotSponsored**

When I first announced that I would be writing this newsletter, many of you asked about the platform I chose.

So, as promised, here’s a closer look at what I was seeking in a Web3 publishing platform and how Paragraph filled the bill.

**Web3 functionality built in** - This is a community focused on learning and using Web3. Whatever I chose should be actively working to incorporate this technology into it’s product.

When I signed up for Paragraph, the only real Web3 functionality was the ability to create an account with a wallet instead of a user name and password.

This might not sound like much, but this is how everything will work in the not-too-distant future.

You won’t store user id’s and passwords on dozens of sites. Instead, your wallet (and the ability to prove you own it) will act as a universal user id and password that travels with you throughout the web. It’ll be the contents of that wallet that determine what you can access from site to site.

And the platform isn’t standing still. In the 8 weeks since I’ve started sending out newsletters Paragraph has added several new Web3 features.

* Token gated content - You can use ERC-20 tokens or NFT’s.
* Newsletter and blog segmentation - This lets your readers self select into niche communities or topics.
* **Free NFT Minting** - This is a big deal. Minting your own tokens can be an intimidating step for creators who are new to Web3. I’m still experimenting with this feature. But it only makes sense that a platform offering token gating should help you create those tokens.

They’ve got some additional features planned in the near future that will be helpful too.

* Snapshot voting - If you want to build a community, they should be involved in your decisions. Snapshots are a transparent, token gated voting method that gives the members of your community a voice.
* Royalties and Airdrops - This will allow you to reward your community for reading and sharing your work. There are plenty of providers for these services, but having them built in to your primary distribution platform will be really helpful.

**FYI**: At the time I made my choice, Paragraph’s only solid competition in Web3 native publishing was Mirror.xyz. There may be some other players now. If you know of, or discover one, please let me know.

**SEO** - I would rather optimize my writing for humans than algorithms. And I have no interest in applying all the “tips, tricks, and hacks” to grow this community. So my content better be easy to find.

This is where Paragraph shows promise over Mirror. Unless I’m sent there by someone else, I can’t find anything on Mirror. Posts on Paragraph are optimized for SEO, so I know people will find me when they search.

**Blog + Newsletters in a single platform** - I want to ship newsletters. But if I cover more than one topic in an issue, I want to break each subject into separate, searchable posts for a blog.

Paragraph gives me the option to send out a newsletter or post only to the blog.

**Audience segmentation through tokens** - If it has to do with the intersection of Web3 and The Creator Economy, it’s fair game for this newsletter. But you may only be interested in Web3 Music. There should be a way for community members to filter the content.

Paragraph allows me to create separate, niche communities under a single content umbrella. I can give away or sell NFT’s that allow access to specific topics within the larger scope of this community.

This would allow me to create and sell (or give away) “Creator-Driven Music” NFT’s. If you hold one, and I write about a new Music NFT project, you get that issue of the newsletter. If the next issue is all about a Web3 video sharing platform, I won’t be cluttering your inbox that week.

**Community publishing** - Right now Creator-Driven is just me. But the Web3 space is exploding with projects and ideas. As this community grows, there will be members who can offer insights into creative niches where I might not have any experience. I hope to offer a space for those members to share their thoughts.

Paragraph is built to easily allow a team of writers to contribute to a single publication.

**Paid subscriptions** - I’m not sure this is the route I want to go, but I want to make sure this is an option. I also wanted people to be able to pay with traditional payments or more Web3 friendly methods.

Paragraph offers subscriptions that can be paid with a credit card or crypto.

You can also manage access with token gating. Paragraph’s token gating works with any NFT or ERC-20 token on Ethereum or Polygon. So I can use their built in token minting capability or mint my own subscriber tokens and manage access through a platform like Unlock Protocol.

**Committed to privacy** - I don’t like being tracked and I don’t want to spy on my readers. This is counter to the current culture of content marketing, but it’s completely aligned with the people who I hope to reach.

The only piece of personal information required to subscribe to a newsletter on Paragraph is an email address. As wallet to wallet messaging comes on line, all you’ll really need is a wallet address.

If you plan to earn revenue from your newsletter through traditional advertising, this may be a deal breaker. Though your posts on Paragraph are Google Analytics friendly, there’s no way to track open rates.

But the future of ad sponsored media in Web3 will rely on much more than email open rates. Advertisers will be looking for value in direct interactions with your community through on-chain attestations or “Proof of Attention”.

If payouts are based on readers proving they saw or interacted with the ad, each click will be much more valuable to your sponsors. The challenge will be providing the right incentives to get your community to respond. This is where tokens can be used to create incentive systems that have previously been unavailable to smaller scale creators.

**Minimally extractive** - I’m willing to pay for a service, but it needs to be reasonable.

If your Newsletter is free, Paragraph is free too. No limited feature set. No subscriber caps. It’s just free.

If you use Paragraph’s subscription payment system, they charge 5% on all subscriptions. This is half the cost of Web2 competitors like Substack.

**Minimal platform risk / Censorship resistant** - As long as you have their permission, you should be able to reach your readers at any time. No one else should decide who accesses your content.

With Paragraph, you own your subscriber list. You can easily download it at any time.

Your content is protected too. Each time you post or send out a newsletter, you have the option to publish directly to Arweave, a decentralized data storage system. Arweave storage is permanent. Your posts can never be deleted.

## What about the editor and advanced publishing features?

You may have noticed that none of my criteria had anything to do with the nuts and bolts of publishing.

I’ve never written and distributed a newsletter.

I had no idea what I needed there.

I knew that signing up and publishing content was the only way I would figure that out. I also knew that I would adapt to any system I chose. There was no right or wrong choice… I had to pick one and **make it** the right choice.

I’ve found Paragraph’s editor to be simple, but getting more robust with each release. This is fine with me. If I signed up for a more mature platform, I would be overwhelmed and unlikely to use all the features. It’s already hard enough to get the words out of my head and onto the screen. I don’t need to add more steps.

I also like the idea of growing alongside the platform. By participating in Paragraph’s Discord community, I have access and insight into a developing product that I’ve never had before.

## **Bottom Line**

Paragraph is a platform with a clean and simple editor that is working to bring Web3 functionality to the creators of newsletters and blogs.


---

## Getting Meta

Subscriber Count: **64**

Total Alpha Claims: **17**


---

No Alpha this week. I was able to do a little bit of reading and listening last week, but there’s still a lot to catch up on.

**Thank you** for reading!

## Was this newsletter shared with you?

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

Writing with Paragraph.xyz

Welcome to **Issue #7!**

We brought one more weary traveler in from the cold of the Crypto Winter this week.

Some of you shared last week’s newsletter. Thank you for that. It made a noticeable difference in traffic to the blog.


---

This is Part 4 in a multi-part series on different types of tokens and how they can be used.

You can read the other entries in the series here:

* [Part 1: Intro and Vocabulary](https://paragraph.xyz/@CreatorDriven/its-all-tokens-part-1)
* [Part2: ERC-20s (aka Crypto-Currencies)](https://paragraph.xyz/@CreatorDriven/its-all-tokens-part-2)
* [Part 3: ERC-721 (aka NFTs)](https://paragraph.xyz/@CreatorDriven/its-all-tokens-part-3-erc-721)

This week we’re taking a look at a few popular ERC-721 variations.

## ERC-721 Variations

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


---

## Getting Meta

Subscriber Count: **62**

Total Alpha Claims: **17**


---

Instead of reading and writing about crypto, I spent most of this week in the woods at Cub Scout Camp. So there’s not much [Alpha](https://paragraph.xyz/@CreatorDriven/alpha-week-ending-july-9-2022) this week. But I did mange to put a few thoughts down on a new token standard.

**Thank you** for reading!

**If this newsletter was shared with you**, you can [Subscribe here.](https://paragraph.xyz/@CreatorDriven/embed)

\


It's ALL Tokens - Part 4 - ERC-721 Variations

## NFT rental contract standard reaches final phase of approval process.

[EIP-4907](https://eips.ethereum.org/EIPS/eip-4907) - is a backwards compatible token standard that allows owners of ERC-721 to rent their NFTs. The concept involves sending the NFT into a smart contract that assigns you as the “owner” and the renter as the “user.”

If you’re using NFTs to gate access or content you’ll probably have to update the logic in the wallet connection. If you want to allow your NFTs to be used by renters, then you’ll grant access to the “user” wallet. If you don’t want to allow it, you’ll grant access to the “user” wallet address only when it is the same as the “owner” address.

You’ll also need a clarify your fair use policies on the user agreement for your NFTs.

\
\


About

(Token) Game Theory - Part 1 - Launch

Alpha - Week Ending August 6, 2022

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

Alpha - Week Ending July 23, 2022

ERC-721 Variations

ERC-721

ERC-20

Writing with Paragraph.xyz

It's ALL Tokens - Part 4 - ERC-721 Variations

Alpha - Week Ending July 9, 2022

About

About

Links

(Token) Game Theory - Part 1 - Launch

Alpha - Week Ending August 6, 2022

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

Alpha - Week Ending July 23, 2022

ERC-721 Variations

ERC-721

ERC-20

Writing with Paragraph.xyz

It's ALL Tokens - Part 4 - ERC-721 Variations

Alpha - Week Ending July 9, 2022

About