Web3 Use Cases for Creators that are "Not Boring"

#newsletter

Welcome to Issue #6!

And welcome to the one curious soul who joined us this week.

You are literally “The Man”, Marc.


Packy McCormick writes some great stuff for his Substack, Not Boring. But he takes a broad view. And they can get pretty long.

He’s also a venture capitalist. So he writes a lot of long form advertisements disguised as “Deep Dives” for the businesses he’s invested in.

But they’re not all commercials. And in addition to being “Not Boring”, he’s also “Not Stupid”. His pieces are worth reading.

Two recent posts covered Present and Future Use Cases for Web3. I recommend you read them if you have the time.

I put down these thoughts as a Creator’s TL;DR for the Alphas. But it turned out to be longer than I expected.

So now it’s a Newsletter…


Creator Use Cases for Web3 - Today and Tomorrow

Today, most popular web3 products are in that early [looks like a toy] phase. They’re not perfect, but they’re “good enough” for a certain group of users. More centralized, robust, and secure products exist that do a lot of the things that web3 products do, but that don’t serve the needs of that group well. So web3 products are finding a foothold with that group.

Does your Web3 project need the masses to survive?

Right now you’ll only reach the early adopters. If your minimum viable audience is bigger than that, you might need to hold off, or at least adjust your plans.

Digital collectables

NFTs give physical properties to digital items, making them unique, ownable, and tradeable, in addition to digital properties like programmability and composability. Over time, NFTs will represent things that are more useful than the things they represent today, but even today, the collectibles use case is a real one.

Will your project include NFTs? Presenting them as “Collectibles with Utility” might be a good way to bridge the divide between NFT collectors and potential Web2 converts.

Instagram itself announced in May that it was starting to test letting creators and collectors showcase their NFTs.

Instagram NFTs will be just another in a long line of Meta rug pulls.

I’ve been watching for the NFTs to appear on the accounts listed in the article. But I haven’t seen any. Once I get a chance to look at a few of them and the code behind them, I’ll give you my thoughts. If you find one, please let me know.

Trading, De-Fi, blah, blah, blah…

I avoid the De-Fi (Decentralized Finance) side of crypto as much as I can. I’m not a seasoned investor. A mortgage is enough leverage for me.

But Stablecoins will be relevant for most Web3 creators.

As crypto payments become a bigger portion of our revenue streams, these digital currencies will allow us to collect without the added time and expense of banks and credit card processors. And we’ll want to be paid for our work in a currency that doesn't create a taxable event every time we spend it (at least in the US).

You’ll want to ask a few questions before you choose which stablecoins you’ll accept.

Is it backed? - Some stablecoins are backed by collateral. Others are (or were?) algorithmic stablecoins (like UST) that rely on mathematics and modeling to keep their price stable. The recent downturn in the crypto market has proven most of these algorithms to be something between unreliable and disastrous. Math may behave rationally; people don't.

Even with backed stablecoins, there are questions to be asked.

What’s the collateral? - There are stablecoins like USDC that are backed 100% by cash and short term US Treasuries. This collateral keeps the price of USDC pegged to the US dollar at a reliable 1:1 ratio. Inflation may suck, but having the value of your assets drop to zero in a matter of days is devastating.

Other coins are collateralized by a mixture of cash and other crypto currencies. Sometimes there’s also a little magical crypto math mixed in. The stability of these coins is tied to the stability of the larger crypto market.

It’s your treasury. Choose wisely.

As Web3 entrepreneurs, we have our work cut out for us.

Every new app, game, and protocol is simultaneously a mini-experiment in economic design…. In the early days, that means that web3 entrepreneurs face even more complexity than a traditional entrepreneur might – they need to build a great product, a thriving economy, and an attack-resistant and productive governance system.

You may not need to worry about governance right away. But if you plan to allow your community to have a say in how your business operates, you should start looking at governance models now.

The Metaverse may sound silly, but it's already here and will become an even bigger part of our lives

Whether the Metaverse looks like Twitter and Zoom and video games or is comprised of immersive, multiplayer virtual spaces, like Cyber, being able to own items and transact with minimal friction will be important to a smoothly functioning economy.

I have to admit, I have a hard time envisioning my place inside “the metaverse.” But it’s probably because I’m working with the wrong mental model. We might already be there.

The underlying structures built in Web3 will successfully cut out the middlemen

…by replacing centralized aggregators with minimally extractive Hyperstructures, more value can accrue to creators and consumers, incentivizing a richer, more liquid economy.

Jacob Horne defines Hyperstructures as… “Crypto protocols that can run for free and forever, without maintenance, interruption or intermediaries.” They “are entirely on chain, and are public goods which create a positive-sum ecosystem for any participants.”

Blockchains are already giant, almost free payment systems. What other business services do you use that involve simple, automated transactions? These will be the next problems replaced by blockchain based hyperstructures and smart contracts.

Web3 Social

This is the killer app of Web3 (Mark speaking here).

To believe that web3 social will take off doesn’t require you to believe that any one social product would benefit from building in tokens. Instead, it requires you to believe that a well-designed social protocol – potentially a Hyperstructure itself – will give each of the more centralized, performant, and novel apps built on top of it a better shot at building and sustaining network effects by tapping into a shared social graph.

Some apps will become really popular, others will, like so many social apps created over the past decade, get super hot early and burn out, but all will contribute to the strength and quality of the protocol’s network, making it easier for the next app to come in and tap into more users.

…by connecting the apps, users would be able to build followings in one app that accrue to all of the other apps they use in the ecosystem.

This is why I’m not so bullish on “Creator Coins”. They have a tendency to drive communities into their own silos. There’s no network effect to be had there. A social protocol that allows communities to hold their own space while being connected to a wider pool of users and content will be much more productive.

In this space, I’m excited about what Farcaster and Lens Protocol are building.

I’m already watching Lens Protocol (read my post about it here). I’ll have to take a look at Farcaster.

Gaming

Over the past year or so, game developers from AAA studios have started to build for web3, and it will take another year or two before they release their titles. These games will tap into web3 models and infrastructure where useful, and use centralized tech where necessary. Great games first, ownership as an added benefit.

…early breakout web3 games will follow [this] model: top-notch gameplay, a free mode for people who just want to have fun, and a crypto-powered economy for people who want to win or earn by playing and building.

There will need to be a lot of work to convince gamers that web3 isn’t a scam, not mainly in words, but in the way that game developers design their economies.

I enjoy games. I’m not a “gamer.” But it’s worthwhile to watch the space. We’ll all have something to learn if they can manage to overcome the gaming community’s HUGE resistance to Web3.

Decentralized Storytelling

…the general idea is that communities and fans of particular stories and characters can participate in creating their favorite story’s universe.

This category is trying to solve for:

  1. 1 - How content and IP get funded and developed.
  2. 2 - Community involvement in world building and storytelling.

I’ve already seen the seeds of these types of projects being planted in several communities. NFTs and smart contracts remove most of the difficulty of proper attribution and profit sharing. Open-minded creators of original work should partner with fan fiction writers. When they do, they’ll see an explosion of tiny revenue streams adding up to rivers of cash.

Wallet-Aware Sites

When a user connects a wallet to your site, you gain access to the entire on-chain history of that account. This ranges from the current contents, like crypto currencies and NFTs, to every transaction that wallet has ever made with you and anyone else.

Tokengated Commerce

Tokengated commerce connects the very real ecommerce market to web3. Tokens have the potential to add richness to the online shopping experience that makes it feel more like physical shopping.

The customer doesn’t get access to a store or product unless they hold a qualifying token. And that token could have been created by anyone. You could use this to build loyalty among your community, capitalize on the success of other brands, or lure in your competitor’s customers.

Personalized Recommendations

This turns the current model of marketers implanting cookies to follow you around the web on it’s head. By connecting a wallet to your site, and granting access to all that historical data, the customer has opened the door to creating an instant personalized customer experience.

Discounts for a Cause

What if your business could show support for a cause by offering discounts to anyone with on-chain proof of a personal donation? What if, instead of a discount, you offered to match that donation up to a certain percentage of their purchase? What if you did both?

Challenges Going Forward

It’s understandably hard to look at pictures of monkeys and unsustainable yields and volatility and “have fun staying poor” tweets and hundred-million-dollar hacks and think, “Yes! This is how we’re going to solve all of the world’s problems!” It’s even harder to imagine that the same system that produces so many frauds, scams, and rug pulls will be net good for society, especially when there are so many other pressing problems to work on.

Ultimately, this won’t be settled by a debate. It will be settled by usage and usefulness, by whether any of the things I’ve written about here, and a whole host of others I can’t imagine, come to fruition, or if the scams, margin calls, obnoxious maxis, and frauds overwhelm the positive potential… it’s important to call out bad actors and unsustainable models… the bad stuff, by proving skeptics right and inviting overbearing regulation, can prevent the good stuff from ever happening.


There you have it. From 14000 words down to about 2000.

I hope I was able to add a little value… and maybe get you thinking too.


Getting Meta

Subscriber Count: 61

Total Alpha Claims: 17


This week’s Alpha is nice and short.

Thank you for reading!

Was this newsletter shared with you?

If so, you can Subscribe here.

  • Loading comments...

The Creator Driven Community is on Paragraph, a web3 publishing & newsletter platform.

About

The Creator Driven Community is on Paragraph, a web3 newsletter platform. Subscribe above to get notified when a new post is published.