NFTs, The Creator Economy, and the Case for Hypertokenization

Even though the market conditions of the past 20 days have brought uncertainty into the crypto market and the hype seems to be stabilising, there’s no denying that the token economy is here to stay, allowing creators of all classes to monetize their work and achieve economic freedom.

Software developers, community stewards, content creators, artists and beyond all have something in common: they are creators. 

In 2009, Paul Saffo, Professor at Stanford and technology forecaster, published the first article and coined the term “creator economy” in the McKinsey publication What Matters. 

“I like the term “creator,” as this new kind of actor is doing something more fundamental than the mere sum of their simultaneous production and consumption. Creators are ordinary people whose everyday actions create value.”

When you view it from this perspective, you will notice some similarities with open-source software developers. Open-source software developers not only write code, but test, integrate, maintain, refactor, communicate, troubleshoot and more. They form communities, accept contributions, merge PRs and the list goes on. Their work and actions go beyond production and consumption. 

The same reasoning can be applied to other classes of creators, especially those that require a high level of interaction with communities. The creator economy is immersive and participatory, and so should be the native currencies fueling them. Cryptocurrency is permissionless, decentralized (well, at least for the most part) and community-led by nature. The token economy and the creator economy are a perfect match. The Cambrian explosion caused by these two economies colliding gave birth to multitudes of use-cases, communities and creations.

The Versatility of NFTs

NFTs are not only a way to sell your digital art, or collectible virtual figurines and cards. Since ERC-721 (NFTs) is a token standard and is as versatile as the ERC-20 token standard, there are many other uses for them. Whether it’s for decentralized finance or certificates of authenticity or creatives, NFTs are proving to be a great funding mechanism as well.

During April 2021, the Mint Fund, a community of creators working with digital artists and technologists, crowdfunded via the Mirror platform for the first digitally unique and collectible NFT codebase.

The final code was deployed to mainnet and used to auction off the NFT, and the earnings in ETH from the sale accrued to $BOUNTY tokens, that could be traded as any ERC-20 token and redeemed for ETH.

The reverse auction functionality was then built and later integrated within the Zora protocol, the underlying protocol powering the aforementioned Mirror platform.

Another interesting use of NFTs was the Open Science Research NFT ideated by Planck. 

This NFT was auctioned on Open Sea, and its goal was to fund scientific research for the Planck organisation, which produces Non-Fungible Manuscripts ("Glyphs") which record innovative ideas and findings. The bearer of this Manuscript has helped fund an independent replication of Seth Robert’s appetite theory.

Planck has been working on the use of NFTs for science since 2018, and they are continuing their work after the initial funding of 13 ETH has been secured in March 2021, nowadays utilizing the Mirror platform. 

These are just two of the many use-cases for NFTs beyond collectibles and art. 

Social tokens 

ERC-20 tokens can be used as much more than for ICOs. Not only, most ERC-20 tokens are utility tokens, meaning they allow for different functions (including crowdfunding, of course) like protocol voting, staking, reputation, and all sorts of financial instruments, but also can be used to rally communities. These tokens are now called Social Tokens. 

Social tokens have existed in one way or another for quite some time, as this article  mentions. These tokens are community-born and serve to incentivize, interact with  and access communities, they can be issued by creators to add value to their micro-ecosystem, and beyond.  Most importantly, in many cases social tokens are tied to the platform’s governance. The sense of agency pushed by belonging to a community coupled with the social token present a solid foundation to grow a common project in a balanced manner. 

Funding the commons

The attribution of work and incentivization of the commons has historically been a problem before cryptonetworks started implementing rewards programmes, inspired by fidelity programs and paid market research surveys.  

Cryptonetworks understand the power of community, and growing a sustainable one is crucial for their success. While a few years ago, incentivizing a project’s community through tokens was taboo and regarded as disingenuous when it came to proving network effects growth, nowadays this is widespread and appreciated. From retroactive airdrops á la Uniswap, BadgerDAO, to microgrants, and community incentive programs like Golem Network’s GLM Rewards Program, making sure the community gets to share the cryptonetwork’s success beyond just words is key to healthy growth.

At Golem, we implemented our GLM Rewards Program in August 2020, and we have seen great progress in our community and the quality of the contributions.

From providing tech support to their peers, providing computing power in times of high demand for specific projects, contributing to the documentation, our Awesome Golem guide, and even managing Telegram our community contributors stick with us through thick and thin. They are responsible and consistent, and they provide critical feedback when the project needs it the most.

If you are curious about how to build such an incentives program, Golem Network is on its second iteration, find the details here and here.

In summary, the current token + creators economy presents options for everyone to access funding, get support, and work and live within communities, around the token itself, or even around creators. A plethora of diverse use-cases for funding DAOs, artworks, code, science projects, and even books as $NOVEL by Emily Khole have been surging all across the board and proven effective. 

Communities can become self-sustainable and retain users and contributors easily if the correct incentives are in place. After the reputation crisis that cryptocurrency tokens suffered after the 2017 ICO boom, we are experiencing a new dawn for these incentivization schemes, especially important as we navigate a post-COVID19 world and are rebuilding ourselves and our future as creators.