The Potential of Web3 & The Creator Economy

In spite of the overwhelming amount of noise around web3 (noise that’s often filled with endless jargon and many seemingly nonsensical projects with crazy sums of money being made, or lost!) we at Whalar couldn’t be more excited for what we see as the seismic long term potential of web3 for the Creator Economy.?

From our POV, web3's ability to empower creators with new opportunities is like nothing we’ve seen since the actual advent of web2; when platforms first came along and gave creators the opportunity to publish and build audiences.

We have a mindset at Whalar that the best way to understand something new, let alone try and talk about it with others, is through a line we’ve borrowed from our Chairman, Sir John Hegarty.

‘Principles Remain, Practices Change’

So, here’s three key ways in which we have seen web3 projects that feel rooted in long standing principles, yet demonstrating new pathways to how web3 will be a game changer for the Creator Economy in the long run.

1. As Art/IP

The ability to unequivocally verify both the authenticity and ownership of a piece of art has been fundamental to the traditional art world, otherwise who would feel confident in purchasing a Bansky/Picasso or anything at auction for that matter.

In a digital world where anyone can share a file, screenshot an image, download a video...how would you truly know who is the original IP holder of a digital asset and who has the right to sell it, let alone who deserves the 'street cred' for owning it. This is what's changed, web3 technologies have now made the verification of authenticity and ownership actually possible with digital assets.

As with any art, it’s now up to the audience to make a market and decide what art/ip/assets are worthy of what value, but the fact that this is now possible for anyone creating or trading digital assets is a big deal for creators. Then, on top of that, you've got the added capability that the original creator of the IP can now also earn residual income from every future resale as well!

Indicative Projects:

• The famous Charlie Bit My Finger YouTube Clip Turned Into An NFT
• No list could not include the Beeple auction for $69m
• Itzel Yard the highest selling female NFT artists
• William Shatners NFT project sells out at warpspeed

2 As Membership

Moving on from just the Art/IP that’s being created, we’re seeing real momentum of projects where the underlying value being created and sought after is actually about getting membership into a community where certain products and services and/or access are connected to it.?

Thinking in terms of 'principles remain', a good example is the existing model of a golf club that sells its membership to a fixed number of people and instead of just being a cost, it’s actually an asset to the people who have bought membership. As a member you use the facilities of the club, and if one day you no longer want to keep your membership then it’s something you can actually sell to someone else who wants to become a member. Typically when someone sells their membership the majority of that money goes to them, but often a small share will go back to the club. As the club grows in reputation or facilities the value of the membership often goes up.

This exact same mechanic is what we’re seeing in many web3 membership projects and it will empower creators to build new opportunities. Projects that financially benefit creators while also creating assets for their loyal communities. Think of the re-imagining of a fan club. Think of an exclusive e-commerce store that can only be accessed if you hold a creator NFT. Think of a creator launching their own business and rewarding their first customers with a token which gives them meet and greet opportunities or exclusive event opportunities.

Indicative Projects:

• Crypto Packaged Goods, a community of like minded individuals that share knowledge, contacts and Web3 related dealflow
• Flyfish Club, a restaurant in NYC that’s a Gary Vee backed project
• Coachella sells 10 x lifetime membership and access packages to the festival
• Bored Ape Yacht Club, the one almost everyone has heard about
• Full Send Metacard, a project launched by YouTubers the Nelk Boys that sold $23m upon launch
• House of Mempo (full disclosure a Whalar co-created project) where access to a gaming house is through a Mempo (NFT), where your Mempo is also your avatar to play the games with.

3. As Fundraising

While this has many similarities to the membership concept, there is a distinct category here where the primary purpose is to raise upfront capital.?

It’s the potential web3 evolution of the crowdfunding model. Similar to concepts like Kickstarter, or crowdfunding websites where people invest money to get stock in a business, or collectives where people buy fractional ownership in wine, art, property etc.

Web3 is simply bringing a new scale of possibilities for people to back projects and people that they believe in, and in doing so have a digital asset they can trade as well.

Being a creator comes with the challenge of being both a freelancer and doing something that the ‘traditional’ world still doesn’t fully have a grasp on. On the whole creators can’t go to banks to get loans and raise capital to develop their careers and businesses. Web3 changes all that and creators can now have multiple paths for raising capital with their audience.

Let's go one step further as well. Will creators building businesses today aspire to sell those via a trade sale or do an IPO...or would they just sell ownership in some format to their audience and loyal customers, directly!

Indicative Projects:

• Royal, an NFT music rights platform that allows fans to financially support artists and through doing so receive a share of streaming royalties and get other benefits
• Crypto Baristas, a project launched to fund the creation of a cafe in New York
• Constitution DAO, a project that ultimately didn’t succeed, but one where a whopping 17,437 people came together and raised $47m in order to try and purchase a copy of the US constitution
• Particle, a company enabling the purchasing of valuable artworks through blockchain powered fractional ownership
• LinksDAO, a project launched by golf enthusiasts to raise funds and create a new type of golf membership

This was by no means meant to be an exhaustive list of all the ways in which web3 has potential to positively impact the Creator Economy. There are opportunities to build in metaverses, to bring a web3 approach to brand partnerships, and sponsorships and even possibilities around rewarding the loyalty of communities that engage with creators.?

What we hope to have been able to convey is how the underlying technology along with this new framework for the internet that web3 embodies around themes of ownership, interoperability and liquidity/tradability is a seismic shift, both in general and for the Creator Economy.

At the end of the day, we're only at the starting line and there is still much to be worked out...but, at the heart of this movement are loyal and engaged communities and that’s something the Creator Economy has in spades.

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Please do share your thoughts in the comments as I’d love to hear of other great projects, other interesting use cases I’ve not mentioned above and resources you’ve found the most helpful in learning more about web3.

Also, for anyone keen to double click, below are some of our favorite resources that we've learnt from...not necessarily completely aligning with everything said, but learnt from nonetheless:

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