The rise and fall of my Web3 creator token. A drama in four acts.
Mark Schaefer
Top Voice in Personal Branding, keynote speaker, university educator, futurist, and bestselling author of "Marketing Rebellion," "Belonging to the Brand," and "Audacious: How Humans Win in an AI Marketing World."
About a year ago (or was it ten?), I launched a crypto-backed creator token called $RISE, an exciting foray into the new world of Web3. A few months after launch, my creator community was one of the most valuable in the world, with a valuation over $1 million. Today the project has been abandoned, people lost a bunch of money, and the coin is gone.
I learned that Web3 still has a long way to go. This is my story.
Act 1: The rise of $RISE
In the summer of 2021, I was invited to launch a creator token through a start-up platform called Rally. I hired a crypto analyst to vet the company and help me discern if this was a good bet. Rally was founded by a Silicon Valley star, had $100 million in backing from Andreeson Horowitz, and had an impressive management team. I was aware of the risks, but I decided to give it a try. I saw these benefits:
I called my coin $RISE, as in RISE above the noise.
How a creator token works
When the coin launched, I honestly had no idea what I was doing. But this didn't bother me. My career has been a continuous set of experiments. I didn't know what I was doing when I wrote my first book, hosted my first conference, or taught my first college class, so this was no different.
My coin was backed by a publicly-traded cryptocurrency called Rally ($RLY). Each of my coins was paired with a $RLY coin, which was traded on the crypto exchanges. My coin was only traded inside of Rally, but it could be exchanged for $RLY and cashed-ou at any time, so $RISE was worth real money.
Theoretically, I could increase the value of my coin by using it to grow my community, allowing fans to trade it for my goods and services, and using it as a "currency" to reward people in my community. In reality, that did not work. My token price was almost completely determined by the rise and fall of the crypto market. You probably see where this is heading.
I was given an initial cache of tokens (worth about $20,000) that I could use to start my community. My community could benefit from creator tokens in three ways:
This last part caused me the most stress. Rally had a frictionless exchange system. There was essentially no tax or penalty for buying or selling coins. So speculators could buy tens of thousands of dollars in coins and sell them a day later if the coin value went up in value, even by a penny.
And, they did.
For months I struggled to keep my community progressing as it was being jerked around by speculators. On two occasions, I invested my own money to make up for dramatic declines caused by these people we called "whales."
I was determined to lead my coin community in an ethical and business-like manner, but the whales were a source of constant stress -- and even one anxiety attack -- as my community was jeopardized by strangers looking to make a quick buck.
The early days were very, very difficult and took a lot of my time.
Act 2: Success and momentum
Within a few months, I was figuring things out, and my creator token rapidly rose in value. $RISE eclipsed nearly every other community in terms of size and value. For example, at its peak, I had a mind-blowing 1.7 million $RISE coins in circulation, more than?ten times more?than most other creators. I attribute this success to:
Eventually, nearly 2,000 people owned my coin. Although I never ran promotions or asked people to invest their money, many did because they believed in our mission. The impressive community success was proof that we were headed in the right direction.
Six months after launching the coin, the value of my own personal holdings was about $250,000.
Act 3: Exposing the creator token flaws
In any start-up environment, you'll face unexpected problems. I knew Rally was an experiment, so I was patient with the company's frequent missteps and technical glitches. However, there were some fatal flaws embedded in the creator token system:
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The Meltdown
Just as another new management team was coming on board,?crypto winter?set in. All the cryptocurrencies melted in a matter of days, and this of course hastened Rally's decline. The company dramatically cut staff, stopped launching new creator tokens, curtailed development, and -- unbelievably -- suspended all communications with their 350 creators.
Rally had been in business for a year and a half. In that time, the value of its $RLY cryptocurrency plummeted from $1.45 to $0.01.
A series of mysterious "technical problems" kept creators and our community members from exchanging tokens or cashing out during the meltdown. Finally, Rally sent us a notice giving us a one-time 10-day window to cash out whatever we had left. We had to sign a document agreeing not to sue them.
For my year of effort, I realized a net profit of about $5,000.
And yet, I am happy ...
Act 4: RISERS RISE
Perhaps this seems strange, but the whole Rally mess was an awesome experience.
I learned so much. Being on the cutting edge of Web3 was an incredible opportunity. Many of my fellow creators became close friends through this trial by fire.
I often feel alone in my career. I spend most of my time in my office in the woods -- writing, thinking, and helping customers. A self-imposed solitary life. But my world is different now. The end result of the Rally rollercoaster is a supremely cool RISE community.
The coin is gone, but RISE remains -- a friend-driven machine moving toward bigger opportunities and collaborations. It has grown far beyond the creator coin idea that first brought us together.
In fact, we don't need the coin at all.
Every day, we gather on Discord to teach each other and debate the future of marketing. It is my most valuable network of friends. It has become my university.
We're doing experiments in the metaverse together. We're solving problems. We're attending free webinars with global thought leaders. We're writing a book together (look for?The Most Amazing Marketing Book Ever?next summer!). We've been gathering for live events. I've made more new close friends in six months than in the last six years.
On most days, I check in every few hours to see what juicy new ideas are circulating in the RISE community. These are my friends. They are challenging me, teaching me, and pulling me in new directions. As a curious person, I can’t think of anything more fun or energizing.
I still spend most of my time in my office on the hill, but I’m no longer alone.?I belong to a community.
Mission accomplished.
Onward
What's next?
Some of my fellow creators are moving from Rally on to other platforms or creating their own solo coin efforts on a blockchain. I am not doing that for now, primarily because I'm concerned about how these coins might be impacted by upcoming SEC regulations. I might change my mind, but let's see how things play out.
Despite the painful experience, I think tokenized economies will work, especially for creators who are artists and musicians. "Selling stock" in themselves can fund new creative efforts and launch a virtuous cycle of promotion from people who want them to succeed. Tokens will also find a place in corporate loyalty programs.
The dust is still settling from the Rally creator token demise, but my community is growing in exciting new ways. If you would like to be part of RISE, you can?learn more here. It's free to join, and all are welcome.
I appreciate you and the time you took out of your day to read this! You can find more articles like this from me on the top-rated?{grow} blog?and while you’re there, take a look at my?Marketing Companion podcast?and my?keynote speaking page. For news and insights find me on Twitter at?@markwschaefer, to see what I do when I’m not working, follow me on?Instagram, and to discover my?$RISE creator community here. Image generated by AI through MidJourney.
30+ years of fighting for equality— lawyer and fearless advocate. Get breaking political news commentary ?? substack.com/@mitchthelawyer
2 年Mark- the same dynamic will probably happen with AI being used in commercial settings. I just shared these thoughts- especially with how ChatGPT and other AI interacts with Intellectual Property rights (like copyright) in today's post. The tech is cool and fun to play around with, but I do see, absent full disclosure re ownership/use rights, litigation moving forward in commercial settings and business transactions. There's a legal storm coming and I mentioned a few issues and solutions here https://www.dhirubhai.net/posts/mitchjackson_are-you-using-ai-generated-content-in-your-activity-7006636313588240384-1kd9?utm_source=share&utm_medium=member_desktop
Advisor to Global Brands & Start-Ups. Founder @ SocialNorth. Founder @ JustSocial. Social Director & Digital Crisis Specialist @ Mangold Consultancy.
2 年Wow. Such an incredible article and piece of writing. Thank you for sharing the detail of your journey into creator tokens. I remember a message exchange we had when you started out and you were kind enough to give me some advice then. To be able to read this and learn from your experience, in such honest detail, is massively helpful. Fantastic article Mark.
Owner & Geek Executive Officer @ Graziani Multimedia | Revenue Operations | Sustainable Growth
2 年Honestly, I admire you for giving it a go.
As the Global Voice of CX with an audience of over 500,000 CXers, we redefine what customer experience means internationally, blending journalism, keynote storytelling, and enterprise consulting to spark societal change.
2 年Brian Freeman ????
Won’t DM you to sell anything. Author of “Will AI Take My Job?” and Host of Digital Marketing Masters Podcast. Marketer/Speaker/Agency Owner/AI Chicken Wrangler based in Nova Scotia, Canada.
2 年What a lost opportunity it was. Rally had (and still have) all the tools and tech in place but have squandered the opportunity. As the $BBT token holder, we were a part of the system and we were there with all the other token holders at CEX. We all offered an olive branch to help the management and marketing teams with advice from our combined decades of business and marketing experience (for free) as well as knowing what needed to change in the program to make it work. They refused to engage with any of us. I will never understand why they wouldn’t listen. Now it’s all falling apart. Not shocked a bit.