After vocus began to explore the Web3 creator economy, some friends around me are often very enthusiastic to share different token economy cases with me. In this article, from the perspective of a Web2 platform operator who has stepped into Web3 with one and a half feet, we will share what exactly the token economy (Tokenomics, or Token Economy) of “writing is mining” and “socializing is mining” needs to have. Which core elements do not talk about technology or mathematics, simplify as much as possible, and only speak vernacular.
Let’s get straight to the point, is it logical to make money by publishing content or socializing?
Let’s start with the business model and briefly summarize the whole thing:
As a content provider, the author provides the content to the media, and then the media retouches, subscripts, and revises the content and provides it to the audience, and uses the aggregated traffic and eyeballs in exchange for advertising revenue. In such a situation, one-handed delivery (authors provide content), one-handed delivery (media provides royalties), and both money and goods are paid, this is the PGC (professional production content) model in the past.
Some media are only reprinted for free, and extended topics are beyond the scope of this article.
Next, many UGC (User Generated Content) platforms began to appear, such as Bokebang, Dcard, FB, Youtube, and various forums…. This type of platform completely opens the supply of content to users, and the platform itself does not do too much review or intervention. After the platform aggregates traffic and eyeballs, it also uses this in exchange for advertising revenue.
It is not difficult to understand here. Therefore, the advertising model is that whoever aggregates the most traffic, or the most accurate and effective traffic, is the winner.
After the concept and technology of Web3 appeared, many people would start to say that users provided so much content for the platform, but they didn’t get a piece of the pie, and even when the reach and visibility became poor, they had to buy advertisements themselves, Is this reasonable. So, new models like this began to appear in the market:
A: You can earn tokens by writing articles, which is awesome!
Wait, I’m not an economist, but this all sounds weird, right?
Let’s rewind a little bit forward…
If these platforms with traffic and income, take out part of the advertising revenue they earn and distribute them in legal currency (Taiwan dollar) to the contributing users, wouldn’t it be good?
That’s right.
In fact, Youtube and Bokebang have already shared a portion of the advertising revenue to the creators, that is to say, if you publish your works on platforms such as Youtube and Bokebang, you will be able to get income long ago.
The question behind this is whether the distribution of profits between platforms and creators is fair, and what is fair, which is another big issue and is not discussed in this article.
Hey, so, aren’t these platforms already “creating and earning” platforms? So what’s the difference between those who say that publishing works and socializing will get virtual currency? What is this virtual currency for? Because after getting it, will the price skyrocket?
If this token economy system is created out of nothing, then of course, it is easy to become a Ponzi scheme or a bubble. There must be a value system that can continue to circulate to support it. In short, it will be healthy if there is a positive cash flow that can continue to enter the pool to distribute profits to the creators.
The business model has returned to business logic. Where will this profit-sharing money come from? In terms of advertising mode, of course, it is advertising. Below, we will further dismantle it.
The basic structure of traffic, advertising and revenue
We use basic advertising logic to calculate, but for simplicity, the following is only calculated in CPM (revenue per thousand impressions):
- Network Ad Slot Value: CPM $50
- Monthly Unique Visitors: 1 million
- The article reading page is the place with the most traffic. It is packed with 5 advertising slots, so that your readers will be dazzled and can’t stand it.
Simple calculation based on this
- 1 million/1,000 (every thousand impressions) =1,000
- 1,000*50（CPM）=50,000
- 50,000*5=250,000
There are about 250,000 advertising revenue a month, but these are not net income, and they also include fixed costs and expenses such as personnel and servers, which are deducted first and then split. My experience is that this amount of money is not enough, but let’s assume that there is still 20% left, that is, NT$50,000 a month can be used to share profits, and we will dismantle it further.
A website or platform with 1 million unique visitors a month, assuming that each article contributes 1,000 views on average, about 1,000 articles a month (not considering long-tail benefits), if it is shared with 250 creators to contribute, each person writes a week One article, on average, one person gets 200 Taiwan dollars in advertising profit per month.
A website with millions of visitors can be estimated in the roughest and most optimistic way without considering its own business team selling advertisements, editing, and matching. It is about the same level. 5 million, 10 million, 50 million… etc. (of course, there may be more creators equally divided).
That is to say, assuming that a person who focuses on writing content or socializing can earn virtual tokens today, and the price of the virtual tokens you get in exchange for Taiwan dollars is far more than a reasonable figure, then obviously, you are a skeleton and a millionaire. The creator who chooses one, otherwise there are other things to consider behindEastern mysterious power factors such as:
- These platforms take money from other places to subsidize (raised funds, borrowed from the bank, given by dad)
- Other businesses that have not been considered make money (similar to the above)
- Most of the people who got virtual currency have not exchanged it
- This platform or website is amazing
The basic logic of the token economy
After talking about the basic advertising model concept, let’s talk about the token economy.
The token economy is very complex, but one of the cores issupplyandneedif someone always wants to sell, of course there must be enough demand to undertake, otherwise it will crash; on the contrary, if everyone always wants to hold, no one wants to sell, because of scarcity, so the price rises.
In other words, if this token is only available for publishing content, or through social interaction and interaction, there must be otherSubstantial use(Otherwise, why don’t you use Taiwan dollars?), people can continue to use or continue to hold, if not, usually get the moment, or after a certain amount of money will be sold, but the holder will sell it. Still holding it, the result is obvious – looking forward to continuing to rise in the future.
At this time, the problem arises. If this token does not have many practical uses, but everyone is expecting to continue to rise in the future, and the price does seem to continue to rise, but if the company’s business, If the core business model and revenue stream cannot be turned around, the decoupling between the value created and the price of the token will become larger and larger. What should we do in the end?
- These platforms continue to take money from elsewhere to subsidize (raised funds, borrowed from the bank, given by dad)
- Other businesses that have not been considered continue to make money (similar to the above)
- Those who get the virtual currency, continue to believe and not exchange (some people find that it is not very good, and while slowly shipping, they find more new people to join, and please continue to believe and believe in all this)
In such a case, in the end there will be two cases:
- The fundamentals and business of this website or platform are slowly turning around, so the profit sharing pool is getting bigger and bigger, forming a positive cycle, as the saying goes, “Fake it till you make it”, and finally developed into a successful token economy. (In fact, many new startups do grow in this way)
- One day the bubble burst directly
Since it is a token “economy”, it is necessary to pay attention to the fundamentals
Most people understand the above principles, but it seems to have a magic power when put on virtual currency and token economy.
Take LikeCoin as an example, I like the idea of LikeCoin very much myself, but have you ever wondered why clap makes money? Is it because it is a new technology, a new system that is incomprehensible, so money will emerge from nothing?
The money to be shared behind LikeCoin will of course come from other places, possibly from paying to appreciate citizens (that is, the whole original intention of appreciating citizens) or other business income.
Have you yourself become a paying appreciation citizen while continuing to earn income through LikeCoin? Have you ever thought that you have to be involved in order to make this cycle and vision build?
Similarly, today you publish your works on any website and platform that focuses on “Social-to-Earn” and “Creation/writing is mining”, and you will see various “OOXX To the Moon!”, “OOXX tokens have risen to history. Xingao, haven’t you joined yet?” “Hundreds of thousands of salary per week!” When writing these writings, you may also be able to think a little calmly, where the money for these profits comes from (I think this copywriting and communication situation Similar to Cambodian scams…), and whether the core essence of the source continues to grow, it is not difficult to find such information.
It is very difficult to establish a value system. This article is not to say that all “creation/writing/OOXX is mining” platforms are scams. There are many excellent teams and services in continuous development, but as for which ones are There are elements of a Ponzi scheme, which are short-term subsidies and which are serious work. You can use the concepts shared in this article to judge by yourself when you encounter different cases in the future.
Web3 is a new framework, not equal to blockchain technology (only that blockchain technology is compatible with Web3), and virtual currency and token economy are not equal to the entirety of blockchain technology. And no matter how the framework, technology or value system iterates, the core essence of many things will not change – at least, not just generating electricity with love.
I think the development of Web3 has great potential for creators, which is the core reason why Fangzi started to explore. In the future, I will gradually talk about more personal ideas and opinions. If you have topics and content that you are interested in, , also welcome to leave a message to let me know.
Remark:The price of virtual currency will also have different situations due to different model designs. For example, the total supply (Total Supply) is locked and issued, and it is continuously distributed in 4 years. As more people participate, but the supply remains unchanged, the generation When the currency becomes scarce, the price will of course continue to rise; and in practice, there are many ways to hype the currency price. I am not arguing whether the price will rise or not in this article, but just return to the basic business logic.