The creator community will be equally as important to this next crypto boom as the developer community was to the DeFi boom SS 2020.
The goal of tools in the creator boom should be the same: maximize liquidity optimization for market suppliers and reward community. The suppliers aka market makers in this case, however, are the creators. No different than you needed a token as the reason for someone to provide liquidity on Uniswap. You need the creator and their artwork in the form of a token as the reason for someone to collect it and provide liquidity on SuperRare.
At Zora, creators are making markets by minting tokens that have markets built in them. And these markets and tokens are owned by the creator.
Literally market making.
Where is the DeFi parallel, though? In the explosion of $MEME and the excitement of Elephants Dreaming in Somnium Space, we’ve missed a key step in the development of NFTs and the ownership of creation on the internet. Similar to the bricks or money legos that had to be built for the DeFi system to take off, there are creation legos that must also be built for NFTs to take off. What is a money lego? A money lego is a DeFi building block like Aave, Snx, and Maker. They provide market makers and developers with building blocks to compose debt, create liquidity, and fuel the DeFi yield farms that have made 2020 such a good year for the “few”.
Creators making and owning their own markets is akin to liquidity providers in DeFi using money legos to create their own loans or token exchanges using protocols like Aave, Compound, and Uniswap. Suppliers use their assets to create markets built on DeFi that attract financial consumers and the marketplace seed is planted. Uniquely those markets were owned by the internet as token holders. Similarly, creators will also use their assets to create markets. The assets are their media, artwork, writings, etc. They will be shared on Zora where the creator owns the media and it’s built-in market.
To see composable media we need composable markets.
Just like anyone in the world can borrow from i.e. engage with an Aave or Compound loan that I supply to the market. Anyone in the world will be able to engage with a piece of Zora media I share with the world.
The rate of that loan is market driven based on makers and takers. The value of the media is market driven based on a perpetual bid book of takers.
Overall feels like NFTs are missing their DeFi moment in two ways. First, they’re optimizing liquidity in the incorrect model. Second, they’re undervaluing the true builders of this creative paradigm. Already covered the first re: creators becoming market makers. This optimizes liquidity for the most valuable market makers in the system i.e. creators.
For two, creators are also the developers of this ecosystem. Reaching escape velocity as the neo-Spotify, Instagram, or Soundcloud means turning over the tools (picks, axes, shovels) to the true builders of these platforms: THE CREATORS. Not curating these exclusive playlists of songs or selections of media like the NFT galleries we see in the wild today.
No different than in DeFi where the best developer community wins. In the creative paradigm, the best creator community wins. Why? Because if built correctly, the team that has the best creators has the best market makers.
But what about demand? 3LAU, RAC, Beeple, and the NBA have all aggregated demand on various NFT marketplaces. But guess what, that demand is really just the same small pool of collectors traveling to follow the artists they know are valuable. Yes, a new artist will drop on SuperRare for immediate exposure and blessing. But proven artists can drop wherever they want. They’re sought after talent. But don’t have the tools to maximize this leverage in their market.
Creating markets for media and content is a protocol level action. That action is owned by the suppliers to the ecosystem i.e. the creators. Universally accessible media and markets in the form of a token gives us instant access to a global market of potential takers to engage with creators from Day 0.
Shifting us from a local marketplace maximum to a global maximum on the internet.
Timeline of change. Similar to how it took some time for the world’s best and brightest developers, designers and technical talent to wake up to crypto… It will also take some time for the world’s most prolific creators to wake up to it as well. Similar to how we watched the increase in world class talent create the gold rush that was the DeFi boom… we will also see world class talent in the form of creators making a new gold rush that could be the creator boom.
Where we’re headed. The crypto community thought it was insane when Andre Cronje memes were popping off and selling for $1000s. Wait until it’s a Taylor Swift post. Or a Kylie Jenner image. Or a Virgil Abloh design. That is going to have a similarly cosmic feeling to when Jamie Dimon conceded to BTC or when Paypal decided to support ETH. To ignore this is not be excited about the bull runs to come.
We have a long way to go. Creators are just now buying BTC. Wait until they start minting their content through our protocols. Wait until the reclaim ownership like we did of the financial system. Gonna be happy days.