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If you feel like the NFT trend is already pretty pervasive, then, to coin a phrase, you haven’t seen anything yet. NFTs are perhaps one of the most talked about trends on social media, although so far NFTs haven’t featured much in social media. But that is changing.
Earlier this year, Twitter launched a limited feature that allows users to upload NFTs to their profile similar to a profile picture. During an event at SXSW in late March, Mark Zuckerberg announced his plans to integrate NFTs into Instagram “in the near future” – and those plans came to fruition faster than expected. Instagram head Adam Mosseri comes shared on Twitter that the photo-sharing platform is rolling out the “opportunity for creators and people to share NFTs they’ve created or purchased, either in Feed, Stories, or Messaging.”
YouTube is also getting in on the act. A February announcement said the company would launch new authoring tools, allowing videographers to sell their content as NFTs. Spotify has also reportedly (subscription required) explored NFTs, having recently posted job postings for web-focused positions3.
The value of being able to use an NFT as a profile picture may seem somewhat debatable, but these last two developments provide perhaps the best clues as to the potential benefits of including NFTs in the established social and media landscape – monetization.
Improving the creator economy
Currently, the established creator economy is estimated at over $100 billion and is on a growth trajectory that could see it reach into the trillions within a few years. Keep in mind that this astronomical growth has occurred in an environment where creators have very few ways to directly monetize their content.
According to Influencer Marketing Hub, more than three-quarters of creators rely on brand sponsorship as their primary source of revenue, while only around 5% rely on ad revenue. Creators have also found other ways to monetize – affiliate marketing, selling courses, and fan tips all provide additional revenue streams.
Addiction to a particular platform can also be a vulnerability, as Russian influencers discovered when the government banned Instagram in mid-March. The platforms themselves are also quick to ban even the biggest creators if they think there may be a threat to their brand. For example, YouTube removed megastar PewDiePie from its ad platform in 2017 after posting anti-Semitic content on his account.
Own your suite
There are a host of apps and tools designed specifically for digital content creators, and Lightricks, the company behind Facetune and Videoleap, has aligned its product line with the needs of this community. After years of focusing on visual editing tools, the company’s management has shifted its focus to initiatives that make it easier for creators to access monetization opportunities.
Gilad Bonjack, SVP of Creator Services at Lightricks, believes that the opportunities of NFTs go far beyond simple monetization for creators. “Integrating NFTs into content creation is a huge step for creators,” he said. “Monetization opportunities are certainly significant and will no doubt increase the value of the creator economy as a whole. However, I believe there are greater opportunities for creators to leverage NFTs as a way to own their brands and their communities, so they can become less dependent on big platforms.
It’s a well-known adage among influencers and virtual business owners in general that the only thing you really own is your email list because it’s the only direct way to connect with your followers. In that sense, adds Bonjack, “NFTs are a whole new way to directly reach and engage an audience, giving creators unprecedented control.”
Now that NFTs are becoming more and more popular, it should come as no surprise that some creators and influencers are already seizing the opportunity of a whole new revenue generator and coming up with innovative ways to use NFTs to interact with their fans in the new digital. environments.
In January, crypto influencer and Instagram model Irene Zhao launched a collection of NFTs under the banner of IreneDAO (DAO is an acronym for Decentralized Autonomous Organization). She sold the collection as a set of virtual stickers featuring her, offering buyers membership in the IreneDAO.
She later told reporters the move was an experiment in “social collectibles,” a decentralized alternative to platforms like OnlyFans or Patreon. Indeed, Zhao used NFTs to create an independent community of followers – a local economy, you might call it. Although in practice it still needs a messaging or similar platform to interact with its customers, the ownership of the NFT cannot be tampered with, and therefore it is quite easy to set up closed communities on platforms like Telegram or Discord, which NFT senders commonly use.
NFTs are growing, and not just in market value
Bonjack seems to be right, then. If NFTs can be used as a tool for creators to create and interact with audiences independently, allowing them to better monetize their creation, what’s the downside?
Additionally, as the NFT space grows and develops, these tokens become fascinating vehicles for whatever kind of benefits and rewards the crypto community chooses to bestow. For example, DeFi protocol Aave launched Aavegotchi in 2020, a protocol allowing users to stake their Tamagotchi-like NFTs in exchange for rewards.
There are now all sorts of variations on the NFTs-cum-DeFi theme. Last month, an animated NFT art project called HOURAI partnered with iZUMi Finance, a programmable liquidity protocol. The purpose of the partnership was to give NFTs additional value derived from their membership in the iZUMi DAO.
Indeed, imagination is the only limit when it comes to the features and functionality an NFT can provide content creators and artists.
The dilemma of decentralization
An intriguing question is how centralized tech giants like Meta, which operates Instagram, and Alphabet, which operates Google and YouTube, plan to implement an NFT minting platform and whether their goal is indeed to support and to advance the economy of creators. While the big platforms have certainly started prioritizing the needs of creators in recent years, adapting their technology to support decentralized finance models is a whole different story.
NFTs exist on blockchains, giving them properties similar to other types of crypto-assets. They live on ledgers managed by decentralized networks, which resist censorship and cannot be manipulated. It seems hard to imagine a company like Meta allowing the free minting of NFTs on a blockchain platform if there weren’t also monetization opportunities for the company itself.
Yet, with decentralized NFTs offering the kind of opportunities that IreneDAO has demonstrated – taking full advantage of the monetization potential that NFTs offer creators – why would creators care about a centralized NFT minting platform at unless it offers greater audience or revenue opportunities?
However, it’s also worth remembering that tech companies control the algorithms, which means there could be more engagement opportunities using Meta’s proprietary NFT minting platform compared to a decentralized alternative.
Zooming out, one thing is very clear. Media and communications have been the mainstay of the technology boom of the past two decades. Decentralized technologies have long loomed as a distant threat, but now, if the creator economy places its chips on decentralized roulette, will it really be a game-changer?
The NFT craze is now accelerating the clash of centralized and decentralized worlds, and puts big tech companies like Meta and Google in a precarious and pivotal position, which could even pit them against creators, the real fuel that runs these platforms.
Sadie Williamson is the founder of Williamson Fintech Consulting.
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