“Is ‘coining content’ the next big thing on Base, or just another crypto gimmick?”
There’s been a lot of talk this week about tokeninsing and coining content on the Base L2 blockchain.
The ripple effect of the Base L2 leader and chief posting content onto a new social platform, https://zora.com, cause Crypto Twitter to go into meltdown and have Farcaster users fairly split on the choices made.
Jesse, Base employee #1, then went onto a podcast with Bankless to explain the narrative they’re running with (and then coined that content as well, see below)
https://zora.co/coin/base:0x4d1747fd39ecb72935f373c35ea835e08507a4a7
I pulled the audio from that file and used https://whisper-web.netlify.app/ to grab a transcript for me to go through some of the points.
Base is absolutely going to coin more content. I’m going to coin more content. I think lots of people on Base are going to coin more content. Heck, I’ve been talking to brands, and so many of them are excited about coining content.
There is a strong push for Base to coin content, and it seems to be how they want to strategically gather more use in a very competitive L2 market.
It would be great to get a list of the brands that are keen to coin content, and more specifically the rationale around why the are looking to coin the content.
It’s unlikely that the reason is for allowing their supporters to “own a piece of content”. Brands will do this if
- It separates them from the competition – in a positive light
- It furthers their reach agains their competition
- It makes them more money
Clarification on the types of brands is interesting as well. There are a few brands that I could think of wanting this
- Base
- Coinbase
- Zora
- 0x (I love 0x, but the coining of more content would then drive the amount of trades which then get routed through them for…. you guessed it… a slice of the profit).
Okay, that’s a bit cheeky—but seriously, isn’t this just NFTs all over again? I think brands will like the idea of something new and exciting (like NFTs) but the ones that do it will fail to execute and alienate their web2 audience and annoy their web3 audience.
I think we should coin this live stream. I mean, why not? It’s clearly not a meme coin. If you and I post this live stream—everyone who’s watching this right now and everyone who can watch it in the future—let me be 100% clear: this is not a meme coin. We’re not going to create a Telegram. There’s not going to be the David and Jesse April 17th meme community.
Agree, this is not a memecoin. But coining it… makes it a coin right? Why make it a token though, why not an NFT. Wouldn’t a non-fungible-token make more sense here? A 721 for true ownership of a peice of content, or an open edition 1155 if you wanted an audience to own a slice. But a token?
We’ll come back to why NFTs make more sense here.
This is a piece of content. And when it gets posted on the internet, the free market will value that piece of content. Some people will like to collect that piece of content because they think it’s fun or meaningful.
Some people will want to trade it because they think it’s going to be more valuable than it is right now, or it’s going to be less valuable than it is right now.
Hold up. Value go up or down? We’ve just described meme coins right? Again, this is pushing them as coins to value the piece of content, but what’s the point of that? What problem are we solving here?
But it is a piece of content. And Base is going to keep taking pieces of content and coining them—on our account and probably on other platforms as well—because fundamentally we believe that this is the best way to have value flow back to creators.
This is far from the best way value can flow directly back to the user. It is a way for value to flow back, 1% worth of value of the total ammount on every trade.
Well, not quite 1%.
When trades happen directly on Zora, a 1% fee is distributed as follows:
- 0.5% to Creator Rewards
- 0.15% to Trade Referral Rewards
- 0.15% to Create Referral Rewards
- 0.2% to Zora
So that’s 0.5% back to the Creators, and 0.2% back into Zora.
Zora also rewards the creator with 100 million tokens from the coined content, which they are able to sell once there has been some activity (trading) on the token. This creates sell pressure on the token and can reflect badly on the creator for “rugging their supporters” by selling off the coin to increase their profit.
I’m surprised that Jesse and the Base team do not push to just launch a token with Flaunch instead, or even better Zora could adopt the Flaunch protocol as their underlying token issuing launchpad leaving them to focus more around improving the social network side of the app.
What is Flaunch you say? Flaunch is another token launchpad on Base that allows users to launch tokens for free. From the flaunch docs…
Other launchpads extract millions. Flaunch sends it all (100%) back to the trenches.
- Coin creators get paid on every swap, aligning them with the coin’s success
- Automated buybacks protect the token price from falling
You can use the SDK to launch free tokens (only pay the gas) or the Web2 API to launch a token without needing a wallet or signing a transaction.
Both of these methods set up the fee structure to be
- 0.8% to the creator
- 0.2% to price protection and automated buybacks
Unlike other platforms, the creator never earns their own tokens so they never have any reason to sell, all the fees come back in ETH (for both buys and sells, regardless if it’s on flaunch.gg or on Uniswap).
The question is then, is Base advocating to reward creators? Or are they working on creating a bigger social network to gain more leverage further down the line?
From the Zora site…
Zora’s mission is to make the internet valuable and free—that’s why we’re building a social network that makes creating and trading coins easy, fun, and rewarding. 1
Given the amount of traffic that the likes of YouTube, Twitter, TikTok, Instagram etc receive it’s no wonder that Zora are looking to grab some of the market. Along with more users of Zora, that is more users with accounts on Base which I’m sure is one of the teams KPIs.
I believe—and this is a strategic belief that some people might disagree with—that if we, as a culture, reset our norms and start treating coins not as a monolith, not applying the same expectations to every single coin, but instead treat them as they are—which means using our brains and looking at where a coin was created, who it was created by, what their expectations are, what platform it’s on—and value it appropriately, then we’re going to unlock way more creativity.
We’re going to unlock way better tools for creators. And we’re going to be able to take this next leg up in adoption. Because right now, we’re stalled out. We’re stalled out with less than 1% of the world onchain. And we’re bickering about: are there enough apps? Are we building the right things?
The sentiment here is great.
Unlocking more creativity, creating better tools for creators, these are really important things we should be working twards.
Brining more of the world onchain is also a great goal, but do these things need to be paired together? Are creators more creative as a result of creating on chain?
Probably not.
And all of that is downstream of the fact that crypto is not growing. And the way we grow is by building awesome products and by solving hard problems.
Yes. The way people will move on chain will come from two areas.
- We solve a problem for the person
- The person will make (more) money
Transferring money from Australia to the UK is not a hard problem. It was solved when I first moved in 2007, but the problem was that it cost me hundreds of dollars when I needed to do so.
With the blockchain, it costs cents to transfer HUGE amounts of money around and unless you’re transferring it across chains to into CEX’s, it’s practically instantaneous.
For folks that live in countries with a volatile currency, the ability to store their value in something like USDC or other stables means they won’t see their money inflate away, and they have control.
And I believe that one of the biggest problems in the world to solve is the fact that there are hundreds of millions of creators who are creating in a broken economy, where the vast majority of the value that they create is captured and taken away from them by large corporations.
Jesse, we are singing from the same hymn sheet here, I LOVE THIS GOAL.
I tweeted a reply to Oxmons the other day…
Coil did such a good job to allow content creators — bloggers, folks with their own online presence — to still earn money without resorting to advertising.
The issue with Coil was that you needed to register with Coil, download the browser extension, and then have it on while you were browsing sites to ensure that the creators were getting paid. As a creator, you still had ads but you only loaded them onto the site when you detected a user wasn’t using coil, or most likely the other way where you removed them when you noticed they were paying.
These were micro payments and continued for the time you were on their site consuming, and then stopped when you left. Brilliant idea.
Owen’s idea to “at that point why not e.g. lock up user deposits into yield bearing assets, stream procedds to creators?” is more interesting and practical on a creator reward system than asking people to CoinContent and then earn money through people buying the tokens.
So yes, I agree there is a problem but rather than Coining Content on another platform the answer needs to be around how we support users who own their own content, have their own sites and their own blogs, and not force them onto yet another Social Platform to receive value.
Let’s see how this coined content is wrapped up by Jesse.
If we invest in open platforms and an open economy that gives them the tools to put their creativity onchain and earn from it, that can bring hundreds of millions—and then billions—of people onchain. And then those people can tell the story of onchain. And they can bring all of their friends and family because now they’re creating onchain, they’re making money, they’re evangelists, and they’re the ones who create the content that then builds the engaging onchain feeds that can eventually replace TikTok, Instagram, Facebook, and these massive corporations that have controlled the internet for the last 20 years.
I can reallly get behind this stuff.
Bringing more people onchain will stretghen the work that we do and he is right that it can really make a difference in a lot of peoples lives.
If we’re going to do this, then getting networks like Zora and Farcaster to use token launchpads like flaunch is key to increasing the creator value, by using platforms that extract value from the creator fees we’re effectively advocating for creators to leave money on the table, or again in the pockets or the corporations that power the networks we’re posting on.
Why NFTs make more sense
If the true desire is to provide value to the content creator then “coining content” is not the best approach. If you have fans that buy the token for $100 you’re going to get $1 in trading fees. From those trading fees Zora is going to take 40%, leaving you with $0.60.
Your supporters/fans have now just paid you $0.60 for your work, but they’re out of pocket $100.
Sure, the $100 could now go to $10,000 which would be a huge win for the supporter of your content, but we’ve already been told these things are NOT meme coins and we shouldn’t expect price action from them?
If fact, “tools to put their creativity onchain and earn from it” is the primary goal and problem to solve, so why aren’t we encouraging users to just buy the NFT from the creator?
Could we do both — Coining Content and NFTs?
Just spitballing here.
When you create a token on flaunch an NFT is created at the same time, and the 721 is where the underlying value is stored.
What do I mean by that?
Well, the holder of the 721 is allocated the Creator Fees for as long as it is in their wallet. If the user was to send/sell that 721, then the new recipient would begin to earn the fees.
So let’s say I decide to coin this blogpost, “Coining Content on Surf the Dream $COINEDSTD2“. I would become the creator of the 721, and there would be 100 billion tokens created at a marketcap of $10.
Let’s say that 100 people decide to buy the token in the first 30 minutes during the fair launch period (which ensures you can sell the token back for no more than a 2% loss at any time) and we end up generating 100ETH volume, then another 100ETH in volume up and down with buys and sells post fair launch.
That would be 0.8% of fees from the 200 ETH, paid in ETH, directly back to me and 0.2% going to buy backs and price protection.
That is 1.6ETH to me as the creator.
Now if Jesse really likes what I’ve written, and why wouldn’t he, and he wants to support me as a creator he could put an offer in on the underlying 721. Let’s say he’s being really generous and offers me 16 ETH for the NFT.
For me, I’m now super pumped because I’ve made 1.6ETH in fees already, and now i’ve got another 10x that for a 16ETH profit on my NFT, and for the memories I buy 1.6ETH of the $COINEDSTD at a $100k market cap.
Winner Winner Chicken Dinner.
Jesse has supported a little known builder on Base. Thanks Jesse.
Being a sharing kind-of-guy, he then posts about the $COINEDSTD from his accout, the Base account, on Twitter, or Farcaster… everywhere. He mentions this exchange on a couple podcasts and spaces.
All of a sudden the $COINEDSTD does the same volume as the Base is for Everyone token.
DAYUM.
That is $50.4M in volume… and because it was done on Flaunch AND Jesse holds the 721 now he’s earned $403,200.00 (~253 ETH) which can then be used to help more creators and bring more people onchain.
Oh, and because it has now gone from a $100k -> $12.32M marketcap that is a 123x increase and the 1.6ETH I used to buy the tokens is now worth 197.12 ETH (~$300k)
Interesting times.