What’s next for NFTs and Web3 in the age of the creative economy?

A recent report from The Influencer’s Club suggests that the creator economy was worth over $100 billion in 2022 and continues to grow. Recent trends seem to support this, with YouTube expanding into Shorts, TikTok’s launch of Pulse and Facebook pushing content with Reels.

The creative economy is also expanding in other ways, with the use of artificial intelligence tools like ChatGPT and DALL-E to generate content, the rise of live streaming platforms like Twitch and growing interest in podcasting.

However, creators face a number of challenges that are likely to become more severe as the economy grows. One of the biggest problems is that creators often find themselves locked into centralized platforms like Instagram and YouTube, held hostage by algorithms that determine the reach of their content. Meanwhile, the vast majority of creators struggle to generate much income from their work.

With the emergence of Web3 technologies such as cryptocurrency and non-fungible tokens, creators have an opportunity to break free from their dependence on centralized platforms, gain full control over the content they create and establish direct relationships with fans.

The creative economy owes its existence to the Web2 era. Web2 saw the rise of platforms such as Facebook, TikTok and Instagram, the concepts of blog posts and podcasts, which gave people a way to generate their own content. With Web3, creators now have a fairer ecosystem that allows them to be masters of their own destinies.

The advantage of Web3 is that it gives users ownership of their data. Creators will be able to treat their data as their own personal property and get paid for the content they create and others use. We’ve already seen NFTs used to record who owns a piece of digital art, and user data can be tracked and tracked in the same way.

Existing projects have already made this possible. A good example is the tokenized Web3 advertising platform Permission, which connects consumers with brands. With permission, users can earn cryptocurrency as a reward for sharing data and engaging with brands. A similar idea is the Ocean Protocol, which is a marketplace where individuals can sell their data as an NFT. In addition, Zedosh is an app that pays users to view advertisements.

Decentralized platforms

In Web3, artists, musicians, vloggers and other content creators don’t have to rely on traditional platforms like Facebook and Instagram, or try to attract brands to sponsor their content. Instead, they will be able to distribute the content through decentralized, user-owned platforms.

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Web3 will see the rise of decentralized social media platforms such as Taki, where all of the platform’s users have a stake in the network and can earn rewards for sharing, liking and commenting on content. Decentralized platforms will be democratic and inclusive, allowing everyone to monetize their work directly. Creators can therefore be more selective about which brands they choose to work with, leading to better quality advertising.

The Web3 creator economy will also enable closer relationships between influencers and their fans and new funding opportunities. For example, Snapmuse.io is pushing the concept of NFTs that allow fans to collaborate with their favorite creators. They can obtain NFTs with a portion of the influencer’s ad revenue. The aim is to promote a larger community and get a wider commitment through the new partnerships.

In Web2, Amazon, Google and Apple emerged as the new middlemen, taking large cuts of every sale through their online stores. The same goes for Facebook and Instagram, which take most of the ad revenue generated by content from creators.

That may change with Web3, and in fact it already has. Their largest NFT marketplace is OpenSea, which takes a 0% transaction fee from each sale. Each transaction is transparent, creating a public overview of NFT’s value and origin.

Instead of posting a video to Facebook and losing rights to the content the moment it’s uploaded, creators will be able to create NFTs that establish they are the owner of that video. Alternatively, creators will be able to sell these NFTs directly, transferring ownership to the buyer.

A forward-looking project that takes advantage of this is GenZeroes, the world’s first NFT-powered video and cartoon series. It’s funded by the sale of NFTs to fans, who get exclusive access to new episodes and the chance to have a say in what will happen in the second season.

Smart contracts ensure timely payments as they eliminate the middleman, meaning creators will receive their revenue share the moment it has been paid. As Web2 platforms begin to disappear, smart contracts and NFTs will emerge as the new standard, with a record of ownership for every piece of content posted on immutable public blockchains.

With NFTs, artists will be able to keep track of the value of their older creations and continue to monetize them through royalties. Under the old system, if an artist sold a painting for $10,000 and it later sold again for $5 million, the artist would receive nothing more and the dealer would pocket the difference. That will not happen with NFTs, as the artists can create a smart contract that ensures they will receive a percentage of any future sales.

Web3 means more power for creators

Most would agree that content creators deserve full recognition and value for their work, and that’s exactly what Web3 will provide. One of the biggest benefits of technology is democratization, putting advanced capabilities in the hands of consumers.

Web3 is the next evolution of this paradigm and will be a game changer for creators, giving them unprecedented control over their content. They no longer have to rely on platforms like YouTube to monetize their work. They want direct ownership of their work along with direct access to their fans.

Tomer Warschauer Nuni is CBDO @Kryptomon, a serial entrepreneur, advisor and investor focused on the innovative blockchain and Web3 industry.

This article was published through the Cointelegraph Innovation Circle, a researched organization of top executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.

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