Let’s say I wanted to monetise this newsletter, how would I go about it? Well, I’d turn on paid subscriptions on Substack. But creators should consider monetising their content via tokens instead. Here’s why:
- Users can invest: tokens allow your subscribers to invest in you and gain from any increase in value. If a user pays a creator $10 per month it is static — I’m paying for access to content and nothing more. If I buy a $CREATOR token for $100, I could sell it for $150 and stand to gain. Creators can also follow a different model where the owner of the $CREATOR token earns a share of the creator’s future earnings.
- Compounding returns: tokens allow creators to retain a share of all future earnings. In the example above, if the user sold the token for $150 and the creator wanted to retain 10% of future earnings, they’d make $15 from the sale. The creator and the user’s incentives are aligned.
- Composable: the blockchain is public and let’s a creator take their followers with them. We’ll see a number of services being built to support use cases (eg. ability to attend an event if you hold a token). It’s different to web2 because your subscribers are truly yours, forever. Imagine being able to share your audience across Instagram, TikTok and Twitter, that’s what we’re talking about.
NFTs vs. fungible tokens
There are 2 types of tokens creators can use:
- NFTs (non-fungible tokens): these tokens represent something unique. As the name implies, one unit cannot be traded for another unit. NFTs usually reference content that is stored elsewhere such as a JPEG, audio or text. NFTs also enable creators to retain future earnings.
- Fungible tokens: these tokens are like money. If you issue 10k tokens, each of these tokens is equivalent to one another. These tokens do not have any content behind them.
The two above are not mutually exclusive. For example, a creator could issue $100k worth of a fungible $CREATOR token and then use that to generate 100 NFTs. The revenue from the NFTs is shared with the owners of the token. Users will typically evaluate fungible tokens with stricter criteria — this is because they are not accompanied by a JPEG or other content (though these aren’t the really valuable part of most NFTs).
Guide to utilising tokens
Now let’s look at how a creator can go about doing this.
- Building your subscriber base
- Choose your blockchain
- Issue your token
- Ask your followers to buy
- Use a token-gating tool
Building your subscriber base
Building your subscriber is critical no matter how you choose to monetise your content. The most important part about building your subscriber base is to think about your funnel:
- Where do people hear about you?
- Why should they follow you?
- How do they sign up?
This can be on Twitter, a Discord group, a Whatsapp group or a different mechanism. As long as you are collecting contact details (usually either email or a handle) and you can communicate with your subscribers, you’re good.
Choose your blockchain
There are many blockchains to consider, but these are the most relevant ones:
- Ethereum: the most widely used but also the most expensive. Choose this if you want to cater to a wide range of use cases.
- Polygon: helps remain compatible on Ethereum (in most cases), but is also cheaper and faster.
- Solana: cheap and extremely fast. If you aren’t concerned about being compatible with Ethereum, this is a good option.
Issuing your token
Once you’ve decided on the blockchain, you’ll need to create a smart contract and issue your tokens. The key considerations are:
- The type of token
- The number of tokens
- If you decide to go with an NFT, then choose the share of future earnings you want to retain
Ask your followers to buy
Generating demand for your token issue is critical. Unlike a traditional newsletter where a creator can have a steady stream of sign ups, token launches tend to be more immediate. This is because tokens are public — prospective buyers can see how much of the token has been purchased before deciding whether to buy. It works to the creator’s advantage if demand for the token is high.
Token-gate your content
When you share your content, you’ll want to make sure that it can only be accessed by subscribers who own your token. Here are a few tools that can help with that: Mintgate, Gated [for full disclosure, this is a tool I built myself] and Whaleroom.
Monetising with tokens has many advantages. If you create content, you should consider whether tokens are right for you. And if they are, we hope the little guide above helps you get your web3 journey going.