The creator economy is worth $100 billion. The majority of creators today monetise their content using fiat money. I believe that creators will use tokens to monetise their content. Tokens offer benefits that fiat money does not.
Let’s dig in.
How do creators make money today?
Today, creators choose between one or more of the following strategies to earn money:
- One-time purchase: users pay a one-time fee to access content. This may or may not include ownership. For example, buying a Notion template on Gumroad doesn’t give you ownership. Buying a painting from an artist does.
- Recurring payments: users pay a periodic fee to get access to a creator’s content. For example, I pay $10 to read Lenny Rachitsky’s weekly newsletter (which I highly recommend).
- Tips: users tip their creators on platforms like Twitter or Patreon.
How do creators use tokens?
Creators can monetise their content by using NFTs or requiring their users to hold a certain number of tokens.
Why are tokens superior to fiat for creators?
Tokens are superior to fiat for a few reasons:
- Compounding for the creator: if a creator uses NFTs, they gain from secondary sales. For example, OpenSea allows artists to set a creator fee up to 10%. If set at 5%, this means that the creator retains 5% of future sales in perpetuity. This is simply not possible with fiat money.
- Invest in the creator: tokens allow users to benefit from an increase in demand for the creator. Let’s say I buy into a community by buying 1 token for $100. The value of the community goes up and users are willing to pay $1,000 for the token. I’ve suddenly main $900 dollars by joining a community. With fiat, the subscription fees you pay for a community cannot lead to an increase in value.
- Contribute to your community: tokens allow users to contribute actively to the creator’s community. This is possible with fiat too — I can run a Discord server and have an active community. But tokens unlock a type of governance that’s not possible with fiat money. For example, a creator could empower their community by allowing them to vote on new member applications or a critical decision.