Do Creators Have a Future in Web3?

In 2022, web3 and crypto entered the creator economy full of hope and dreams…now it’s ending the year in infamy.

Just last week YouTuber CoffeeZilla released the latest video in his three-part investigation uncovering Logan Paul’s 2021 project CryptoZoo, a blockchain-based game where players can buy NFTs and earn cryptocurrency. Though the game never officially launched, many of its supporters lost upwards of a half-million dollars.

The investigation is a chaotic end to a year marked by controversy for web3 and crypto.

Zoom out: Over the last two years, creators have been drawn to web3 projects for several important reasons—hype, for one, but also the culture of ownership in this new-wave tech. Web3 projects typically offer creators and their communities more ownership over the content they’re creating and consuming—something that advertising-reliant web2 platforms like YouTube and Instagram don’t.

Web3 in its current iteration also largely consists of communities built around monetizing digital goods like NFTs. And at its core, the creator industry isn’t all that different—we build communities (followers) around digital goods (content published online).

When 2022 kicked off, creators were chomping at the bit to launch their shiny new web3 endeavors:

• The Nelk Boys unveiled a Full Send Metacard in January and grossed $23 million in about 10 minutes.

• Party Shirt launched a Superstars NFT group in March to fund creative projects.

• Yes Theory used NFTs to crowdfund a movie in April.

• Logan Paul released an NFT photo series, 99 Originals, in May with unique perks attached to each purchase.

But…for many creators their projects proved to be complicated. Why?

For Party Shirt, NFTs no longer aligned with their goals. “We were trying to take something exciting and new and incorporate it into what was already working for us, without realizing how complex and cumbersome that can make everything else,” the duo, X and Ivy, tweeted. They didn’t want to mint a project and then vanish like they’ve seen other creators do with NFTs.

Yes Theory initially used NFTs to successfully crowdfund their Project Iceman documentary (after turning down a $1.25 million offer from a major streaming platform) so they could keep creative control over the movie.

After the NFT release, they were met with backlash. “I would legit much rather you guys do a Kickstarter and give us rewards like an Iceman t-shirt, a photo book with BTS of the documentary, a cool hoodie, a signed dope as heck Iceman poster, absolutely anything else,” one comment read.

In response, Yes Theory offered another funding tier that gave participants the same benefits as NFT purchasers, without having to participate in crypto.

Big picture: These creators’ web3 showings are representative of more than just catching the bad end of a hype cycle—all over our economy, creator or otherwise, web3 is losing its luster.

While 2021 saw a record-breaking $31 billion invested in the space, web3 investment has been slowing this year. Both funding to VC-backed web3 startups and overall web3 deal flow dropped to their lowest since the end of 2020…back when very few of us even knew what the letters N, F, and T stood for.

In addition, many crypto investors have felt scammed, rug-pulled, and left out to dry because they were promised big things—like major payouts or the benefits of becoming a full-time fan—and didn’t get them. Current developments suggest those feelings aren’t off base—two men recently sued celebrities like Justin Bieber and Jimmy Fallon for endorsing NFT’s from the Bored Ape Yacht Club in an alleged attempt to artificially raise prices.

But not all creators see web3 as a lost cause.

For YouTuber JomaTech, NFTs were a good way to raise money for making sponsor-free videos because the blockchain technology aligned with his audience. “I'm planning to pivot my channel into crypto to gain a more mainstream audience, [so] it makes sense to fundraise with crypto technology,” JomaTech told us.

But your success as a creator in web3 depends on your community—are they tech savvy? Are they ready to learn and participate? “I want my audience to grow with me and to feel like they’re part of my journey. [Selling NFTs] keeps the community tight and intimate,” JomaTech said.

Another proponent of web3 is Mad Realities, an entertainment network creating shows on TikTok using web3 tech to engineer new kinds of social-based content—like allowing the audience to influence what they produce and providing creators a platform to share their content without having to game algorithms.

And many unsigned music artists like Latashá and Jazii are using crypto to support their work by uploading music and music videos onto the blockchain.

Lastly, even projects that had a bumpy start with NFTs, like Yes Theory above, reached a fruitful end. They recently finished an international tour to premiere their mostly NFT-funded film. The movie is also running in select Cinemark theaters and wouldn’t have had the chance to do so without the community-funded approach that web3 facilitated.

Our Take

When talking to Colin and Samir about innovating in the creator world, manager to MrBeast Reed Duchscher said, “The first person through the wall usually gets the bloodiest.” This is no doubt the story of web3 and creators this year. Some creators made it through the proverbial wall unscathed, funding projects and building deeper connections with audiences. Unfortunately, at a glance for most, the negative stories outweighed the positive. As creators, the moves we make can affect many people beyond just ourselves and for that we need to tread carefully.

The story to watch in 2023 will be Logan Paul and the fallout from his CryptoZoo project. From the looks of it, he plans to address the situation head on which will hopefully provide a case study for all creators to learn from. Education is the path towards a healthier relationship with web3 moving forward.

Sponsored by Spreadshop

What It Means to Have 1,000 True Fans

You’re probably familiar with the theory of 1,000 True Fans.

Coined by Kevin Kelly in 2008, the principle states that to find success as a creator or artist, you need 1,000 True Fans—1,000 people that will spend $100+ per year on your products.

In today’s creator landscape though, the criteria for a True Fan has evolved. In their latest video, the team at Spreadshop breaks down how to apply the True Fans theory to your own creator business.

Here’s a preview of what they cover:

• Tactics to identify your True Fans beyond the $100/year principle.

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• How to apply the 80/20 rule to your creator business.

Watch the full video here.

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