CREATOR ECONOMY NEWSLETTER Issue 31 March 17, 2022 Welcome to the Creator Economy Newsletter from the Daily Dot, where we ID business trends, Zoom with influencers, and highlight the best tips for today’s rising creators. TODAY:
New Frontiers 
What creators should know about Web3 This year’s South by Southwest (SXSW) conference was dominated by Web3, crypto, NFTs, and the metaverse. The discussion was mostly centered around how the next stage of the internet can further democratize the internet and give creators more control over their work. However, concerns about the inflated valuation of the crypto market and a skepticism over scams have called into question the necessity of blockchain technology in general. With all of these big hopes for and criticisms of Web3, the utility and potential of it for the average person has been obscured.
Like much of the world, here at Passionfruit, we’re just beginning to understand Web3. Web3 itself is kind of a confusing set of ideas built around the blockchain (more on that later). It’s simple: The future of the internet will be decentralized, theoretically removing the shackles of giant tech companies that eat your data (Google, Facebook). Discord and Crypto Twitter are where Web3 communities talk, but it’s not really a place, according to a SXSW panelist we heard. It’s, again… an idea.
Today, we want to present a quick primer for creators looking to explore the space further, using the information we’ve gathered from SXSW. Here are some terms to know and the implications of these Web3 aspects for creators. I will try to make it the least insufferable explanation it can possibly be!
Blockchain What: It is a public, decentralized ledger—or a collection of transactions. All activity—from minting (turning a digital file into a token, an asset, on the blockchain) to transactions between users—is stored in blocks as data. Those blocks are then built on top of each other, creating a chain.
Why is this important for creators? When data is filed and stored in the blockchain, it is difficult to alter later. The information on the blockchain is also public, so you can see when something on the blockchain was created and how it has passed hands. If, say you create a piece of work on the blockchain and someone later creates something similar and tries to pass it off as their own idea, there is theoretically an unchangeable record on the blockchain that shows you did it first. Amid the constant conversation about theft and credit among content creators, this may be a way of showing the origins of work.
NFTs What: The term non-fungible token means nothing to you, right? Same here. The simplest way to explain NFTs is that they are tokens that are unique digital representations of an asset. The asset can be digital or physical. It is just a way to show on the blockchain that you own something. So yes, you might be able to screenshot these digital art NFTs, but you don’t have the certificate of ownership that proves you own the original, authentic piece.
Why is this important for creators? I don’t necessarily believe that creators need to get into NFTs or buy them just for the sake of doing so. The average person is not buying a Bored Ape, right? However, if you create merchandise or art and you want to sell it to your fans, you can attach an NFT to each item you sell that can help authenticate that it is really your merch instead of, say, a knockoff (of which there are plenty on websites like Redbubble).
Cryptocurrency What: Bitcoin and Ether are the two biggest cryptocurrencies in the space right now. They are digital, peer-to-peer currencies not distributed or controlled by a central entity like a bank. While they can be used to buy things—NFTs, for example—”much of the interest in cryptocurrencies is to trade for profit,” per Kaspersky. This means that a lot of the value is dependent on speculation, or the hope that it will be more or less valuable in the future. This results in fluctuating valuations for the currency and makes it quite volatile to invest in.
Why is this important for creators? If you are getting paid in cryptocurrency, you are more or less getting paid in assets, not actual IRL money. While you can use crypto as currency on the blockchain, it is more like a security, as Ben McKenzie said in his crypto skepticism talk this week. The value of the cryptocurrency you have, which is subject to an ever-fluctuating market, doesn’t necessarily translate to cash on hand. This could be an interesting investment, which advocates belief can help marginalized communities build generational wealth by passing high-value assets down to their kids. However, if you’re a creator looking to get paid now, maybe you don’t want to be paid in crypto. Especially when considering that the percentage of actual cash in the crypto market is allegedly 10-15% of the market valuation of $1.8 trillion.
Smart Contracts What: Programs written into a transaction on the blockchain that will automatically execute an agreement. Instead of completing a deal and waiting for a middleman to fulfill the exchange, the program runs an “if/then” function that will immediately perform the agreed-upon transaction.
Why is this important for creators? Here’s an example: If you are a musician, and you’re selling a fraction of a song’s royalties as tokens, a smart contract may instantly allow the distribution of royalties to the token holders, per each sale of the song. Instead of an accountant or other intermediary handling the transaction, it is automated. It takes out extra middle people and expedites direct transactions between creator and token holder.
Hopefully, this demystifies some of the jargon for creators looking to explore Web3. If you have any questions, want us to look into more Web3 stuff, or think I didn’t totally cover something— drop me a line at daysia.tolentino@thedailydot.com. Daysia Tolentino Passionfruit
From the Inside 
Calaxy is a conduit for creators looking to get into Web3 It seems that everyone is trying to get into both Web3 and the creator economy right now, but no one has really made the case for average creators to get into the blockchain. In fact, amid all the talk of creating an inclusive new internet, the jargon and perceived exclusivity of it appeared to be a turnoff for many.
Enter Calaxy, a supposed “Web 2.5” of sorts, building an all-in-one social platform on the blockchain that takes the familiar aspects of current social media and implements Web3 principles like decentralization and tokenization to create a new resource for creators to monetize their work. Obviously, these concepts are pretty abstract, but Calaxy seems adamant on making Web3 accessible to the layman, taking steps to teach creators about the technology it’s using.
Calaxy is currently in beta testing, with about 200 creators playing with the functionality of the platform. There are no real fans on the platform yet, just a close group of people testing out the user experience on the fan-side of the app. The company hopes to launch the app soon, but the continual development of the technology makes it difficult to set a date.
“To join it, right now it's one on one,” Calaxy’s chief of staff, Chavah Grant, said “We've got a director of creator relations, and he is onboarding people since we are in beta. Later on, just like Instagram or anything else, you'll be able to jump in the app, prove who you are, and see your social following and your engagement… Then you'll be able to jump right into the app with some explanations of what the features are, how they work, and all that fun stuff.”
Grant is a TikTok creator herself and was brought onto the team because of her specific insights into creator needs. She sat down with me to answer a few pressing questions about how creators—actual social media-first creators—fit into the Web3 equation and how they can use Calaxy to get started.
Grant said many of the Calaxy features should be familiar for creators, making it easier to start using the platform. The app will have drop-in audio functions like Clubhouse, Patreon-like monthly paid fan clubs, Cameo-esque video messaging, a social feed, and monetization options for polls—meaning people can pay to vote on certain decisions for a creator. The app will also have video calling tools and DMing features. Creators have the ability to toggle features on and off based on what works for them.
Creators all create their own creator tokens when they join, used as currency in the app for fans to purchase access to these features. The creator tokens currently operate with a one token to $1 ratio, but they are planning to develop dynamic token pricing later—making the tokens more akin to cryptocurrency like Bitcoin but rather than the market determining the value, it could be a creator’s performance (i.e.: Are they consistently winning basketball games? Did they just snag a deal to create a beauty brand? Have they gotten awards for their music?)
Calaxy is positioning itself as a creator-forward platform that will be dictated and built up by creators themselves. As creators join the platform and work with the features that exist on the app, they can then make decisions about what it needs, what it doesn’t, and everything in between.
“As we move along… we’ll move to this decentralized place where the creators are actually the ones that are saying what happens in the app and they will have a say, and it won't be us anymore,” she said. “We’ll just be the people facilitating, keeping things moving forward. But it'll be the creators and people that are a part of the platform that will actually push that forward.”
This model is distinct from traditional social media platforms because most social media companies dictate tools, features, and rules for a community. In this instance, the community makes changes for itself. Creators don’t necessarily have to struggle with guidelines changes from companies like TikTok or Facebook that can suddenly ban their accounts or impact their income. (Although, Calaxy will have a code of conduct, which will prohibit adult content. But if others want to build a new platform that does host NSFW content on top of the Calaxy code, they can.)
"You're putting so much power into other people's hands for them to change the algorithm, for you to not even be able to make ends meet and you have a million followers," Grant said of current social media companies.
Calaxy, like other direct payment platforms for creators, allows creators to set the price for their work accordingly. They would be less reliant on major companies determining what the value of their work is or distributing from a finite pool of cash.
“I was one of the first people on the TikTok creator fund,” Grant said. “We were so excited they were making the creator fund. Everyone just knew there’s gonna be $1,000s rolling in a day from our million view videos. And it was nothing. It was such a letdown.”
The end goal of Calaxy is to make a platform for creators that gives them more power over their work and income using Web3 principles and technology. And they want to make it easy and accessible. In addition to the layman explanations of the tech and space, one way they’re doing this is by absorbing the cost of NFT minting fees for creators so that they can figure out if NFTs are right for their audiences without worrying about investing in pricey fees that might not pay off.
“I think the most important thing about Web3 is the fact that it puts everything in [creators’] hands,” Grant said. “That wasn't a thing before. We talked about monetization and all this stuff, and you're just at the mercy of what other people want to give you.”
—DT
In the Biz (SX edition)
Tips & Tricks 
SXSW EXCLUSIVE: Chapo Trap House on podcasting, propaganda, and parasocial relationships
For those of us attending SXSW, we’re used to being surrounded by crypto and tech bros. But this week, there was an event with a different audience: Chapo bros.
The popular podcast Chapo Trap House live-recorded an episode at the Work In Progress: Powered by Patreon activation. Afterward, we went backstage and three members of Chapo Trap House—Will, Matt, and Chris—sat down with me to talk about the medium of podcasting, propaganda, parasocial relationships, and more.
Click here to read my exclusive interview, where they offered some critical life advice for all us who want to make money off... a podcast.
We’ll be featuring a new Q&A with a creator every week, so shoot an email to grace.stanley@clarion1822.com if you would like to be included.
TikTok Made Me Do It Life IS so fun when MUNA's on. We had the fortune of seeing the band perform their viral TikTok hit "Silk Chiffon" IRL at SXSW this week. Copyright © 2022 The Daily Dot, All rights reserved.
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