Three days ago, Andreessen Horowitz, which has the biggest crypto fund in the world, released their 2022 State of Crypto report illustrating the transition of the internet from Web2 to Web3, and how we’re each day walking towards a more cooperative, collaborative, and democratic internet. They concluded with some remarks regarding what’s next for Web3, predicting many Creators will discover how much better they can monetize leveraging Blockchain, and for that, we believe cobogo perfectly represents the future of Web3.
Cobogo aims at solving the many problems we currently face on the Web2 internet, by using Web3. In this article we’ll describe some points presented in the report and compare them to cobogo, so you can understand how we fit as a solution. Cobogo is one step ahead on the future of Web3 and the Creator Economy, and here’s why:
1. “The internet as we know it is flawed”
As presented, although the second era of the internet had the goal of being a revolutionary type of large-scale cooperation and economic democracy, the internet as it is today is a double edge sword — we’re either under a digital authoritarianism or a big tech oligopoly control. Web3 provides us tools to break away from this control and create a new future. Cobogo will give Content Creators the power over their own monetization and communities through our unique funding mechanism, without having to rely solely on big companies that watch over them with arbitrary rules and autocracy.
2. “Web3 aligns network participants to work together toward a common goal — the growth of the network”
The few individuals that control Big Companies and the Builders have so much power and capture so much of the value created on Web2 that they’re the ones that have actual incentives to scale and expand their businesses.The vast majority, which are users and Creators only capture a small relative amount of value even though they’re the ones generating content and revenue in all these platforms.
Web3 changes this, it realigns incentives and puts Users and Creators at the same table as Investors and Builders. At cobogo this is really clear: as a DAO, Content Creators and their communities will actually own the protocol, their own monetization and the ecosystem as a whole. Every decision will be taken through governance with the CBG token. Investors and builders will all be part of this entity, together deciding the future of cobogo.
3. “Web3 empowers a collective owned future over a corporate or government owned future”
As mentioned previously, Web2 currently consists of digital authoritarianism. Platforms such as YouTube have a reputation of demonetizing or deleting content arbitrarily, or even the entire channel, not to mention they take 45% of the advertising revenue. Some content moderators who work for a third-party contracted by YouTube have told The Washington Post that YouTube constantly shifts policies and that it gives “special treatment” to top creators who bring in the most money in ads, by overruling recommendations to strip advertising from videos that violate the guidelines.
With Web3, Creators don’t have to rely on these platforms, and they can control their means of production, distribution and commercialization. Cobogo will become the first Content Creator DAO, which will remove the middlemen and allow Creators to join with other Creators and their fans to become part of something bigger, without censorship or arbitrariness, which will allow them to monetize themselves more efficiently. They will be able to have a close relationship with their communities with no one watching over them, and work together and cooperatively towards a common goal.
4. “New categories of NFTs will emerge”
We have posted in a previous article about NFTs and how they can be much more than just digital art, and instead, they can be used to empower communities. In the report, there’s a dedicated section to NFTs, highlighting how new categories will emerge. They mention Utility NFTs, that is, items that grant special access, benefits, rewards, or memberships.
This is exactly what we are proposing in cobogo with our NFT as Proof of Active Patronage. This NFT will prove fans have a staking position in their favorite Creator’s pool and which can be used as keys to access perks, such as gated videos or special access to Discords or Telegram groups. In addition, just like the fans, Creators will also get an NFT, that will work as the first Content Creator authenticated proxy, which will grant them many perks, as well as it allows brands to get the word around their projects through airdrops to its holders.
5. “Web3 platforms have drastically lower take rates than the internet giants”
The take-rates of Web2 companies are outrageous, especially when you compare them to Web3, and you see how much each creator is earning on average in each platform. YouTube takes 45% of the ad revenue (when they’re not demonetizing videos arbitrarily), which explains why 97% of people trying to become YouTubers don’t make enough money off of it to crack the US poverty line. In Brazil, half of Creators make less than $100 per month, and a quarter don’t monetize at all.
This is the main reason why we have envisioned cobogo. We want Content Creators to have the freedom to produce any content they want, without having to rely on a centralized control institution, and actually being able to live off of their work producing content for their fans. Fans will be able to fund their favorite Creators and get rewarded for it in CBG tokens, in a win-win situation, all possible because of our unique funding mechanism. In the mechanism, Content Creators can mint their Staking Pool, where fans are able to stake their CBG tokens in. After that, both fans and Creators get rewarded in the form of a yield, in a 50%/50% split.
6. “DAOs are providing a path towards community governance.”
DAOs are businesses owned by its own community members, which means that there isn’t a centralized authority controlling it. They are fully democratized, and for that, any member can require a vote if they want to implement some new features or make changes, and these votes are tallied and implemented automatically. Consequently, Web3 and DAOs allow a bottom-up way for groups to make decisions, instead of a hierarchical, top-down chain, which is what happens in Web2.
As we have mentioned in previous articles about DAOs, they can be a great tool for Creators, especially when taking into account they usually have to upload their content in centralized organizations that have power over them. In cobogo, we plan to leverage Web3 to bring as many creators as possible and transform our platform into the first Content Creator DAO, and we think this is the best strategy for Creator to finally have ownership over their businesses.
7. What’s Next for Web3
“Expect many more creators to embrace NFTs in their own communities as they discover how much better they can monetize by selling digital goods directly to their fans vs banner ads and other web2 monetization methods.”
Cobogo has thoroughly studied monetization mechanisms and has taken it to a new level. We’ll illustrate it to you with a model to show you how cobogo is unique and the future of Content Creator monetization.
First, think about traditional, direct Creator funding mechanisms, they involve a one-off transaction, a donation, from the Fan to their favorite Creator. What motivates Fans to do this? The answer is clear, because they feel good helping their favorite Creator. In Economics, we use utility to model value, that is, a way to measure the benefit that a good or a service gives to an individual, that is, it measures their well-being. Let’s go back and use this in our example, suppose a Fan donates $100 to their favorite Creator. They only do that because the utility they get from donating $100 (green) to their favorite Creator is at least equivalent to $100 (yellow), but, as it is a one-off transaction, they necessarily have a $100 monetary loss (red) as well.
It is clear that not everyone can afford being Philanthropic, so only a small share of super Fans are actually inclined to do that. Moreover, there can actually be Fans that would have an increase in well-being from donating, but they never donated and don’t know what that feels like. Ribon focuses on this, by giving a voucher coming from larger donors (promoters) to potential smaller donors: they don’t have the monetary loss (red) when donating, and get to feel the increase in well-being (yellow), some of them might discover that they are indeed Philanthropic and decide to donate a bit with the voucher.
Other projects play with utility to increase funding in interesting ways, for example, Gitcoin uses the Quadratic Funding mechanism, where smaller donations are matched with a pool of bigger donations. This way, with Gitcoin a $40 donation could be matched with a $60 donation coming from the bigger donor matching pool, totalling $100 for the Creator, for example.
All of these mechanisms are great, they are changing the world and how we help people in need, public goods, Open Source Software and Creators. They all work by having a large donation, increasing the utility of individuals when making a smaller donation, and they depend on individuals having varying degrees of philanthropic behavior within them (0<utility≤1:1).
The reliance of a large donor to match donations can be fragile, they could have difficulties and stop donating for some reason. Cobogo introduces a new model where third parties matching donations are not needed, even more, donations are not needed, even individuals that get 0 utility from philanthropic deeds can be pushed to use cobogo (0≤<utility≤1:1). We redirect an individual’s self interest to fund Content Creators. This is possible because instead of a one-off transaction, we introduce a win-win staking mechanism, where Fans deposit their principal (CBG tokens) in a smart contract and the yield is split between the Fan and the Creator.
Philanthropic individuals not only get the increased utility that they would get from traditional donation mechanisms, or new mechanisms (like Ribon or Gitcoin), but they also get a positive monetary reward, in form of the yield generated by their staking positions. Non-Philanthropic individuals would get a positive yield but would still be funding a Creator
Fans and donors are free to use any mechanism as they please. We’re introducing a new, powerful way to fund Creators leveraging it as a growth tool, to attract Content Creators and their communities to cobogo, with the goal of transforming it in the first Content Creator DAO and give Creators the power over their own monetization.
About cobogo:
cobogo is an aggregator of protocols that has the goal of funding Content Creators sustainably through their own community. It is a dApp that leverages Web 3.0 to monetize Creators while maximizing their growth and community building abilities.
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