Introducing CROWDX: The Distributed Patronage Platform

Our culture has romanticised the notion of the “starving artist,” that individual who is unable to support him or herself in their creative endeavours despite their persistence: the game developer, the painter. the musician, the filmmaker. So many people toil in the pursuit of art because the practice has become so enmeshed within the machinery and interests of industry gatekeepers, the institutions which provide the tools and access to the market. This relationship between the artist and the gatekeeper has been the same since the days of the Renaissance, when the aristocracy could decide the fate of talents like Michelangelo or da Vinci. In the twentieth century, the role of patron was replaced by the corporation in the form of studios, record labels, and galleries, but the song remained the same.

Within the past decade, enterprises have realised the Internet’s incredible potential in value-creation in the form of crowdfunding. With platforms like Indiegogo, Kickstarter, Patreon, GoFundMe, and many others, independent creatives across all manner of industries have been able to launch their projects with the aid of the supportive crowd and with less reliance on the wealthy few. Billions have been raised to fund games, films, comics, albums, tours, even dance.

The popular perk-based model of crowdfunding has already been through the gauntlet of regulatory uncertainty to become a sound way to raise capital for creative endeavours. The sheer volume of funds raised is testament to the power of pooling capital from a large number of supporters rather than a select few.

Which leads us to an obvious question: If these incumbent platforms are so successful, what is the value in creating a new platform atop a new technology stack? What new capabilities are unlocked?

We have identified three main areas in which established platforms are failing to innovate:

• Payments Infrastructure: Bringing credit card payments onto the Internet lead to the e-commerce revolution and with it a 3–5 percent baseline fee of all transactions. With platform fees, the total fees of successful funding campaigns can be as high as 10 percent.
• Market Design: Crowdfunding platforms are naturally multi-sided, facilitating two-sided markets, yet their design is basically a high-latency shopping catalog or subscription service. There is significant room for innovation in areas of curation and patronage.
• Community Engagement: Incumbent platforms do not use the vast potential of the community to generate value for both sides of the market. While the community is the core driver of a successful crowdfunding endeavor, their role is fairly passive beyond purchasing tiered rewards and subscribing.

What is Crowdx?

CROWDX is a state-of-the-art crowdfunding platform built with Web3 technology which enables new forms of patronage in the digital age, allowing creatives to maximize value creation with their community in a manner not existent on incumbent platforms. Creatives can use the platform to launch projects by building/onboarding their support base, funding campaigns, issuing NFT-based patronage assets as non-financial perks/rewards, while earning continuous income as these exclusive rewards are bought and sold in the market.

The CROWDX platform is fundamentally different from established platforms because it maximizes the value creation between creatives and their patrons within a more fine-grained system. In short, we are creating a market where there was previously none. This is possible because of the way CROWDX handles the creation, issuance, and exchange of assets, specifically patronage assets.

Patronage assets are rewards given to campaign contributors when certain funding goals have been met. A fan who supports the funding for an album at a certain tier would receive a badge that grants them future rewards, like an exclusive, redeemable ticket to a future show, or a tradeable VIP subscription that allows more direct engagement between creatives and fans. There are many exciting ways creatives can engage their community with this type of rewards-based system.

Patronage is a more connected and continuous relationship between creatives and their supporters than one-off crowdfunding events. Supporters can receive recurring rewards from their contributions and creatives can receive campaign donations in addition to continuous income as rewards are bought and sold in the market.

Technology Overview

We chose to utilize blockchain technology because it provides immutable and always up-to-date storage, transparency, and trustless asset management — all ideal qualities to facilitate digital scarcity.

Patronage assets are Non-Fungible Tokens (NFTs) built on the ERC-721 Ethereum token standard. These assets are truly unique and not interchangeable. We can encode certain metadata into these virtual assets, giving them certain capabilities in the digital and physical world. These non-fungible tokens can represent a wide-range of things: collectible goods, rare digital art, or even certificates of ownership of physical property if designed appropriately. The common pattern here is wrapping a “thing” into a digital container so that it can be transacted with the ease of an online credit card payment. This enables us to create peer-to-peer markets and new forms of value creation.

This project acknowledges that there is a powerful paradigm shift occurring as Web3 technologies continue to form the foundation of new creative economies. This is what the autonomous storyverse project Cellarius refers to as the Decentralized Renaissance. How do we get rid of the zero-sum mentality we often find in the crypto and creative markets and use this groundbreaking technology to create new models of patronage fit for the digital age?

Forward Strategy

Our business strategy revolves around building a community of new and established artists to launch new projects on our platform. After all, a crowdfunding platform needs a crowd to be successful. By attracting creatives with followers, we can build our user base on both sides of the market. We intend to seek out partnerships with independent labels, studios, and publishers to expand our industry reach. CROWDX will also develop the SDK to integrate blockchain-based digital assets with existing streaming services and other creative platforms. We don’t think adoption occurs by asking people to play in a whole other universe with its own rules. Familiarity and ease of use are paramount.

On the technical front, we are currently developing the platform on the Ethereum blockchain to handle asset issuance and secure storage of transaction data. Eventually, we will move to an application-specific blockchain so that the platform can operate without the limitations of a shared public blockchain (while still retaining public auditability). We are actively researching scalable blockchain solutions to implement in the future such as Polkadot Parachains and Cosmos Zones. Above all, we will stay up-to-date on the current state of the art and do what is best for our users.

Where We Have Been and Where We are Going

This project originally began as a platform for bespoke, decentralized NFT marketplaces known as Uniqx.io. One of these markets was a poetry auction for the visionary poet, Frederick Turner. These works were programmed to send a percentage of trades back to Turner which presented a new model of value creation for artists. We shifted our focus to one of the most exciting use cases for rare digital assets as a compelling solution for a more balanced means of funding, addressing one of the critical parts of the creative supply chain. Alongside funding, we plan on adding more services for creatives such as IP creation/management, equipment/talent procurement, creative identity, and mobile apps to extend the platform’s capabilities to events like performances and workshops. The goal is to streamline the creative process from ideation, funding, execution, to distribution.

Our goal is to build a service that bridges the familiarity of traditional crowdfunding platforms with the unique and expansive capabilities of blockchain and the burgeoning crypto asset class, opening access to sustainable creative commerce. We will consider this effort a success when creatives of all kinds continuously turn to CROWDX to help manifest their vision in the world. If we remove as much of the friction in the creative process as possible, we can invigorate our cultures and further realize our creative potential.

For a more detailed look into CROWDX, please give our white paper a read. Visit our website and browse our marketplace of rare digital goods. If you are interested in what we are building, join the conversation and tune into the following channels for the most recent news and discussions around the project. Thank you and welcome to CROWDX!

Twitter: https://twitter.com/crowdxio

Facebook: https://facebook.com/crowdxio

Telegram: https://telegram.me/crowdxio

Medium: https://medium.com/crowdxio