Why social capital is the new way to monetize your content
Deep dive into the history of social capital and what makes Moxie protocol special.
Context
I was reading Crypto Sapiens' article about the Moxie protocol. The article touches on the importance of utility and community in fan tokens, as well as the social capital score algorithm used to reward engagement on the platform.
Social Capital
AI tools have made content creation easier, flooding the internet with material. However, this shift emphasizes the importance of personal reputation. Building a strong, authentic presence in your field is crucial. Focus on quality, unique insights, and genuine connections to stand out.
Growing your personal brand depends on increasing your social capital through engaging content. While this boosts social media platforms, monetizing your influence is challenging. To earn from your online presence, create a clear path for fans to support you financially, often through a 'funnel' that guides followers from free to paid content. This process transforms your online influence into an income stream supported by your community.
Social Token isn’t new
Around the early 2020s, a new idea called "social tokens" started to catch on. This happened at the same time that decentralized finance (DeFi) and non-fungible tokens (NFTs) were becoming popular. At first, influencers were the main ones trying out social tokens. This was during the Initial Coin Offering (ICO) craze, where influencers got paid in tokens for talking up new blockchain projects. But there was a problem: these social tokens weren't really ready for everyday people to use. They didn't offer enough benefits or reasons for regular folks to want to keep using them. So while the idea was interesting, it didn't have the features needed to stick around and be useful in the long run.
Moxie’s Value Proposition
Friend.tech boom is one of the interesting use cases leveraging the idea of bonding curves plus social tokens.
It gained crazy traction at the beginning but frustrated users in the long term.
I think the core issue is that the mechanism incentivizes trading social entities rather than encouraging content creation.
In 2024, the Moxie protocol was introduced, with its value proposition stated as "meant to grow Farcaster's GDP" by encouraging creators to build communities on Farcaster. Both creators and consumers can earn rewards by owning fan tokens.
This represents a new way to monetize content and social networks. Essentially, it doesn't conflict with existing monetization models but creates a new avenue to monetize engagement on Farcaster.
Fan Token holders gain numerous benefits, such as:
Content Posting: The ability to post content in the channel.
Private Chat Groups: Access to exclusive private chat groups.
Rewards Distribution: A share of the channel's rewards (e.g., advertising revenue).
Community Governance: The ability to vote on community decisions (functioning like a decentralized autonomous organization - DAO).
Fans-Only Feeds: Access to exclusive content or features.
Service Offering: The ability to offer services or products within the channel.
Channel Products: Access to products or offerings created by the channel.
Loyalty Program Rewards: Earning additional rewards for engaging with the channel.
The data shows also promising trends:
The chart on the left displays an upward trend in Total Value Locked (TVL) per day over time.
The chart on the right shows an increasing number of fan token holders, also displaying an upward trend.
These trends are impressive for an early-stage project. The growth percentage from July 31, 2024, to August 24, 2024, is approximately 53.12%, indicating a significant increase in value over the specified period.
User experience thoughts
The onboarding process could be smoother if Moxie wants to attract more users from Farcaster and outside the ecosystem. For instance, the steps to claim the Moxie pass should be clearly outlined on the landing page instead of being buried in the documentation layout. Plus, the relationship between Airstack and the Moxie protocol may confuse new users.
While Farcaster users might understand how frames work, there are limitations to the frame-based approach for general consumers, despite its benefits for initial adoption.
The landing page communication should be more categorized, separating information for creators and fans to show relevant value propositions. This approach would be more effective than assuming people will spend time reading the documentation to understand how it works.
Fan Token vs traditional subscription models
Despite some room for improvement, at its core, it remains beneficial for the creator economy in the long term. Jason (betashop.eth) highlighted a key distinction between fan tokens and traditional subscription models in the podcast:
Subscriptions typically offer recurring service or content access for a fee.
Fan tokens operate on a more flexible and decentralized model.
Fan tokens are permissionless, meaning fans can purchase them without any obligation on the creator's part to provide specific features or content. Jason likens fan tokens to sports trading cards—fans buy them because they believe in the value of the creator or the community, and they stand to gain rewards if the creator or community succeeds.
This model is particularly powerful because it aligns the interests of creators and fans, fostering a sense of shared ownership and participation in the creator's journey.
What now and next
Here’s my take:
The moxie mechanism is solid, and we are still in the early stages of creating a massive value and easy-to-use web3 app for broader consumers.
The initial launch of fan tokens on Farcaster has focused on channels rather than individual creators, driven by high demand at the channel level. However, there is significant interest in expanding fan tokens to individual creators. The flexibility of the fan token model allows for various applications, from rewarding engagement to building community-driven initiatives.
If you're interested in how to earn via the Moxie protocol, here's a discussion in a Warpcast post that may be helpful for you.
Reference:
Hi, I'm Kevin Wang!
By day, I'm a product manager diving into the latest tech innovations. In my free time, I'm the builder behind tulsk.io, a platform dedicated to PM Intelligence. My passion? Breaking down the complexities of web3 and AI into bite-sized, understandable concepts.
My goal is simple: to make cutting-edge technologies accessible to everyone. Whether you're looking to expand your knowledge or apply these insights to your personal growth, I'm here to guide you through the exciting worlds of web3 and AI.
Why Choose Curiosity Insights?
We offer:
Cutting-edge Analysis: Our team of experts dissects the latest developments in AI and Web3, providing you with actionable insights.
Strategic Advantage: Stay ahead of the curve and make informed decisions that drive innovation and growth.
Comprehensive Coverage: From investment opportunities to technological breakthroughs, we've got you covered.