Will Web3 and the 'Instaverse' create more ticket-clippers and influencers in the digital economy?
And why Australia's health influencers are poised to enter first
Web3 is being built on reputation scores and social ranking for access to the ‘decentralized economy’ where people sell directly to each other.
But before the Metaverse ‘Big Bang’ Zuckerberg is bringing us to the Instaverse, in which anyone can create NFTs in-app at a tap. Influencers are among the first to jump on NFTs aka social tokens; will they inspire a whole new generation of ticket-clippers to the rentier class?
The Instaverse:
From July, Australia’s “health influencers” will be prohibited from paid promotions of therapeutic goods on social media regardless of whether a testimonial is genuine.
The newly enforced Therapeutic Goods Advertising Code is to prevent conflicts of interest arising between consumers who are trying to make a health choice and influencers who gain financially from the sale. It applies to medicines and medical devices, supplements and sunscreen.
For a country obsessed with sun and screens this seems like a reasonable move to protect consumers.
I also endorse the regulator’s move. My family suffered sunstroke for the first time this summer after switching to an Aussie ‘natural’ sunscreen marketed to my partner on Insta.
And we weren’t alone, several reviewers had the exact same experience.
More importantly, the regulator’s move will hopefully lift the lowest rung of the ladder just enough out of the reach of a rentier ticket-clipping class that has grown voraciously in every industry in the digital economy.
In the early days of the internet people predicted the death of ticket-clippers, obviated by tech. Instead middlemen have flourished in even more varieties, creating behemoths like Amazon.
The same promise has been made of decentralized Web3 but so far the opposite has happened and its current trajectory could create more opportunities for intermediaries and influencers than Web2.
The flock of Byron’s Baes
Like the crescendo of a Home and Away break-up scene Aussie influencers are screaming that the new therapeutic goods advertising rules will destroy them and their business model tenanted on Big Tech.
But just before the influencer can get to the nearest crypto cafe and learn how to mint her own NFT in the metaverse there’s a knock on the door.
There appears a hazy holographic avatar of Mark Zuckerberg from the future metaverse, a scorched red face sitting atop a yellow rash vest and speedos.
In a tinny voice he assuages the heartbroken influencer:
“I know I tricked you all those years ago into creating a precarious business model tenanted on my platforms, all the while I was cheating and selling your data to others.”
“Give me another chance. I can change this.”
He opens a closed palm to reveal in his palm glistening reputation tokens, all theirs if they migrate to the Instaverse.
Dubbed Zuck Bucks by employees, Meta is soon to release “social tokens”, “creator coins” and NFTs into its apps. For Australia’s health influencers this could be a workaround the regulator’s advertising and provide them with a new revenue model.
So, rather than being at the sole mercy of landlords Facebook and Instagram, they can use these social tokens to open up more direct selling to customers in the Instaverse, which is a middle plain somewhere between platform and national jurisdictions and the Metaverse. (Later we will see what these new influencer and advertising business models might look like in the Instaverse).
However, what Zuck doesn’t mention is that the Metaverse is Facebook’s answer to the Apple Store (especially since the latter has repeatedly shot down the group’s privacy policies) and Meta plans to take taking a 47.5% cut out of every digital token/NFT sold.
So from the very inception the Metaverse/NFTs are being clipped.
Australian influencers and fast money
Australia is in the last stage of an almost uninterrupted 30-year credit expansion and no stranger to financial excess.
It is fertile ground for fast money, supplement multi-level marketing, pyramid schemes and crypto scams. It stands out from its peers as one of the few countries to still allow CFD retail trading, which is banned in the UK, Europe and US.
As I mentioned in a previous article, crypto and the multi-level marketing supplement industry share similar traits and emerged in a regulatory vacuum created by Wall St and Big Pharma lobbyists respectively. The two are now riding on their coattails into the mainstream and I see Bitcoin as the Herbalife OG of network-marketed money.
Australian trading platform Cash FX operates on the exact same premise of companies like Herbalife.
The business model recruits people to recruit people to sell crypto packages earning commissions from their referees’ referees’ referrals, etc. One of the main advertising venues is of course Instagram.
Australia’s financial regulator ASIC has issued a warning about CFX, as have the United Kingdom, New Zealand, Canada and others.
“The Cash FX Group website predominantly promotes a ‘Trading Academy’ with various deposit plans. Upon investing in these plans, the website claims that a portion of the money will be allocated into a trading pool, where it will be managed by a team of in-house ’expert traders’ guaranteeing high passive returns.”
The scary part of the Instaverse is that any crypto marketers can go over the top of platforms like CFX to create their own pyramid scheme at their fingertips.
The Metaverse:
Social scores and social graphs
The foundations of every social network, from Facebook to LinkedIn is the social graph. These are the trillions of relational data points between users that platforms build their products and microtarget ads with.
In Web3, the so-called “Creator Economy” the vision is for everyone to own their own unique Web3 ID, or decentralized ID. A metaverse passport as it were.
Decentralized ID, or DID, is a hot rock of a topic in the metaverse right now.
Its promise is that users will own their social graph, not LinkedIn, and can monetize it themselves. Visitors to the metaverse will also be scored and ranked by their online behavior, interacting with Dapps etc, which score will be linked to their Metamask wallet key.
If this sounds alarmingly like China’s social credit system but with a capital D in front of it you’re too late, it’s already underway.
There are several ethereum-based social graph and social scoring protocols live.
Possible benefits of Web3 social scores for influencers
Let’s look at how Web3 may benefit to those who know how to market themselves, or influencers.
Monetize Web3 ID, reputation and social media following by minting NFT
Collateralize Web3 ID reputation with your own NFT for loans in DeFi
Access to better DeFi borrowing and lending rates using ‘social collateral’
Automate your own multi-level marketing scheme
Possible Web3 influencer business model
In theory, influencers could go over the top of the platforms like Instagram and jurisdictional regulations to sell directly to the consumer with their own ‘influencer’ coins.
Australian health influencer mints coin
Sells to their followers through their social channels, Discord
Promotes health products through ‘decentralized’ apps and platforms
Followers can buy health product from influencer at a discount, using coin
Influencer sets up Multi-level marketing campaign for health product, programming coin/NFT to do something similar to DeFi Liquidity Provider/miner coins which earns a proportion of trading fees
Referrals earn commission on referee’s referees and so on
The more social interaction and product sales they makes they get the more the influencer coin is worth
Possible Web3 ad agency X influencer business model
This time an advertising agency for say a toothpaste brand sets up a campaign around tooth decay. The advertising agency contracts influencers and ambassadors to the campaign thusly:
Agency creates NFTs for ad campaign videos and art
Agency gives influencer some NFTs (aka digital claims) linked to campaign’s video and artwork
Influencer promotes these videos and art on their Telegram, Discord, Odyssey, other apps
Popularity, views and sharing of reflected in the NFT held by influencer
Influencer sells NFT on OpenSea
On to the next project
Bootopians
My favourite DJ has just gone on a foray into the metaverse. I write this as I’m listenting to his Backyard Boogie Mixes.
Moon Boots has launched his own community on Web3 creator platform Highlight, access to which is available only by buying his NFT.
Among some of the perks are:
Exclusive downloads & mixes
Discounts on merch & exclusive merch
NFTs
Talking with me about music or production on Discord
Meeting other fans on Discord
Early access to tickets for future shows
I’m not too sure what the ‘economics’ of these creator coins is meant to achieve but presumably like the gravitational pull in the metaverse:
more FOMO = higher price
Conclusion
Musicians and artists have benefited little financially from the digital economy largely because their work is intermediated by more middlemen than ever.
Think Spotify, YouTube but also all the millions of YouTube accounts that make money from uploading other artists music with a scan JPEG of the album cover or lyrics. I’m sure there’s a better way for digital creators to earn directly from their work and ‘coins’ might be the start of it.
But it’s not just the ticket-clippers that have eroded the livelihoods of many artists. The democratization of art and music production tools has lowered the barrier of entry for millions of people to become pseudo artists.
Similarly crypto’s ‘democratization of money’ will cheapen many of the social interactions that were once highly valued even though the didn’t have price on them.
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