This research report is the joint work by Biteye and Sixdegree.

Written by: Biteye & SixDegree Core Contributor Loius Wang

Edit by: Biteye Core Contributor Crush

*The full text is about 1650 words, estimated reading time is 5 minutes

The creator economy is a crucial component of Web3 social applications, offering users full ownership of their accounts and data, and enabling peer-to-peer creator rewards, breaking free from the limitations of platform fees.

This economy monetizes creativity and is better known as creatorfi instead of socialfi. With the development and widespread adoption of Web3 technology, the creator economy is expected to become the core driving force behind social apps, promoting more equal and autonomous interaction and communication between creators and users.

As a leader in Web3 social protocols, how does the creator economy perform on Lens, and what are its prospects?

Creator Community Model on Lens

In the creator economy, cognitive monetization is a significant challenge. If creators offer all content for free, it may help to build influence and audience, but it doesn't guarantee creator rewards as reader tipping is based solely on altruistic behavior.

On the other hand, if creators only allow paid subscriptions or gated content, it could hamper growth and be unfavorable to creators without established fan bases.

To address this issue, Lens created a creator-centric community model that integrates the fragmented roles of creators and consumers into a community.

Understanding the creator economy on Lens requires an understanding of the three different identities envisioned by Lens in the creator community, their respective roles, and the relationships between them.

1. Creator The creator is the person who creates content on Lens, including ideas, text, images, videos, music, and other types of content.

2. Curator The curator's role is to promote the content created by the creator to the public. In Lens, this promotional behavior is referred to as forwarding or mirroring.

3. Collector The collector is a consumer who displays their consumption behavior by casting and collecting NFTs on Lens.

These three identities form a closed loop: creators create content that consumers are willing to pay for, providing viewpoints that curators can promote through forwarding, increasing the creator's influence, and enhancing their own brand effect through curating high-quality works.

Good curators have strong taste and promotion abilities, and collectors follow curators to indirectly discover high-quality content, bringing traffic to creators.

Although we identify these identities as independent, they are not isolated, and one person may play any role in different scenarios. Additionally, anyone who promotes content through forwarding plays the role of the curator.

Some may wonder why there is no "follower" concept in this closed loop? In fact, followers are the implicit condition of the entire loop. In this creator-centric community, community members are either fans of creators or followers of curators, meaning that if you don't follow, you won't enter this creator community.

So what is the combination of these three roles?

• Creator + Curator = Fandom

When a creator creates content and a curator forwards it, it can lead to fan behavior. For example, when Elon tweets, his fans will immediately forward it.

• Creator + Collector = Marketplace

When a creator creates content and a collector purchases it, it creates a market. An example of this is OpenSea, where creators sell their NFTs to collectors.

• Curator + Collector = Partronage

When a curator forwards content and a collector purchases it, it creates a sponsorship relationship. An example of this is buying art from Sotheby's.

• Creator + Curator + Collector = Community

When a creator creates content, a curator forwards it, and a collector purchases it, it creates a creator community. For example, when Kanye releases a new song MV on Lenstube, Stani helps him forward it, and both sides' fans collectively pay to collect it.

In fact, this identity loop is similar to Twitter. Content creators output their creations, KOLs forward viewpoints, and normal users follow these KOLs while also paying attention to the content creators.

The only difference is that the Internet was not built for promoting capital flow, and payments were not embedded in the Internet infrastructure. Attention economics dominated Web2 and was centered around platforms driven by advertising, but the emergence of blockchain technology in Web3 has returned power and ownership to creators and users.

In this new economic model, creators and users can break free from the platform fees of traditional platforms, and gain more peer-to-peer creator rewards and full ownership of accounts and data.

Creator Economy Data in Lens

Income

The creators on Lens protocol have earned a total of $268k through user-paid collections, subscriptions, forwarding, and following behaviors. These include collect, subscribe, and mirror. The per-creator income is $69.68, with an average income of $1.6 per transaction. Note that the average income refers to the creator/transaction that generates income.

Lens protocol offers a unique feature where creating a collection of a post will mint a collection NFT, and paid minting is the primary source of income for creators. To date, over 130,000 collection transactions have been made, generating a total revenue of $264k, accounting for 99% of the total creator economy revenue.

On the other hand, paid subscriptions and forwarding generated only $5k and $9.4k in revenue, respectively. It is evident that the paid minting feature has been the most effective monetization model for creators on Lens.

The head effect is significant on Lens, with only three creators earning over $10k, accounting for 72% of the total creator income. The highest-earning post generated $58k and featured content related to gender struggles, prompting users to collect and obtain Proof of Protest NFTs.

Consumption

Lens requires users to hold a Lens profile to create a publication, while there are no restrictions on consumption. Therefore, users who missed the opportunity to mint a Lens profile can still participate in the Lens ecosystem by spending money.

As of now, over 41,000 users have paid to creators on Lens, with 63.5% of these users not holding a Lens profile. It is noteworthy that the top three spenders are all Lens team addresses.

Creator Data Interpretation

When we compare the number of creators and consumers on Lens, as depicted in the left figure below, we can observe that the blue curve represents the cumulative growth of creators, while the red curve represents the growth of consumers. The blue curve has flattened, indicating that the growth rate of creators has slowed down, while the red curve remains steep, indicating that the growth rate of consumers is still high.

If we observe the relationship between creator earnings and fan base on Lens, we can see that most creators who generate revenue have fan bases of 1,000 or less.

In terms of quantity, it is relatively easy for creators to achieve a fan base of 1,000 or less, which is in line with general expectations. However, from another perspective, this also indicates that Lens' creator economy mechanism has created more opportunities for niche creators.

Even creators with a small fan base have the opportunity to earn revenue as long as they can output valuable content. This decentralized creator economy model is more fair and inclusive compared to traditional centralized platforms, providing more opportunities for people to participate and benefit.

In terms of overall income, it basically conforms to the logic that income is positively correlated with the number of fans. In the creator economy, creators with over 50,000 followers (considered top-tier on Lens) account for 37% of the total income.

Vision of Creator Economy on Lens

Can a more effective creator economy model emerge on Lens? Based on recent developments and information, we can speculate on some potential improvements.

1. Collaborative Creation Economy

The newest revenue-sharing model on Lens allows multiple creators to share revenue, promoting the development of a collaborative economy and achieving mutual benefits for creators.

To increase the diversity and quality of creations, creators can collaborate on Lens. Under this model, creators can initiate creation solicitations and invite other creators to collaborate. This can not only bring more inspiration and ideas but also increase interaction and community among creators. At the same time, creators are also curators in collaborative creation, bringing more fans and an audience and increasing exposure and revenue for the works.

2. Maximizing Creator Revenue with AAVE

Lens recently launched the aaveFeeCollect module, allowing creators' earnings to be directly deposited into AAVE v3's pool. This module has opened up unlimited possibilities: when the leader of lending protocol meets the leader of social protocol, the composability is strong.

Currently, lending protocols in the DeFi field adopt the form of over-collateralization. Although this method is called "trustless," it is essentially based on distrust or lack of trust. In our daily lives, we all experience the convenience of credit loans. In the decentralized world, what is the source of trust?

DID protocols that construct social relationships and social graphs may be a solution, but building a bridge of cooperation between DID protocols and lending protocols is not easy.

However, what if they belong to the same company?

AAVE can enable high-quality creators on Lens to earn more revenue. They can directly deposit funds into AAVE to earn interest and can establish a social evaluation mechanism to monetize their credit. When borrowing, these high-quality creators can obtain a lower collateral rate or a better health factor.

Lens still faces challenges and obstacles in the creator economy, but at the same time, it has enormous potential. Based on blockchain technology, Lens provides creators with the advantage of owning their account rights completely, which is not available on traditional social media.

Lens is NFT-based, and with NFT characteristics and interoperability with other protocols, it provides creators with broad imagination space, but more attempts and exploration are needed to tap into its potential.

In summary, as a trailblazer in the Web3 era, Lens has established a fully decentralized and inclusive platform for creators and users, enabling everyone to take part in the cultural and artistic revolution of the digital age.

While Lens is still in its early development stages, this suggests that there is ample room for exploration and innovation by Web3 enthusiasts to devise novel creation methods and monetization models.

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