Models surrounding the Attention Economy or the Creator Economy continue to evolve, and with Moxie, they take an additional step toward becoming mainstream.

One of the main value propositions being explored is to create a market for tokens associated with profiles. The most successful token profile markets to date has been Friend.tech, which showed impressive initial growth but was unable to sustain it, eventually declining to a marginal level of activity. It was unable even to establish a plateau of activity, which it should have at least achieved. However, as we analyzed in an previous article, the economic incentives were unsustainable, turning it into a flash business that generated millions in revenue within a few months, only to see almost zero revenue in the following months.

At that time, narratives around SocialFi surged, sparking interest that reality eventually quashed. Narratives can't do everything, even though it might sometimes seem like they can. It is necessary to regenerate a narrative around SocialFi for this phenomenon to become exponential, and applications like Moxie, AlfaFrens, or Tap to Earn could be the foundation of SocialFi 2.0

The main problem of Friend.tech was that its business model relied on an extremely inefficient market, which practically made operations unfeasible due to extraordinary fees on assets (5%) that quickly reached levels where the risk/reward equation became impossible. The fees related to this market were supposed to sustain the activity of influencers who had strong but fleeting earnings.

Moxie follows that playbook, with many similarities but also significant innovations, bringing together more value propositions.

Moxie's value capture proposition is based on different pillars, and while the market is one of them—currently generating revenue and similar to that of Friend Tech—the CEO's statements clearly distance the company from promoting a speculative token market. However, the design is similar to FriendTech's, with a 5% fee on each transaction,that truly creates a market under the same conditions

Therefore, from this perspective, a similar evolution to that of FriendTech can be expected, at least in terms of trading activity for Fan Tokens. An important difference is that the protocol distributes dividends through purchases and token burning, which will at least sustain this trading activity. I'm surprised that there isn't a genuine effort to create a much more efficient market that could generate a truly solid revenue stream for the project.

Certainly, in the case of FriendTech, we can objectively assert that the market fee structure and the design of the bonding curve were likely major factors contributing to the project's unsustainability and eventual decline.

The main value capture proposition is oriented towards advertising, which makes perfect sense. After all, if we want to replace traditional social networks, it's important to understand their primary revenue source, at least as a starting point. When we talk about the attention economy, it's difficult to separate it from advertising. Social networks are essentially large distribution platforms for products; they are fundamentally about marketing.

The goal of Moxie is to transition towards a model where incentives are paid by other actors who seek exposure on these networks. It’s not an easy transition because the market doesn’t yet exist, and more mainstream advertisers are still far from Web 3.0. However, everything suggests that it’s a future worth pursuing, though it may require some financial capacity to allow it time to develop.

The hope is that the crypto sector is now large enough to leverage these networks, and we might see an evolution of current marketing strategies, such as airdrops.

In this context, it makes perfect sense that the project was launched by Airstack, as the key will be to see if this method of intermediating attention is efficient, with the social score algorithm playing a crucial role. Other projects had delegated this critical aspect to initiatives like Openrank. In this regard, another likely business model around the project would be offering services to better segment those audiences

The project is designed as a protocol to be utilized as a platform for other types of services, such as exploring businesses like subscription models or access to influencers. This business has two facets: one that functions more like a content subscription platform, and another that is closer to the model of accessing influencers, similar to OnlyFans. These are two different models, both of which can explore scarcity, especially the latter, where personalized attention is naturally a limited resource. Fan tokens could enable more efficient price discovery for these services, but, of course, this would require the existence of efficient markets. In this regard, AlfaFrens is a project that has achieved significant success in the subscription model and has managed to remain sustainable after the initial phase.

There are various innovations in these business models, one of which is the ability to invest in the future earnings of these influencers. This significantly incentivizes the initial purchase of these tokens, and Moxie executes this very well by distributing earnings from day one, which gives these tokens inherent value. Although the role of the investor in these projects is often criticized, the reality is that the economy of these projects is impossible to sustain without the involvement of this role.

Projects that respect the role of these investors are able to attract funding exponentially. However, it is challenging to strike a balance in value capture between the capital invested and the labor contributed. It’s difficult to secure the involvement of many professionals who are willing to accept a zero return for the project, so sharing some of that risk with investors seems like a reasonable approach. This even extends to users who can become micro-investors, thereby playing a dual role, which is what we refer to as the Ownership Economy.

The design of Moxie is very clever in how the tokens are unlocked, which suggests that the project won't face as much initial selling pressure. However, the project needs to be able to create value quickly, as the token unlocking is not spread out over a very long period.

What's the main difference that Moxie brings?

• It is structured as a protocol rather than an app within the Farcaster ecosystem.

  This is a smart move in the early stages and is initially synergistic with Farcaster, though in the long term, this relationship will face significant challenges. It limits growth to Farcaster's 500K users, a number that will likely be reached quickly if the project gains strong traction, even with the complexity of moving all transactions to Frames. However, it seems like an intelligent strategy because it amplifies the project's visibility, flooding Farcaster with these messages.

  Moving the activity to another app, aside from the development effort, involves a tremendous coordination challenge. The competition to become the most frequently used app is complex, and if possible, it's better to start with one that is already in use. The issues surrounding sovereignty within that environment and, above all, value capture, are discussions that will need to be addressed at some point—perhaps even before reaching that stage.

• Bonding curve with Moxie's own token instead of another token like ETH

  This model certainly supports token demand, which is always the most challenging aspect to manage, especially for projects that have an extremely aggressive free token distribution. However, it comes with the drawback that all this locked capital has a significant opportunity cost that is not easy to address. Relying on an asset like Ethereum, for example, would offer the protocol the inherent appreciation of the asset, as well as yields from activities like restaking. An efficient pool design and, above all, the ability to establish agreements with lending platforms that could incorporate the token might help mitigate this capital cost.

• The scoring protocol is proprietary

  This is a smart strategic decision, as it could ultimately become the benchmark for social reputation on the network. This certainly holds significant value, though it’s unclear whether the ranking is Moxie's intellectual property or Airstack's. In any case, it's within the group launching this initiative, which indirectly allows Moxie to be supported with more resources. This is probably one of the most interesting business lines that, within this architecture, is decoupled from the social network. Being able to access user data allows for competition in segmentation.

• Moxie protocol burns transactions fees from protocol usage daily

  This mechanism is interesting as it demonstrates that the project has evaluated how to capture value for token holders—something that most protocols to date have given little importance to. Additionally, the protocol has already begun trading on centralized exchanges, indicating the project's awareness of the financial aspect, even if it's only for the Moxie token. This allows the project to implement an initial strategy of Low Market Cap and potentially High FDV (Fully Diluted Valuation), which could provide the resources needed to build a strong ecosystem.

• Channel tokens and network tokens

  FriendTech introduced group tokens, but in reality, they haven't worked well. From a game theory perspective, it seems difficult for these channels to remain profitable for rent seekers. However, in this case, the idea is more about using the channels for content distribution, which is an additional step forward. More information is still needed, but this approach certainly makes more economic sense than FriendTech's idea.

  The concept of a network token is truly interesting, with Farcaster being the only one currently. This token could potentially become a form of indirect exposure to the project. However, this is not possible at the moment, as the project is excellently funded by venture capital and, as of today, it seems there may not even be a token for the project. This contrasts with the idea of the decentralization that is essential for this network

• User incentives

  One of the most interesting innovations of the project is that influencers don't need to take any additional actions to receive income. Therefore, there's no real risk of them abandoning the application, only that they might choose not to claim the token or simply ignore it. With 5,000 requests to generate tokens, there is strong evidence of significant interest, at least in signing up.

  The price of the Moxie token and its own valuation will work the magic of coordination to capture attention, as long as the price continues to rise. In any case, there is no risk of them abandoning the project since they are rewarded for the activities they are already doing. What will be more challenging is engaging them in activities related to payments from third-party companies. Micro-influencers are more open to performing actions for micropayments, which carries the risk of farming on the other hand

Conclusion

More information about the project is still being revealed, and while there is a website that explains many details, some aspects are not public. This article aims to provide a first impression of the project, which I believe is an important step in these models. It is likely that we will see an initial phase of traction, especially due to the design.

The project has a much more solid economic design, which should provide more leeway for validating its market fit. However, the project's expectations, the expansion limit imposed by Farcaster, and the value capture needed to make the token attractive to holders are significant challenges ahead.

What I believe is highly likely is that these iterations will eventually lead us to discover the next giant in online marketing, with business models that we can't even begin to envision yet.