Chainfeeds Summary:
Content tokens may be an effective strategy to drive revenue on the Rollup Chain, but its model of combining creator sponsorship with speculative trading, while increasing trading volume, may fail to truly balance the long-term interests of creators and supporters, ultimately making the blockchain and trading platforms the biggest beneficiaries.
Article source:
https://www.techflowpost.com/article/detail_29310.html
Article Author:
Auditless Research
Opinion:
Auditless Research: Content Coins might be the only way to get Rollups excited for creators. But be aware, the big winners always come from the small players. The Crypto Twitter reaction to the launch of $JESSE was less than friendly, with others pointing out several issues: poor timing: the launch coincided with an article by David Phelps complaining that Base was too focused on creator tokens; withdrawal issues: some argued that $JESSE extracted a large amount of transaction fees from the sale; and a rush to buy: because $JESSE used a bond curve auction mechanism similar to Zora x Doppler, it unexpectedly attracted a rush of buyers. However, I don't agree with these concerns. The timing issue is indeed unfortunate, but I suspect Jesse had planned the launch time carefully and chose his birthday as a special occasion. The withdrawal issue is also untenable. During his birthday livestream, he was able to reinvest the fees back into other creators on Base. He also claimed he had no intention of selling these tokens. If not out of malice, why would Jesse do this? A large portion of the sorter revenue for a Rollup comes from transaction fees. To date, Base has earned more revenue from meme token trading than from any other activity. The issuance of new tokens and the resulting speculative trading volume are significant drivers of transaction fees. It's likely that Base is spending more than ever on its core team, grants, events, its own applications (like the Base App), and support for its founders. However, these expenditures haven't significantly increased Base's contribution to Coinbase's financial statements as a Rollup. Creator tokens and content tokens are a very clever solution to this problem: their issuance even exceeds that of meme tokens (token issuance is a major battleground for Rollups); they incentivize trading and speculation; they are built by converting attention into on-chain fees, and almost anything that can go viral can be tethered to a content token; and unlike meme tokens, they don't even require any underlying economic activity, community support, or commitment. The flywheel effect logic of Creator Coins is simple: when you publish content, a Content Coin is generated, and you own 1% of its supply. Each Content Coin can only be purchased with your Creator Coin. If you issue Creator Coins, you will hold 50% of their supply (gradually unlocked). The demand for Content Coins naturally drives the demand for Creator Coins. This mechanism incentivizes you to create high-quality content while benefiting from holding Creator Coins and transaction fees. However, creators do not directly receive subscription fees unless they sell their Creator Coins. Therefore, even if your costs are paid through revenue-generating subscriptions, not all costs are effectively transferred to the creators you support, unless they cash out and run. Furthermore, Content Coins also possess properties similar to fan collectibles. As an artist's popularity increases, the rewards they can offer subscribers become more valuable. Therefore, Content Coins have a speculative element. Even if you don't care about supporting artists or earning rewards, you might buy Content Coins simply to speculate on their potential future reward value (whether material or non-material). This is similar to buying a first edition CD from your favorite artist, which you may resell for a higher price in the future.
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