Web 3 UX: Would crypto royalty meet fans in the middle?
Getting artists and creators paid is a long-standing challenge shared across industries, including music, digital publication, video sharing, and gaming. When we look at what’s behind a creative output, it’s not full of glamour. It takes relentless rigor to power continuous creation and a long-tailed process to learn about running a business on team one — grow audience, distribute content wisely, and develop practices to manage invoicing, licensing, and more.
On YouTube, it takes 1,000 video views for a creator to earn $3 to $5. For a small channel that doesn’t have enough subscribers to make the joints meet, a creator can be paid only every few months. Lately, when I read about how a royalty gap between creators and fans can be possibly bridged with more payment assurance and engagement outlook, I found it intriguing to dive deeper.
Royalty in the crypto space
The most served approach for a creator to grow royalty comes down to tokenizing art for a sale. Alternatively, creators can monetize through royalty payments. Briefly, it is an added value derived from blockchain’s immutable nature to help creators benefit from the resells of their art and claim support from superfans. In the music space, the Open Music Initiative (OMI) is a great example to outline a committed future when composers and artists can get paid via separate protocols through a shared subscription model, where the split is defined by performance & copyright royalties. From the infrastructure perspective, royalty-based protocols backed by standardized APIs and data formats yield flexibility around payment distributions that different types of creators can enjoy their share.
When we return to the root of selling art, another monetization layer called royalty distribution shall come into our sight, exemplified by Crypto Lithography. Unlike protocols, this royalty distribution refers to a process of creating digital copies of an original creation with numbered footprints, i.e invisible watermarking. Rather than selling out the original creation, creators can choose to sell limited editions of the copies (“child”), which look the same as the original creation but inherent an identifiable digital connection to the origin (“parent”).
Now, what happens to a group of creators rallied around a brand? How is royalty collectively preserved through creation & distribution? The news of StockX being sued by Nike gained my attention as royalty becomes a debatable term on such a large scale. In a conventional marketplace, first-hand or second-hand trades appeal to different consumer markets. The distributor role can be played by manufacturers or re-sellers who are both connected to a product’s ownership chain, yet hold different perspectives on royalty. As a manufacturer, royalty is a rightful authentication defined by the first pencil sketch laid on a blank canvas to a crafted product from a custom production line. As a reseller, royalty is a sophisticated authentication that de-risks the likelihood of reselling counterfeits. From the UX perspective, definitive royalty is a challenging chase because consumers demand and perceive royalty with a changing mind.
However, the disruptive impact is that with blockchain, manufacturers can serve as the only party to authenticate products and define what royalty entails to create a stronger bond with consumers. For example, collectors who were used to buying a second-hand product at a higher price to skip the waiting line can now engage with pre-releases & limited sales as a return for their royalty. This paradigm shift in shopping behavior puts us to review loyalty in a whole different context, where crypto makes loyalty more desirable.
From royalty to loyalty
Long before loyalty emerged in the blockchain space, back in the 1960s, UPC (Universal Product Code) embarked on a formative step towards loyalty in retail. The encoding pattern is not aesthetically pleasing, but it presents valuable information a digital database needs, such as manufacturer names, product variables, categories, and loyalty discounts. In modern-day consumers’ eyes, a UPC is nothing special as it’s ubiquitous from a shelf exhibition to a self-checkout station.
In the crypto space where a UPC up-levels its influence, we are looking at a digital ID that extends the encoded numeric nature. Meet CryptoKick ID, which collectively presents a digital pair of Nike sneakers and a tokenized ID. Since the CryptoKick ID intends to encode unique product information, it looks like a condensed Product Details Page (PDP). Shoe collectors can drill into a provenance search and foresee a future product’s scarcity based on the brand collab, colorway, model, and more.
Make sense of crypto loyalty
From redeemable rewards (discounts, credits) to unique profiles (badges, skins), crypto loyalty rewards fans with new experiences through an exclusive invite. The reward takes various forms, such as carrying a showroom around, passing digital memories to a new owner, or celebrating relationships with an instant connection.
A customized showroom
A CryptoKick invites consumers to change a special edition without tearing any physical soles apart — heel, laces, outsole, toe, etc. It’s a step-up from what consumers experience with Nike by You today, as the base layer to begin customization is based upon a unique pair consumers already own.
A gifted memory for someone special
As consumers extend their digital footprints in the virtual world more frequently than ever, their digital footprints continue to carry new meanings. From video conferencing rooms, and gaming worlds, to digital properties in Decentraland, digital footprints signify a growing record of memories. For example, Ternoa capsules enable creators to encode memories and pass the ownership down to a new owner at a future time of their choice. The crypto enhancement to this experience is a decentralized IFTTT automation for the gift delivery.
A digital memento meant to be shared
While gifting memories can be personal, it can also be an aloud announcement to reward group participation. For instance, POAP, a platform designed to celebrate shared memories welcomes creators to connect with their fans to celebrate a launch party, a social meetup, and a ceremony that is meant to be remembered collectively.
Wrapping thoughts
The royalty connection between creators and fans has never been closer than it is today with evidential practices in the development of payment protocols, limited distributions, provenance assurance, and reward programs. In a sense, a new shopping experience becomes a ticketing service to unlock exclusive experiences, at the deposal of a shared consensus. As the crypto space becomes less clouded with waves of mining and minting, it returns to people’s fundamental needs of seeking ownerships and connections because not everything in life can be numbered.
Shan Shen is a product design leader in the tech space, who loves turning ideas into meaningful experiences, and carries the guilty pleasure of collecting paper books.
