Onchain social network Zora has built a reputation as a popular tool for artists, musicians and other creatives to monetize their content onchain, but the recent launch of its eponymous ZORA token has left many users confused and dissatisfied.
The token’s price tanked shortly after launch, with users and observers complaining about everything from poor communication from the team to the token’s distribution and utility models.
This comes amid an overall decline in interest in the onchain creator economy and a changing perspective on whether blockchain tools like non-fungible tokens (NFTs) are still useful for creatives who want to monetize their work on the blockchain.
With creators and builders shifting focus and NFTs no longer selling like they used to, does the ZORA token drop symbolize the end of the creator-driven NFT model? Maybe not, but many creatives are changing their perspectives and the role blockchain should play in the creator economy.
ZORA token launch and airdrop go awry
The ZORA token launched on April 23, and it quickly became a point of controversy among users. To start, Zora did not officially announce that it had gone live until two hours after it was already trading, leading to confusion on social media.
Source: ZachXBTThe token’s price quickly fell by over 50% within those roughly two hours, from $0.037 to $0.017, adding to users’ complaints. It has since fallen even further, sitting around $0.013 at the time of writing.
ZORA’s tokenomics also became a point of contention. 45% of the supply is reserved for the team and investors, while 25% is for the treasury — leaving 20% for community incentives and just 10% for the user airdrop. This led some to complain that the project was keeping too much for itself.
Others disliked its general lack of utility. Zora repeatedly stated that the token “is for fun only and does not entitle its holders to any governance rights or a claim on any equity ownership in Zora or its products.” But the project seemed to respond to this criticism on May 1 by announcing that ZORA would have some additional functionalities within the network.
However, many others came to the defense of the project, saying that sharing on the platform has been financially lucrative. Others were simply thankful they received anything at all.
Source: WbnnsSinger Vérité, who has racked up hundreds of millions of streams as an independent artist and was an early adopter of Web3 tech, told Cointelegraph that “on a base level, I’m appreciative of being rewarded for participating in something early.”
She said that while she doesn’t know the team very well, “I feel like they are genuinely trying to construct new models for valuing digital artifacts and have built an aesthetic and culture around their brand in juxtaposition to what are usually awful crypto vibes.”
Source: VéritéNFTs no longer the top of the creator food chain
Zora’s token launch was the latest move in a broader shift away from the traditional NFT model for creators, in this case toward embracing the cultural dominance of memecoins.
While posts on Zora used to be minted as NFTs, now each post creates an instantly tradeable memecoin, also known as a “content coin.” Creators are given 1% of the supply and earn 50% of the trading and liquidity provider fees.
Source: ZoraWhile the move from NFTs to content coins was itself controversial, it represents a shift to a new class of creators, according to Adam Levy, host of the Mint podcast and founder of Blueprint, which helps creators go viral onchain. He told Cointelegraph that the wild success of memecoin launchpad Pump.fun “brought in a brand new class of creators that now Zora is trying to capitalize on.”
NFT sales remain way down compared to their 2021 peak, and many creators have simply left the NFT space due to its perceived shortcomings. Music-related NFTs, which used to be prevalent on platforms like Zora, have taken a particularly hard beating.
Several builders of the most popular creator platforms have moved on to work on other projects. For instance, the team behind music NFT platform Sound.xyz has shifted its focus to a new platform called Vault, which still uses blockchain technology but keeps it hidden on the back end.
In a February X post, Sound co-founder David Greenstein said a hyperfocus on speculation led to the decline in NFT interest. “Over time, it became less about the artist, the music, and real connection—and more about financial transactions,” he wrote. “When speculation cooled, so did the energy behind supporting artists.”
This sentiment was echoed by Vérité, who said, “I don’t think digital artifacts will have lasting value outside of speculation, experience and patronage.”
Related: Tokenizing music royalties as NFTs could help the next Taylor Swift
According to music artist and builder Latashá, “We weren’t getting focused on culture; we were getting focused on speculation. And once the bear market hit, it really showcased that.”
Latashá, who was previously head of community at Zora and is now building several blockchain-based platforms, told Cointelegraph that people also got too caught up in the language of Web3 instead of simply using the technology:
What’s next for the onchain creator economy?
Despite the shift of interest away from NFTs toward things like memecoins, as encapsulated by Zora, many builders and creators still believe blockchain remains incredibly powerful — just that maybe it needs to be used in a different way.
“I learned that you can’t force your idealism onto the world and into the market,” said Vérité. “I am less interested in making ‘Web3 tools’ work because they’re on the blockchain and more interested in finding new ways to solve problems that face artists, audiences and the systems that connect them, regardless of form.”
“I definitely won’t sell NFTs to fans,” she added.
Levy, on the other hand, remains firm in his belief in NFTs, specifically. “I still have endless conviction in what I’m doing,” he said. He pointed out that cryptocurrency overall, let alone NFTs, is still in the very early stages of adoption. “I think we all need to zoom out.”
One notable shift has been to hide the blockchain elements and focus solely on user experience. For example, rap duo Run The Jewels has a fan club where members are rewarded with “JWL” points that can be used to unlock exclusive experiences. JWL is actually an onchain token, but that fact is buried in the club’s FAQ page.
“We still need to come up with a better way of making crypto wallets accessible to people so that it is easier,” Renata Lowenbraun, CEO of independent music Web3 platform Infanity, told Cointelegraph. “The moment that happens, everything will change.”
Lowenbraun compared blockchain to the internet, saying the internet took decades to truly catch on. NFTs, she argued, had a “false start” before the infrastructure had a chance to mature, “but it doesn’t mean it’s not going to stick and it’s not going to be around and it’s not going to have these amazing applications, particularly for creative people and creative ventures.”
For Latashá, the future is in the hands of the artists themselves. “I think artists are just going to build their platforms. I think that’s going to be the future,” she said.
Whatever the future of the Web3 creator economy holds, it’s clear that it won’t be without road bumps along the way. But if the builders and artists are to be believed, the road bumps lie on the path toward greater artist independence.
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Source: https://cointelegraph.com/news/zora-airdrop-whats-next-web3-creator-economy?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
