Web3 is a hot topic.
Its proponents say it’s the next iteration of the World Wide Web, with promises of decentralisation, scalability, and privacy. Web3 is based on blockchain technologies, a distributed ledger keeping track of digital transactions. So far, these technologies have created a vast number of crypto-currencies, as well as the rise of NFT trading (non-fungible tokens).
At Recuro, we’re constantly thinking about how the subscription business model will be developed in the future. In the light of Web3, we've done some thinking on how blockchain technology and NFTs can be used for access control, monetization and financing of membership services - similar to today’s subscriptions business model.
This think piece discusses a general idea of how this might be possible and outlines the impact if it would be realised. Feel free to contact us to continue the discussion.
To understand why new monetization models in Web3 are relevant to discuss, let’s look at the shortcomings of current models.
With those challenges in mind, let’s now look at how a subscription-like monetization model could work in Web3.
In principle, a Web3 subscription-like model can be built on five principles:
Let’s return to the challenges discussed previously, to see how they can be mitigated in Web3.
Let’s say there’s an independent journalist wanting to start a news service, covering a particular topic with quality journalism. To get started, the journalist would need to hire some colleagues, get some equipment and build a website. This requires initial funding.
Let’s say they decide to mint a new membership token in a finite number of unique copies. These tokens are offered to the market through an exchange. By selling these tokens, the news startup will receive the initial funding to start its operations and start producing content. Members acquiring the tokens can access the content from the news service, indefinitely.
Members can sell their tokens through the exchange to the open market at any price. Selling will result in transfer of ownership for the access to the service, as well as a royalty fee to the news startup. The royalty fee will be used to cover the startup’s continuous operations.
The members will engage with the news service and try to improve it, as this will increase the value of the tokens to the market. They will enjoy the service for their initial investment, and hopefully see their investment increase in value.
In this example, the service provider will need to purchase some cars, made possible by the financing from selling the initial tokens. Through the token ownership, members can access and use the cars. Members are incentivized to care for the cars, as this will improve the quality of the service, and therefore the value of the membership.
When a member no longer needs the access they can sell their token in an open exchange. This will result in a royalty fee going back to the carpool provider and they can maintain and improve their service.
If properly implemented, this type of monetization model can create a direct and decentralised relationship between the supplier/creator and the users. That’s a great thing for everyone involved.
Are you interested in participating in the discussion around this topic? Feel free to contact us to keep the discussion going.