Crypto-driven marketplace Zora raises $2M to build a sustainable creator economy – ProWellTech

Crypto-driven marketplace Zora raises $2M to build a sustainable creator economy – ProWellTech

Dee Goens and Jacob Horne have the exact and exactly opposite background that you would expect to see from two people building a way for creators to build a sustainable economy that their followers can participate in. , Merrill Lynch. But where is the art?

“Believe it or not, I dreamed of becoming a rapper,” laughs Goens. “There is a SoundcCloud out there somewhere. With that passion you explore the inner workings of the music industry. I would eagerly ask industry friends about upfront and 360 contract templates only to realize they were completely broken. “

And, although many may be well-meaning, these chord structures often exploit art. In many cases taking most of an artist’s property. “I became curious as to why artists weren’t able to source resources from their community effectively, but instead were forced to seek out potentially predatory relationships. To me, this was bullshit. “

Horne says he has always wanted to create a fashion brand.

“I always thought a fashion brand was going to be something I would do after encryption,” he tells me. “I love cryptocurrencies, but I felt overly focused only on finance and it seemed like something was missing. Then I started playing with the idea of ​​combining these two passions and giving life to Saint Fame.”

While at Coinbase, Horne hacked Saint Fame, a side project that leveraged some of the ideas on show at Zora. It was a market that allowed people to sell and trade items for cryptocurrency, buying intermediate tokens of variable value redeemable for future goods.

“I realized that culture itself was shaped and built on an old financial system that was systematically biased against artists and communities,” says Horne. “The proprietary operating system was built in the 1600s with the Dutch East India Company and the first National States. Do you like what the fuck is going on? ”

We now have the Internet, we can literally create and share information with billions of people at once, and the ownership system is the same as when people had to get on a boat for six months to send a letter. It’s time for an update. Any community on the Internet should be able to come together, with capital and work towards any shared vision. This begins with the ability of creators and artists to create and own the culture they are creating. In the long run, this shifts to Internet communities making social commitments. “

The answer they are working on is called Zora. It is a market with two main components but one philosophy: sustainable economy for creators.

Too often creators are only involved in reaping the rewards of their labor once, but the secondary economy continues to generate value beyond their reach. Think of an artist, for example, who creates a piece and sells it for market value. It’s great, but from then on, every ounce of work the artist puts into future work, building a name, a brand and a community for themselves, adds value to that piece. The artist never sees a dime from that, relying instead on the value of future releases to pay dividends on the work.

Image credits: Zora

This is basically the way it has always worked. I have some experience in this as I was exhibiting and involved in managing a gallery and my father is a good artist. If today he sells a painting for $ 300, it becomes much better, more popular and more valued over time, the owner of that painting could resell it for hundreds or thousands more. He will never see a penny of that. And God forbid an artist like him is too stuck in the gallery system, cutting huge chunks worth a piece for a square of wall space and a curator’s or shop’s marketing cachet.

The same story can be told in the record industry, in fashion, in sports and even in social media. Lots of people in the middle and lots of vig to pay. And, unsurprisingly, the same color creators who drive The Culture so much are the biggest losers, no doubt.

The main Zora product is a market that allows creators or artists to launch products and then continue to participate in their second market value.

Here’s how the Zora team explains it:

On Zora, creators have the ability to set two prices: starting price and maximum price. When community members buy and sell a token, the price goes up or down. This makes the price dynamic as it opens up the discovery of prices on items by the market. When people buy the token, the price approaches the maximum. When they sell, it approaches the minimum.

For an enthusiastic community like Jeff [Staple’s], this new dynamic price can cause a rapid increase in the value of its sneakers. As creators, they capture the value of the sale on a price curve and get a grip on trading fees from the market they now own. What used to trade on StockX is now about to trade on a creator-owned market.

There have been some early successes. Designer and marketer Jeff Staple has launched a series of 30 Coca-Cola x Staple SB Dunk customs of Reverseland and their value has increased by approximately 234% since release. A Benji Taylor x Kevin Doan the vinyl figure increased by 210%.

I’ve seen other stabs at this. While still at StockX, founder Josh Luber launched theirs Initial product offerings, a blind Dutch auction system that allowed the market to set a price for an item, with a portion of the price cut above the market returning to the bidding manufacturer or brand. The focus was on brands versus individual creators (although they launched with a Ben Baller slide). Allowing brands to tap into second market value for limited goods is far less of a revolution, but the thesis is similar. Back then I thought it was a good idea, and I like it even more when it’s used to democratize rather than maximize returns.

Side note: I love that this team is joking around with cool ideas like their market dogfood with the value of being in their TestFlight group. I am kind of is what is allowed, but at the same time it is stunning and I have never seen anything like it.

Zora was founded in May 2020 (right in the middle of this panny-palooza current). The team is made up of Goens (Creators and Community), Horne (Product), Slava Kim (Design), Dai Hovey (Engineering), Ethan Daya (Engineering) and Tyson Battistella (Engineering).

Zora raised a $ 2 million seed round led by Kindred Ventures, featuring Brud’s Trevor McFedries, Alice Lloyd George, Jeff Staple, Coinbase Ventures, and others.

Tokenized community

But even this idea that physical goods or even digitally packaged works must exist as finished containers of value cannot be taken for granted. Goens and Horne are pushing to challenge that too with the first big new product for Zora: community tokens. Built on Ethereum, the $ RAC token is the first of its kind in Zora. André Allen Anjos, stage name RAC, is a Portuguese-American musician and producer who does web-streaming remixes, original music and has had commercial works featured in commercials for major brands.

While popular and having a following of tens of thousands, RAC is not a social media superpower. The distribution of the tokens and subsequent activity in exchanges and sales is purely driven by the buy-in that its fans feel. This is key learning for many players in this new economy: raw numbers are the social media equivalent of a billboard that people drive near. It might make your eyes pop, but it doesn’t guarantee action. The modern creator lives in a house with their fans, offering them access and interaction via Discord and Snap and commentary.

Image credits: Zora

But those houses are all other people’s houses, which leads to the reason Zora is throwing a token.

Token release has multiple purposes:

  • Merge fans into multiple silos. Whether they are on Intsa, TikTok, Spotify or Snapchat, they can all earn tokens. That token serves as a unifying unit of community value that everyone understands and revolves around. It is a way to possess a finite binary “atom” of an artist’s digital being.
  • Create a pool of values ​​that an artist can own and distribute. You cannot currently purchase $ RAC directly. You can only earn it. Some of these are retroactive for loyal supporters. If, for example, you’ve been following RAC on Bandcamp dating back to 2009, you’ll get a bit of a 25,000 RAC pool. Have you bought some RAC merchandise? Get some credit in tokens too. Future RAC distributions will be given to Patron supporters, merchandise buyers, etc.
  • The value remains in the artist’s universe, rather than being converted into currency. It serves as a way for the artist to incentivize, reward and energize their followers. RAC fans who purchase his mixtape get tokens and can redeem them for additional merchandise purchases.
  • It allows greater flexibility for creators whose work does not so clearly fall into categories capable of creating packages. Performance art, activism, small entertainment. These are not easy to “drop” for money. But if you have a token that grows in value as your audience grows, there’s definitely something there.

The future of Zora immediately involves creating a self-service version of the market, which allows creators and entrepreneurs to launch their products without direct partnership and onboarding. There are many, many uncertainties here and the team has a lot of challenges ahead on the traction and messaging front. But as mentioned, some early releases have shown promising results and the philosophy is solid and much needed. As the universe of creators / economy of passion / whatever you call it depends on how old you are / the wave of fandom merchants increases, there is certainly an opportunity to rethink how their contributions are valued and whether there is a way to reverse the trend. term work to build a community in long term value.

By the way, the last traded price of RAC tape, BOY? $ 3,713, up 18,465%.

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