X To Earn track review: With the concentration of attention, we should think more about the utility of tokens

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While expressing our opinions, we will list three projects to make X To Earns past, present and future development clear to you.

Original author: Eric SJ (X: @sjbtc 9)

This article will review and summarize some ideas based on the X To Earn SocialFi track.

While expressing our views, we will list three projects to make the past, present and future development of X To Earn clear to you.

Because X To Earn is one of the few tracks besides infrastructure that I am relatively familiar with.

Therefore, some of the projects also include my subjective views on my past participation in this track and the construction process~

This article outlines:

1. The rise of X To Earn | TipCoin @tipcoineth

2. X To Earn: Business Model of This Track丨 Mferc DAO

3. X To Earns future tense丨 Popp @Hi_PoPPOfficial

1. The rise of X To Earn | Tip Coin review

Before the inscription market appeared last year, there was a very popular social market. During this period, two very impressive projects emerged: Tip Coin and Friend.Tech

They each represent two new paradigms of social tracks at the time: X To Earn and private creator economy. Now it seems that the latter is more sustainable and has more stamina, while the X To Earn track is like a higher wave than usual before the tsunami appeared.

🗝️Note: The rise of Friend.Tech was based on the fact that the BASE chain attracted a lot of attention in the market at that time.

However, the X To Earn model is still being used as a reference by many projects at present, because its model is a successful case of quickly gathering brand influence for Web3 projects in the market.

(1) Let me briefly review how Tip Coin spread. This project was divided into two stages. The first stage was a relatively wild diffusion period, generally just posting and replying with the hashtag. Later, the requirement of @Project Official was added;

(2) Then a set of points rules was introduced to quantify the user’s behavior on X. This gave it a bit of a proof-of-work vibe (the originator of the points game???)

Tip Coins model of accumulating profits by posting tweets with tags was not the first to appear on the market at the time, but it was indeed the most famous. Putting aside some possible interpretations afterwards, such as big V promoters and joint schemes, it can really be called a model of viral spread (Friend.Tech is much more tortuous than it).

X To Earn track review: With the concentration of attention, we should think more about the utility of tokens

Now it seems that its biggest problem may be that it met market expectations too early, issued coins too quickly, and released too many circulating shares to the market, causing the price to spiral downward, so that now no one in the market is talking about it (I estimate that few people will mention this project this year, but this is also from the perspective of the entire track)

2. X To Earn’s business model丨Personal practice review: Mferc DAO🔻

After briefly talking about Tip Coin, I would like to share with you some of my practical reviews of similar models and summaries of some business models. It is nothing more than calculating the supply and demand relationship as well as costs and revenues👇🏻

(1) Cost: By capturing user social behaviors through tags and running calculations, the developer API call costs of the X platform are currently divided into two levels: US$100/month and US$5,000/month. If you want to build a platform, you must choose the latter level. This is the basic cost. If the scale is larger, you can negotiate with the X team, but the specific cost is difficult to quantify.

Here alone, the basic cost per year is US$60,000. This is just the basic expenditure and does not include platform construction and statistics. The actual cost is definitely higher than this.

(2) Benefits: To be honest, I am not very clear about the current benefits of doing this in Web3, that is, the question of how to monetize attention, but the indirect benefits of doing this are quite large.

First, accumulate market attention to expand industry influence, refer to Tipcoin;

Second, based on the first point, institutional fundraising + coin listing, this is the income that can be easily thought of. Tip Coin also uses this set of indirect benefits. It has not done much work on the direct realization of attention, but the project I participated in at the time gave priority to direct realization of attention;

How did we do it at that time? At least in terms of the needs of token design, we wanted to use the accumulated attention to serve the project party to do marketing activities, and then the profits obtained were divided among the community according to the points algorithm. This model was considered to be a very complete economic design closed loop at the time, but we found problems after reviewing it 👇🏻

First, the marketing demand of market project parties at that time was generally not great;

Second, due to the scale of the business, we need a certain number of people to find projects and discuss business matters. However, we can generate electricity for love temporarily, but we cannot generate electricity for love all the time. The economic incentives of tokens are real cost expenditures in the short term (don’t say there is no cost, the money in the pool must be paid).

In summary, we use the algorithm of social tags to build a community within the platform, and then the influence of the community continues to expand, serving the B-side based on the influence, and then feeding back the benefits to the community, a complete closed loop~

Note: The platform that provided us with community support was earlier than TipCoin. We were also wondering why it was later than us, but it was able to do it while we were not.

Let me introduce how we acquire tokens: The closed-loop design of the model is ideal and simple, but Web3 not only has a model, but also a secondary market. Market value management and token FOMO attributes are issues that all projects must think about, that is: you are doing well, but why should I buy your tokens?

Otherwise, it might as well turn into a pure meme, so that there is still a story to hype. The rise of the secondary market depends on fate and whether there are market makers who are interested in entering the market.

In the context of token decentralization, there is no hard demand. If you can’t make a living from the product, how can you continue to create FOMO in the market? In addition to the secondary market, there are still some problems in the scale expansion of the product itself, which are difficult to solve at once, such as:

(1) For Twitter celebrities, how can we convince them to use it? After all, this method also involves the issues of account authorization and wallet linking. Wallet linking can be solved by using a new wallet, but how to solve the authorization of social accounts?

Later, I thought about it and decided that the only way to eliminate the basic doubts of these big users was through authoritative endorsement, but authoritative endorsement itself was also a new problem.

(2) If there is a multi-economic system such as NFT design (at least my project has it), then it is necessary to make an absolute distinction between the rights and interests of NFT and tokens. This is a problem that all multi-economic models will encounter. There are tracks that focus on products, such as DEX, but SocialFi is definitely a track that focuses on both products and economic models;

(3) Lowering the entry threshold for ordinary users and reducing the number of steps for users to participate is also a problem, because there are still issues such as the accumulation of points and the collection of tokens that need to be resolved. Later, I thought about it and found that using a user abstract wallet is one of the supplementary solutions in the process of token collection and wallet.

3. The Future of X To Earn丨Popp’s Diverse Ecosystem Matrix

This is also a project whose main product line is X To Earn. Although the scale effect of the product has not yet emerged, the basic foundation has been laid out quite well, and its products have also solved some of the problems I listed.

(1) In terms of content quality, the product itself is embedded with AI to summarize and refine the captured content. This is a relatively novel design that is different from similar projects I have come across before (although it only did Chat GPT integration), and as far as I know, the content captured by this creator does not need to be labeled, it is captured by their AI (although I don’t know how the principle is implemented, maybe the quantitative indicator is the number of fans?).

At the same time, the content on the platform was partitioned to improve the efficiency of information indexing. This was a problem we had encountered before. Later, we used the community to actively select some high-quality content every day, but because the original design required tags to capture, the scope of capturing high-quality content was actually very limited. Popp solved this problem to a certain extent (but the classification was not detailed enough).

🗝️In addition, in terms of content, I think we can design a scoring mechanism and set up a governance committee to score high-quality content or the quality of creators content and give priority to push them. This will actually be more beneficial to users, KOLs and platforms.

(2) In terms of channels, this is also related to content. The capture of content is not limited to one platform, but multiple content platforms will capture it. I am very curious about how this is achieved. In this way, the volume and quality of the content will actually be greater, and it will be more difficult to control it. Therefore, I think that putting the current task points into the community in a governance manner may be a better way to deal with this problem.

In the multi-platform content aggregation, including the capture of Mirror, there are actually similar products, such as ChainFeeds

(3) Token Allocation

X To Earn track review: With the concentration of attention, we should think more about the utility of tokens

1/ I think this part is the most important. Based on the above picture, we can see that the majority of tokens are still controlled by community users, and the issuance is dominated by the user scale, which is positively correlated with the product itself;

I haven’t found detailed information about the mining rate of the community, but it is foreseeable that the share of users in the early circulation will not be the majority. Because if this share is too high at once, the large-scale distribution without cost will encounter the debate of selling pressure and wash trading in the secondary market~

This is the problem faced by Tip Coin

2/ The proportions of the team and investors are within a reasonable range (within 20% each), and there is a lock-up period and linear design after TGE;

There is one point that needs additional expansion here: In fact, if the team and no institutions have shares in it, the distribution of tokens is completely dominated by the community, and the development cycle of the project will be very, very long. This is why I am not optimistic about many fair Mint narratives.

The possibility of a project being able to continue to work together is too low, so depending on the different stages of the project, whether there is a main body to guide the development is decisive (fair mint is a good way to issue assets, but it is not a good development route for a project)

3/ The remaining 10% includes half of the airdrop budget for the development phase, and the other half for the foundation and KOL rounds;

The overall design of the token can be said to include all parties, and the shares will not be tilted more towards any particular party (the user issuance plan allocated to the community has not been found in detail, so it is difficult to comment)

We compare the token allocation of POPP with that of Tip Coin and find some similarities and differences:

X To Earn track review: With the concentration of attention, we should think more about the utility of tokens

(1) Although they all allocated the majority to the community, Tipcoin’s “destructive” allocation allowed a large amount of tokens to enter the market circulation in a short period of time. This move was one of the main reasons for the spiral decline in token prices in the secondary market;

As for the token distribution of POPP, the team may be aware of this, so they avoided large-scale token market circulation in the short term and adopted an issuance design that is positively correlated with the product scale;

(2) In addition, TipCoin did not plan to have a share of investment institutions, which actually surprised me at the time, because according to their qualifications at the time, it would not be a problem to obtain some institutional financing, even if it was not from a large institution;

Looking back, the development of the entire project was relatively fast. In contrast, another popular application, Friend.Tech, delayed issuing tokens for nearly a year. These are two different strategic moves. Perhaps $TIP wanted to take advantage of the hot social cycle, but it did not expect the social application market to end so quickly.

(3) POPP also allocates a certain amount of tokens to investment institutions, which means that the team has certain financial support to polish the product. One of the main reasons why our previous community project with a similar model ended in failure was insufficient funds;

(4) Token demand side

The token distribution above actually talks about where the bulk of the overall supply of tokens is. However, if the X To Earn track cannot escape the continuous selling pressure on the market, it will be a dead end for the holders. This is why I said in the title: In the context of the concentration of attention in the social track, we should think more about the utility of the pass

This is not only a question of market value management. From the perspective of basic needs, we should not give people the feeling that: Wow, I have always been taking over for them, so why should I buy it?

At present, on the demand side, we can see that the project is not a planned product line, that is, the creator economy of X To Earn, and the extended products are packaged into a single token ecosystem. This ecosystem is the design of token demand (as for whether the supply and demand links can be turned around, this is a question in the future, but some things can be omitted, but they cannot be absent. For the X To Earn track, this is the case);

Currently, the ecosystem has three relatively mature products launched.

1/ One is Popp X, which is a strong Fi attribute ecosystem. It allows users to bet on both sides of the voting based on topics, and the winner will share the prize pool of the loser (ever played coin tossing? It is similar to this logic). This type of application logic is very simple, and it is also an event-driven application in Web3.

For example, a previous report by Binance showed that the TVL of the prediction market increased by 68.6% in one year, and the driving force of this growth was based on betting on the results of the US presidential election;

X To Earn track review: With the concentration of attention, we should think more about the utility of tokens

2/ Another one is Popp Echo, which is a creator economy application similar to Mirror that empowers content to become NFT, but this product does not integrate user abstract wallets, and the user access threshold is still isolated from ordinary wallets (that is, you need to connect to a wallet to access the platform);

This type of application requires a strong large user background, that is, some excellent creators to promote the demand for content NFT market sales. However, this sector has performed well in the social market. In the non-social market, users willingness to pay may be more inclined to Web2 platforms with back-end services.

Content NFT does not lack room for hype, but it needs to be driven by the sectors market conditions before users attention will be focused on it. It is difficult to maintain order based on demand alone.

3/Finally, there is PoPP-AI BOX, which is an AI plug-in that supports wallet login. Users can add it in the Google plug-in store. Through PoPP AI BOX, users can obtain the latest key information (including token information, financing information, airdrops, project dynamics and important events) when accessing any Web3 project, and there is a real-time group chat for each project.

I think this product is very groundbreaking. There are many websites on the market that aggregate project information, but I don’t know much about establishing group chat windows based on projects. At least this model has not been widely used in the market!

The above is an introduction to three basic ecosystems, including the future launch of some ecosystems, which are actually centered around the user issuance link, that is, solving the release problem on the supply side and creating token demand for the system downstream to reduce supply pressure.

However, the listing situation of the secondary market needs to be analyzed based on the chips that are about to be listed. Taking the recent IO listing as an example, the chips held by community retail investors are not many, so the performance of the listing is also relatively strong (this is also related to the style of the dealer).

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This article is from a submission and does not represent the Daily position. If reprinted, please indicate the source.

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