Problem: The internet does not allow users to create equity in the products they use. Moreover, if you borrow work from another there is no way to financially credit them on a per-view or per-use basis. Instead, the content-curator rather than the content-producer is compensated.
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Solution: Yesterday, Packy McCormick launched an interesting concept — he minted an NFT of one of his old essays where 50% of the proceeds were split with those whose work he referenced. I’ll let him describe it in his own words:
The Twist: in Power to the Person, I referenced 26 people’s work or ideas. I shouldn’t get all the credit, or all the proceeds from the NFT auction. And I’m not. Mirror just created a feature that lets creators split the proceeds from the sale with other people, and I’m the guinea pig, the first person to try it. The proceeds from the sale will be split with the 26 people whose work I referenced and the people who share it (if I have their ETH address; the unclaimed amounts will go to charity).
Here’s how it works: 50% of the proceeds go to me, 50% goes to the people whose work I referenced, proportionate to my estimate of how big an impact each person’s work had on the essay. Li Jin will take home the most, with 8%, because her writing on the Passion Economy was fundamental to the piece.
You can bid on the essay now, and if you win, you own it… I’m fascinated by why people buy certain NFTs, so I’ll also record a conversation with the winning bidder and publish the podcast.
I found this concept extremely interesting: traditionally, citing someone’s work has no economic value. It only has “clout” value; knowing that you have created something that someone else finds valuable to reference as well. With new ledgers and infrastructures, however, there are now opportunities for economic value to be transferred through an active ledger of views and contributors. Moreover, even readers and consumers can get in on the bidding, splitting, and sharing (as described by Patrick as well in his Tweet about joining a 10% ETH split).
This business would take it a step further by innovating on new bidding mechanisms to create new incentives for creating or owning a product. It would offer BaaS: Bidding as a Service. How would you design an auction such that participants are rewarded for bidding higher? This business would create a solution (equity stake in bidding on an item). What incentives can you induce to create “co-winners” of an item rather than traditional bidding which only has one item? This business would innovate on new models. How can currency value be integrated into the bidding process? The business would ideate on models to explore this. Moreover, the business would also publish cutting-edge research papers not only ideate on these topics, but also to generate net-new insights in the world of economics, psychology, game theory, market design, and more.
So what’s the size of this crypto-inspired market? As Patrick described in his essay “Power to the Person,”
… the NFT and crypto space has been on an absolute heater. Dapper Labs, the company behind NBA TopShot, which I wrote about in The Value Chain of the Open Metaverse, is rumored to be raising $250 million at a valuation north of $2 billion. Bitcoin broke $50k for the first time on Wednesday, and there are now over 100k addresses that hold over $1 million worth of Bitcoin.
Broadly, this bidding company would compete to create the go-to platform for smart, dynamic bidding on anything for any purpose.
Monetization: Sales of this Bidding-as-a-Service Platform
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)