Collective DAOs – Funding New-Gen Creators and Opposing Digital Gentrification

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The new age of digital patronage. How a group of fan investors can foster, pay and sustain an authentic creative community.

The creator economy, born in the era of web 2.0 and having exploded during the pandemic, is booming. Today, it includes over 50 million content creators, opinion leaders and bloggers. For approximately 2.3 million of them, it’s a full-time job. Influencers with multi-million followings are collaborating with world-famous brands, collecting millions of views and turning clicks into cash.

This creative machine is fueled by centralized social media platforms, services and tools that help talents grow their audience and monetize their work. According to the CB Insights’ report, creator-focused companies raised $1,207,967,200 in 2021 alone. However, more than often, the centralized toolkit creators are using to earn their living is becoming a problem in itself.

Challenges of the creative economy

With the emergence of centralized social media networks and social journalism platforms, creators got the freedom to put their content out there in just a few clicks. They didn’t have to build and maintain a website anymore – while in-built tools allowed them to get exposure and reach their following. In other words, what had to be done by a whole team of professionals has now become a one-person job.

The curious thing about the human psyche is that we are happy with what we have unless we know there’s a better alternative. It wasn’t before the rise of decentralization that the drawbacks of centralized platforms – such as high commissions, unfair revenue distribution and changing policies – became evident to the masses.

The fees are, indeed, ranging from tangible to crazy high. For one, Patreon takes five percent to 12%. Substack takes 10% minus processing fees. OnlyFans says the 20% fees help offset the costs of the security and privacy features that adult content, in particular, requires. In the case of Twitch, it’s a 50% cut of any subscriptions.

Being dependent on the platform’s policies (i.e. concerning content) is another problem for the modern creator. The OnlyFans’ recent announcement that it would be banning explicit content, which was the main source of income for many people, is a good example.

The rise of DAOs

In this context, the rise of decentralized autonomous organizations, which Mark Cuban dubbed, “the ultimate combination of capitalism and progressivism,” seems more than timely. The concept was first created in 2016, by a group of developers who took the idea of cryptocurrencies to the next level. Sharing the same level of trustlessness, DAOs would offer a transparent governance system, as well as fair and fast distribution of the organization’s funds, cutting bureaucratic red tape.

Unlike traditional organizations, DAOs have no typical management structure or board of directors and are funded by venture capital based on open-source code. Much like open source projects such as Bitcoin Core, DAO projects involve both volunteer participants and passive followers, often shepherded by paid core contributors.

On top of that, DAOs can help eliminate human errors or manipulations with investor funds. Participants can decide on how to use the funds locked up on the blockchain by taking part in a transparent, automated voting process.

New-age investments, equality and cool neighborhoods

With the help of DAOs, creators can better connect directly with their audiences and analyze how their work is distributed and consumed. Fans and investors, in turn, can become the new-age mercenaries, funding their favorite creators and making sure more of the content they love is brought to the digital world. By pooling their money and setting rules for sharing and distributing assets, resources and risks, they can open new frontiers for investment into the creative economy.

The empowerment of independent creators and minorities is another benefit DAOs offer. Syndicate, a community-based investment system that provides communities with the tools to work with decentralized investments, has already seen the creation of DAOs that support female, non-binary, Black and African founders, as well as emerging/overlooked markets and scientific research. That’s a huge step toward supporting minorities and rising equality and representation in the market.

And finally, DAOs contribute to the rise of a phenomenon well-known to the traditional art world – for the lack of better wording, ‘neighborhood coolness.’ Imagine a neighborhood, dull and cheap, like a freshly created DAO. Then imagine artists coming to this place and starting to create. Bit by bit, the space gets full of ‘weird and creative’ people, as Andreas M. Antonopoulos puts it, and lights up with concerts and galleries. It becomes hip.

The emergence of such like-minded communities that spin around themselves and grow in value could happen in a real neighborhood – or in the DAOs of the digital space.

A ‘no’ to digital gentrification

Artistic neighborhoods have a certain charm to them. However, just as the real-world cool neighborhoods fall to gentrification, digital gentrification is the bane of hip digital neighborhoods. We’ve seen it play over many times along the history of the web. The moment digital communities become the place to be, big corporations and censorship come in – stripping them of the creatives and quickness that come with diversity and freedom of expression, making them bland.

With DAOs, it finally doesn’t have to be the case. You cannot stop a DAO – you can only fork it. Now, imagine a DAO that only grows and grows because gentrification is not possible. Because the moment someone tries to co-opt it, it’s forked and moved away. Following the main principles of web 3.0, DAOs click perfectly with the creator community, forming a more equitable ecosystem, giving independent creators access to new revenues and opening an opportunity for truly decentralized content production.

In my opinion, DAOs enable a brave new world, and most importantly, one where authenticity, creativity and diversity grow wild – and uncensored.

Viktor Trón has been spearheading the Swarm project since its inception. He’s now president of the Swarm Foundation and holds the role of chief architect.

Featured Image: Shutterstock/metamorworks

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