On The Other Side ep 73 - Content liquidity + protocol lock-in w Rafa
Primer: From the perspective of a creator, what are the differences between a protocol and a standard? How do you decide which protocol to build your audience on? What about the interfaces that connect to the protocol? Rafa shares with us his insights on this episode of On The Other Side.
Background
One summer, he was working for his uncle’s hardware store counting screws and putting them into bags of 100s
It took him a month to realize why he was not weighing the screws instead
It led him down a rabbit hole of how organizations coordinate and how humans get together and provide value
In 2019, he had already spent a few years reading about crypto and thought he was late
Was working in human resources, he was dissatisfied with how employee relations, rewards, and incentive structures work
Came across online communities, which happened to coincide with DAOs, and saw how Ethereum was producing new tools for on-chain treasury management and coordination
Folklore
During the last decade, he read articles about how humans coordinate and save those hyperlinks
One day, he realized that he should start a paid telegram group because people are asking him for these links
Wrote an article on Mirror about Folklore, his telegram group
Ended up selling out all 150 memberships
Folklore is 9 months old now. They have a curated article every 1-2 days
The payments for membership are reinvested into essays commissioned by Folklore
On-Chain Media
He joined Mirror because he believed in their mission of putting context on digital assets and making that context a digital asset as well
“I like to think about blockchain as almost like a protocol of time, where it embeds a timestamp and actual time into the digital assets.”
- Rafa
Downstream, it provides materiality to assets that do not exist in real life
First, you have to choose a chain to publish on
At the second level, you have to decide on the protocol itself (e.g. Zora, Manifold, etc.)
The third decision to make is on the standard you are going to execute (ERC-20, ERC-721, ERC-1155, etc.)
He chose ERC-1155 because he wanted to create a collection of memberships over the long term and because that was what Mirror defaulted to
For Season 2, he probably would select ERC-721 because he wants an index number and Optimism as an L2 because of their vibes
Interoperability Of Content
Can think about content deployed — on IPFS, Arweave, Manifold, etc.
Tokenized media, which is content tied to a specific token ID and contract, is a subset of content deployed
The on-chain media could be hosted on IPFS or rendered in the contract itself
Whenever you create a contract, it inherits the opportunities and features that the protocol is offering to you
The ERC-721 standard is very limited on purpose so as to enable interoperability between any interface that it is connected to
There is no standard mint function. The protocol that you choose gives you the specific mint function that they have designed (e.g. could be gas optimized, enables airdropping, have burn mechanics, etc.)
Mint.fun is creating interoperability with a mint button for every type of protocol and project
Your distribution as a creator is predetermined by the interfaces that support your protocol choice
The metadata standard is optional, even in the ERC-721 definition
“My content provides power to the protocol, because the protocol says, hey, look at this, all the popular creators, which have hungry, insatiable audiences, their content is hosted on my protocol.”
- Rafa
There’s a symbiotic relationship between creators and protocols
Migrating/re-creating content on another protocol is very hard. Has respect for DeGods for moving from Solana to Polygon
Moving From One Platform To Another
If we fast-forward 10-20 years, there might be different protocols that support backward compatibility
However, your NFT may not be up to par with the latest standard
This does not mean that the protocol controls your audience because you still hold the NFTs and the NFT contract
The question to ask is what does a contract upgrade look like and how do we ensure backward compatibility
Protocols need monetization to be sustainable
If a protocol raises fees, migrating to another protocol could become very problematic
Protocols have control over who they support and interfaces have control over what protocols they choose to connect with
The Interplay Between Protocols And Interfaces
We have decentralized data, so people can’t really block IPFS as the contracts are public code
In the future, when we have privacy-preserving tech, protocols could say that a particular interface is not allowed to encrypt/decrypt their contracts
Does not know if there is a way to prevent an interface from interacting with a protocol yet
Interfaces could have their own protocol as well
The Thought That “The Best Protocols Would Win”
This problem gets increasingly more important as we think about longer-term content (e.g. lifetime memberships)
Creating custom contracts and forking another protocol is fine. One has to make sure that the custom contract is supported by the interfaces where your community lives
The market will manage itself — if a protocol becomes too extractive, someone will fork it and the fork will be supported by the interfaces
Folklore is committed to publishing on Mirror because it provides the best user experience
Chose to deploy the mid-season pass on Zora
Why Does He Not Build His Own Vertical For Folklore?
It takes a lot of time and technical expertise to do so
Wants Folklore to be used within different protocols and exists in different interfaces
Do not want a monolithic vertical
When protocols introduce new feature sets, they deviate a tiny bit from the standard. Over time, the deviations will cause the number of interfaces that could compose with your protocol to decrease
Promising Alternatives That May Play Out
They spoke with core researchers about the differences between standards and protocols
Standards are declarative statements that have limitations
Protocols are flexible in the context of those standards
There are 3 potential pathways:
Expand the standard set (e.g. a standard for a mint button and a burn button). The downside is that the protocol that lobbies the hardest will have the most influence on the standard
Think about micro-protocols — develop a factory/protocol that is always updated to the recent standards
Creator-centric middleware — when users interact with an interface, that interface connects to a middleware that swaps in/out contracts
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