Putting tokens to use growing your fans
Web3 tokens are a new tool for creators and builders to to use to connect with fans, earn customer loyalty and grow a brand and businesses. Tokenomics let any creator create a powerful loyalty program. Tokens on public blockchains help creators build an easy to track program, one that can be built in conjunction with other creators, empowering smaller creators to create powerful programs that offer compelling value to their fans and customers.
In this article I’ll layout the process and offer a tokenomics template for creating your creator tokenomics. We’ll start with the process of defining your goals for what you want to achieve, what you have to offer and then we’ll proceed through an example of my own creator businesses, designingtokenomics.com, to walk you through the tokenomics template for creators.
Tokenomics template for creators part 1: Process & Business analysis
The tokenomics process starts with defining what you want to achieve. Growth can be divided into three: growing your fan base, growing the revenue you receive per fan (called ARPU) and growing the non monetary engagement per fan.
In parallel you need to evaluate what you can offer your fans as a reward for their increased engagement with you. There are five categories for this: equity, money, goods & services, social capital and experiences. This 3x5 table of what you can offer compared to what you’re looking for is called the ‘growth-incentive fit matrix’.
Once you’ve analyzed your goals and what you have to offer it’s time to move on to part 2 of your creator tokenomics process.
Tokenomics template for creators part 2: Growth-incentive fit
Based on the growth-incentive fit matrix and your goals, you should have a set of offerings for your fans and customers. Now is the time to ask yourself how you can craft a program that’s compelling — is the incentive you’re offering enough to generate the growth you’re looking for? If yes, great, you can move on to part 3. If not, you should consider strengthening the value by partnering with other creators or offering something more compelling.
In part 2 evaluate:
- How you’ll reward customers: what are the tangible things you’ll offer? how valuable are they?
- Constraints you have: Do you have constraints on your time? Money? Equity? What can you not offer?
- Strengths you can leverage: Do you have something you can offer that fans and customers value highly but costs you little? What are you extremely good at that you can leverage?
Tokenomics template for creators part 3: Structuring your tokenomics
You know what you’re looking for and what you have to offer. Now is the time to create the actual program. Most programs can be broken down into three buckets:
- Earn & Burn: Each action a customer takes earns them a portion of a reward. Once they reach the reward and redeem it, they start from scratch.
- Recognition: Fans who reach milestones are rewarded with gestures of recognition that bequeath them with benefits.
- Relationships: Relationships are built with customers over time around who they are and their preferences.
The best programs use all three in some constellation based on your strengths and constraints. Proper tiering and structuring is a challenge and should be modeled out thoroughly. The full design of your creator tokenomics should earn a net benefit to you, the creator, while also increasing the value your best fans earn.
Example tokenomics template for creators
You can find the creator tokenomics template here.
Part 1: Analysis
Creator business: Designing Tokenomics.
Goal: I am looking to grow the number readers in absolute numbers and the number of highly engaged readers. Designing Tokenomics is almost all free, not interested at all in growing ARPU. Focusing instead on engagement with super ‘fans’. Quality > quantity.
The Growth-incentive fit matrix:
Part 2: Program
Constraints: I have limited time and no funds. Designing Tokenomics is a passion project I do for free. There are limited monetary valued rewards I can offer since most of the content is free.
Strengths: Subscribers are highly engaged and looking to network and a lot of the content already exists. Value could be created by connecting people in the space with little effort from me. There’s lots of valuable content that will be added over time to the Designing Tokenomics offering, giving a clear eye to future value for highly engaged subscribers.
How: After fulfilling the matrix I have the following offerings:
- Free invite codes (goods & services + social capital): Top readers and subscribers will receive invite codes they can offer to anyone giving access to the Designing Tokenomics Udemy course for free ($20 in value).
- Expert badges for learners who have finished the courses and/or contributed material back to the Designing Tokenomics resources hub.
- Create a larger bundle of content by partnering with other relevant DAOs and communities. This will open the door for discounts, affiliate marketing and a more compelling bundle of products.
- If there are enough highly engaged readers I can open a private chat for experts & job sharing.
- Equity in Designing tokenomics for highly highly engaged subscribers who contribute back.
Part 3: Structure
I’ve opted for a simple program that rewards subscribers with ERC-20 token which tracks engagement of subscribers and lets them unlock the different tiers of rewards. Occasional NFT badges will be given for different rewards: finishing courses or participating in the community.
The ERC-20 tokens and NFTs together will be used to assess and unlock experiences between collaborating DAOs and offer present and future benefits.
As I’m looking to engage super fans I’ll construct a general, easy to put together program with napkin math:
- Each desired activity (examples: reading a newsletter, responding, taking the Udemy course, providing feedback, sharing with friends) will bequeath with a different number of tokens.
- Milestones will be set based on engagement so that someone who’s done a meaningful number of actions (for example read 7 emails in my email course) will be able to invite 3 friends to the Udemy course.
- Milestones will scale exponentially, so that it’s harder to achieve higher status. The higher the status the more expert and white glove the treatment will become - they will receive badges elevating their status, shout outs in the newsletter as experts that can be consulted with, possible job opportunities on consulting projects etc. While it would be great to offer everyone everything, this is one of the constraints I have on my time and it would dilute the offering - experts want to be surrounded by experts.
Designing Tokenomics by Yosh Zlotogorski