Revenue share trading, is it feasible?

So I’ve been interested in developing ecosystem around Web Monetization API via Probabilistic Revenue Sharing in the past few months (in case you don’t know, my open source library on it - https://prognovel.gitbook.io/fundme/). I’ve been scratching on some ideas around it, one that I think is feasible is to create affiliate marketing network that gives shares (as in weight in Probabilistic Revenue Sharing) to referrer easily, which if done correctly I reckon it could make creators less dependent on big platform (as they can easily market their works without any prior funding).

However, just today, I’m starting to move on another idea and play around on tradable shares that can be sold either by the creator itself, or the contributors, or just anyone whose payment pointer address listed in the works’ revenue sharing pool.

The idea is to imitate stock market, but works in peer-to-peer manner with (probably) smart contracts, which during WIP phase creators can sell some shares for their works to fund their projects without having to go to into a binding contract with traditional third-party (publishers, content platforms, etc). This is also makes contributing on the projects (that pays with rev share points) looks more attractive, as contributors could cash their shares quickly in case they needed immediate money, something that is tricky if the ecosystem rely around web monetization streams alone.

The reason why I’m thinking doing this is because I want to design an ecosystem that pays not only by popularity, but also with the works’ quality. Previously I’m thinking on aggregating reviews and rank creative works based on how well people rated them–but it comes with its own complexity and I’m worried if people will game the system too much, it will crash, as I’m not planning to oversee the system closely. So a system that people could fund based on how well the works will perform in the future is something I want to explore.

What do you think? Do you think it can be done? Suggestions are welcomed!

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I like it. I had a similar idea and it set me on the path of starting my new project.

I was thinking on some sort of crowdsourced / crowdfunded record label where the public could “invest” in new music projects before they were produced in exchange for a share of future streaming revenue. (I didn’t know about the web monetization standard or Coil then. I’m talking about traditional monetized streaming services like Spotify and YouTube.)

But this would require a platform that was legally incorporating each of the music projects. I didn’t figure out any other model for it. Long story short, what I was thinking of doing originally is probably (still) illegal. I also think that the theoretically legal version of it isn’t worth doing because you’d have to go through the trouble of creating a regulated corporate entity for every single song or album (so that its revenue share could be individually bought and sold later on).

When you’re talking about selling assets that have some expectation of a financial return, then to the regulator you’re talking about the business of selling securities and you’d better get ready to pay some hardcore lawyer fees. Maybe if all payments are crypto only you might be in a legal grey area? I’m not a lawyer.

The tools to make ideas like this possible might exist in the next few years, though. I’m pretty optimistic in light of progress we’re seeing in DeFi all-around, securities token projects like https://polymath.network/, a new potential “nationally harmonized” crowdfunding regulation in Canada, and with just the overall speed of innovation with Web3 and Web Monetization.

Maybe it’s worth starting to plan this type of thing despite the legal quagmire? I’m not very knowledgable about this stuff but I know a few ppl. Let’s keep talking. Smaller scale content creators and artists should at least have access to the same fundraising options as startups.

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I think music is one that will do well the most for this kind of model because its repeatedly consumed nature. Indie musicians probably the most reasonable first clients to do this. I’d like to see that flourish with good ecosystem and decentralized creator platforms to supports it.

I also feel your worry about the legality treading on this. I’m myself starting my own project because I create my own work, and am not interested in publishing with local publishers due to artistic difference, so the idea on creating legal entity like those established legal publishers could be a turn off for me.

Anyhow, I don’t think planning and prototyping this kind of project requires approval from any legal entity. At least, I don’t think setting up an app that connects to interledger test net (or XRP test network) required any paperworks, and writing whitepaper for it doesn’t require any governments’ permissions either.

Also, I think Polymath is quite neat platform, but it seems to related closely to ethereum, while I was thinking more on Web Monetization and Interledger side. I’m thinking to bootstrap the system without outsourcing to third-party, mainly for better control for it, and for the chance to learn web economy from the experience building it. I’m very eager to learn something out of it.

My original plan when I was starting thinking on it is to set up an open source Codius host, then somehow put it into the wild and let it collect fees from shares tokenizing to pay for its hosting. The problem was that I don’t have any baremetal machine to run a prototype for it, and Codius doesn’t seem to actively developed as the last commit was 2 years ago.

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Yeah, I’m thinking on the Web Monetization and Interledger side of things as well. I find the gas prices on Ethereum to be problematic. But it’s good to think on the possibilities and benefits of being interoperable / multi-platform. Even if maximal decentralization was your ultimate goal you could still benefit from something like Ripple or Stellar as a bootstrapping mechanism. (EDIT I’d like to concede that Ripple is possibly even more decentralized than any other platform. It’s just that that’s not really a common perception in the crypto community.)

For indie music I think one of the main issues we face is discoverability. There are a lot of people out there creating cool music that isn’t reaching its audience. Platforms are using data/AI driven solutions to auto-create playlists and stuff like that. Nothing wrong with that. But back in the 80s and 90s there were a lot of indie/college radio stations that exposed ppl to the cool new stuff they couldn’t find in the mainstream. Now instead of a “mainstream” vs. “indie” we have this massive blob of stuff on linchpin (kingpin?) sites like Youtube and Spotify.

I think there’s room for a lot of higher quality curation or “neo indie/college radio”. I’d love to be a part of something that not only exposed people to new music, but also told the stories behind the music and even shuttled the conversation to a monetization platform. We’re working on a podcast that discusses the struggles of artists. Maybe it could also be the genesis of something like we’re talking about? I guess one simple way to start in that direction would be to include a few songs in the podcast pilot.

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Yeah, I’m thinking on the Web Monetization and Interledger side of things as well. I find the gas prices on Ethereum to be problematic. But it’s good to think on the possibilities and benefits of being interoperable / multi-platform. Even if maximal decentralization was your ultimate goal you could still benefit from something like Ripple or Stellar as a bootstrapping mechanism. (EDIT I’d like to concede that Ripple is possibly even more decentralized than any other platform. It’s just that that’s not really a common perception in the crypto community.)

You are right. The system might be better to designed stack/platform agnostic if possible.

It’s just that for the proof of concept, I’d like to make it simple first. If it really can be done and there’s no obstacle from making it public (from legal point and such), it might be worth it to consider its interoperability feature more.

For indie music I think one of the main issues we face is discoverability. There are a lot of people out there creating cool music that isn’t reaching its audience. Platforms are using data/AI driven solutions to auto-create playlists and stuff like that. Nothing wrong with that. But back in the 80s and 90s there were a lot of indie/college radio stations that exposed ppl to the cool new stuff they couldn’t find in the mainstream. Now instead of a “mainstream” vs. “indie” we have this massive blob of stuff on linchpin (kingpin?) sites like Youtube and Spotify.

Discoverability is the most crucial problem to solve if we’re meant to make decentralized platforms competitive than centralized ones back by corporations. On my side it’s also a serious problem. There’s just no way indie creators could have better options if decentralized platforms don’t innovate against big data and personalisation recommendation system that makes centralized platforms far ahead in the game. And if things went on like this, we creators who’s struggling and don’t have much choice would have elites taking advantages and making us who depend on their platforms receiving the short end of the stick. Really, news like this is sucks hard.

I think there’s room for a lot of higher quality curation or “neo indie/college radio”. I’d love to be a part of something that not only exposed people to new music, but also told the stories behind the music and even shuttled the conversation to a monetization platform. We’re working on a podcast that discusses the struggles of artists. Maybe it could also be the genesis of something like we’re talking about? I guess one simple way to start in that direction would be to include a few songs in the podcast pilot.

I also think on improving features on human curation is the first step to support independent creators. If we can’t beat big corporations armed with machine learning then we just make it easier for people to spread works they like through the words of mouths. Taking a stand behind influencers, like working on podcast, would definitely help!

From my part I’m planning to working on open affiliate marketing that pays with Web Monetization rev shares instead of upfront payment - so content creators can market their works without paying a single cent (the design is something like this).

My solution might have its own challenge like technical difficulties and potential of spams on social media, but if done correctly, once people starts to think sharing indie creators’ works can bring them side income and incentivizes them to scale up, there might be opportunities to develop platforms for influencers (indie critic blogs, reviewers, etc) – and it also might be possible to create an entire ads network on top of it, one that only promotes creative works made by small creators, with Web Monetization rev shares as the main driver of its economy.

I just realized when I said Codius hasn’t updated for 2 years – it was the Codius site I was referring to, while other Github repos of Codius turn out to be actively maintained by someone (though they seem to do it silently and there hasn’t been any updates on their site or their Medium, I really thought it was almost abandoned yesterday).

But in the meantime ethereum ecosystem seems to be more mature on smart contracts. Their standardized tokens seem reasonable point to get started.

Anyhow, I’ll look into both, and see my options first before start on planning my blue print.

Wow. That’s cool. I really like the long 5 year time horizon.

I’m going to look again at this idea of offering a share of streaming Coil revenue in the context of something like an arts crowdfunding campaign for a digital media project, like we’ve been talking about, where backers get a % of the revenue. It might work well if we have a platform with user profiles set up. Backers wouldn’t need to worry about payment pointers or wallets necessarily, but we could show them how that stuff works. Let’s chat more! I’ll send you a DM.

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The plan is to make it store the referral long term, but it’s quite tricky with the current implementation as no sign ups like WM API works means I have to rely on IndexedDB, which is depending on browsers, quite unreliable to store important data. I’ll probably mix that with online profile syncing in the future to make it more reliable.

Anyhow, most of my projects (including the affiliate rev share) are or will be in open source, so if you’re interested, maybe we can think together to make it work. I’ll send you an email in a minute.

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