On November 14, as the rapidly spreading contagion from the FTX exchange's collapse pushed crypto into an existential crisis, shoemaker Nike unveiled SWOOSH, its daring new Web3 platform.
The initiative, which will allow Nike sneaker fans to buy and sell the brand's digital wearables and create their own collectibles energized by non-fungible tokens, is one of many household brands that are proceeding as if nothing has happened in the larger world of crypto.
Starbucks, the National Football League and its players, Instagram, Budweiser, Adidas, Dolce & Gabbana, and Time are among them. The list goes on and on.
That may be the case, and it's great that spending on such initiatives will help offset the significant decrease in spending by native crypto companies. Many people were drawn to this industry's rebellious, disruptive appeal and its pledge to level the playing field by giving creators and users more control over their money, content, and data.
The question is, will crypto lose its edge as it becomes more corporate?
Signals that are mixed
To some extent, the answer must be yes. The cryptocurrency industry will be forced to accommodate the legal and marketing concerns of image-conscious, bureaucratic public companies. Trigger words like crypto, blockchain and even NFTs are being removed from materials in favor of the more general concept of digital collectibles.
But all is not lost. So far, brand activities in this space appear to be motivated by a positive, inclusive mindset. For example, there is a genuine effort to give artists, musicians, and writers more control over their work, increase royalties, and seek out diverse creative backgrounds and styles.
A similar vibe can be found at Instagram, which, as a subsidiary of Meta Platform, is frequently viewed as an extension of the social media giant's massive control over people's data, content, and lives. The platform's most recent trial with a group of NFT-savvy influencers allows them to create, buy, and sell collectible content and use the technology to create new exclusive-access business models, dealing closely with their most loyal audience members. In spirit, it adheres to the Web3 principles of giving creators and users more control and ownership.
But, before we start cheering the liberation of aspiring artists everywhere, keep in mind that Meta began its metaverse project with the intention of charging fees of up to 47.5% for the privilege of using it. The crypto community was both outraged and amused by that monopoly-like pricing model.
The Web3 economy that has emerged from these brands' ad hoc projects is already riddled with contradictions. We must untangle them if we are to properly assert the competition and ease-of-access principles required to assume an open, disintermediated Web3 future.
Consider the pricing and fee structure that artists involved in the new Instagram NFT project will face.
On the one hand, it forbids influencers from charging more than $1,000 for their work. Although this is a form of market restriction in and of itself, the price limit is being welcomed as a way to allow for greater inclusivity than, say, the marketplace OpenSea, where NFTs sold for multi-million dollar prices to crypto-rich collectors at the peak of last year's boom. It could encourage broader involvement and allow the NFT business model to become more mainstream-inclusive.
Is this, once again, the curse of an overpowering, intermediating internet platform? Yes, but it turns out that the monopoly is not Instagram's, which does not charge its artists, but Apple's. The iPhone maker is slamming Instagram with its standard fee for all products sold over apps purchased through its app store.
But, before you get all worked up about CEO Tim Cook, consider that egalitarian pricing structure. What caused it to appear? It turns out that it is also based on Apple's policies.
All of this serves as a reminder that, in Web2, centralized platforms such as Meta and Apple wield enormous power over the information, art, and entertainment markets on which society, and indeed our democracy and culture, rely.
This is why open metaverse projects like Punk 6529's Om and Lamina1, founded by Bitcoin pioneer Peter Vessenes and science fiction author Neal Stephenson, are so important. They are both built on first-principles frameworks that aim to prevent anyone from attempting to control any core applications or infrastructure or from establishing rent-seeking portals through which creators or users must enter their worlds.
More is needed to rely on the goodwill of legacy platforms and the gigantic ones that use them to reach customers and audiences. We must design systems that are resistant to corporate control.
That is the core spirit of crypto, and it sends a message to the rebellious coders and censorship-resisting creators who have been drawn to it: it's okay to accept these companies' money, but look carefully at the strings attached and then make sure enough of that financing finds its way to those who can construct the decentralized protocols, applications, and APIs required to keep the system open.
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