Crypto-Powered Market Zora Raises $ 2 Million To Construct A Sustainable Creator Economic system


Dee Goens and Jacob Horne come from exactly the opposite background that you would expect from two individuals creating a path for creators to build a sustainable economy that their followers can partake in. Coinbase, University crypto hack projects, KPMG, Merrill Lynch. But where is the art?

"Believe it or not, I used to have dreams of becoming a rapper," laughs Goens. "There's a Soundcloud out there somewhere. With that passion, you explore the inner workings of the music industry. I would be excited to ask industry friends about the up-front and 360-deal models only to find that they are completely broken."

And while many may be well-intentioned, these deal structures often make use of artistry. In many cases he takes over the majority of the artist's ownership. “I became curious as to why artists couldn't effectively pull themselves out of their community – but were forced to seek potentially predatory relationships. For me that was bullshit. "

Horne says he always wanted to create a fashion brand.

"I always thought a fashion brand was something I would do after Crypto," he tells me. “I love crypto, but it felt too much on finance and it seemed like something was missing. Then I started playing with the idea of ​​combining these two passions and creating Saint Fame. "

While at Coinbase, Horne kept hacking Holy glory, a side project that took advantage of some of the ideas shown in Zora. It was a marketplace where people could sell and trade items with cryptocurrency to buy tokens of variable intermediate value that were redeemable for future goods.

"I realized that the culture itself is built on an old financial system that is systematically directed against artists and communities," says Horne. “The operating system of property was developed in the 17th century together with the Dutch East India Trading Company and the early nation-states. How the fuck is this going on? "

We have the internet now, we can literally create information and give it to billions of people at once, and the ownership system is the same as having people get on a boat for six months to send a letter. It's time to upgrade. Every community on the internet should be able to come together with capital and work towards a common vision. It starts with empowering creators and artists to create and own the culture they create. In the long term, this means that Internet communities are making social efforts. "

The answer they are working on is called Zora. It is a marketplace with two main components, but one philosophy: Sustainable Economy for Creators.

All too often, creators are involved in reaping the rewards for their labor only once, but the secondary economy continues to generate value beyond their reach. As an example, imagine an artist who creates a piece and sells it at market value. This is great, but after that, every ounce of work the artist puts into future work in building a name and brand and community for himself brings added value to this piece. The artist never sees a dime of it and instead relies on the value of future releases to pay dividends on the work.

Photo credit: Zora

That's basically how it always worked. I have a little background knowledge from exhibiting and running a gallery in the past, and my dad is a visual artist. If he sells a painting for $ 300 today, and gets much better, more popular, and more valuable over time, the owner of that painting can resell it for hundreds or thousands more. He'll never see a cent of it. And God forbid an artist like him is too entangled in the gallery system that cuts off enormous chunks of the value of a piece for a square of wall space and the marketing seal of approval of a curator or a storefront.

The same story can be told across the recording industry, fashion, sports, and even social media. Lots of medium-sized businesses and lots of vigs to pay for. And unsurprisingly, the same color makers who drive so much of The Culture are hands down the biggest losers.

The primary Zora product is a market where developers or artists can bring products to market and then continue to participate in their second market value.

This is how the Zora team explains it:

Developers can set two prices on Zora: starting price and maximum price. When community members buy and sell a token, the price moves up or down. This makes the price dynamic as it opens up pricing for the items through the market. When people buy the token, it moves the price closer to its maximum. When they sell it is nearing its minimum.

For an excited community like Jeff (Staple’s), this new dynamic price can lead to a rapid increase in the value of its sneakers. As creators, you capture the value from the sale on a price curve and receive a takeover of the trading fees from the market that you now own. What used to be traded on StockX is now traded on a market owned by the creator.

There were some early successes. The designer and marketer Jeff Staple started an edition of 30 copies Coca-Cola x Staple SB Dunk inches by Reverseland and its value has increased by 234% since publication. A Benji Taylor x Kevin Doan The vinyl number has increased by 210%.

I've seen a few other stitches. When he was at StockX, founder Josh Luber started theirs First product offering, a blind Dutch auction system that allowed the market to set a price for an item, with some of the price drops above the market being due to the manufacturer or brand making the offer. The focus there was on brands versus individual developers (although they started with a Ben Baller slide). Allowing brands to tap into second market value for limited goods is much less of a revolutionary game, but the thesis is similar. I thought that was a good idea back then, and I like it even better when it is used for democratization rather than maximizing returns.

Side note: I think it's great that this team is playing around with interesting ideas like dog food in their own market to be in their own TestFlight group. I'm like, Is this allowedbut at the same time it's dope and I've never seen anything like it.

Zora was founded in May 2020 (in the middle of this current Panny-Palooza). The team consists of Goens (Creator and Community), Horne (Product), Slava Kim (Design), Dai Hovey (Engineering), Ethan Daya (Engineering) and Tyson Battistella (Engineering).

Zora has raised a $ 2 million startup round led by Kindred Ventures with the participation of Trevor McFedries of Brud, Alice Lloyd George, Jeff Staple, Coinbase Ventures, and others.

Tokenized Community

But the idea that physical goods or even digitally packaged works have to exist as finite containers of value is not a given. Goens and Horne are also trying to question this with the first big new product for Zora: community tokens. Built on Ethereum, the $ RAC token is the first of its kind from Zora. André Allen Anjos, stage name RAC, is a Portuguese-American musician and producer who makes remixes that are streamed on the web, original music and commercial work in major brand promotions.

Despite being popular and having a following of tens of thousands, RAC is not a social media superpower. The token distribution and the subsequent activity in trading and sales are determined exclusively by the buy-in that its fans feel. This is a key takeaway for many players in this new economy: raw numbers are the social media equivalent of a billboard that people drive past. It can get eyeballs, but it doesn't guarantee any action. The modern creator lives in a house with his fans and gives them access and interaction via Discord and Snap and Comments.

Photo credit: Zora

But these houses are all other people's houses, which results in Zora putting a token on the market.

The token drop serves several purposes:

It unites fans in several silos. Regardless of whether they use Intsa, TikTok, Spotify or Snapchat, they can all earn tokens. This symbol serves as a uniform unit of value for the community, which everyone understands and around which they revolve. It is a way of owning a finite binary "atom" of an artist's digital being.
It creates a pool of values ​​that an artist can own and distribute himself. You cannot currently buy $ RAC directly. You can only deserve it. Some of this is retroactive for loyal supporters. For example, if you followed RAC on Bandcamp in 2009, you get a pool of 25,000 RAC. Bought some RAC merch? You will also receive credit in tokens. Future RAC distributions will be given to Patron supporters, merch buyers, etc.
The value stays in the artist's universe instead of being converted into currency. It serves the artist as a way to motivate, reward and energize his followers. RAC fans who buy his mixtape receive tokens and can redeem them for purchases of additional merchandise.
It offers more flexibility for developers whose work doesn't neatly fall into package-able categories. Performance art, activism, bite-sized entertainment. These are not easy to "drop" for money. But if you have a circulating sign that will increase in value as your audience grows, there is definitely something in it.

The future of Zora is immediately about creating a self-service version of the market that will allow developers and entrepreneurs to bring their products to market without direct partnership and onboarding. There are many, many uncertainties here, and the team faces many traction and messaging challenges. But as mentioned earlier, some early releases have shown promise and the philosophy is solid and much needed. Since the Creator Universe / Passion Economy / whatever you call it depends on how old you are / the fandom trader wave is rising, there is definitely an opportunity to reconsider how the value of their contributions is assigned and whether there is a way the long term work to build a community in long term value.

By the way, the last price traded by RAC's band, BOY? $ 3,713by 18,465%.