Zora: Pushing Value to Creators

Key Insights

• Zora serves as a space for collectors to mint NFTs and discover creators, as well as a means of distribution for creators themselves.
• Zora charges a mint fee (0.000777 ETH) per NFT mint. The recently introduced Protocol Rewards system now splits the mint fee between Zora, the creator, and any relevant minting platform. Prior to Protocol Rewards, Zora internalized the mint fee.
• The combination of Protocol Rewards and Zora Network (Zora’s L2) creates two distinct revenue streams for Zora. Optimism, Arbitrum, and now Base have shown the net onchain revenue potential around L2s, and Protocol Rewards create revenue for Zora regardless of which chain the NFT is minted on.
• The inherent Zora mint fee presents its own challenge since there will always be a cost (albeit a relatively small one) for minting Zora NFTs, but it also serves as an anti-spam feature as well. Creators will need to invoke this property to help segment and identify their superfans.

The zeitgeist around content creators is shifting. Over the past decade, social media platform revenues shot up exponentially, but creators, who in many ways drove this revenue growth, did not equally share in this massive upside. To that end, there is now a growing focus on shifting value capture towards content creators. Examples can be found across numerous Web2 creator platforms:

• Twitter began directly paying out platform users in July this year. The payouts stem from ad revenues generated via a posts impression count.