George from CryptoRUs invited BackedBy to an episode of FOMO or Pass. The series, co-hosted by Brian D. Evans of bde.ventures, features projects that join the episode in order to pitch and let the hosts decide if they would FOMO in or pass on the investment.
Dax Herra of BackedBy joined the episode to pitch the duo on their decentralized Patreon like platform which is a crypto subscription payment service. Dax opened by explaining the feature that is sorely missing from Web3, and that is recurring payment options. This $1.5 trillion dollar industry includes the creator economy with podcasters, streamers, and other content creators. The middlemen, like financial payment systems and banks, continue to exert control over how content creators connect with their fans. He used twitter as an example, mentioning how Elon bought twitter to protect the public from censorship and third parties who stand in the way of creators and their community.
BackedBy is designed so anyone can use Web3 to fund online content directly from their fans. The system is automated and tied to the blockchain eliminating the risk of deplatforming, so common on other web2 social content platforms. BackedBy aims to return the power to creators and their fans. Currently, about 10% of the revenue for creators is used for web hosting services. The costs are prohibitive on many of today’s outlets according to Dax.
For the first simple use case, the project can be thought of as a decentralized Patreon, but they will be adding more options for fundraising, kickstarting, charity, and more.
Brian pointed out that the subscription world is difficult, and asked for more details on how it works. Dax responded that Backedby is authorized to pull subscriptions out of wallets every month. They have made the product composable so there can be a subscription model based on stable coins that is specific to the users needs. Since security of automatic payments with wallet access will be a huge concern for some, the team chose the premier auditing platform Certik, to conduct security and smart contract audits.
They currently have about 20 members and 3000k worth of subscriptions flowing through the platform. Brian asked how they plan to grow this, and the summary of the goal seemed to be a slow and steady word of mouth process.
George asked about the revenue model of the platform and Dax informed them that they will be taking a percentage of the subscriptions that come through the platform. Creators will have a choice of how much they want to contribute to the platform in order to support its growth. Dax feels platforms should be partially owned by creators and he mentioned the governance token will be used to reward content creators on the platform. Brian asked about NFT integrations and Dax discussed some of the fields they are working on. They will be creating a built in NFT factory that will interface with shopify for merch, ticketing, and other online transactions.
In the future they will be adding a kickstarter, onlyfans, and superchat clone. These are the services streamers and creators use that take a big cut of the creators check. Next is ERC-20 integrations and then moving into the B2C space. For example, if a store wanted to set up a coffee subscription, but didn’t have the ability to accept crypto, they could use the BackedBy widget as a point-of-sale option.
George then returned to the issue of marketing and attracting creators to the platform. Dax explained how creators understand the traditional model but not the blockchain. In the next few years, Dax anticipates fees on these outside platforms to rise and restrictions to become more severe. There will be companies that fold, and others that raise fees so high creators will be forced to move and look elsewhere. He is banking on the idea that Web3 will be there to pick up the pieces of these less efficient platforms.
Dax highlighted that BackedBy will have an email login and user credit card in order to remove the in-your face blockchain technology that turns those outside the crypto world away.
After Dax left the building Brian and George discussed the project. George mentioned that he likes projects that can be easily summarized, like being the ‘decentralized Patreon.’ He also appreciates the idea of incentivizing creators to move over for cost efficiency and decentralization to avoid censorship. The security concerns were George’s main hangup.
Brian continued on saying the process of subscription models can be very difficult. Charge backs can be a huge problem that takes down a whole platform. Finding this niche could be hard in a world where people might not keep crypto in their wallets to fulfill the subscriptions, but still agreed the company has a novel idea.
Did they FOMO or Pass? Watch the full episode here to find out:
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