makesy
@makesy.eth
base app’s user acquisition cost is market making long tail zora posts at a level where the windfall retains normie users. ergo: they should dump their entire marketing budget into systematically losing money on zora content coins. in addition to feed visibility, base has another lever to drive creator retention via discretionary micro payments. tech adoption curves differ between products with monetary and nonmonetary value props. when benefits are nonmonetary, it is more of a social decision (are a critical mass of my friends there?). this raises the user acquisition cost and lowers the likelihood of success when there are incumbents with network effects and switching costs. when the benefit is monetary, the decision is a rational/individual one. if you are making money, that is all of the validation you need. seeding an lp allows market makers to capitalize the user acquisition cost in a way that is volatile but easily quantified, perhaps even net profitable in the limit bullish case? Interesting.
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Christian Montoya 🦊
@m0nt0y4
How does this scale? Over time the market for content has to be driven by demand from the audience. Base can't subsidize demand forever.
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makesy
@makesy.eth
basically every social network subsidizes content creation now. they can subsidize post demand from whatever revenue they are earning from tx fees or ads or premium features. question is whether there will be enough $ and engagement to retain users. paid user acquisition costs for mobile apps are around $5 in US regardless, so business model needs to be able to justify that amount of spend at scale regardless. the more sticky the product is, the longer you can project out the average revenue per user and the more likely you are to be able to recover the initial spend. demand doesn’t have to come from base directly either, it could be crowdsourced from brands as a new advertising model. they should include prices and volume in the relevance algo, and also make it more personalized
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