Nostr Web Client

Sending a percentage of your zaps to head straight to your Client's development team, optionally or forcibly, sounds like a great way to sustain a project. And, depending on the team's career goals, it is. However, I am here to argue that this revenue model doesn't serve us well.

Let's be real: if you are developing a client and seeking venture capital, then yes, rev-share is by far your best shot at winning. It's a hot favorite in venture pitches because it hands the company (and its investors) control over the entire field while raking in maximum revenue from all participants. Your performance metrics are very well established, incentives are aligned with the fast-scaling needs, the path to growth is very common and many, many investors know the territory extremely well and will be more willing to easily give you money. If that is your case, go for the usual route of YC -> VC -> PE -> IPO. You won't control anything in the end, but it will make you, and your investors, a lot of money.

That being said, I believe this revenue model bakes in the wrong incentives, and forward-thinking clients should seek alternative revenue-generation strategies.

Storytime: Over the past 15 years, I led a medical device business that integrated a rev-share component. Doctors purchasing our devices gained access to our medical record system. The revenue model for that system was rev-share: the system itself was essentially free, and each time providers submitted a prescription, we earned $0.50. Initially, this model thrived because it scaled with our customer's needs. If they were small businesses, their payments would stay small, proportional to their bumpy use. $0.50/patient was something everyone could afford out of their insurance payouts. It was great for beginners, great for large players, and great for us. Things looked great. But little did I know what it would do to the business. Gradually, our focus shifted from developing devices and enhancing the system to obsessing over increasing the number of prescriptions. We ended up staying quite small as a business, but even at that small size, I could already see the damage the revenue model could make at scale. If we grew, it would be all about how to get providers to file as many prescriptions as possible, even for patients who didn't need one. Controlling the medium upon which customers file prescriptions gives the company immense power to incentivize behaviors that will go against the well-being of the community.

Similar tendencies are visible in other platforms like Substack nowadays. You can't visit your favorite author without being constantly "reminded" to subscribe to other creators. It doesn't matter if you care or not about those topics. What matters is that you subscribe to them. The company doesn't care if you end up never reading their content. That's not their problem. Their goal is to push as much content down your throat as possible so that they can collect little fees here and there. The bigger the amount of content you subscribe (not the quality), the bigger the fees they get.

The same is happening with Lightning wallets and many Bitcoin products that sustain themselves by taking a share of your transactions. They are incentivized to make users spend and not to help them manage their finances well.

Nostr won't be different. Zap-share Clients have an incentive to make you spend. In the long run, that is all they will care about. It doesn't matter if the content is good or not.

You become a Foie gras goose.

Social media has grappled with broken incentives since its inception. If we want to design a better social environment, it's our duty to find business models that are more aligned with the well-being of our users. We don't have a clear answer for that right now, but there is hope: we know what we want. We want to align the size of the user's contributions with products that make users feel better and more productive.

In the long run, this desire will split Clients between creator tools and consumer tools. Creator tools should help authors optimize their revenue stream while consumer tools should help readers optimize for their needs and well-being, independent of how much creator tools try to push content down your throat.

If you are a consumer of content (or more precisely, WHEN you are consuming content), you should reward those clients that hit the sweet spot for you without forcing you into spending more than what's needed. If you are a creator (or more precisely, WHEN you are creating content), you should reward clients who help you optimize the outcomes you desire for your content.

I find it hard to believe a single client can play both sides well. In a decentralized environment like ours, specialized clients will always win.

Remember to choose clients that are on your side. A creator's side is not always aligned with the consumer's side. When the eagles are silent, the parrots begin to jabber.

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Discussion

jb55 2y ago

Whats wrong with encouraging more zapping? That means content creators are getting rewarded, this incentives more people to create content which means more and better content for consumers.

jb55 2y ago

You mentioned before that encouraging people to do a certain thing feels wrong, but the design of our apps do this regardless. If we make things easier to do users are more likely to do it. If we make zapping more fun than users are more likely to zap. Is this a bad thing? I thought we wanted to grow the zapconomy?

ᴛʜᴇ ᴅᴇᴀᴛʜ ᴏꜰ ᴍʟᴇᴋᴜ 2y ago

You should see the incentive models for nostr relay development. hah!

Moss 2y ago

As if the two are not in conflict, the two are mutually reinforcing and mutually beneficial: "Creator tools should help authors optimize their income streams, while consumer tools should help readers optimize their needs and well-being."

Medical treatment is an extremely unsuitable case, because the status of the patient and the doctor is not equal, the patient is in a weak position during the illness, he has no choice, the patient needs the doctor to solve his pain. Patients will accept any pharmacy that a doctor prescribes as long as they can afford it. The status of creators and content consumers is equal, and no one needs to ask anyone. Creators have better content, there will be more consumers, consumers don't like the content can not consume.

And everyone is willing to create and consume on a platform with excellent experience and fair mechanism, which is what Nostr client should do. Users can also choose to share a percentage of their revenue to support the development of the client.

Vitor Pamplona 2y ago

> The status of creators and content consumers is equal, and no one needs to ask anyone.

Sure, but that's not the point. My point is that if the Client is incentivized get consumers to spend, the Client takes the creator's side. And Creator + Client together will smartly play the consumer so much that it will be equivalent to the weak patient description in the medical case. Consumers won't even notice. In the end, consumers will have to choose a Consumer-first to even fight the attention-seeking drainage of zap-share apps.

Moss 2y ago

The extreme situation of turning consumers into weak patients is likely to only occur on hardware monopoly platforms like Apple. Even monopoly platforms like Apple don't dare to do this. So far, Apple is still a consumer-centric platform. This situation is even less likely to happen on the Nostr client. Nostr exists for consumers because users can switch their clients at any time without losing their personal data. Consumers will pay for products they like, and if they don't like them, they will abandon them.

If there is one part of Damus' zap-share that needs to be optimized, it is to grade users' split ratios, from blue to yellow badges. This will make users feel discriminated against and forced to split a large proportion. If we really want to give users a sense of fairness, as long as users have set the zap split ratio, they can all get the same badge.