How far are we from the true Web3? Starting with the creator ecosystem of Mirror

Interview: Hongjun, Silicon Valley 101 ("Silicon Valley 101" WeChat ID: svstyle)

Written by: Hu Shaoyang

"What other Web3 products can you name besides Mirror?" This seemingly joking opening line not only reflects the awkwardness of the hype period of Web3 but also confirms Mirror's unavoidable position in the field.

Image｜ Mirror Product Roadmap Source: Mirror Official Website

Users who have experienced Mirror often compare it to a blockchain-based Medium or Substack. Mirror is not just a decentralized content creation platform; it also aims to provide creators with a set of content creation tools. It is precisely because of its limited functionality that it lacks traditional features like subscriptions, view counts, and recommendation systems. The absence of these core functions is intentional by the team: because Web3 is still a wild frontier, filled with entrepreneurial opportunities. This is also what makes the product most attractive.

At the same time, Mirror has also developed a series of additional features, such as "crowdfunding" and "minting NFTs." These extra features have contributed approximately $1 million in revenue to Mirror.

Web1: read

Web2: read / write

Web3: read / write / own

What is Mirror? What is Web3? How far is Mirror from the ideal Web3 product? The host of "Silicon Valley 101," Hongjun, invited Shawn, one of the 17 core contributors to Mirror, to help us decode Mirror.

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Topics for this interview:

• Not just a decentralized content creation platform, but also a set of content creation tools
• Why does Mirror intentionally lack subscriptions, view counts, and recommendation systems?
• The wild frontier of Web3: abundant entrepreneurial opportunities
• Five tasks of the community: developer tools, curation, governance, operations, resource cooperation
• Three ways DAO pays salaries
• Over $1 million in revenue? Mirror's business model
• Controversial review: fraud, privacy, or freedom
• The problem the Web3 industry is trying to solve in 2022: how to verify identity
• What is Web3?
• The founder's self-disclosure: top Web3 projects are not even Web2.5
• Future blockbusters will come from Web3 natives, not Web2 upgrades
• Key decisions: made by founders, not the community
• Strong correlation with Twitter: why did Mirror's cold start succeed?
• High gas fees and difficult traffic: the dilemma of the creator economy in Web3

Content creation in Web3: Not a platform, but a protocol, a tool

"Silicon Valley 101": Do you think Mirror is a typical Web3 product?

Shawn: Mirror is a very, very typical Web3 product. When we discuss in many occasions and ask guests to write down the most typical or impressive Web3 products, more than half of them would choose Mirror.

"Silicon Valley 101": In your definition, what is Mirror?

Image｜Various tools provided by Mirror Source: Mirror Official Website

Shawn: First of all, most people who use Mirror see it as a decentralized content publishing platform. Because the core of Mirror is that content is stored on-chain, rather than in a central database.

But from Mirror's own perspective, its positioning is as a media or DAO infrastructure. It provides a series of basic technical tools for DAOs, allowing creators to build media DAOs based on these tools.

"Silicon Valley 101": In your definition, Mirror as a DAO tool has a series of systems to support the content creator ecosystem, not just a creator platform.

Shawn: Yes, that's right. There are actually multiple content creation platforms in the industry, such as Matters, Fanggezzi, and Patreon, which only focus on content publishing or aggregation. Mirror is quite different. Content creation is just a small part; it focuses more on crowdfunding tools, NFT tools, and on-chain tools.

"Silicon Valley 101": You entered Mirror quite early and became a core member of the Mirror DAO in the Chinese community. When did you first hear about Mirror, and how did you join?

Shawn: I came across Mirror in the first half of last year. Before October last year, Mirror accounts could not be applied for; you could only gain access by winning $WRITE tokens. This token had to be earned through voting campaigns on Twitter, with 10 people selected each week. I also participated in the campaign, but it was really hard to win, so I gave up after a few weeks.

After open registration began, I started using it seriously around November to December. I began to communicate with the Mirror team. Initially, I understood Mirror as just a content publishing platform, but it lacked many features. Later, I slowly discovered that Mirror actually has a huge system; what we see is just the tip of the iceberg, and it is the part they care the least about.

So I started to invest more energy into Mirror. By December, one of my articles was selected by Mirror, and they rewarded me with a $WRITE token. After burning it, I joined the Mirror DAO, which is invitation-only, and there are only about 300 people so far. In December last year, they also opened up contributor applications, and now there are 17 of us, and I am one of them. Mirror is currently mainly run by the core team and 17 contributors who handle operational tasks.

"Silicon Valley 101": After using Mirror, what features do you think it lacks?

Shawn: The basic functions we often use in traditional media, such as subscriptions, reader tracking, and view counts, are all missing in Mirror. Secondly, there are no curation and portal functions; after articles are published, users have to spread them through social media, but later I realized they want the Mirror community to handle this.

"Silicon Valley 101": So this leaves entrepreneurial opportunities within the Mirror ecosystem, with the platform only providing underlying services.

Shawn: Yes, in December last year and January this year, more than a dozen members joined the Mirror DAO because they actively developed many products on Mirror, such as a website that allows users to subscribe to Mirror creators, track their crowdfunding and latest articles. About five or six high-quality products were recognized by the Mirror DAO.

Image ｜ AskMirror Source: AskMirror Official Website

"Silicon Valley 101": When I experienced Mirror, from the perspective of traditional creators, there was no traffic mechanism unless your own public account already had many followers. When I talked to a friend about Mirror, he recommended the software Submirror, which allows you to subscribe to Mirror accounts and sends newsletters to your email. There’s also AskMirror, which is a search entry for Mirror. These products made me more interested in Mirror; it feels like a wild frontier. As long as you have ideas, there are countless entrepreneurial opportunities related to content.

Shawn: Many developers are very interested in this. Many needs raised by people in the community are avoided by the Mirror team. They believe that application-level needs should be handled by the community. This indeed presents entrepreneurial opportunities. For example, just two weeks ago, several developer contributors formed a team to participate in the Lens Protocol hackathon, attempting to integrate Lens Protocol with Mirror. They received encouragement from the Mirror team.

"Silicon Valley 101": If developers want to do it themselves, do they need to communicate with the Mirror team?

Shawn: We find it quite amazing that no authorization is needed because its data is completely open. At least from our experience over the past six months, these product teams often complete their products and even start promoting them before the Mirror team begins to communicate with them and invites them in.

Mirror has some relatively simple APIs, but most data is stored on Arweave. Data on Arweave is accessible to anyone.

How does DAO operate?

"Silicon Valley 101": As a contributor involved in Mirror, how does Mirror pay salaries?

Shawn: First, we need to recognize that DAO, as an emerging organizational form, is like the early days of Silicon Valley garage culture, where there are relatively few positions and opportunities that can offer generous salaries.**

Generally, there are three ways: one is full-time and part-time salaries. There is not much difference from traditional companies, and the job responsibilities and specific salaries need to be agreed upon in advance. Only the amount of salary needs to be decided by vote.

"Silicon Valley 101": Is the payment in cryptocurrency or fiat currency?

Shawn: Different DAOs have different methods. Bankless pays with its own token, while Mirror pays with USDT stablecoins. The second method is through bounty tasks, which is somewhat like project-based companies, where one or several people claim tasks and receive rewards upon completion. Rewards can range from hundreds to thousands of dollars.

Image ｜ Coordinape Interface Source: Coordinape Official Website

The third method is somewhat like tipping, a kind of incentive based on a gratuity system. Typically, the software Coordinape is used to distribute amounts. All contributors enter this software and receive 100 points. Each month, everyone evaluates each other, and you allocate points to contributors you recognize. After the distribution, a numerical ranking appears, and each person's salary is the percentage of points they received multiplied by the total budget.

"Silicon Valley 101": The third method is quite interesting.

Shawn: Although there will be many issues, it is relatively objective. For example, if we produce a podcast episode, and I think your episode is very helpful to our community, but I don’t know what the other 200 contributors did this month. So I give all my 100 points to you. If the community only has two or three people, the data may show significant deviations, but once there are hundreds of people, its fairness is reflected because your contributions are recognized by others. This product was originally an internal product of Yearn Finance, and everyone found it quite useful, so it was open-sourced.

"Silicon Valley 101": Does Mirror currently have a business model?

Shawn: Many people say that Mirror does not have a business model. I would tell them that Mirror already has revenue, and it may have over a million dollars in revenue now.

They are curious about how Mirror can generate revenue. When you mint NFTs and conduct crowdfunding, there is a 2.5% revenue share that goes directly into the Mirror DAO treasury, which ordinary users do not feel.

"Silicon Valley 101": Are there any typical projects that have been crowdfunded on Mirror?

Shawn: There are several aspects where crowdfunding is currently doing well: one aspect is crowdfunding for movies, which is currently the largest segment and should become increasingly successful. SeedClub has specifically incubated several service DAOs, such as MClub. These service DAOs target independent filmmakers in Europe and America, helping them to conduct crowdfunding on Mirror and promote their films, allowing the entire Web3 community to integrate with the filmmakers' circles. These independent filmmakers have no concept of what Web3 is or how to manage their communities. Many independent filmmakers are even negotiating with Hollywood to attract them to Mirror for crowdfunding.

The second aspect is the establishment of DAO organizations, for example, a basketball DAO called The Krause House, which has crowdfunded a sum of money to prepare to buy an NBA team in the U.S. Of course, they cannot buy one now because it is too expensive, so they are preparing to buy 1% of an NBA team.

The third aspect is crowdfunding for Web3 products.

"Silicon Valley 101": I wonder if the crowdfunding for movies is for online films or offline films, and how they generate revenue?

Image ｜ Movie "ETHEREUM: THE INFINITE GARDEN"

Source: "ETHEREUM: THE INFINITE GARDEN" Mirror Crowdfunding Page

Shawn: A relatively successful crowdfunding movie is by Linda Xie, who is quite well-known in the Ethereum community. She crowdfunded a film about the early experiences of Ethereum called "ETHEREUM: THE INFINITE GARDEN." However, this is not a profit-making project; everyone is just donating purely. Linda Xie invited several well-known NFT designers to create rare NFTs for the top donors, which is also a form of return. But there is currently no established business model. Recently, there was also a documentary about cowboys, but I think its business model is also not very viable, mainly relying on donations.

"Silicon Valley 101": After the movie is made, will it not be shown in mainstream theaters? I understand it will still be spread within the crypto community.

Shawn: It really depends on the subject matter; whether the cowboy movie can enter the mainstream market is uncertain, but it can definitely enter some niche markets outside of the crypto community.

"Silicon Valley 101": There should still be many new ways to play. The simpler the initial product, the better; once you understand it, you can identify the problems and figure out how to design it more complexly.

Shawn: Yes, we will see dedicated service DAOs being established, which represent entrepreneurial opportunities based on the Mirror ecosystem. They will integrate networks and experiences from both Web2 and Web3 to help more people enter this field. First, they help solve funding issues, and second, they will gradually explore some business models. They are all exploring this area. It shouldn't be long before we see successful cases emerge.

"Silicon Valley 101": Regulation has higher requirements for DeFi and finance than for NFTs. Crowdfunding is considered to be in a regulatory gray area, involving fundraising. If there are fraudulent projects, how do you review them?

Image ｜ juicebox Source: juicebox Official Website

Shawn: From the platform's perspective, it does not concern itself with the problems of the projects themselves; it mainly provides tools. In fact, there was a more popular crowdfunding platform called juicebox that surged with over $20 million in donations in a single day, but the projects there were mixed. If the platform were to conduct reviews, it would be a significant challenge for governance.

Whether as a community or a team, they actually do not want to conduct reviews because it goes against some of the underlying values of Web3, but there are indeed teams or community members who keep an eye on the dynamics. If any issues are discovered, they will warn other members.

"Silicon Valley 101": You just mentioned that Mirror is a relatively Web3 product, which means part of its data is on-chain. But I also saw some reviews mentioning that while Mirror's text is on-chain, the storage of images and videos is still somewhat centralized. This is similar to OpenSea, which only records your transaction address, but the images you trade are still stored on centralized servers.

Shawn: Yes, currently Mirror does operate this way; its multimedia content is stored in a database. There are now many new projects emerging that provide decentralized solutions for Mirror, and I estimate that upgrades will gradually take place in the future, with cost considerations being the primary factor.

You may not know that Mirror's text is permanently stored on Arweave, and fees have been paid for each creator, which is not cheap. However, the storage costs for media content are currently too high.

"Silicon Valley 101": Is it mainly because the technology is still immature?

Shawn: I think it is currently a consideration of cost, decentralization, and user experience. It can be seen as an intermediate solution. It avoids charging creators directly while preventing storage costs from becoming astronomical and avoiding restrictions on the formats of multimedia content uploaded by users, which could degrade user experience.

"Silicon Valley 101": If Mirror does not want to conduct reviews, will there be a lot of inappropriate content on the platform in the future?

Shawn: This issue sparked a debate in the English community at the end of last year when a prominent figure published an article stating that Mirror lacks traditional protections for privacy and creator rights. How can creators be protected? This issue has two sides; when Google or Facebook presents 40 or 50 pages of creator protection agreements, people say it is hegemony. But when there is none, some challenge it.

In Mirror's Discord, you often see reports of articles with inappropriate values, such as adult content or articles promoting ethnic discrimination. Mirror has made some improvements, but its stance and positioning are currently very firm; it will not intervene. Mirror provides tools and does not even own user data; instead, it belongs to the creators after being put on-chain. So creators themselves must take on this responsibility; any legal disputes that arise in the future must also be resolved by the creators themselves.

"Silicon Valley 101": Regarding Mirror's current non-review mechanism, I thought of another issue. Since Mirror currently does not have an official ID verification mechanism, if a celebrity like Elon Musk does not register an ENS and Mirror account, scammers can easily register a fake account to deceive donations.

Shawn: Yes, the risk you mentioned does exist. First of all, Mirror itself cannot solve this problem, as it involves the direction of DID (Decentralized Identity). If ENS itself cannot prove such identities, many products based on ENS cannot solve it either.

Secondly, how to verify identity is not currently the most urgent issue for Mirror because it does not involve content promotion. Perhaps it will be discussed next or addressed from a technical perspective. However, I believe that technological solutions are more about waiting for the improvement of the DID direction, which is also the core issue being addressed in the industry in 2022.

"Silicon Valley 101": So for the Web3 world to make significant progress, many foundational infrastructures need to develop to solve these problems.

Shawn: Yes. This is why DAOs suddenly became popular in the second half of 2021. A significant reason is that the DAO tool track has established a strong foundation after three years of development. Some big names said they wanted to do this back in 2017, but there was no infrastructure at that time. So it is definitely the combination of technology, infrastructure, and industry development that lays the foundation for the emergence of more Web3 products.

Top Web3 projects, are not even Web2.5

"Silicon Valley 101": Today we have mentioned the term Web3 many times. What do you think is the difference between it and Web2? Is it the same as blockchain?

Shawn: What Web3 is varies from person to person. Many people on Twitter think that blockchain is Web3, but at least I have a clearer definition.

Web3 products, first of all, have on-chain value capture. They must have a part that is on-chain. Now there are some DAO tools that I find hard to classify as Web3 products; they are not different from Web2 products, such as database management, collaboration, etc. You can run them with a database and a Web front end, making it hard to define them, putting them in a gray area. But products like Mirror, whether it’s crowdfunding or other functions, are all conducted on-chain. It also has a 2.5% on-chain revenue share, which clearly captures on-chain value, so I would at least define Mirror as a Web3 product.

Secondly, there are governance token rights. Although they are not typical governance tokens, they do have certain functions. So many Web3 products have some governance tokens.

Thirdly, there is strong community participation. Yesterday I tweeted: the best DAO tools will eventually become protocol DAOs. Many Web3 tools have strong community involvement. In the beginning, the community helps you with functions and products; in the second phase, they help you promote and provide feedback; in the final phase, the team begins to integrate into the community, and the concept of a team disappears. Instead, the entire community builds the product. These three characteristics are currently quite distinct in Web3 products and are rarely seen in Web2 products.

"Silicon Valley 101": I think these three characteristics are quite close to blockchain.

Shawn: This is also why many people say Web3 is just a gimmick; after all, it still boils down to blockchain.

"Silicon Valley 101": But I have also heard a viewpoint that distinguishes Web3 from blockchain, suggesting that Web3 is a system designed based on cryptography, which may be somewhat different from blockchain. Perhaps everyone's understanding of this issue varies based on their position in the industry.

Shawn: Yes, just like when we ask what the difference between Web3 and DeFi is; it is more about distinguishing tracks. Many times when we ask what the most impressive Web3 product is, some say MetaMask, claiming it is the most typical Web3 product.

"Silicon Valley 101": When I was gathering questions, many listeners asked if MetaMask counts. But if you say MetaMask or OpenSea belongs to Web3, I think many people might feel they are not even Web2.5. Is that a valid point?

Image ｜ GitCoin Source: GitCoin Official Website

Shawn: A few days ago, we happened to be listening to a podcast where GitCoin founder Kevin and several other well-known figures discussed how to get 8 billion people on Earth to use Web3. Many people asked Kevin to share his development experience with Web3 products. He said, "I'm sorry, but you asked the wrong question. Actually, they say we are Web2.5, but I think we are not even at 2.5."

Although GitCoin is a top Web3 project, to survive, from a product and technical perspective, we are based on Web2. Now we are starting to pay off technical debts. Since the second half of last year, GitCoin has overhauled its entire product architecture and is starting to develop on-chain governance according to Web3.

"Silicon Valley 101": Why is there so much debate about the definition of Web3 today?

Shawn: OpenSea and GitCoin are probably the most influential products in the entire Web3 world. However, when they explain their underlying principles, they are at most Web2.5. It is undeniable that they are also making various changes.

I think they are considering this from first principles. When the entire industry’s technical architecture and various aspects are immature, I must have something to meet user needs. Once the product reaches this scale and even monopolizes the market, it begins a self-revolution, gradually replacing it with a new architecture.

"Silicon Valley 101": What is a Web3 native product? When I talked to some GameFi entrepreneurs, they believed that traditional online games combined with NFTs could be considered Web3-type games, but that definition seems somewhat inappropriate.

Shawn: We often discuss whether a product is migrating from Web2 to Web3 or is Web3 native. I believe we will see more and more blockbusters coming from Web3 digital natives. This discussion has been ongoing since last year, somewhat similar to the concept of digital twins that is often discussed domestically. We believe that digital twins essentially map Web2 to Web3, but such products are hard to succeed or become true blockbusters.

"Silicon Valley 101": What is the biggest difference between digital natives and non-digital natives?

Shawn: The biggest difference is whether there is a token economy. Token economy refers to how to design a set of incentive mechanisms from the entire system perspective to ensure sustained positive incentives over the next decade. The token economy is the most fundamental and core aspect of digital natives because a well-designed token economy can create a chemical effect that turns a product into a blockbuster.

"Silicon Valley 101": Relating your earlier point to Mirror, its token does not have such a token system; it is only used to enter this DAO community and is meant to be burned. It is not a part of a token system's economic structure. Yet we still consider Mirror to be a very digital native project.

Shawn: This has been one of the most challenging internal discussions in Mirror over the past two to three months. The path Mirror initially chose may need to be upgraded at this stage. Should it replan its future products? Should it have a token incentive mechanism? Can this token incentive mechanism address the issue of high gas fees?

We find that, whether in Mirror or other platforms, the vast majority of creators do not receive sufficient incentives due to a lack of followers. Most tips or NFT crowdfunding flow to top projects. However, those top projects inherently have traffic; those who are least in need of money are the ones who can get it.

Can Mirror's token mechanism solve this problem? This is indeed our biggest internal challenge. Recently, our DAO Team Leader even flew from Germany to the U.S. to discuss this matter with other teams.

Creator economy, or the era of influencers?

"Silicon Valley 101": What do the founders of Mirror think? I see one of its founders is a partner at A16Z, and Mirror has also received funding from A16Z.

Shawn: Yes, they have raised over $10 million in two rounds of funding. One founder is the CTO, and the other is a co-founder. They have both been very successful in previous blockchain projects. The former A16Z co-founder used blockchain to track content, which is somewhat similar to Mirror.

This project was later acquired, and then he joined A16Z. As a co-founder and CTO, he previously created a well-known decentralized exchange that was successfully acquired. Now, about one-third of the technical backbone of the Mirror team comes from that background.

Image｜ Denis Nazarov Source: Messari

"Silicon Valley 101": Their founder is named Denis Nazarov, and their CTO is Graeme Boy.

Shawn: In the Mirror community, I mostly communicate with Graeme. Although Graeme was the chief protocol engineer in his previous startup, mainly responsible for the underlying protocol, he is now the CTO. Graeme is a very thoughtful person. Once he starts discussing philosophical topics, he has a lot of ideas. This makes many community users believe that Mirror has a bright future.

"Silicon Valley 101": You just mentioned that everyone is discussing whether to issue a token. What are their thoughts? Have they responded to these questions?

Shawn: They certainly do not respond to these questions because they involve many sensitive issues. They will not deny you; they will agree with what you say, but they will not discuss the details of this aspect.
"Silicon Valley 101": But ultimately, whether they do it or not is still decided by the team, not the community.

Image ｜ Mirror DAO Pre-Season Source: Mirror Official Website
Shawn: At this stage, yes. Currently, Mirror is in the first step of transitioning from corporate governance to DAO. So the Mirror DAO is also divided into Seasons. The current phase is called Pre-Season, meaning the first season has not yet started and is still in the incubation period. At this time, you cannot expect too much from me. Perhaps by the third season, governance capabilities will be very mature. They also acknowledge that they have various issues. Mirror took a year to develop the product to this level, and it may take another two to three years to achieve a purely decentralized governance and community.

"Silicon Valley 101": If it were to decentralize now, many things might not be able to progress, as corporate structures still have many efficiency-related advantages.

Shawn: Especially for strong product-oriented DAOs.

"Silicon Valley 101": I noticed that Mirror's popularity is also related to its early ability to gather many Twitter influencers. Is it because their founders are relatively elite individuals, allowing them to invite these influencers?

Shawn: Yes, I think there are two reasons. First, Mirror's product itself is indeed very well done; its style is particularly suitable for elite groups. The metallic color of Mirror's logo is very appealing. When Mirror started, it was strongly coupled with Twitter; for example, its current image ratio is 2:1, which is designed to match Twitter.

The second aspect is that the two co-founders of Mirror have a certain influence in the entire circle, allowing them to gather a wave of people for a cold start. Of course, these two reasons complement each other, which is why its voting campaign on Twitter lasted for ten months and was very popular.

"Silicon Valley 101": Mirror currently has two ways to publish content: one is to obtain a link address directly after publishing, and the other is to mint it as an NFT, allowing for tipping, auctions, and crowdfunding, forming a new business model. However, some people feel that gas fees are too high now. For small and medium creators, the revenue from minting articles as NFTs may not even cover the gas fees.

Shawn: Yes, this is a problem that the community has been providing feedback on. When gas fees are too high, readers have no motivation to tip. Mirror is also considering solutions, and the solution will definitely involve moving to L2 or other public chains to reduce costs.

"Silicon Valley 101": In the Web2 world, as a creator, the business model is to build traffic and then monetize through advertising. We mentioned earlier that Mirror provides various monetization methods, but these are also based on having a certain user scale. Looking long-term, do you think Mirror has the potential to completely overturn the Web2 business model, allowing creators to earn entirely through tips?

Shawn: This is definitely one of Mirror's missions: to create a positive cycle for the entire creator economy. However, I believe that this change will not come too quickly. The issue of works not being discovered by readers has not been solved in Web2 either. For example, we can easily find the Top 50 fantasy novels, but this industry is highly productive, and there are many authors who remain hidden, possibly never to be discovered in their lifetime.

Should we create a portal? Should we recommend authors? This is also a topic we discuss. But if Mirror truly had a portal, it might only be able to recommend a hundred creators, while behind them are hundreds of thousands of creators who would still not be seen. A portal cannot fundamentally solve the problem. Mirror is also looking at whether it can solve this from a protocol perspective, which is also a core task for them this year.

Since the second half of last year, the Mirror community has been communicating with creators, emphasizing that they need to introduce and promote themselves in various specialized curation communities. It is impossible to wait for opportunities to fall from the sky.

Image ｜ Creators promoting their Mirror articles on Twitter

Source: Twitter@hollycopter.eth

"Silicon Valley 101": This is similar to promoting oneself in various WeChat groups, Twitter, and Discord.

Shawn: Yes, both creators and Mirror need to work hard. Creators should actively promote themselves, while Mirror provides channels and network support for promotion. Secondly, Mirror is also considering providing positive incentives for creators through Web3's unique token incentive mechanisms.