Interpretation of EIP-5489: Igniting the Web3 Attention Economy through the Extension of ERC-721

Source: Parami Protocol

New Uses for NFTs

On November 29, 2022, EIP-5489, developed and submitted by Parami Protocol, entered the final review stage before becoming an ERC standard. This standard expands the capabilities of ERC-721 by allowing hyperlinks to be embedded in the metadata slots of NFTs, enabling the audience of NFTs to click and jump to any specified URI landing page.

New Revenue for NFTs

Just as hyperlinks made a breakthrough for the internet during the Web1 era, they became the cornerstone of digital advertising for the commercialization of the internet. To date, digital advertising remains the largest revenue source for the internet, generating $521 billion in revenue for the industry in 2021.

In addition to proposing EIP-5489, Parami Protocol has built a brand new "attention economy" for Web3. This protocol suite not only tokenizes the social influence of "influencers and fans" through advertising revenue but also constructs a decentralized exchange (Dex) for social tokens to empower social tokens and their liquidity.

New Application Scenarios for NFTs and FTs

Since October 2022, an active community has emerged around the testnet of Parami Protocol. A Chrome browser extension developed by the community allows Twitter influencers to embed hyperlink NFTs into their profile pictures (PFPs) and start earning advertising revenue. Some influencers have even issued governance tokens for their PFP NFTs (referred to as "NFT Powers" in the Parami ecosystem), allowing fans to click on hyperlink NFTs to jump to advertiser-specified landing pages and earn NFT Powers as rewards. The social tokens (NFT Power) of influencers are held by advertisers, fans, and the influencers themselves, leaving significant room for future governance of the NFT through DAOs.

New Solutions

The core of the internet lies in attracting attention (traffic); more attention means more revenue. In the Web2 era, the largest attention engines are social media platforms represented by Facebook, Twitter, and YouTube, where, by 2022, the average user spent 2 hours and 49 minutes daily on these platforms, far exceeding any other sector. The underlying attention data is hijacked by these large internet companies to provide high-precision ad targeting (machine learning algorithms analyze attention data to predict user preferences, which are sold as tags to advertisers).

However, the social relationships and corresponding influence between influencers and fans have never been quantified or tokenized. These two issues can be summarized as:

1) Data sovereignty, meaning that data ownership must be returned to users so that the economic value generated by data can benefit them;

2) Quantification and tokenization of social influence, with fair distribution within the community.

The Parami protocol addresses these issues by 1) aggregating users' PCAP (Personal Crypto Advertising Preferences) around their DID (Decentralized Identity) and subsequently generating tags and on-chain reputation for users. 2) Utilizing hyperlink NFTs and their governance tokens to fairly reward all participants.

New Economic Model

The tokenization of the dynamic relationship between advertisers, influencers, and fans forms a sustainable economic model, eliminating the risk of creating a "death spiral." All upstream revenue comes from advertisers, which Parami Protocol distributes to the audience according to on-chain reputation. Upstream liquidity based on actual utility drives potential growth in token prices and downstream user earnings.

Web3 Explosion Driven by Incentive Layers

Parami Protocol is not focused on rebuilding a decentralized Twitter but rather on redistributing revenue using existing social relationships. Every role in this new attention economy is incentivized accordingly.

• Fans: Ordinary internet audiences can earn money simply by interacting with ads displayed on their profile NFT while browsing the internet. #Attention2Earn.
• Influencers: Content creators (including individuals, media, projects, communities, etc.) no longer need to profit by "selling things" to fans; they can jointly manage advertising revenue with fans and attract and retain more community members.
• Advertisers: Content promoters can reach audiences on a large scale without censorship. They can easily calculate and optimize return on investment (ROI) instead of engaging in endless airdrop activities.

New Liquidity for NFTs and Social Tokens

Each community (influencers and fans) has NFT governance tokens paired with Parami Protocol's utility token AD3. Each trading pair has an automated market maker (AMM) and liquidity pool (LP), allowing users to STAKE. The decentralized exchange creates a healthy mechanism to filter real social influence, reflected in higher token prices.

Rather than betting on a killer application, perhaps a robust protocol revitalizing the attention economy will create true mass adoption of Web3. What do you think?