Many writers on Substack are worried about the direction of this platform: that it is squeezing out writers who aren’t already famous, that it is going to introduce advertizing and all the terrible incentives this implies, and that it is pandering to people who have large social-media followings on platforms such as TikTok.
I share these concerns, but what would it take to generate a truly decentralized platform for writers and readers to find, read, and transact creative literary works, without for-profit middlemen (or at least where those players are incentivized in a way that supports writers)?
There are only two ways. One is that someone with lots and lots of money decides to set up a non-profit foundation to build this, dedicating a few million dollars every year to support the ecosystem. There are plenty of billionaires but I haven’t seen anyone keen to do this. Not even MacKenzie Scott, and she’d have cause.
The other way is to turn to the Web3 economy, ie, crypto. This is where decentralized platforms exist, at least to some extent – certainly a few of these platforms are more decentralized and community-supported than Substack or other ‘Web2’ internet companies (ie, Facebook, Amazon, Netflix). But these communities, such as they are, exist to make a fast buck.
Nonetheless, on paper, a Web3 architecture could be created to support a literary marketplace. But be careful what you wish for.
Here’s me prompting Perplexity.ai about what this might look like and what it would take to build. If this gets a fire burning in your belly, go for it! If not, then we just have to manage the best we can with a platform built by others for reasons of their own.
Jamie Dibs:
You are a technology startup founder with a grasp of successful tokenomics. Write a business proposal / white paper for a blockchain-based, decentralised network dedicated to the marketing and distribution of creative content, particularly literature—a decentralised version of Substack. The paper should lay out how to create a network for writers and readers to publish, find, catalog, and sell creative works, as well as the tokenomic system that makes this commercially viable without resorting to ads or pandering to people with large followings on social media.
Perplexity:
White Paper: LITChain — Decentralized Literature Publishing and Distribution Network
Executive Summary
LITChain proposes a blockchain-powered, decentralized platform for the publication, curation, and sale of literary content. In contrast to centralized, ad-driven models or platforms that reward popularity over substance, LITChain empowers writers and readers with control, transparency, and fair economic participation. The protocol designs a vibrant ecosystem that rewards quality, discovery, and direct value exchange using thoughtfully designed tokenomics, ensuring commercial viability and sustainability—without reliance on advertising or social media virality.
Vision
The mission of LITChain is to reinvent digital publishing by:
· Empowering writers to publish and monetize their creations without gatekeepers.
· Enabling readers to discover, purchase, and support content based on merit, not algorithms driven by popularity or ad revenue.
· Fostering a curated, diverse, and dynamic literary ecosystem, resistant to manipulation by bots, fake engagement, or centralized authorities.
Platform Architecture
Core Features
· Decentralized Content Publishing: Writers publish works as immutable entries on a public blockchain. Text is referenced on-chain, with content stored on distributed storage (IPFS, Arweave, etc.) for redundancy and access.
· Peer-Based Discovery and Cataloging: Readers, curators, and critics tag, review, and curate content. DAOs (Decentralized Autonomous Organizations) form around genres, interests, or movements.
· Transparent Sales and Payments: Smart contracts handle purchases, pay-per-read, subscriptions, or patronage models, distributing value instantly to creators and contributors.
· Open Metadata and Indexing: Search, categorization, and ranking are transparent and community-governed, resisting centralized control or arbitrary curation.
Tokenomics
LITChain introduces the LIT Token, serving as the platform's primary utility and governance token.
Utility
· Payments: Readers purchase works, tip authors, or subscribe to ongoing publications using LIT.
· Curation Staking: Curators or recommenders stake tokens to back new works or curated lists. If their recommendations are valuable (measured by independent reader engagement and sales), they receive rewards. Poor or manipulative curation results in staked losses.
· Contribution Rewards: Coders, app developers, translators, and designers who contribute enhancements to the network earn LIT based on community voting or DAO bounty systems.
· Governance: Token holders propose, debate, and vote on protocol upgrades, fee schedules, and rules for cataloging or curation.
Commercial Model (No Ads / No Popularity Contests)
· Direct-to-Creator Sales: All sales, royalties, and subscriptions flow directly to authors (minus small protocol/network fees).
· Discovery and Curation Incentives: Instead of influencers or social media metrics, quality curators earn by finding underappreciated talent—staking tokens to "vouch" for works and sharing in subsequent commercial success.
· Anti-Spam and Quality Measures: Publishing or curating requires a small token stake, penalizing spam while rewarding genuine participation.
· Marketplace Fees and Staking Revenue: A fraction (e.g., 2%) of each transaction funds network operation, security, and community grants. No forced advertising or pay-to-play visibility.
Deflationary Supply Mechanisms
A portion of transaction fees is periodically burned or redirected to long-term ecosystem grants, controlling inflation and ensuring long-term value.
Benefits and Uniqueness
· Creator-Centric: Minimal fees, no algorithms favoring paid content or surface-level popularity. True meritocracy through economic incentives and staking.
· Reader Empowerment: Readers decide what rises in visibility via curation and staking, not platform algorithms.
· Economic Sustainability: Ads are unnecessary because all value is generated by real transactions (purchases, subscriptions, tips) and curated discovery, not attention or engagement metrics.
Roadmap
· MVP Release: Open publishing, LIT token smart contracts, basic reader/writer interface.
· Curation Layer: Enable staking for curation and review rewards.
· Advanced DAO Features: Genre-specific DAOs, writer collectives, translation and audiobook bounties.
· Ecosystem Growth: Grants for app developers, plugins, data analytics, and UI/UX enhancements.
· Interoperability: Bridges to NFT, print-on-demand, and other creator platforms.
Conclusion
LITChain is designed for writers and readers who want more than viral content or platform-imposed monetization. By aligning incentives with the creation and discovery of high-quality literature, and anchoring interactions in a transparent, decentralized protocol, LITChain builds a fair digital future for literary arts—without selling attention, privacy, or creative control.
Jamie Dibs:
Map out the financials of LITChain. How much money does it need to get started, and why? What are the best ways to raise? Will people in the crypto community want to back such a project? Who are the tech developers and engineers and how are they paid or rewarded? What’s the revenue model within a tokenized system? What blockchain should be the Layer 1? What’s the Total Addressable Market (TAM)?
Perplexity:
1. Startup Costs
Launching a blockchain-based content platform like LitChain typically requires a startup investment in the range of $300,000 to $1.5 million. The main cost elements are:
· Blockchain Development & Infrastructure: $150,000-$500,000 for protocol design, smart contract development, secure storage integration (IPFS/Arweave), and audits.
· Talent Acquisition: $100,000-$500,000 for hiring blockchain engineers, UI/UX specialists, and business developers.
· Legal & Compliance: $20,000-$100,000 for company registration, legal consultation, tokenomic compliance, and licensing.
· Marketing & Community Building: $30,000-$200,000 to secure early network effects, build an initial user base, and ensure public presence.
· Cybersecurity: $30,000-$120,000 for ongoing audits and monitoring.
· Office, Facilities & Miscellaneous: $40,000-$150,000 for equipment, insurance, and minimal operational support, especially if part of the team works remotely.
Total Initial Outlay: Generally $300,000–$1.5 million is needed to reach MVP launch, with max range covering robust infrastructure, deep content features, and strong compliance posture.
2. Best Fundraising Strategies
In 2025’s climate, the most effective ways to raise funds for a crypto startup are:
· VC Funding & Early Stage Funds: Web3 VCs show renewed interest, focusing on projects with real product-market fit.
· Grant Programs & Accelerators: Web3 incubators, Layer 1 foundations (like Ethereum, Solana), and sector-specific grants are active sources.
· Token Pre-Sale/Raise: Although fewer projects are raising purely via tokens, pre-token raise remains viable if paired with verifiable product execution.
· DAO/Community Backing: Community DAOs, hackathons, and Web3 accelerator DAOs can offer early capital and dev support.
· Equity + Token Hybrid: Many recent projects use an equity/token hybrid to assuage risks for traditional and crypto investors.
3. Crypto Backer Appetite
The market in 2025 is selective but very much alive. Crypto fundraising is at record levels with $16.5b raised in the first half of 2025. Notably:
Investors prefer projects with real milestones, strong teams, and sustainable revenue models (rather than just speculative tokens).
There’s appetite for publishing/content-distribution infrastructure, so a project like LITChain—with a well-crafted whitepaper and MVP—would find strong interest from crypto VCs and Web3 communities.
4. Technical Team, How They’re Paid/Rewarded
Key personnel: Smart contract developers, blockchain architects, full-stack devs, front-end/UI/UX specialists, security auditors, and community managers.
Compensation Models:
Salaries: Core developers (~$80k-$150k/year each).
· Token Incentives: Core team gets pre-allocated tokens with vesting schedules—aligning incentives with long-term platform growth.
· Bounties/Grants: Community contributors, bug-finders, plugin authors can be rewarded through on-chain bounties.
· DAO Distributions: Long-term contributors can be voted further token rewards by the governance DAO.
· Hybrid: Many projects mix fiat, token, and milestone-based payouts.
5. Revenue Model in a Tokenized System
· Transaction Fees: Small protocol fee (e.g., 1–3%) on all content purchases, subscriptions, and patronage payments—automatically distributed via smart contracts.
· Curation Staking: Curators and recommenders stake tokens to vouch for works. If their picks succeed (drive sales/quality engagement), they share in protocol revenue. Low-quality picks can result in partial loss of their stake.
· Premium Features: Writers or publishers can pay for enhanced analytics, cross-chain publishing tools, or DAO services using platform tokens.
· Token Burn or Reserve: A share of token-based fees is burned or sent to ecosystem grants—managing inflation and supporting long-term value.
· Governance Fees: DAO votes on fee splits, creator support funds, and improvement bounties, so economic activity grows the protocol.
6. Best Blockchain Layer 1 Choice
Candidates in 2025:
· Ethereum: Most mature, broadest developer base, but high fees and congestion.
· Solana: Fast, cheap, but less decentralized.
· Hyperliquid: New, EVM-compatible, high throughput, growing fast in late 2024-25, optimized for content/DeFi and low latency.
· Avalanche, NEAR, Sui, Aptos: All solid choices with strong community and scalability.
Recommendation: For a literature/content Dapp, Hyperliquid or Avalanche are leading choices for scalability, speed, and low costs, with EVM compatibility for broadest smart contract support and interoperability. Ethereum or Solana are viable if their ecosystems are required for network effects.
7. Total Addressable Market (TAM)
· Global Web3 Market: Estimated to reach $98.3B by 2032 for general Web3/blockchain projects.
· Blockchain Technology as a Whole: Projected size of $797B by 2032.
· Digital Publishing Sector: Book publishing is a $100B+ annual market globally. The digital/self-publishing sector alone is valued at $15B–30B. Crypto-native digital creative content is an emerging subset.
Estimated TAM for LITChain: The addressable market for decentralized publishing and creative content tokenization could plausibly exceed $10B by the late 2020s, assuming capture of a fraction of Web3’s growth and the mainstreaming of digital payments and creator monetization.
In summary: LITChain would need $300k–$1.5m in the first 12–18 months to build and launch. Talent is attracted via a mix of fiat and token incentives; strong teams and sustainable token economies are favored by today’s investors. The most fitting Layer 1 is an EVM-compatible, high-throughput chain like Hyperliquid or Avalanche. Revenue is generated through usage and staking, not ads. The long-term market potential is vast, rivaling traditional digital publishing and riding Web3’s explosive growth trajectory.
Jamie Dibs:
What are the biggest challenges to building LITChain and its success? Give me good reasons to do it and good reasons not to do it.
Biggest Challenges to Building LITChain
· User Adoption Hurdles: Convincing writers and readers to migrate from established platforms like Substack or Medium, which offer user familiarity and an existing audience, is extremely difficult. Many users remain skeptical of blockchain’s unfamiliar user experience, technical complexity, and perceived volatility.
· Cold Start/Network Effects: LITChain’s value grows with active participants, but new decentralized networks face “chicken and egg” problems—without enough content, readers won’t come; without enough readers, quality writers won’t stay.
· Quality and Spam Control: Decentralized systems lower entry barriers, opening the door for spam, plagiarism, low-quality content, and bad actors unless staking and curation incentives are perfectly aligned and robustly monitored.
· Sustainable Tokenomics: Maintaining a balance between rewarding contributors and avoiding inflation or value erosion of the LIT token requires deep economic design. Many tokenized platforms have failed from unsustainable or poorly thought-out reward mechanics.
· Regulatory Uncertainty: Laws regarding crypto, content moderation, digital copyright, and royalties shift rapidly. Founders must anticipate and navigate complex legal landscapes across jurisdictions.
· Technical Execution: Integrating decentralized content storage, scalable blockchain UX, robust smart contracts, and censorship-resistance is nontrivial and demands a highly skilled development team.
· Monetization Risks: Without advertising or “pay-to-win” promotion, LITChain depends solely on user payments, tips, and staking activity. If readers are unwilling to pay, the revenue pool for both the protocol and creators could be too small to sustain growth.
Good Reasons to Build LITChain
· Creator Empowerment: LITChain eliminates platform middlemen, helping writers—especially underserved and niche ones—retain a higher share of revenue, creative control, and audience access.
· Transparent, Merit-Based Discovery: Content rises through curation and value exchange, not hidden algorithms or manipulation by influencers, promoting diversity and higher-quality work.
· Alignment with Web3 Ideals: It’s a flagship example of decentralized ownership, giving stakeholders (writers, readers, curators) direct governance and participation in platform evolution.
· Innovation in Publishing: Launching LITChain positions you at the vanguard of a rapidly growing, transformative movement in digital publishing and Web3 creator economies.
· Global Accessibility: Decentralized systems potentially unlock global markets and communities previously excluded by geography, payment rails, or censorship.
Good Reasons NOT to Build LITChain
· Adoption Risk: The market for decentralized creative content is still young; most writers and readers gravitate to ease-of-use, reach, and network effects that established platforms offer.
· Technical and Regulatory Uncertainty: The twin risks of encountering unsolved technical barriers or facing future regulatory crackdowns can threaten the platform’s survival.
· Funding and Sustainability Challenges: Competing with VC-backed Web2 platforms on user experience, incentives, and feature set can quickly burn through capital and exhaust team morale before critical mass is reached.
· User Experience Gaps: Many potential users are “crypto hesitant” due to perceived learning curves, wallet setup, blockchain fees, and complex onboarding.
· Potential for Low-Quality or Abusive Content: If spam, scams, or abusive material surface and outpace moderation mechanisms, the network’s reputation and traction could be irreparably damaged.
In making the go/no-go decision, weigh the potential for long-term, ecosystem-shifting impact against the short-term practical risks, resource demands, and likelihood of clearing the “cold start” hurdle. For idealistic founders with the right team, deep expertise, and patience, LITChain offers world-changing promise—but no guarantees.