Today Ripple’s Xpring announced a “grant” of 1 billion XRP tokens to content monetization platform Coil. At today’s XRP value that equates to $260 million. Coil CEO Stefan Thomas was one of the co-creators of the Interledger Protocol developed by Ripple. He was also Ripple’s CTO until May last year when he formed Coil.
Ripple’s Chairman Chris Larsen has been on Coil’s board since it was set up and Xpring participated in the $4 million Coil seed round.
Coil’s mission is to build an ecosystem of creators, developers, companies and nonprofits to use XRP to pay for content using the “Web Monetization” open standard. The aim is to supplant ad-supported content and avoid the need to have several subscriptions.
“Advertising and site-by-site subscription models are ready for disruption,” said Ethan Beard, SVP of Xpring. “The low cost and fast transactions of XRP makes it an ideal tool for Coil to offer an alternative monetization method and have a positive impact on creators.”
Coil’s first solution is a $5 subscription which allows consumers to see any content by creators that have signed up to the service. In May this year, it unveiled the Coil site where creators can post articles. It’s also possible to have split posts, with part free and the rest behind the paywall.
XRP is used to pay the content creators micropayments in real-time as their content is viewed. But creators don’t have to accept XRP. Instead, they can choose to receive payment via check, wire transfer and other means.
The website says that Coil “pays out a fixed bandwidth per second that goes to the creator instantly.” If we’re interpreting that correctly (see update below), that implies that the cost of all content creation is equal. But it may not be. In fact some really good content, like a good summarizing graphic, is quicker to consume but takes longer to create.
Two months ago, Coil invested $20 million in Imgur, and meme and storytelling app, which has more than 300 million monthly users.
Q & A with Coil
1. You stream payments in real time – but what if someone pays $5 but consumes $10 of content? How does that work?
We currently cap the real-time payments at $5 and we pay out additional funds via our boosting pilot program based on upvotes on the site to get to an average payout amount of at least $5 per subscriber. This model prevents people taking advantage of our platform to pay themselves while also rewarding the highest-quality content creators. It’s still early but the program has already helped to attract much higher quality content. In the future, we have plans to further adjust the model based on feedback from our members.
Ledger Insights comment: So for heavy users, the content creators are subsidizing them with freebies when they consume more than $5. But Coil is trying to make that up by compensating high quality content creators with a sort-of bonus. It’s a nice idea because its easier/cheaper to pump out high volumes of low quality content. But the boosting involves some subjective decision making.
2. Your site FAQ says that Coil “pays out a fixed bandwidth per second that goes to the creator instantly.” So all content is paid the same $ amount per second? Some content costs more to create. And sometimes it costs more to create content that is time efficient for the user. eg. to create a good visual costs more than to write out what it represents, but it takes longer to read the latter.
You are correct. We are planning to introduce different payment speeds for different types of content. We don’t have any details to share regarding those plans yet.
3. Xpring’s money is a grant not an investment, right? How does the governance of the grant work? Do you get it in one go or have to meet milestones etc?
Correct, it’s a grant not an investment and it’s intended to grow the Web Monetization ecosystem and by extension Interledger and XRP. Xpring’s blog post provides some additional color.
Update Q & A added