How Two Statisticians Are Betting Web 3.0 Will Disrupt the Influencer Economy
28 Dec 2021
Like so many other tech startups, the pair behind the London-based Web 3.0 startup, Hashswap, began their entrepreneurial journey with little more than a business idea and a pair of scrappy self-starters eager to build the next big thing.
Their story is familiar, reminiscent of the origin stories behind tech companies such as AirB&B, where former college mates working in corporate jobs at large multinational firms come together to work on a shared startup idea. One makes the leap of faith to commit to the venture full-time, while the other co-founder pitches in outside office hours.
Co-founders Deovrat Sharma and Sudeep Dasgupta first met when they majored in statistics at the Indian Statistical Institute – one of the country’s most venerable colleges devoted to the science of data. Long after graduating, the pair continued their friendship, spending time hashing out interesting startup ideas and mathematical concepts with each other while working at white-collar jobs in finance.
Before starting Hashswap, Sharma spent nearly a decade as a quant at a hedge fund, developing models for algorithmic high-frequency trading in equities and futures on the Indian Stock Exchange. His co-founder, Sudeep, cut his teeth in the corporate world, building operational risk models for global banks like ANZ and Barclays.
As crypto began to establish itself as an emerging alternative asset class, the pair found themselves eager to learn more about the rapidly growing technology and its applications. In particular, they were drawn to the crypto-economic models of decentralized finance platforms and their potential to disrupt the billion-dollar industries dominated by large tech companies today.
At the time, Sharma had already been running his own successful e-commerce brand, sassydaily.com, helping consumers shop the latest outfits and accessories worn by celebrities and influencers. While the site was raking in a healthy six-figure annual revenue, the two saw the opportunity to address a more significant problem plaguing the Web 2.0 influencer economy.
Social media platforms like Instagram exercise tremendous influence over the relationship between influencers and their followers, and that influence can often be limiting, if not downright censorious at times. For instance, until recently, Instagram has constantly vacillated on which accounts were allowed to post links, limiting how influencers could engage with their followers or monetize their content. Other platforms like Facebook or YouTube have periodically wielded their community guidelines to demonetize or takedown influencers’ content, and change the rules that govern their discoverability and ad revenue.
Those constraints have made it challenging for the vast majority of emerging influencers, who are yet to reach a scale where they can secure big-budget marketing campaigns with large brands. The resulting “valley of death” makes it difficult for most influencers to continue investing time and resources into growing their communities to reach the point of financial viability.
While many have turned to platforms like Patreon that let influencers sell exclusive content directly to their fans, Sharma and Sudeep felt that a Web 3.0 model could do even better. Their startup, Hashswap, aims to allow influencers to issue utility tokens that fans can exchange for exclusive content, merchandise, or access to events. Influencer tokens also enable marketers and followers across the globe to pay influencers directly without having to pay fees to social media platforms or payment processing companies.
As the social value of influencers grows, the demand and resulting market capitalization of their tokens will follow. Hashswap’s founders say this serves to incentivize influencers to grow their brand sustainably and allow market forces to more fairly and accurately determine the social value of an influencer through price discovery.
Having witnessed the exorbitant transaction fees resulting from periodic gas wars on Ethereum, Hashswap’s founders needed to find a scalable, high throughput blockchain network upon which to build their platform. Deovrat found the answer from his friend Fabian Buchmann, co-founder of Cerchia, a DeFi venture on the Zilliqa network.
Sudeep and Sharma have no regrets about choosing to work with Zilliqa. “ZILHive’s clear deadlines allowed us to get things moving very quickly”, said Sudeep. The developers at Hashswap also enjoyed working with Scilla, explaining that they found the syntax to be “very neat”, allowing them to more easily spot bugs in the code early in the process, unlike with Solidity, Ethereum’s smart contract programming language.
While the platform is in its infancy, its founders are eager to grow it with the help of investors and strategic partners. According to Sudeep and Sharma, Hashswap was selected by the Swiss national innovation agency, Innosuisse, to join a startup program to accelerate their growth in the region. To date, Hashswap has also received US$15,000 in grants under ZILHive’s innovation stream to develop an early prototype of the platform. The founders say they are already in talks with venture funds to raise a small seed round to build the platform and acquire users in Europe and US.
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