Why Crypto Winter Hasn’t Dulled the Passion for Web3 Sex Work

Dead Discords, derailed roadmaps and shrinking market caps have not deterred those who think crypto could reshape adult entertainment for the better.

AccessTimeIconSep 2, 2022 at 1:46 p.m. UTC
Updated Sep 2, 2022 at 3:34 p.m. UTC
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Xinyi Luo is CoinDesk Layer 2's features and opinion intern. She does not currently hold any cryptocurrencies.

PolyAnnie worked hard as an erotic NFT artist and adult content creator for two and a half years. Last year, she spent the whole summer traveling and teaching other adult content creators about non-fungible tokens, but she became burnt out and has been on hiatus for at least six months.

Something changed in the crypto industry when she came back. She found herself out of the loop. Projects she had dedicated time and energy to were inactive, and some were dead.

This feature is part of CoinDesk's Sin Week.

PolyAnnie was one of the content creators on Datingverse, a metaverse for mingling. The platform introduced a “dating-to-earn” tool to the world of crypto, enabling fans to develop connections with “content producers” while earning tokens ($DVC).

PolyAnnie started working on Datingverse in its early days, hoping to direct it to be the best version of a badly needed adults-only space in Web3. There was going to be ownable land, NFTs and a bustling community.

“The idea they presented to me was a platform to explore diverse and unconventional sexual expressions,” she said. In other words, a place for the types of misfits who find crypto attractive. She intended to eventually share personal, erotic photos on the site – one of her many streams of income.

But nothing panned out. There were lots of promises and little delivery, she said of the site that still advertises her as one of its “first 50 creators.” The project seems to have been abandoned.

"I checked their Discord, and there's been no activity for over two months," she said. For many adult content creators who are getting into crypto, these projects are an alternative and possibly more reliable way to earn income.

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(Primal Architecturex from the Story Series on Rarible, an NFT created by PolyAnnie/PolyAnnie)

This situation is far from uncommon in the Web3 world now. After experiencing skyrocketing growth during the crypto bull run last year, many players are down and out, or mothballed. Once reliable ways for creators to earn income have dried up. But many still believe crypto offers a better alternative to the traditional adult entertainment industry and advocate for its adoption.

Run-ups to roadblocks

In June of last year, Elon Musk tweeted a series of emojis that appeared to refer to CumRocket, an adult-themed cryptocurrency. No one was sure if it was a joke or if Musk was even referring to the project, but nonetheless, the price of CumRocket rose to 28 cents from 7 cents. Suddenly, sex work crypto projects seemed like a viable model – at least as promising as the billionaire’s other crypto fascination, dogecoin.

"Everyone and their mother made a porn token last year," Ben Fraden, chief business officer of Vicewrld DAO, a Web3 adult entertainment organization, said. He said he was aware of around 80 porn tokens, some of which, such as TABOO, had market caps of more than $400 million.

The money rushing into the sector was a huge incentive for some adult content creators. By selling NFTs, PolyAnnie finally felt that for the first time she was an artist, getting paid fairly for her work.

“I had to hustle my ass off to get people to give me $10 a month [on OnlyFans]. ​​But I sold a painting [as an NFT] for $5,000. There were months where I would do $10,000, which was crazy for me, because I'm not used to making more than $20,000 a whole year,” she said.

After the run-up, many project founders exited the market when they realized sex work was more than a fantasy and they would have to do more than sell a token to make their business viable. The biggest project remaining on Fraden’s radar, called TABOO, is worth just $16 million now, down 96% from its peak of $400 million.

"There’s probably 15 or less out of 80 [projects that] still have active communities one way or another," Fraden said.

Many things can kill a crypto project. Its founders could depart, its token could collapse or its community could lose interest. That’s all true and then some for erotic projects, which carry their own particular risks.

Crypto’s adult creators also feel the crypto winter.

PolyAnnie's first five months' income from selling adult NFTs was twice as much as her previous year's earnings. That’s not the case for Web3 sex workers this year. Liv X Jem, a Canada-based adult content creator and Web3 obsessive, also recently switched to creating for traditional web platforms after experimenting with Web3.

"I have a family to support, so I'm trying to bring in as much income as possible. I have moved back to OnlyFans as well," she said, referring to the private “camming” platform.

Pain or pleasure

According to IBISWorld, a U.S.-based industry research publisher, the online adult and pornographic industry in the U.S. in 2022 is worth $1.1 billion. The adult industry in Web3 is still far from competing to any meaningful degree with traditional adult entertainment companies.

Often, the crypto industry erects its own roadblocks. Tim, CEO of the Pleasure Network, an adult social platform, got a “no” when he reached out to MoonPay, a cryptocurrency exchange, when looking to list his project’s token.

"Our native token cannot get listed on centralized exchanges because they don't allow adult projects, and they are working with Mastercard and Visa," said Tim, who requested that his surname be withheld.

This was even after he took steps to sanitize the project, which was initially called xxxNifty and focused on selling NFTs. PolyAnnie worked as a brand ambassador and NFT manager on xxxNifty, where she also sold lots of her erotic NFTs. One of the reasons it made the change is because the name carried a “negative stigma.”

"Anything with XXX or porn in front of it, or super adult-related things makes it extremely difficult to do business in the United States and even many places in Europe," Dan Leal, aka “Porno Dan” of the Pleasure Network, said.

Pleasure Network had trouble opening bank accounts, getting lawyers to take it on as a client and paying its bills. It also felt it was having trouble drawing an audience on social media.

Despite Pleasure Network’s payment issues, its founders have expanded the scope of the project and are now developing the “​​world’s first adult metaverse,” a token-gated platform that promises a safer environment for adult models.

Tim and Leal are far from the first people to believe that crypto can right the wrongs of adult entertainment. The industry is known for its exploitation of workers and a web model that has meant most revenue accrues to centralized companies like Pornhub, rather than content creators.

Many projects have set out to build something like Pleasure Network’s $NSFW token, pitched as a standard way to pay for porn, which on the day of this writing saw only $12,131 in trading volume. Many have failed or exist only on the margins. But many will continue to try to bring sex work into Web3, because it seems so compatable.

"The adult content industry is the most legitimate thing I can think of for crypto," Fraden said.

Financial issues

In 2020, Visa and Mastercard stopped allowing their cards to be used on the world’s largest porn site Pornhub. Recently, those two credit card giants suspended card payments for advertising on Pornhub and its parent company MindGeek.

Under the pressure of being kicked off mainstream payments platforms, the adult entertainment website moved to accept only cryptocurrency payments in 2020. It now accepts direct deposits and paper checks, but similar financial risks have caused other adult businesses to also adopt crypto as a failsafe.

Some crypto projects were founded as dedicated solutions to deal with this long-existing problem. Back in 2019, for instance, Spankchain launched a crypto payments platform called SpankPay that allows users to pay with "privacy coins" zcash (ZEC) and monero (XMR) and a few other cryptos.

In addition to being censorship-resistant, crypto’s basic design structure naturally addresses the significant financial woes for adult enterprises: chargebacks and piracy. The chargeback rate is well-known for being unusually high in the adult content industry, likely in the double digits, Fraden said. Customers can easily make a call to their credit card companies to get their money back after watching porn they buy online.

That is less of an issue for porn creators using blockchain technology, which by design makes transactions irreversible. You can't have chargebacks in crypto. And for a similar reason, piracy becomes harder.

"It was so easy to rip off content that was produced by people like myself, and they just uploaded it randomly," Leal said.

Blockchain prevents piracy in a number of ways, although all digital media (even stuff appended to a blockchain) can still be copy and pasted. There are token-gated entertainment platforms, and the ability to monetize original works using NFTs, which reduces the sting of counterfeits.

The pseudo-anonymity of crypto is also useful for people who can’t have or would prefer not to have porn-related transactions tied to their financial identities.

"People don't like 'Sexy Fox 69 OnlyFans' showing up in their bank account,” Fraden said. “Buying ethereum or something looks nicer.”

Still exploring

The recent crypto bubble brought in believers and speculators alike into the Web3 sex industry. What survives now that it has popped, mainly believers, will be stronger, some say.

Jordanna Foxx, a British porn star, created her Web3 project, called Vicewrld, in September 2021 amid the height of crypto mania before bitcoin started to deflate. It has generated about $27,000 so far since its NFT marketplace launched in February.

Although it hasn’t yet pulled in the revenue she was expecting, Foxx said she continues to work hard on it, she said. For her, it’s not just about the money – but the chance to better conditions for sex workers.

The project has given her the ability to test her mettle as a front-end developer and experiment with increasingly complex technologies, she said. Vicewrld, for instance, recently merged with Adult DAO, a Web3 adult production company and community Fraden belongs to, to form the Vicewrld DAO.

Foxx thinks crypto can help adult performers expand their “shelf life,” or the amount of time that producers think they are young or new enough to the industry to attract attention.

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(An NFT sold by Jordanna Foxx/Jordanna Foxx)

To Foxx's mind, the metaverse expands a porn star’s options because it allows them to be whoever they want – young, old or penguin.

"There isn't a shelf life and your avatar is forever young,” she said. “The metaverse elongates somebody's career, so they don't have to kind of then be ashamed of who they are.”

The metaverse is expanding the options for sex work, including for jobs that are removed from the stage. Inspired by Foxx, Liv X Jem, previously an adult performer, has taken up front-end development after joining the Vicewrld DAO team as an operation manager, and she has started to learn how to code.

"I just finished Python. I know how to write smart contracts, and I've built a generator for my own NFT project," she said.

For PolyAnnie, Web3 isn’t just an alternative way to earn income but also a place to explore solutions to censorship, income inequality and individual data ownership. PolyAnnie is exploring moving away from platforms like OnlyFans that would increase her vulnerability.

She said she might explore building her own Web3-enabled website, which could link with other creator’s sites and begin to build a community.

"I'm exploring a more autonomous and sovereign way of doing things,” she said.

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Xinyi Luo is CoinDesk Layer 2's features and opinion intern. She does not currently hold any cryptocurrencies.

CoinDesk - Unknown

Xinyi Luo is CoinDesk Layer 2's features and opinion intern. She does not currently hold any cryptocurrencies.