The Next Virtuals? Interpreting the Narrative Flywheel Behind Zora's Big Pump of 1000%

Author: dpycm

Compiled by: Tim, PANews

PANews Note: The content of this article is solely the author's personal opinion and does not constitute investment advice. DYOR.

I believe everyone must have experienced a sense of déjà vu, whether it's a certain phrase, a particular experience, or a simple interaction.

Strangely enough, while researching the ZORA flywheel recently, that sense of familiarity returned. I was instantly transported back to October 2024, the first time I read about the Virtual flywheel theory, and the two feelings were completely identical.

Will history repeat itself with ZORA?

SocialFi

In August 2023, as the narrative of consumer-grade applications surged on crypto Twitter, we witnessed the rapid rise of Friend.tech. Participants gained access to private chat rooms by purchasing keys from their favorite KOLs, while also engaging in speculative activities and obtaining potential airdrop opportunities.

However, after the token issuance incident, users scattered and Friend.tech quickly disappeared from the spotlight.

Is SocialFi ahead of its time, or is its underlying mechanism not attractive enough to encourage users to stay voluntarily? More importantly, with the renewed attention on cryptocurrencies, will consumer-level applications become mainstream again?

ZORA

Unlike Friend.tech, Zora is an on-chain social network similar to Instagram. Its uniqueness lies in: every user's profile and posts are tokenized, allowing creators to earn income directly from their content.

A ZORA creator's homepage: @chloe

Working Principle

ZORA Flywheel

ZORA Flywheel:

• Each user's profile is tokenized
• Each post published by the user will be tokenized.
• Each post published by users will be bound to the creator token.
• All creator tokens will form trading pairs with ZORA tokens.

A fee of 3% will be charged for each transaction. This helps creators earn revenue from each transaction generated on their posts or personal pages.

| | | | | --- | --- | --- | | Reward Type | Tokens that make up trading pairs with creator tokens | Creator Tokens | | Creator | 1% | 1% | | Trading Rebate | 0.3% | — | | Platform Rebate | 0.3% | — | | Zora | 0.3% | 1% | | Doppler | 0.1% | — | | Liquidity Contributor | 1% | — | | Total Fee | 3% | 3% |

Please note: Starting from June 19, 2025, all new tokens created on the Zora platform will adopt this reward standard. Tokens created before this date will continue to follow the original reward standard.

This reward model benefits every token holder.

advertisement

Advertising is an important component of social media. Zora has pioneered a peer-to-peer advertising marketplace that supports micro-targeted advertising strategies. If executed properly, the Zora platform will contain enormous profit potential.

Token Economic Model

The total supply of ZORA tokens is 10 billion.

• Community Incentive: 20%
• Airdrop: 10%
• Liquidity: 5%
• Investors: 26.1%
• Treasury: 20%
• Team: 18.9%

token unlock

• Airdrop, community incentives, and liquidity portion: fully unlocked at TGE on April 23, 2025 (accounting for a total of 35%)
• Team and investors: 6-month lock-up period after TGE, followed by linear monthly unlock over 36 months.
• Treasury part: 6-month lock-up period after TGE, followed by linear monthly unlock over 48 months

This means that the team and investors will welcome the first unlock on October 23, 2025.

financing

Zora has completed three rounds of financing, with the largest being a $50 million raise at a valuation of $600 million. Notably, as of the time of writing, ZORA's FDV has reached $800 million, approximately 33% higher than the previous financing valuation.

ZORA Chart

Looks familiar, right?

Here is the chart for Virtual.

Although the ZORA token has only been on the market for a few months, it has gone through a period of low market interest and activity, almost as if it experienced a seller's washout. It then regained upward momentum through the integration of fundamental applications and the flywheel effect.

team

A brilliant summary of the ZORA team by Social Graph Ventures:

The team members have a Coinbase background and have maintained a fast-paced product rhythm, focusing on creating unique products that blend native crypto experiences with native Web2 experiences.

Zora has promoted the development of the entire field by introducing innovative concepts such as bonding curve-based bidding tokens, content tokenization mechanisms, and a referral points system. This team demonstrates qualities of being willing to experiment openly and iterate quickly, which are the team qualities we value most when exploring new social models, creator economies, and profit models.

Jacob Horne, co-founder and CEO of Zora: Formerly a product manager at Coinbase, he led the development of two core product lines: the USDC stablecoin and Coinbase Ventures. He is known in the industry for his deep thinking on cryptographic mechanism design, NFTs, and monetization models for creators, focusing on integration solutions within the Ethereum ecosystem and DeFi. As the public spokesperson for the Web3 content platform Zora, he frequently articulates strategic visions and updates through interviews and on social platform X. He previously participated in the development of fashion projects powered by tokens and has been continuously building the Zora ecosystem since 2019.

Dee Goens, co-founder of Zora: Formerly the marketing director at Coinbase and a seasoned participant in the early NFT movement and creative community. In the early development of the Zora platform, Dee led the construction of key ecosystem cooperation frameworks and community development strategies. He is committed to opening the Zora platform to underrepresented creator groups and emerging digital cultures.

Zora co-founder and CTO Tyson Battistella: responsible for leading the company's engineering team. Previously, he worked at Coinbase, focusing on smart contract infrastructure development. Several core components currently used in the Zora protocol were designed under his leadership, including minting tools and L2 chain integration features. The company has raised a total of $60 million through token financing, with a recent valuation led by Haun Ventures reaching approximately $600 million. According to the team, this funding will provide the company with "years of reserve funds."

thinking

With its powerful flywheel model, simple UI/UX design, support from the Base team, and favorable bull market conditions, I believe Zora is expected to continue rising due to the value discovery effect.

Token price increases → Attention to Zora rises → Platform activity increases → Token price further increases.

Do you remember when the crypto community collectively recognized Coinbase as the best choice for retail investors to go on-chain? (At that time, we all shouted about consumer applications)

With the new integration with Base applications, Zora will be in an excellent position to benefit once the influx of users arrives. Just like the wave of attention sparked by Friend.tech at the beginning, Zora will also replay this scene. Such waves often start with curious content creators and KOLs creating personal profiles to ride the trend, which then leads to a positive "Matthew effect."

Currently, multiple independent teams are gradually building infrastructure for the Zora platform: including trading ports, bot programs, front-running tools, etc. Deep users have already begun trading social profiles and content data. All of this evokes the scene when the SocialFi craze first emerged in 2023.

That said, I do have some concerns, mainly about whether SocialFi still has enough narrative tension. After all, we have already seen its performance at the beginning of this cycle, and it may now lack freshness and impact. In contrast, the Virtuals in the fourth quarter of 2024 have precisely hit the pulse of the market.

Compared to the TGE period, the indicator data of the Zora chain is not ideal, but with the recent surge in token prices, signs of recovery have emerged. The market is forward-looking, and we should also focus on the future. We need to assess the current situation and predict the possibilities for sustainable development. For this reason, I firmly believe that once the reflexive cycle is formed, all indicators will continue to improve over time.

No narrative can achieve 100% consensus in the early stages.

I still remember the initial surge of Virtuals, when I excitedly promoted my theoretical claims, many participants were skeptical just because the project was not on Solana. Then a lot of FUD emerged. But just a few weeks later, with strong ecological participants joining and broad market recognition, the price of Virtuals tokens skyrocketed in a parabolic manner. The current situation bears a strange resemblance to that period.

Opportunity > Narrative

Overall, I believe it is worth building a position at the moment, with the specific size of the position based on individual circumstances. Although ZORA has surged over 700% in the past week, I still have a positive outlook on its upside potential in the coming months.

A well-known creator is enough to ignite the Zora frenzy.