Analysis: What’s so clever about Qutoutiao’s fission strategy?

In 2017, a dark horse, Qutoutiao, emerged in the news and information industry, catching up with its big competitors Tencent News and Toutiao .

In March this year, Qutoutiao received over US$200 million in financing led by Tencent , with a valuation of over US$1.6 billion, and announced that it would go public in the United States at the end of the year.

Of course, with the support of Tencent, Qutoutiao’s performance is naturally outstanding. In one year, monthly active users doubled, and daily active users increased to three times the original . In June this year, Qutoutiao's monthly active users exceeded 4 million, and its daily active users exceeded 12 million.

Monthly number of independent devices

Average number of independent devices per day

The rapid growth of Qutoutiao’s users is due to its fission strategy . Use money to lure users to invite friends, read news, and click on advertisements.

Of course, you can’t just foolishly spend money to ask for user fission . After all, the effects of many businesses’ fission routines are mediocre.

Why is Qutoutiao successful?

There is actually a new way of playing hidden in this - blockchain token economy.

01 Token Economy Makes Growth Powerful

Let’s first understand what Token is.

If we translate Token into token, it emphasizes the right to use . Users can use certain functions. For example, Tencent Video ’s VIP is a token. With it, you can watch high-definition movies for free.

If we translate Token into token, it emphasizes the right to income . Users can enjoy the token appreciation brought by the project premium. Bitcoin is a token. If you bought Bitcoin at $200, you would be rich now.

If Token is translated into "token", it emphasizes governance rights . Users can participate in major decisions of the project. In layman's terms, you are a shareholder of the project.

We often hear people say that the innovation opportunities and waves of innovation brought by Tokens will far exceed the sum of the previous computer and Internet eras. Does this mean that you can be invincible with Tokens?

Actually, it is not. If your token does not have the following two characteristics, it is just a piece of stone.

1) Token liquidity

It solves the problem of where the token comes from and where it goes . For users, it solves the problem of how to obtain tokens and how to trade tokens.

2) Token value-added

The added value of tokens is the motivation for users to acquire and hold tokens . It promotes the liquidity of Tokens. The higher the liquidity of Tokens with high value-added, the higher the value-added of Tokens with high circulation.

When Token has the characteristics of liquidity and appreciation, it will become the powerful Token economy. If we bring it to the operational level, we can quickly turn users into super users who are willing to work hard for the platform.

Next, let’s take a look at how Qutoutiao uses the idea of ​​Token economy to achieve growth (which can also be regarded as consolidating the understanding of Token economy).

For Qutoutiao, it issues a token with currency attributes - gold coins . The proof-of-work mechanism is adopted for the issuance of gold coins. Users can obtain gold coins by completing tasks such as inviting friends, reading articles, and clicking on advertisements. Users can exchange gold coins for RMB by themselves, which further improves liquidity.

The biggest highlight of Qutoutiao's gold coin system is that the exchange rate of gold coins to RMB is linked to the platform's revenue . The higher the platform's revenue, the more RMB users can exchange for the same number of gold coins. This not only allows users to see the appreciation potential of gold coins, but also ties the platform's interests with user interests very well.

The more Qutoutiao earns, the more its users earn, and in this way it turns its users into super users who are willing to work hard.

02 Projects that use the Token economy to quickly grow rich

In addition to Qutoutiao, there are also some blockchain players who have quickly split and become rich through the Token economy. For example, the famous Bitcoin and Fcoin that rose in the bear market. Below, I will introduce to you how to play them.

1) Bitcoin

I believe many of my friends know about blockchain, probably starting with Bitcoin.

Bitcoin suddenly became popular overnight. Today people are talking about whose boss uses Bitcoin as salary, and tomorrow people are talking about who used Bitcoin to buy advertising space all over the city and show off his wealth to his ex-girlfriend.

In fact, Bitcoin is not only a virtual currency, but more importantly, a distributed ledger.

For example, suppose I spend 5 yuan to buy something from you. At this time, a third party will record our transactions in the small Bitcoin notebook.

At this point you may be very curious, why does this third party have nothing better to do than to help us keep accounts?

This is actually due to the Token economic system (POW consensus mechanism) designed by Satoshi Nakamoto (the founder of Bitcoin). He cleverly tied Bitcoin rewards and competitive accounting together. Every time a bookkeeper obtains the right to keep accounts and keeps accounts correctly, he will receive new Bitcoins generated by the system as a reward.

2) Fcoin

In addition to Bitcoin, I would like to introduce to you a dark horse, Fcoin.

Fcoin is a digital currency exchange that has achieved legendary growth. After only half a month of going online, its trading volume quickly jumped to first place in the world , exceeding the total of the second to seventh places.

How can it achieve such results in a bear market? This is also the credit of the Token economic system, but its incentive is more naked and is purely the temptation of money.

Most exchanges not only charge transaction fees, but the fees are also ridiculously high.

But Fcoin doesn’t do that. As long as you trade with me, I will return the transaction fee to you , but in the form of FT.

This model is called trading is mining , or to put it simply, you can make extra money by trading .

Why? Because FT is very useful. It is the token issued by Fcoin. To put it simply, with FT, you are my shareholder.

In the words of Fcoin:

This is a typical way of making money together . Users will go crazy to earn more FT by inviting friends and trading tokens.

03 How should you use the Token economy?

After reading the projects mentioned above that made their fortunes through Tokens, I believe many of you have already wanted to apply the Token economy to your own platforms to achieve growth.

But before that, I suggest you think clearly about these two problems that must be solved.

1) How to make tokens liquid?

When designing Token liquidity, you need to first understand:

To make it easier to understand, let’s go back to the example of Qutoutiao. Qutoutiao is a content platform whose core indicators are DAU and advertising revenue, so it distributes tokens to users who invite friends, watch ads, log in to the App, and can help the platform improve its indicators.

2) How to increase the value of Token?

In order to help you understand the problem, we need to first introduce a value exchange formula: (M*V)/Q=P. Through it, we can see how to maintain or increase the value of Token.

M is the total issuance amount of blockchain project tokens? V is the transaction frequency of the token, Q refers to the real and effective transaction frequency (for example, purchasing a certain smart contract development permission, transactions in the exchange are not real and effective transactions), and P is the value index. The lower the value index, the higher the value of your currency.

Once you understand the value exchange formula, you will know how to increase the value of the Token.

First, reduce invalid circulation and reduce the circulation of tokens. A common practice is to guide users to lock or destroy tokens to enhance the scarcity of tokens.

Second, build actual transaction scenarios to generate real and effective circulation. On the Qutoutiao platform, the gold coins obtained by users will be converted into RMB based on the exchange rate of the day. You can understand it as Qutoutiao building a Token consumption scenario (of course, the daily settlement is due to the daily changing exchange rate).

04 Conclusion

Finally, it should be noted that although gold coins have certain rights and interests in "Qutoutiao" and can be circulated, Qutoutiao is not a real blockchain project, because its "gold coins" do not use blockchain technology, let alone cryptocurrency.

We just want to make it easier for everyone to understand what Tokens are, what mining is, and how to use the Token system to achieve growth by analyzing how Qutoutiao plays the game.

1) Token is like the “gold coins” in Qutoutiao.

2) Mining is like the process of obtaining "gold coins" in Qutoutiao, such as obtaining "gold coins" through tasks such as inviting friends, reading articles, and clicking on advertisements.

3) The consensus mechanism adopted by Qutoutiao is the "proof of work mechanism", which is similar to Bitcoin. The more work you do, the more rewards you will get. For example, the more articles you read on Qutoutiao, the more rewards you will get.

4) The biggest highlight of Qutoutiao’s gold coin system is that it adopts a “token-like” system that ties the interests of the platform with the interests of users.