The Next Virtuals? Explaining the Narrative Flywheel Behind Zora’s 1,000% Surprise

Author: dpycm

Translated by: Tim, PANews

PANews Note: The content of the article is only the author's personal opinion, not investment advice, DYOR.

I believe everyone must have experienced the feeling of déjà vu, whether it is a certain sentence, a certain experience, or a simple interaction.

Oddly enough, when I was studying the ZORA flywheel recently, that familiar feeling came back. I was instantly brought back to the moment when I first read the Virtual Flywheel Theory in October 2024, and the two feelings were exactly the same.

Will history repeat itself on ZORA?

SocialFi

In August 2023, when the narrative of consumer applications was hot on crypto Twitter, we saw the rapid rise of Friend.tech. Participants purchased the key of their favorite KOL to gain access to private chat rooms, while participating in speculative activities and obtaining potential airdrop opportunities.

However, after the token issuance accident, users fled and Friend.tech quickly disappeared from the spotlight.

Is SocialFi born at the wrong time, or is its underlying mechanism not attractive enough for users to retain spontaneously? More importantly, as cryptocurrencies regain attention, will consumer applications become mainstream again?

ZORA

https://zora.co/

Unlike Friend.tech, Zora is an on-chain social network with functions similar to Instagram. Its uniqueness lies in that each user's profile and post is tokenized, allowing creators to earn income directly from their content.

Homepage of a ZORA creator: https://zora.co/@chloe

How it works

ZORA Flywheel

ZORA Flywheel:

• Each user profile is tokenized
• Every post published by a user is tokenized
• Each post published by a user is bound to a creator token
• All creator tokens are traded in pairs with ZORA tokens

A 3% fee will be charged for each transaction. This helps creators earn revenue from every transaction generated by their posts or personal homepages.

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

This reward model benefits every token holder.

Advertisement

https://paragraph.com/@socialgraphventures/zora-the-thesis

Advertising is an important part of social media. Zora pioneered the peer-to-peer advertising market and supports micro-targeted advertising strategies. If executed properly, the Zora platform will have huge profit potential.

Token Economic Model

The total supply of ZORA tokens is 10 billion:

• Community incentives: 20%
• Airdrops: 10%
• Liquidity: 5%
• Investors: 26.1%
• Treasury: 20%
• Team: 18.9%

https://support.zora.co/en/articles/4797185

Token unlocking

• Airdrop, community incentives and liquidity: All unlocked at TGE on April 23, 2025 (35% in total)
• Team and investors: 6-month lockup period after TGE, followed by linear monthly unlocking for 36 months
• Treasury: 6-month lockup period after TGE, followed by linear monthly unlocking for 48 months

This means that the team and investors will have their first unlocking on October 23, 2025.

Funding

Zora has completed three rounds of financing, the largest of which was $50 million at a valuation of $600 million. It is worth noting that as of the time of writing, ZORA's FDV has reached $800 million, which is about 33% higher than the previous financing valuation.

ZORA chart

Looks familiar, right?

Below is the chart of Virtual

Although the ZORA token has only been around for a few months, it has experienced a period of low market interest and activity, almost like a seller's wash. It then regained momentum through the integration of basic applications and the flywheel effect.

Team

Social Graph Ventures’ wonderful summary of the ZORA team:

Thinking

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

Token price rises → Zora's attention increases → Platform activity increases → Token price rises further.

Remember when the crypto community collectively determined that Coinbase was the best choice for retail investors to go on the chain? (At that time, we all shouted consumer applications)

With the new integration with the Base application, Zora will be in a great position to benefit from the influx of users. Just as Friend.tech attracted a wave of attention, Zora will repeat this scene. Such waves often start with curious content creators and KOLs creating personal profiles to follow the trend, and then form a positive "Matthew effect".

There are currently multiple independent teams slowly building infrastructure for the Zora platform: including trading ports, bots, preemptive tools, etc. Deep users have begun trading social profiles and content data. All this is reminiscent of the scene when the SocialFi craze first emerged in 2023.

Having said that, I do have some concerns, mainly about whether SocialFi still has enough narrative tension. After all, we have seen its performance at the beginning of this cycle, and it may lack freshness and impact now. In contrast, Virtuals in the fourth quarter of 2024 can be said to have accurately hit the market's lifeline.

Compared with the TGE period, the indicator data of the Zora chain is not satisfactory, but with the recent surge in token prices, it has shown signs of recovery. The market is forward-looking, and we also need to look to the future. Not only should we judge the current situation, but we should also predict the possibility of sustainable development. For this reason, I firmly believe that once the reflexive cycle is formed, various indicators will continue to improve over time.

No good narrative can gain 100% consensus in the early stage.

I still remember the early days of Virtuals' surge, when I was excited to promote my theoretical claims, many participants were skeptical just because the project was not on Solana. A lot of FUD followed. But just a few weeks later, with the participation of strong ecosystem participants and widespread market recognition, the price of Virtuals tokens skyrocketed parabolically. The current situation has a strange similarity to that period.

Chance＞Narrative

Overall, I think it is worth building a position now, and the specific position size is based on personal preference. Although ZORA has soared more than 700% in the past week, I am still optimistic about its upside in the next few months.

One well-known creator is enough to trigger Zora fever.