Nafty & others surge after OnlyFans payment misstep

OnlyFans, the popular content subscription platform, has reversed its decision to ban sexually explicit content. The U-turn was announced on Wednesday after the company received criticism from content creators after the initial ban was announced earlier in August.

In its initial statement about its proppsed ban on explicit content, the company said that “in order to ensure the long-term sustainability of the platform, and to continue to host an inclusive community of creators and fans, we must evolve our content guidelines." In reality, the move was driven by pressure from the banks – OnlyFans has said that the rationale for making the changes was to “comply with the requests of our banking partners and payout providers.”

On Wednesday, however, OnlyFans announced that it had now “secured the assurances necessary to support our diverse creator community and we have therefore suspended the planned October 1 policy change.”

Reaction to the OnlyFans flip-flop has been mixed. Some OnlyFans content creators have asked for compensation because of the stress caused by the first announcement. Many content creators had already closed their accounts and were shifting to alternative platforms. In an email to content creators the company wrote, "OnlyFans is committed to providing a safe and dependable platform for all creators and their fans."

A tense relationship

However, the relationship between OnlyFans and banking partners still appears tense. The day before the ban decision was made, OnlyFans founder Tim Stokely told the Financial Times that he blamed banks for penalizing the company for supporting sex workers. JPMorgan Chase is particularly aggressive in closing the accounts of sex workers or  any business that supports sex workers," Stokely said in a statement.

The decision by OnlyFans to ban sexually explicit content due to a fraught banking relationship is similar to Pornhub’s move to crypto-only payments for premium services after Visa and Mastercard blocked payments to the platform.

The rise of OnlyFans

OnlyFans has a reported 130 million users and more than 2 million content creators. The platform was founded in 2016 by English businessman Tim Stokely. Its popularity exploded at the onset of the Covid pandemic and in May 2020 Stokely claimed OnlyFans was "seeing about 200,000 new users every 24 hours and 7,000 to 8,000 new creators joining every day."

This signup rate has slowed but the continued growth of the platform is impressive. In July this year, for example, 114,065 new creators joined the platform.

Source: OnlyFans

Unlike sites like Pornhub, OnlyFans was not designed specifically to be a vehicle for delivering adult content, but it has nonetheless become synonymous with the industry. It has disrupted the adult content space by creating an efficient way for performers to connect with fans. It uses a subscription-based model that allows pay-per-view content plus other revenue opportunities such as tips and live streams. OnlyFans found success thanks to a straightforward, easy-to-use user interface, attractive revenue sharing (performers keep 80% of earning), and relevance to the creator economy zeitgeist.

R&B superstar Beyonce mentioning OnlyFans in her remix of the Megan Thee Stallion song ‘Savage’, drove a surge in the platform’s usage. Then, when former Disney Star Bella Thorne joined in August 2020, she broke revenue records, earning US$1 million within 24 hours and more than US$2 million in less than a week.

OnlyFans has been a major factor in the destigmatization and normalization of adult content. Even mainstream celebrities have used the platform to share risque content and connect more closely with fans. On top of disrupting the porn industry, OnlyFans has also influenced the content strategy of big-name social media platforms.

In February 2021, Twitter announced a Super Follower program. If a user has 10,000 followers and tweets at least 25 times per month they can sign up for the program. Super Followers is Twitter’s first foray into a membership-based monetization model. Creators will be able to charge Super Followers a monthly fee for exclusive content. It follows a similar revenue model to OnyFans where creators take 97 percent of the revenue, up until they reach $50,000 in lifetime sales. After that, Twitter increases its cut, but creators still keep 80 percent of the revenue.

A victim of its own success

It is still unclear how much OnlyFans brand loyalty is set to be undone because of its tense relationship with banking partners. Exasperating the situation, the rationale behind the policy shift remains unclear. The banking industry remains conservative and it may be that OnlyFans was a victim of its own success. Axios reported that OnlyFans has had issues getting investors on board due to its association with pornography.

OnlyFans has also faced examination from regulators because of concerns that illegal content may be hosted on the platform. On the 19th of August, congresswoman Ann Wagner announced that she would lead a bi-partisan coalition calling for the Department of Justice to investigate OnlyFans for child exploitation. Wagner is the congresswoman that introduced the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA) bill. Packaged with the Stop Enabling Sex Traffickers Act (SESTA), this came into law in 2018.

Following an investigation, the BBC reported that OnlyFans was "failing to prevent underage users from selling and appearing in explicit videos" and they say this was based on reports from police, schools and the UK organization Childline.

The National Center for Missing & Exploited Children (NMEC) reports less than 100 instances of child sexual abuse material (CSAM) per year over the last three years on OnlyFans. To put this in context, NMEC reported that in 2020, MindGeek-owned companies (Pornhub is an example) accounted for around 13,000 CSAM cases, Twitter accounted for 65,000 and Facebook accounted for 20 million instances, around 95% of total recorded incidents.

Speaking to Vice, Mike Stabile, communications director for the adult industry organization Free Speech Coalition, criticized the Wagner coalition. "They claim that OnlyFans is a major marketplace for CSAM, but can’t provide any evidence. While all internet platforms are vulnerable to unwittingly hosting CSAM, OnlyFans is incredibly rigorous in its vetting process, certainly more so than mainstream social networks. Ask any of the adult creators on that platform how difficult it is to get content approved." Before posting anything on OnlyFans, creators have to provide multiple forms of ID, and sign all federally required tax documents.

Creators appear happy to play ball and work towards stamping out CSAM and other illegal content on content subscription platforms. In a quote shared with Brave New Coin, adult actress Brandi Braids, one of the top 0.34% of OnlyFans earners, explained that she “100 percent supports any and all means to eliminate ANY illegal content. That said, 99%+ of adult content creators and adult content is 100% legal and should be protected. We are willing to undergo any verification procedure to ensure the safety of online platforms, as well as our continued ability to provide content and earn income.”

Creators explore Crypto-based alternatives

OnlyFans does not accept payment in cryptocurrency, so when its content ban was announced, creators like Braids began to look towards crypto-based solutions as an alternative to mainstream platforms likely to face pressure from banking partners.

Platforms such as SpankChain, Cumrocket, and Nafty are emerging to provide crypto-based alternatives to OnlyFans that are less likely to change policy or disenfranchise users. Braids told Brave New Coin “My partner and I have been involved with the Cumrocket team since very early in their project and I am an ambassador for Nafty. We recognize that this attack on our industry from banks and payment processors is likely to continue and that we can avoid this threat in the crypto space.”

Braids, however, reported that very little of her income comes from crypto. Crypto payment systems at present lack broad mainstream adoption, and using crypto wallets remains challenging for newcomers. Braids told BNC that PornHub’s demonetization and switch to crypto payments meant she lost 80% of the revenue she had previously earned from the platform. Adult NFTs are part of the NAFTY ecosystem

Another performer, Lacey London, is ready to make the switch to crypto-only. London told Brave New Coin that she is leaving OnlyFans to create content on Nafty exclusively. London said that almost 70 percent of her income is crypto-based and has been since the beginning of last year. “Every single week I invest,” she explains. “There’s so many advantages to having crypto for adult content creators. The ability to track your profits, fraud prevention using the blockchain, passive income, security against payment processors, the list is endless.”

When asked about how adult content creators can protect themselves from the danger of de-platforming, London had some suggestions. “Always save your content on a separate drive, never direct upload to the site. Start putting money aside to create your own website. That way no one can take you down. Start a decentralized website. Upload on more than one platform.”

Jeff Dillon, Nafty’s Chief Business Development Officer, told Brave New Coin that sign-ups to the platform have increased dramatically since the first OnlyFans announcement. Nafty operates both an NFT platform (NFTart.com) and a fan-content sharing platform (NaftyFans.com). It functions with its native NAFTY token and has its own payment organization system called Naftypay that can be integrated into other decentralized applications for the easy swapping of NAFTY with other tokens.

Dillion told Brave New Coin that “if the credit card companies decide to restrict Nafty, we have an alternative payment method and a big user base that likes to pay in Nafty tokens.” The NAFTY token currently trades for ~$0.00261 and is up a staggering ~120474% in the last 30 days.