Originally written by Simon de la Rouviere
Compile: Kxp, Rhythm BlockBeats
The NFT creative universe is in a frenzied experimental phase: emphasizing free IP, a new economy, and recombination. As these universes evolve, success depends on three main elements:
1. Permissive licensing, primarily in the form of Creative Commons Zero Copyright (CC0). This model will encourage creativity to be recombined, benefiting both originals and imitators.
2. Focus on low fidelity and metadata that inspires imagination, while lower fidelity ensures that recombination can have a more visual interpretation.
3. By categorizing metadata into on-chain packages, items can be scaled with post-bundle guidance.
This excites me because if these three elements are combined, it can form a whole new media franchise that is hard to ignore. It will create a free, rich IP and create wealth for all collaborators. Next, let's take a closer look at these three elements:
Legitimacy with CC0 NFT flywheel
An NFT references a typical interpretation: for example, a link to a file or an image on-chain that is published periodically. Ownership of the NFT is separate from the copyright of the referenced image, and in many cases, copyright is retained by the original author, regardless of what changes the NFT has undergone. As a result, the NFT holder can only enjoy ownership of the referenced image and cannot use the image in any other way, especially commercial use.
The value of an NFT comes from what it represents, and an immutable timestamp engine on the blockchain can justify specific references. People code all kinds of "signals", which makes people want to own the reference even though they know that it has no token value.
While the image itself is usually immutable encoding and adds a large portion of desirability, it is also very important to see who "signs" the NFT. Most of the value of NFTs is generated by the legitimacy of a specific individual's timestamp cryptographic signature, which also confirms the importance of "signature". It is a focus engine that embeds social relationships on cultural objects over time.
This legitimacy engine, built on the ownership of signed cultural objects, also empowers derivative works.
Previously, creators of derivative works often had to meet the following conditions: 1) they could not commercialize the derivative IP, and 2) they could not own any proceeds that they channeled upstream (derivative works conveyed attention upstream and became a potential source of income for the original author). For original authors, acquiescing to derivative works means that they can accept losing control of potential income and their own creativity, but inferior derivative works can also have a negative impact on them.
These incentives remain for derivative works of NFTs that use traditional copyright, but are stronger if the original author allows the free commercialization of intellectual property. With NFTs, the value incentive effect of positive incentives will become stronger because derivative creators can not only get money from their derivative works, but also earn rewards from the attention they send upstream to the original work. If derivative creators own the NFT of the original work, they can earn twice as much. It's like if you successfully create a spin-off sequel to the Harry Potter story and you can get money from the sales of the Harry Potter Wand. In some cases, it's possible to happen (for example, if you own shares in Disney and create a good Star Wars spin-off). Of course, this is only feasible if you can create derivative works; that is, as more people join, the CC0 model will be more promising.
Originals want to do the same, because in this way they can not only earn royalties in secondary sales and profit from upstream value growth; they can also get more attention to pave the way for future sales of works (original or derivative).
The specific process of flywheel is as follows:
1. A Author CC0 content
2. A sells NFT#1 of cc0 content to B
3.B Decide to create derivative content of CC0
4.B Selling A derivative of CC0, NFT#2, to C
5.C liked this spin-off very much and decided to buy the original NFT#1
6. Thus: A receives royalties from the sale, B receives revenue from the sale of derivative works + sales of the original NFT, and C collects two versions of the NFT
7.C Decide to create a spin-off of NFT#2 or NFT#1 and proceed to the next round of the loop
This model is practiced in a variety of NFT projects. While it's still in its early stages, many projects have already adopted this model: following the trend and starting to recombine free IP.
Here are some real-world examples:
Jenkins The Valet
In this project, a team categorized boring apes as storytellers who told stories that took place at the yacht club. Notably, in order to be able to participate in the project, they sold their own set of "keys" NFTs.
Yuga Labs is coming soon with Otherside
Yuga Labs (creator of the Boring Ape Yacht Club) has set up a scene in its upcoming virtual world, showing the possibility that many different NFT universes can "coexist" in it.
For example, CrypToadz's intellectual property agreement reads: "To the extent permitted by law, Gremplin has waived all of its copyright or related rights to CrypToadz."
Renegade Comics
Renegade Comics is an example of taking an IP image from the NFT universe and making it into a comic. The comic shown below is from Chain Runners:
Blitwear
Inspired by Blitmaps, the project upgraded it to create digital fashions that could also be converted into physical clothing.
Nouns Center
There are many such derivative works, and we can't catalog them all here. NounsDAO even made a website for cataloging all its spin-offs: https://nouns.center/projects.
Interestingly, low fidelity of original references has become an emerging trend: these references tend to be pixelated or abbreviated. This may be due to the fact that many projects referenced the early pixelated CryptoPunks, but now low-fidelity projects are becoming more and more valuable. I believe there will be more projects in the future that choose low fidelity, or even move towards metadata.
Scale with fidelity and metadata
When you were a child, a branch has infinite possibilities in your eyes: it could be a sword, a gun, or a magic wand. However, a plastic toy sword cannot be a real gun. Sometimes, the more abstract an object is, the more likely it is that it can be recombined or interpreted. So, higher fidelity doesn't always result in better images.
4K HD version 2022
A CRT TV version from the 90s
In order to expand and disseminate, the more interpretable the exemplary reference, the easier it is to disseminate. It's like the space for a branch to play is much wider than a high-fidelity toy.
In the case of Chain runners, for example, one of their own extension packages is increasing the fidelity of their typical references.
We can notice that HyperLoot's conceptual art spin-offs have increased resolution for Nouns, CrypToadz, and Blitnauts.
Many NFT games are moving in this direction. Some critics in the gaming industry argue that you can't reuse NFTs through games because that's not how games should run. While this is true, it doesn't matter because with CC0 and the low fidelity of the base level, NFT is used in the game just to reinterpret the classic images/files. Some projects simply give you access to additional files that you can use in your game, but even then, it's not necessary. Chainrunners XR, Meebits, and Forgotten Runes all provide you with the corresponding files, but if it's CC0, a recombined piece doesn't need to rely on classic files/images.
Value comes from reinterpretation, and the lower the fidelity of a typical reference, the easier it is to reinterpret. In the future, the NFT project will only disclose some features when it releases the classic version, and its first derivative works will only be conceptual graphic displays. As a result, the collection, which had previously consisted of only one series, has now become two.
The only problem is that we may lose control of our ideas. Therefore, this flywheel is not suitable for all creative works. Some projects are willing to transfer control of their ideas to others, but others are unwilling. You can still see this opposition in some permissive licensing projects, such as Fluf World (not cc0).
AngelBaby is a spin-off of Fluf World, and the use of these NFTs in music projects has changed dramatically: they can be used to create virtual bands/artists.
Here is the intellectual property agreement from Fluf World:
These provisions are fairly reasonable, as any one derivative work rife with hate speech affects the entire project and all subsequent derivative works. We can't really avoid these risks, but we can constantly strengthen the stylistic character of the project, so that the derivative works will also become positive and have the possibility of further expansion. So far, most of the projects I've described have been mostly avatar or identity projects. By its very nature, it does not necessarily spread widely. Having a combination of CC0 and low fidelity will certainly help expand the spread, but it's also perfectly fine to keep it as is. Chain Runner, for example, wouldn't force you to advertise it. Currently, many of these projects are social clubs and hope to expand into the metaverse (such as Yuga Labs' Otherside). So they invite you to use their NFT and set it as your personal photo on Twitter and Discord.
However, avatar projects are just one of the project categories, and we still have many categories that we have yet to explore. In my opinion, we have to have an avatar first, but once we have it, we can start exploring other projects. For a metadata-first approach to work, we must put the metadata layer on the chain. Currently, metadata is independent for many projects. This is an API for extension, but only in a web 2.0 way, and it doesn't exist in the same modular framework. If the metadata of the NFT world exists in the same modular framework, it will be easier to combine them and expand in specific directions.
In addition to avatars, loot combinations are also a new development trend. Let's take a look at how Loot and Dopewars leverage these components to build vast NFT universes with CC0, low fidelity, and domain-specific expansion.
Loot Combo: Guided expansion
Loot conforms to the current PFP boom, and their loot portfolio is pure metadata about features. Its typical references are just a combination of transcripts, while other information, including statistics and images, is deliberately omitted.
Without reference images, people can illustrate their understanding.
You can cast the accompanying NFT image on The Root Character.
Hyperloot is a new interpretation.
In addition to direct representation with the help of information in the package, because the nft feature is on-chain, other NFT projects can apply it to their derivative works: it is precisely because the metadata is on-chain that these items are possible.
The Genesis Project is an example:
Each bag has at least one item with an "of" suffix. Collectors find that these loot combinations are disrupted by the initial or "creation" adventurers. Thus, the Genesis project is a collecting game with the goal of distilling the combination of loot into "mana" based on these "of" suffixes. These suffixes are now separated from the original combination, and if successfully flattened back, you can summon and recreate a new combination to represent these Creation Adventurers.
Because of this composability, it produces neither direct derivative works nor related derivative works. Loot Realms is one such example.
Here's also an example of scaling with low fidelity.
These are all hierarchical, and this interaction takes place at the metadata level, and the extension is guided by on-chain bundling.
Another example of scaling by bringing metadata on-chain and in packages is Dopewars. Its example NFT is also just a text package.
In Dope Wars, example NFTs can be used to refine them into stand-alone equipment NFTs.
This, in turn, can be recombined into a Hustler.
The emergence of loot combinations shows that all elements can be combined with each other and have a great promise: CC0 IP, low-fidelity example NFT, and guided scaling with bundles and on-chain metadata.
Even in NFT space, the metaverse is not only a typical representation, and almost all NFTs are combined with their classical interpretations. For example, the following image shows a regional map of Cryptovoxels:
Its metadata shows you the characteristics of the graph.
However, it doesn't show you what's in it, and it's linked to off-chain metadata, so you can't use that information on-chain. In my opinion, the future development of the NFT universe will rely primarily on a combo of expendable on-chain loot. And, it may be more like Loot Realms than Cryptovoxels. The interpretation of experience will depend on a particular UI (or "viewer"), and metadata will become mainstream, followed by interpretation. For now, the so-called metaverse is a multiverse of metadata.
I believe there will soon be a standard that we can use to customize how items fit into the bag and how they are pieced together.
Loot combinations are just one example of scaling with the help of categories, and we have plenty of other categories that we haven't explored. A true metadata map will be able to add/build/expand on a piece of land. In the future, we will also find more ways to recombine specific kinds of NFTs. The Logbook will help us bundle metadata. Over time, more metadata will be placed on the chain, and we can track and bundle events into specific "loggers," and the variety of "log books" will increase: stories told using on-chain events.
Takens Theorem has been notorious for marking and linking events to NFTs.
In their project called The Grid, your NFT changes based on the historical item you have and its relationship to all the other NFT holders in the grid. Of course, posting on this art network will also change everyone's NFT.
It visualizes the time-stamped, shared, common frameworks we've been tagged with. And, it's like a giant universe of stories that links our avatars together based on historical records.
Questions and conclusions
My assessment may not be as accurate. Does low fidelity really matter? Famous NFT collections, such as BAYC, don't have low-fidelity images or collect on-chain metadata with packages, but that doesn't have much of an impact on it either. So in my opinion, while these three elements have a role to play, what is more important is the more possibilities it brings. Loot is the most typical example, but I don't think it will be the last. As for cc0, is it viable in the long run, or is this flywheel not as powerful as we expected? To what extent can on-chain metadata and bundling be scaled?
These questions will be tested over time, and at the very least it will provide fertile ground for emerging cultures. How many possibilities will they create in the future with timestamp engines, open APIs, and free cultures? At least, for a long time after we're gone, we'll embed the friends we've made along the way.
*Rhythm BlockBeats reminds investors to guard against chasing high risks, and the views expressed in this article do not constitute any investment advice.
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