Over the last two years, NFTs have broken out into mainstream conversations, with collections like Bored Ape Yacht Club and CryptoPunks selling for six to seven figures. The skepticism around valuation is fair, given that this is new technology and far too many bad actors have entered the space. One clear value for NFT collectors is the immutable record of ownership created on the blockchain when the NFT is purchased. Ownership can include the right to commodify the NFT content, which is a utility for those that understand the value of the intellectual property (IP).
NFT IP Ownership
Imagine if you owned the IP associated with a Marvel superhero or a character from a Disney cartoon. Think of every way you could monetize that IP. These franchises are some of the biggest in the world, but what’s stopping Bored Ape Yacht Club or any other significant project from eventually becoming a household name? It makes a bit more sense why some assign such high value to NFT collections, especially with IP ownership being a utility.
YugaLabs provides IP rights to their NFT holders, empowering them to create music, restaurants, wine, and other merchandise. We’re talking about decentralized brand building, with thousands of collectors all incentivized to create content and build awareness as a community. As the brand gains value, theoretically, so do the NFTs, with a set supply surging against the growing demand. This gets very interesting very quickly.
The utility of IP rights can help get believers bullish on the long-term potential value of their NFTs. What happens when projects decide to waive all copyrights? What if not just NFT holders but anyone in the world can use a project’s IP? We are starting to get answers to these questions, as some NFT projects have gone in the direction of CC0 classification.
What is CC0?
CC0 is the most lenient Creative Commons license that exists. A CC0 classification allows digital content creators to create text, code, music, photos and videos, waiving all copyrights. This “no rights reserved” copyright means that content can be created for any purpose, commercial or otherwise, without permission. The work can be used in any way the creator would like, similar to a public domain classification. Ultimately, CC0 does not designate exclusive rights to one person or impose limits on how the work is used and shared.
The Benefits of CC0
An increasing number of NFT projects are exploring CC0 copyright. The most apparent benefit is generating more awareness around your Web3 brand. As CC0 NFTs are minted and traded, they are unrestricted by copyright concerns because, technically, nothing can be stolen using a CC0 license. CC0 changes the dynamic for media brands, removing opposing interests and creating cooperative opportunities. Many love this approach as it continues to cultivate a culture of information sharing, a fundamental pillar of the emerging Web3 ethos.
The Downsides of CC0
Projects that implement CC0 licenses lose a bit of control over brand perception. Suppose an influx of derivatives enters the market using a collection’s IP. In that case, they can’t control projects unaligned with brand principles or vision. For example, suppose a hate group decides to use a CC0 image to promote violence, which goes viral. In that case, this can tarnish the reputation of the brand. Brands that want complete control of their narrative aren’t the right fit for CC0, as it immediately sacrifices control over the brand.
Examples of CC0 NFT Projects
On August 5th 2022, Kevin Rose, founder of the NFT project Moonbirds, announced on Twitter that the project moved to a CC0 license. “In this new future, true ownership is dictated by what is recorded on-chain, the way it should be, not by a record housed by a government or corporate entity.” explained Rose in his twitter thread. This change allows free use of Moonbirds art in any capacity – forever.
To help oversee the licensing of Moonbirds trademarks, a Moonbirds DAO is set to launch in 2023. This DAO allows Moonbirds holders to join, participate, and vote on proposals the project and community put forth. . While these announcements were mostly received in positive light, some Moonbird NFT collectors are upset they were not consulted on the decision to give away their IP rights. This process has sparked a debate around when a project should move to CC0, and how doing so post-launch can be seen as a move that removes rights from holders.
Nouns is one of the projects pioneering CC0 licenses in the NFT space. According to their website, “The Nouns project initiative is an experiment in decentralized governance and the bootstrapping of culture, identity, and community, the intrinsic property that underpins it all is the way the intellectual property is managed.” This innovative approach is why the project operates under a CC0 license, making everything created by the community public domain.
Nouns has already demonstrated the value of their approach, as all creations based on the project directly benefit Nouns, the Nouns DAO, and the community as a whole. This is meant to remove friction from brand building by allowing permissionless participation at any level. Their apparel, sunglasses, documentary, and esports team all represent the potential of open-sourcing IP. As the Nouns continue to expand, it will be exciting to see how other projects incorporate their approach to CC0.
Exploration of IP rights will deepen as we are still in the early days of NFTs. CC0 represents the full-on decentralization of brand building, which will be very interesting to follow as the space grows. Decentralizing ownership in this way is a perfect example of how value is being created and shared within NFT communities.
At Liteflow, we bring the flexibility of building web3 projects according to your needs while helping you own your revenue model for the internet’s next era. If CC0 and IP rights designation are a part of your project’s vision, we will help implement it! If you’re interested in bringing your ideas to life, reach out and schedule a call with one of our experts.