I’ll wait on the larger theory of NFT’s for later. TLDR; NFT’s are a new way of structuring value flows that takes advantage of blockchain trust and transparency to potentially radically shift things in a good direction.
Right now I’d like to suggest a few example “NFT’s” or, more specifically, smart contracts that I hope will open up some fruitful areas of exploration in the larger NFT world. The intent here is not to “get it right” but to provide enough concrete detail that someone else can really implement some of these ideas and, with luck, the NFT “self organizing collective intelligence” can run with and evolve in more and more interesting directions. A secondary intent is to gesture in the direction of the larger theory and why I propose what I propose above.
* An NFT model for constructing a self-organizing ecosystem.
Bind the economics of both the creator of some set of NFTs with the people who purchase them. The feedback loops create potentially powerful incentives. For example:
(a) Whenever a given NFT is "first sold,” a portion (lets say 30%) of that sales price is allocated to all other NFTs that were minted by the same identity.
So if Sally mints an NFT S1 and sells it and then mints S2 and sells it for 10 ETH, Sally gets 7ETH and 3 ETH go to the “pool.” In this case the pool consists exclusively of S1, so S1 gets 3 ETH (which can stay in S1 or the owner of S1 can move to his wallet). If Sally mints S3 and sells it for 10 ETH, 7 ETH go to sally and 3 ETH go to the pool. This time, the pool is split between S1 and S2. So, if you want to use pro-rata rules, then 1.5 ETH each. Obviously the specific allocations can be quite various.
(b) Whenever a given NFT is “resold,” a portion of that sales price (lets say 20%) is allocated to a pool. 70% of that pool goes to the original identity that minted the NFT. 30% goes to all other NFTs minted by that same identity.
So Tom purchases S1 for 10 ETH. He then goes on to sell it for 50ETH. Of this price, 40 ETH goes to Tom and 10 ETH go to the pool. From this pool, 7 ETH goes to Sally and 3 ETH are divided among all other NFTs minted by Sally.
The intent of this construct is to create a set of interests on the part of creators and different kinds of other agents in an entire ecosystem of value (not just one NFT).
An NFT contract for price discovery.
A contract is created that puts a given NFT on offer for a limited time. Potential purchasers must identify how much they are willing to pay (their “max price”) for 1 NFT against a set of “minting" scenarios. E.g., 10 ETH for 1 of 1. 7 ETH for 1 of 2. 5 Eth for 1 of 10 etc.
The potential purchaser must stake an amount of ETH equal to their maximum bid. When the auction closes (at the pre-determined time), the contract finds the price at which the auction yields the most ETH, mints the NFTs accordingly, allocates them accordingly, takes the appropriate share of ETH and returns the remainder.
For example, three potential purchasers set the following paramaters:
A. 10 ETH for 1 of 1. 8 ETH for 1 of 2. 5 ETH for 1 of 3. [Stakes 10]
B. 15 ETH for 1 of 1. 8 ETH for 1 of 2. 6 ETH for 1 of 3. [Stakes 15]
C. 11 ETH for 1 of 1. 6 ETH for 1 of 2. 4.5 ETH for 1 of 3. [Stakes 11]
The contract sees that minting 3 NFTs for a total of 15.5 ETH is the highest yield. So it claims 5 ETH from A (returning 5), 6 ETH from B (returning 9) and 4.5 ETH from C (returning 6.5). It then mints 3 NFT’s and allocates them to each purchaser for the price that they signed up for.
An NFT model for attracting content into the NFT universe (the “Reverse Kickstarter Contract or RKC”).
A contract is created. The contract stakes ETH and allocates governance tokens (you can unstake your ETH by paying back 100% of your governance tokens). The holders of governance tokens design the NFT that they want their contract to “acquire”. The design of the NFT consists of (a) some piece of digital content; (b) some set of “creator/owner” identities; (c) some price; (d) some allocation of the price among the creator/owner identities; (e) Some N copies of the content that ultimately will be minted as 1/N NFTs.
If/when a given person “claims” one of the identities, a “proposal” is issued to governance token holders to approve or deny this claim. If it is approved, that identity is now “owned” by the wallet that submitted the claim.
If/when all of the identities in the contract have been claimed, the price is transferred from the contract to all of the creator/owner identities according to the allocation.
For example, I want to see this clip minted as an NFT (from 2:17 to 2:30):
So I create a “Reverse Kickstarter Contract”. I grab a really high quality version of the clip edit it and “Mint” it into the RKC. I stake 1 ETH into the contract for 100 governance tokens. I identify the following identities as “creators/owners”
* Taika Waititi [10%]
* Kevin Feige [10%]
* Eric Pearson [5%]
* Craig Kyle [1%]
* Christopher L. Yost [1%]
* Stan Lee [20%]
* Larry Lieber [5%]
* Jack Kirby [5%]
* Led Zepplin [15%]
* Chris Hemsworth [10%]
* Disney [16%]
And call for the NFT to be minted as a One of One.
Over time, other people come in, stake their ETH and get their governance tokens. Proposals about the creator/owners, their splits, the number of NFTs and the content itself are made and voted on.
Eventually, the contract is holding $10M USD worth of ETH and Disney takes notice. They try all kinds of shenanigans but as the wealth staked to the contract increases, a variety of pressures emerge. Hemsworth’s agent nudges them. Feige nudges them. Fans start creating a variety of other RKCs for their favorite iconic scenes.
Finally, when the RKC is holding $100M USD worth of ETH, Disney makes a proposal for a final version of the identities, splits and number of NFTs. It has their share of the pie a lot larger than the above, but not 100%. This proposal is accepted by the RKC governance token holders, the creator/owner identities are all proposed and claimed, the ETH moves from staked to held by the RKC and then is moved to the wallets associated with the creator/owner identities, and the NFTs are duly minted and owned by the RKC.
Now the governance holders need to auction off the NFTs (possibly to themselves) but that is another story . . .
Love these! Here’s another:
Each token minted represents something good. (Non-profit mints 1 token per 100 trees planted).
Each token minted has a simple symbol as the first “layer”. (100 trees is a simple stick figure tree).
Every time the token is traded, the buyer can add a layer. (Beeple buys a token for 0.1 ETH, draws an apple on the tree, sells for 10 ETH to a collector who puts their signature at the bottom and flips to another collector for 100 ETH).
Every time the token is traded, 50% of the price goes back to the original minter. (55 ETH is sent back to the non-profit).
Very cool! First I'm reading of these besides hearing in passing. I'd also propose you change the numbers in the purchaser parameters, because if I'm following, A+B gets the minter 16>15.5, right? Although combined with the first example... having 3 NFTs in the ether could possibly lead to a greater volume of 'resale royalties' hah!
Building on Jared's type of idea (i.e., "layers"). What if the tokens represent an unfinished thought, like the start of a novel, and you purchase the rights to add the next layer to the story... Or we start with that clip of Thor, the next buyer adds another clip, and so on! A reverse crowdsourced movie?! Lol