How NFTs Will Revolutionize Intellectual Property
Crypto's Killer App Fuels the 'Passion Economy'
By: Jake Fraser •Op-ed
In January 2022, Prada, the Italian luxury fashion brand Prada and Adidas, the giant sportswear manufacturer, teamed up to create a groundbreaking NFT project. By bringing in credibility and authenticity, NFTs are poised to redefine collaborations and create a safe space where all the collaborators can equally benefit from the partnership.
This, combined with the inherent rarity of NFTs, could give rise to an era of meaningful collaborations where the contributions of each collaborator are recognized, stored, and accounted for on the blockchain.
They asked people to submit unique artwork and photographs and selected 3,000 of them. They were compiled and featured in digital artist Zach Lieberman’s larger NFT and went up for auction on SuperRare. About 80% of the proceeds from the auction went to a non-profit organization Slow Factory. This project shows how NFTs unite brands, artists, creators, and social organizations around the world.
Recently, NFTs underwent a rapid transition from the fringes of blockchain innovations to the forefront of emerging digital economies. Whether it is art, entertainment, fashion, or insurance, these digital collectibles positively impact the world’s major industries. Investors love them.s. In 2021 alone, NFT sales topped $17.7 billion, with digital artists and creators as significant beneficiaries.
Standalone NFTs by individual creators laid the foundations for the market, but it was projects by giant firms that overtook the scene and propelled digital collectibles to the mainstream. These projects, coupled with the underlying technology, foment a collaborative culture for brands, artists, creators, and entertainers where stakeholders benefit equally.
Why do Creators Collaborate?
Venture capitalist Li Jin coined the term “passion economy” in 2019 to describe a new wave of entrepreneurship. This passion economy spurred the rise of digital artists, creators, and gamers. When the success of these creators and their influence over the fans came to light, global brands entered the passion economy to collaborate with creators and claim a share of the profit pie.
Today, the passion economy is worth over $100 billion and is fuelled by collaborations between brands and creators, benefiting from each other’s influence.
NFTs further enable royalty collection mechanisms where all parties involved receive financial benefits immediately.
Yet every collaborator experiences a tiring process of agreements and legal documentation to protect their intellectual property. And even then, there are instances of content theft or one party benefiting more from the collaboration than the other.
The rise of NFTs is thus a welcome tool for creators. They enhance collaboration and protect rightful content ownership and automated revenue sharing.
Give Way for NFT-Based Collaborations
NFTs also have hybrid ownership standards, e.g., ERC-1190, which enables multiple parties to own a single piece of content. When creators collaborate, they can share ownership of their work and benefit from it equally.
For starters, the need for complicated documentation and third-party involvement is evaded. The collaborating parties can set their terms and conditions, establishing working relationships on their own.
NFTs further enable royalty collection mechanisms where all parties involved receive financial benefits immediately. There has consequently been a sharp rise in NFT-based collaborations recently. Mercedes-Benz collaborated with five different artists across fashion, architecture, real estate, graphic design, and music to create an NFT for its G-Class line. The NFT project went live in January 2022 on Nifty Gateway.
Furthermore, SINCE3000, a company that creates NFT collections, collaborated with the content production firm Live Rocket Studios and 3D Artist Isaac Udogwu to create a NFT collection of dresses worn by the Academy Award-winning actor Julianne Moore. The collection is named Gowns for Good and features three iconic dresses donned by the actress on red carpets.
Collaborations like these bring new recognition to the artists and brands, creating a symbiotic relationship.
Building the Metaverse Through Collaborations
NFTs entered the limelight as digital collectibles. However, they are also the building blocks of virtual economies and the entry point into the metaverse.
Now, the metaverse itself is akin to a blank canvas. To bring it to life, creators across different industries need to collaborate to create content and experiences. NFT-based collaborations will allow artists, brands, creators, and influencers to join forces and build the metaverse and the future of the internet while reaping equal financial and social benefits for their efforts.