NFT IP is debatable. In solving the IP problem, Truth Labs has taken a novel approach. It decided to provide each holder of 187 collectible NFTs with bespoke contracts. The move potentially sidesteps regulatory issues while maximizing value for holders.
What is included in Truth Labs’ deal with Holders?
Truth Labs has already entered into two unique deals with holders. The first includes King Kong, which has become an official partner of the Goblintown collection. As per the terms of this partnership, he would earn 1% royalty from both past and future sales. This guarantees him a payment of 40-50 ETH.
Another unique contract has been negotiated with Ding Ding. It focused on the production of real-life merchandise inspired by its NFT, The Waldragon. In this arrangement, Ding Ding is described as an “equal participant” in the revenue generated from merchandise sales.
As the NFT market grapples with uncertainty, the question of the value and usefulness of owning an NFT becomes more relevant. Some, such as Puddy Penguins, have successfully leveraged the IP of their projects, making licensing deals for physical toys and children’s books. NFT collection Deadfelz has adopted a similar strategy, partnering with organizations such as the Chicago Bulls, DraftKings, and Wranglers.
What are the other models for IP?
In contrast, Proof Collective switched its Moonbirds collection to a CC0 license last August, causing an uproar among holders. Some felt the decision was a centralized bait-and-switch, as it occurred long after people had originally purchased the NFTs.
Yuga Labs followed suit, giving Cryptopunks holders free rein to use the IP of their NFTs through a CC0 license. This makes the IP public domain and available for any purpose, including commercial use.
While CC0 licenses provide significant freedom to holders, they allow anyone to use the same IP address. According to some Web3 commentators, this defeats the purpose of owning a unique piece of digital art in the first place.
By creating separate contracts for each holder of the 187 NFTs in the collection, Truth Labs is navigating a middle ground. Furthermore, it allows it to avoid SEC scrutiny while still preserving the exclusivity and value of its NFTs.
The company aims to capitalize on Web3’s IP to weather the prolonged crypto winter. This unique approach to NFT IP management, while still in its early stages, may represent a new way for Web 3 projects in a rapidly evolving landscape.
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Source: nftevening.com
