Over the past several months there’s been a growing debate around NFT property rights that has (once more) divided CT: CC0 or copyright?
Questions over publication, distribution, and monetization rights for NFTs have existed since the very beginning of the space, but have heated up especially in the past year as blue-chip collections have exploded in value. At the center of the closed IP camp is Yuga Labs, the juggernaut behind BAYC and recent acquirer of CryptoPunks and Meebits from Larva Labs. Essentially, Yuga owns the IP but grants holders unlimited commercial rights to use the image and likeness of any Ape, Punk, or Meebit they own.
On the other side of the spectrum, we have CC0 NFTs, which hold a creative commons license. There are several degrees of creative commons licenses, but the CC0 is the most liberal. It’s basically a public license that entails anyone to use the property, for free, with no restrictions. Quite a few NFT collections have launched under this model, including Blitmap and CrypToadz, but arguably the most popular is Nouns.
There are a ton of pros vs cons arguments on both sides, and I’m not going to go in-depth analyzing each one here (there are plenty of threads on Twitter like this one if you want to check those out). From my perspective, most of the arguments boil down to one point of contention:
“Why should I let other people profit from my asset?” vs “Your asset becomes more valuable as other people use it.”
As I’ve studied this debate, I couldn’t help but notice its parallels to an idea we’re focused on at Verse: Infinite vs Finite NFTs. I define a finite NFT as an NFT that has a predefined, limited supply (a 1/1, 1/50 edition, etc.). In contrast, an infinite NFT is one that has no supply cap. Rather, its supply is dynamically determined by market demand.
Like CC0, It’s become increasingly clear that infinite NFTs are the most valuable model for digital objects to exist on the internet.
Closed IP and finite objects are ideas built for a physical world. CC0 and infinite objects are ideas built for the internet. To understand why, we first have to recognize the fundamental utility of the internet as a network for meme propagation. In a digital landscape, content becomes a cheap commodity as distribution costs (and increasingly, creation costs) fall to zero. Attention and deep context are now the most valuable, scarce assets. In the hyper-competitive race to attain both these assets, you must have your ideas spread farther and occupy more mindshare than your competitors. It’s no accident that TikTok continues its meteoric rise as Netflix stumbles. The former has built the foundation of its product on shared memetic experiences, while the latter has stuck to the tenet of sucking everyone under its roof and enforcing a monolithic experience. You can’t even take screenshots on the Netflix app.
Today, the majority of NFTs are finite: items in 10k pfp collections, 1/1 artworks or songs, etc. But this model doesn’t make sense in the broader context of the internet. In the short-term, yes, there might be a good amount of value generated within the bounds of closed-IP and finite scarcity. For example, a creator might make 3 ETH selling a 1/1 artwork to a single bidder.
But if I’m the holder of a 1/1, I’m also the only one incentivized to increase the attention around my object across the internet. If nobody else can profit from distributing or remixing the NFT I own, why would they? The NFT’s memetic power is effectively nonexistent. It’s a digital object not built for the digital operating system (the internet) in which it lives. Finite NFTs operate on the same physical-world principles of closed IP. These principles favor individuals building empires on the assumptions that distribution is costly and slow. It works for Disney because nobody could built a Disneyworld competitor before they would be shut down by an IP lawsuit. It works for Star Wars because nobody could produce a blockbuster film with Darth Vader’s likeness before lawyers would storm their offices.
But on today’s internet, the dynamics are entirely different. Memes want to proliferate, and you can’t plug all the holes to prevent something from spreading if the market wants it. So your best bet at building something that will generate long-term value and returns is to work with the tide and encourage proliferation and remixing. This is the core argument for CC0 and infinite NFTs.
Infinite NFTs are NFTs created on Verse. Namely, these NFTs have no finite, hard-capped supply. Rather, the supply (and price) of a given NFT is dynamically determined by market demand. Anyone can buy and sell quantities of the NFT’s underlying ERC-20 token at any time, and thus anyone has the incentive to proliferate the NFT across the internet and accrue value to the object. Every NFT on Verse is essentially a currency backed by a meme. As more people encounter the NFT and buy its continuous token, there’s a greater incentive to distribute it further and build deep contexts around it. Every time the token is traded, the creator receives perpetual royalties and far greater potential for long-term value generation as their work becomes more deeply integrated on the internet. With increased demand, the price automatically increases and raises the NFT’s value. The internet is already a market for memetic attention & context - Verse is the first infrastructure built to inherently capture this value.
Verse represents a whole new medium for NFTs that exist in better alignment with the fundamental utility of the internet. In many respects, Verse NFTs and CC0 go hand in hand: they’re both systems that supercharge value accrual for internet-native objects that take advantage of the native meme proliferation network on which they live.