NFT IPs are a subject of debate. In addressing the IP dilemma, Truth Labs has taken a novel route. It decided to provide each holder of The 187 collection NFTs with bespoke contracts. Moreover, this move potentially sidesteps regulatory issues while also maximizing the value for the holders.
What is the Truth Labs NFT IP Deal?
Truth Labs has already struck two unique deals with holders. The first involves King Kong, who has become an official partner of the Goblintown collection. As per the terms of this partnership, he will earn a 1% royalty from both past and future sales. That guarantees him a payout of 40-50 ETH.
The second unique contract has been negotiated with Ding Ding. It focuses on the production of real-life merchandise inspired by her NFT, The Waldragon. Further, in this arrangement, Ding Ding is described as an “equal partner” in the revenue generated from the merchandise sales.
As the NFT market grapples with uncertainty, the question of the value and utility of owning an NFT becomes more pertinent. Some, like Pudgy Penguins, have successfully leveraged the IP of their projects, striking licensing deals for physical toys and children’s books. NFT collection Deadfellaz has also adopted a similar strategy, partnering with organizations like the Chicago Bulls, DraftKings, and Wrangler.
What Other Models Exist for IP?
In contrast, Proof Collective switched its Moonbirds collection to a CC0 license last August, causing a ruckus amongst holders. Some felt the decision was a centralized bait-and-switch, as it occurred long after people had originally bought the NFTs.
While CC0 licenses grant holders significant freedom, they also allow anyone to utilize the same IP. According to some Web3 commentators, it defeats the purpose of owning a unique piece of digital art in the first place. By crafting individual contracts for each holder of the NFTs in The 187 collection, Truth Labs is navigating a middle ground. Moreover, it allows it to avoid SEC scrutiny while still preserving the uniqueness and value of their NFTs.
The company aims to capitalize on the IP of Web3 to weather the prolonged crypto winter. This unique approach to NFT IP management, while still in its early stages, could represent a new way forward for Web3 projects in a rapidly evolving landscape.