The development logic of NFTs is shifting: from digital avatars to narrative beings

Blockunicorn
2021-10-20 16:41:42
Collection
We can have NFTs that can think and feel.

Title: "Thinking About the Future of NFTs"

Author: Mario Gabriele, Founder and Editor-in-Chief of The Generalist
Translator: Block unicorn

Actionable Insights

If you only have a few minutes to spare, investors, operators, and founders can gain insights into NFTs and intellectual property in today's article.

  • NFTs have sparked a disruptive form of IP. We are witnessing the establishment of new intellectual property empires. Projects like CryptoPunks, Bored Ape, Yacht Club, etc. are not just artworks; they are priceless IP that can expand across formats.
  • Traditional talent agencies are recognizing their potential. Others agree with this assessment. The organization behind CryptoPunks has signed a representation agreement with United Talent Agency, while the creators of Bored Ape have signed an agreement with Madonna's agent, Guy Oseary. Niche crypto art is moving into the mainstream.
  • The IP of NFTs is "thin." While these projects are incredibly popular, the IP they create is vastly different from traditional creative works. Unlike novels or comics, NFT projects lack the depth of knowledge or characters to draw from. This may pose challenges.
  • We will see NFTs with greater narrative weight. So far, profile picture (pfp) NFTs have focused on physical traits. This makes them visually searchable but does not endow the creations with true personality. To address this, we may see NFT creators giving their characters internal attributes that reflect a rich identity filled with motivations, conflicts, and secrets.
  • There is often a new experiment, Philosophical Foxes, attempting to add dimensions and narratives to NFTs. Unlike physical traits, the uniqueness of the foxes lies in their philosophies, virtues, burdens, and secrets. These are pixels with intrinsic life.

In 1928, Walt Disney launched his first creation: Oswald the Rabbit. That was the beginning of a $300 billion empire, driven by one of the most important assets: intellectual property.

Mickey Mouse, Donald Duck, Snow White, Alice, Mulan, Luke, Yoda, Thor, Iron Man—Disney's success proves the power of storytelling. Not just their appeal and endurance, but the value they create and capture.

We are witnessing the greatest disruption to IP since Walt's rabbit. The attention generated by non-fungible tokens (NFTs) has sparked a wave of art that may bring us characters for generations to come. Years from now, your Netflix account may have more in common with the homepage of OpenSea, dotted with toads, punks, apes, robots, and other beings that are beginning to live in the web3 world.

However, while these inventions have gained immense popularity, even Disney CEO Bob Chapek would surely take notice, they are fundamentally different from the Mickey company. Of course, their use of blockchain to determine provenance and rarity is correct, but it also involves the IP's context.

Before we unveil our own IP experiment, we will unpack this topic in today's article. I hope you enjoy it.

Thin IP

In 2016, Union Square Ventures published a research paper that quickly became a standard in the crypto world. "Fat Protocols," written by Joel Monegro, explains how blockchains capture value in a way that differs from traditional networks, especially regarding protocols and applications.

Monegro argues that the internet consists of "thin protocols" and "fat applications." The protocols that make the internet work—like HTTP or TCP/IP—capture almost none of the value they create. Instead, it is the applications at the top that thrive and become "fat." Google, Facebook, Twitter, and many other companies are part of this thick application layer.

Blockchain has reversed this order. Underlying protocols like Bitcoin, Ethereum, Solana, and Terra have achieved massive market capitalizations. Meanwhile, applications—like Coinbase and OpenSea—are much smaller, despite still holding incredible value. Of course, Coinbase has a market cap of $50 billion, but Bitcoin's market cap exceeds $1 trillion, flipping the value position.

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While blockchain contributes to the fattening of protocols, it has had the opposite effect on intellectual property. We live in an era of "thin" IP—not necessarily in terms of value capture, but in terms of narrative weight. This is especially true for the "profile picture" (pfp) NFTs that were discussed in last week's article on OpenSea.

What Does "Thin" or "Fat" IP Mean in Narrative Terms?

By comparing this new wave to traditional properties, we can better understand it. Last month, Daniel Craig made his final appearance as James Bond in No Time to Die. It represents the 27th film of the character and is expected to contribute significantly to the series' $7 billion box office to date. Globally, it ranks just behind Star Wars and Marvel, meaning that the character of James Bond is highly valuable IP. He has proven time and again to be appealing to consumers and their wallets.

But what does this IP actually look like? What is the defensible, protectable nature of Bond?

Of course, it’s the name, but also a rich legend, a story filled with his traits, personality, likes, dislikes, flaws, and virtues. Bond is a character with an inner life, even if he may be a cold, pragmatic figure.

All of this is IP, and in most cases, it has been integrated from the start. The result is that the expansion of Bond IP primarily focuses on the surface. Of course, Roger Moore's Bond differs in tone from Daniel Craig's, but the core elements remain unchanged. Bond is always the suave agent serving the Queen. He is always irrationally good at his job, and he is forever absurdly handsome. Inevitably, he drives a very nice car, meets a beautiful woman, and escapes from dangerous situations. (I know, I know.)

Different directors may change the order of these events and emphasize one over the other. In some cases, they may even subvert these expectations, as in Skyfall, where Craig's performance opts for beer instead of a martini. It’s worth mentioning because of the canon it references; for those who understand the world we inhabit, it’s a knowing wink.

Visualize, this framework might look like:

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Now, a reasonable counterargument to this framework is that much of Bond's value has been captured by these superficial expansions. After all, the box office of the literary character Bond is far less than that of the movie star Bond. Fleming's books have sold 100 million copies—an impressive number, but certainly not enough to surpass the $7 billion brought in by Brosnan, Connery, and other tough celebrities.

This is true, but I think it misses the point. The true power of IP lies not in these vehicles, but in the source. There is no doubt that they enhance Bond's mythology and provide opportunities for evangelism, but the value does not come from the actors or scripts, car chases or gunfights. It comes from the character of Bond. Make the exact same movie but call the protagonist "George Stork," and the numbers you get will only be a fraction of what is demanded.

Something different is happening with pfps. CryptoPunks, Bored Apes, Toadz, and other projects are radical, partly because they provide an effective zero-narrative background for their creations. When you purchase CryptoPunk #7560, you know nothing about their character, personality, or inner life. There is no legend or story attached to them. They reflect intellectual property, but only in their surface features—skin color, hairstyle, and accessories.

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CryptoPunk #7560

Other projects may gesture toward a richer universe for their characters, but it is rough. Bored Apes are nice, but boring, and can enter the Yacht Club. Cryptoadz come from a place "formerly known as Uniswamp" and are escaping the evil King Gremplin. These are delightful touches, but compared to traditional IP, the narrative scope is broad and adds minimal background to the personality of individual works beyond aesthetic representation.

This is not a criticism. In many cases, this flattening is more functional than flawed. The cleanest example might be Loot, which is not a profile picture project but illustrates this point. The project does not create characters with certain abilities and properties but merely provides a black-and-white list of items. It expects others to build narrative value on top of this primitive.

Larva Labs (CryptoPunks) and Yuga Labs (Bored Apes) have taken a different approach than Loot. They have not left this additive process open but have cycled through traditional talent agencies. Larva signed with UTA in September, while Yuga announced last week that it had partnered with Madonna's agent, Guy Oseary.

It is not hard to imagine how this partnership will develop. Presumably, UTA and Oseary will be responsible for managing a series of creative projects based on established IP, whether films, TV shows, games, or something else.

This sounds simple in theory, but it is fraught with challenges in practice. What exactly is there to adapt? What are the core principles, traits, and parameters of a CryptoPunks movie or a Bored Ape TV show? Each NFT has become a protagonist of its owner, but it is a protagonist without a clear personality and depth. Their source material is flat, which may give them broad appeal but poses a problem for storytellers.

Even the simplest questions become difficult. Is CryptoPunk #7560 good or bad? Are they smart or foolish? Are they introverted or extroverted? Are they kind or cruel?

Someone must fill this narrative vacuum; will NFT creators take it upon themselves? While this may preserve the spirit of the project, the skills required to create compelling pfps are vastly different from those needed to build traditional narratives.

What remains are outsiders—do film and game studios understand crypto culture well enough to interpret it effectively? Can they provide differentiated incarnations (or looks) of the characters that align with the original spirit?

At best, adaptation is tricky. Using shallower source material, it seems even harder. Novels and comics provide the details and backgrounds needed for reinterpretation—but is there a great movie inspired by video games? If it’s hard to find depth when adapting from a high-definition interactive world, how difficult is it to find drama in static 8-bit images?

All these factors contribute to a radically different IP structure for NFTs, where narrative weight sits atop the original creation, adding everything else post hoc except for physical traits. This is thin IP.

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With no real boundaries set, everything is narratively permissible. Should alien CryptoPunks be villains? Of course. Should zombies be heroes? Why not. Maybe anyone wearing a hat belongs to the same family? Go for it.

You can change these characters at will because, aside from the preconceived notions eliminated from other narratives (a.k.a. aliens = bad), we have no reason to have meaningful emotions about these characters beyond their monetary value (a.k.a. aliens = valuable).

Can we solve this problem? Can pfps carry the thickness of other forms of IP? Can these protagonists acquire something akin to real backstories?

In the coming years, I believe we will see NFT incarnations present greater dimensions. We will see pixels with intrinsic life, thinking NFTs.

An Experiment: Thinking NFTs

I often think of a quote by Gabriel Garcia Marquez: "Everyone has three lives: public life, private life, and secret life."

Undeniably, Marquez's observation is intuitively correct. We are not singular beings—not really. Instead, we live in series, a series of masks that collapse into a whole. Our discreteness is an illusion—we are fluid rather than solid, and we change over time and context, depending on who is looking at us or speaking to us. These cyclical lives and their interactions are an important part of what makes us interesting.

Conflict, deception, heroism, sacrifice; these ideas only make sense within the inner context of a character. We only know the protagonist is conflicted because we understand her inner life and environment. We only know the hero has been corrupted because we have seen what he once was.

Does this nuance fit the form of NFTs? Can we capture it within the realm of profile pictures, or do we need to set new boundaries? If we do want it to adhere to existing pfp conventions, can we add depth without undermining the simulated visual value created by leading projects?

This experiment attempts to answer these questions, or at least begin to. Introducing… Philosophical Foxes. There are only 100 of them, and each is unique not only in appearance but also in personality.

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This is an NFT project designed to create narrative weight. Although the images, created individually by two extremely talented pixel artists, Gordon Zuckhold and Gustavo Pezo, may follow some conventions of other pfps, each character has secret depths. If James Bond is "fat" IP, and CryptoPunks are "thin," then Philosophical Foxes are "sneaky fat" (also the way most people describe my physique). They may appear thin, but embedded in their design and metadata are the components needed to create multidimensional characters.

We have achieved this through five different methods:

  • Foxes have thoughts
  • Foxes have philosophies
  • Foxes have virtues and burdens
  • Foxes have secrets
  • Over time, foxes accumulate backstories

Let’s take a look at these (and see some lovely foxes).

Foxes Have Thoughts

Philosophical Foxes are contemplating some things.

Each fox in the collection has something on its mind. Some are profound, some are shallow, some are jealous, some are angry, and some are romantic. One fox thinks about Nietzsche, another about a cunning conspiracy, and a third just wants a piece of bread.

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With just a few words, we can add texture to the characters and understand their personalities and motivations. A fox thinking about arsenic is very different from a fox fantasizing about Elon in France.

This happens for a reason: humans are contextual beings. An experiment designed by Russian director Lev Kuleshov cleverly demonstrates this, showing how humans create meaning based on the context presented. Kuleshov did this by making a short film in which an actor remains expressionless, followed by three different shots: a coffin, a bowl of soup, and a woman lying down.

The audience does not realize that Kuleshov uses the same actor each time, but is left deeply impressed by the actor's ability to convey sadness, hunger, and desire.

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Image Kuleshov image

We are using the same effect here. A line of text sparks narrative fireworks in our minds, helping to turn static images into stories.

Foxes Have Philosophies

If you wanted to convey as much information about someone as possible but could only use one word, which would you choose?

Perhaps you would focus on their physical traits, noting whether they are tall or short. Maybe you would mention their personality, calling them sweet, funny, or mean. All of these are reasonable starting points, but they don’t tell us much.

Instead, what if you described someone as a "nihilist"? In one word, you convey some fundamental information about that person’s worldview and way of life, creating a series of flowing images and providing a glimpse into their inner life.

This is because philosophical descriptors are semantically dense. By definition, they encapsulate a vast and complex doctrine into a single label. Compared to a character viewed as a "hedonist," a person depicted as a "transcendentalist" evokes meaningfully different associations.

That’s why each Philosophical Fox has a specific ontology written into its code. Some follow ancient schools of thought like "Stoicism" or "Manichaeism," while others align with modern philosophies like "The Church of Til" or "r/WallStreetBets."

Just as CryptoPunks can be searched by their accessories, Philosophical Foxes can be filtered by their beliefs.

Foxes Have Virtues and Burdens

You can search for foxes not only by philosophy. Like other projects, you can search for some surface attributes, including species and fur color. There are a total of 14, with two fur types.

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This is fun, but it may be the least interesting way to describe them (at least, that’s what I think). That’s because each fox has specific "virtues" and "burdens." If applying philosophy to foxes gives us a high-level understanding of their personalities, these additional traits add finer details.

Virtues and burdens vary in severity and rarity. Virtues include positive attributes like "kind to the elderly," "good credit score," "has HBO," "can do mental math without crying," and so on. Burdens include "forgetful," "grew up in the shadow of the golden child," "bean allergy," and "Gary Vaynerchuk Guy," among others.

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Image source: Opensea

While half-joking, these collectively create a cloud of identity. Let’s take the "Will to Power" fox as an example to see what we know about it:

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This is the beginning of personality. It lacks the nuances or depth of a novel, but it is a characteristic, a set of guidelines. If you were to make a movie about the Will to Power fox, not everything would be permissible. For example, making him an innocent, carefree fool would be against the doctrine. Instead of opacity, a shape is emerging.

Foxes Have Secrets

A small portion of the foxes are what we call "Marquez Complete."

They have a public life (their appearance), a private life (their thoughts), and a secret life—a secret that only the owner can unlock. For example, this fox is thinking about what (hypothetically?) Corliss Four is hiding…

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Secrets are deliberately rare. Just like in real life, some may wish to share their secrets with the world, while others may choose to keep them hidden.

In a medium where every attribute and personality trait is recorded on-chain, secrets are a clear ambiguity. This sounds paradoxical, but it is not—you can know who has something to hide, but you don’t know what unless they decide to tell you.

Stories need tension; secrets are a subtle introduction to it. Knowing everything is often not interesting.

  • Foxes can accumulate narrative weight
  • One of my favorite words is palimpsest.
  • A palimpsest is something that has been reused but still bears traces of previous content, like a sheet of paper printed with the remnants of prior handwritten information.

I believe our personalities are palimpsests. We add to them rather than simply adding; we layer on top, gently modifying, refining layer by layer. The old selves are not erased or forgotten but replaced. When Walt Whitman said, "Do I contradict myself? / Very well then I contradict myself / (I am large, I contain multitudes)," he was speaking of these layered, competing psychologies.

How do we give NFTs the same depth? After all, good stories often require their characters.

While non-fungible, Philosophical Foxes can undergo a change—through additive change. Over time, the foxes can enhance themselves, endowing them with more backstory and greater complexity. They do this by collecting independent ideas. In addition to the 100 foxes, we also released 10 unclaimed ideas.

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Like the foxes, each idea carries a philosophy, a set of virtues, and a pile of burdens. Anyone can purchase an idea and apply it to any fox. This gives the foxes new traits beyond their own. Transitionally, they develop new depths; some may even acquire new secrets.

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Through this mechanism, owners can evolve their foxes, granting them greater narrative weight over time. In the process, they effectively write their foxes into protagonists—we are always drawn to characters with dimensions, substance, and secrets. The foxes become increasingly cunning as the plot unfolds.

New media creates new art, and without film, Disney's empire would not have developed; Pixar needed digital animation. Without the concept of NFTs, CrytoPunks, Bored Apes, and other leading projects could not have succeeded.

However, some things will never change; humans are always drawn to characters with emotions and motivations. Truly deep protagonists. These are the necessary cornerstones, not only of great stories but also of winning IP. As NFT projects attempt to leap from digital avatars to narrative beings, this may pose a challenge. In trying to solve it, artists may hand the task over to outsiders.

It doesn’t have to be this way. We can have profile pictures that not only attract visual appreciation but also possess unique traits and attributes that can grow into meaningful IP subjects. In short, we can have NFTs that think and feel.

Source link: www.readthegeneralist.com

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