[AMA Digest] NFTs: Bringing the next 1 Billion to Web3.0

·NFTs serve an important function in bridging web3.0 and web2.0

·Founders need to pay closer attention to their communities, especially in the current bear market

·CC0 Projects need to be prepared for the risks involved in such projects, such as having intangible and long-term returns, if any at all

The past weeks have certainly not been easy for the NFT community. From the plummeting floor prices of Bored Ape Yacht Club (BAYC) to the uproar within the Moonbirds community at the sudden switch to creative commons-zero by the founders, chaos has been reigning supreme in the world of NFTs.

Since its conceptual genesis, NFTs have always been a repository for creativity and art. For many, NFTs were their first step into web3.0 and blockchain technology. Be it their myriad aesthetics or investment value, NFTs definitely hold their unique appeal in the cyberspace of the future. In Coinlive’s recent Ask Me Anything session held on Twitter Spaces, we spoke with a panel of experts who shared their views on the matter with us.

“NFTs are a way to onboard users and get people interested in DeFi,” Braiden, the Co-Founder of Hawksight tells us.

Darren, an analyst from Nansen, agrees with him. “NFTs will bring [about] the next one billion users into web3.0. I’m seeing a trend where NFTs are focused on onboarding people into the space, which may even potentially spark the next bull run.”

Without a doubt, the allure of NFTs is indeed undeniable. Darren is spot-on with his observation as well. More and more NFTs are moving towards the web2.0 space, but not in a regressive way. Rather, it seems to be going back to its origins as a bridge between web2.0 and web3.0. This looks like popular collections such as Pudgy Penguins and Chubbicorns for instance, offering up mechandise such as apparel and plush toys, in an attempt to appeal to a larger community. This is also in line with more legacy NFT collections such as bored Ape Yacht Club and Azuki doing the same and launching their own clothing lines.

It is indeed evident then, that NFT founders are beginning to see the necessity to broaden their appeal towards the wider community – specifically those outside of the web3.0 space. Especially with the overbearing crypto blizzard, it is becoming increasingly pertinent for both founders and their following alike to seek ways to keep the fires of innovation going strong. After all, NFTs have always been founded upon the architects of creativity and aesthetic artistry.

With more and more NFT collections going “creative commons-zero", or “CC0”, we ask the panel what this foretells for the future of the NFT scene.

“If you go down the CC0 route, it allows people to use it and build upon it as well, but it’s a very different appeal already in this sense. I personally don’t see the appeal, but I can see why people will want to support CC0 projects”, Darren tells us.

Indeed, with the recent Moonbirds scandal that saw a massive outcry from the community that led to the sell-off of the digital owls when its founders announced the switch to a “CC0" model, the ongoing debate in the NFT scene between artwork valuation and communal creativity has never been more heated.

When a project is defined as “CC0”, it allows artists and other creators or owners of copyrighted content to waive their interests to the NFT collection so that the public may freely build upon, enhance, or reuse the works for any purposes without any restriction under copyright or database law. CC0 NFT projects such as Goblintown have seen a prominent rise in popularity and growth, in part due to its active community and following that continually add on to and strengthen the collection, resulting in a constantly-evolving series.

“I am for rapid innovation and experimentation in this space,” Braiden explains. “CC0 projects take a large risk, but I think as long as [the founders] maintain a rapid space of open communication, it can work out. There has to be a balance between executing and listening to the community.”

Indeed, founders of NFT projects, especially CC0 ones, need to be able to communicate and listen to the community, for a greater power paradigm shifts across the table from founders to the community in such projects. The community does not simply become a following, or hold a stake in the project. They are contributors to the project just as the founders are creators in their own right. “I think it is really important, now more than ever, for founders to be listening to users and building communities not just for the sake of it, but to actually get feedback from them,” Braiden explains further. “To know what matters to them, what matters to NFT users, because there will be different demands across different user segments”.

Yet going CC0 is nevertheless still a risky manoeuvre, especially for projects who never started out as CC0 projects originally, such as Moonbirds. The resulting backlash was not only immense and intense in scale, it was definitely understandable.

There are three primary risks for projects going CC0: perceived betrayal to the community, intangible benefits, and long-term goals.

First, the community, such as that of Moonbirds, definitely felt the pinch in the transition. The massive sell-off of the feathery NFTs definitely reflected the anger and outrage felt by its most loyal followers. These are users that may have followed the collection since its inception, only to feel what was otherwise a backhanded slap in the face to their loyalty, having their beloved artworks devalued significantly overnight.

Next, the benefits of going CC0 are still largely theoretical. In a relatively nascent sector, there is simply insufficient data surrounding the concrete returns of CC0 NFT projects, beyond promises touting “innovation” or “community engagement”. But what do these monikers actually mean in the grander scheme of things? Especially against the backdrop of non-cc0 legacy projects like CryptoPunks and BAYC with soaring floor prices, it is difficult for many to truly discern the value behind non-cc0 projects.

Finally, any benefits that may realise, will have to be in the long term. Akin to communal grassroots activities, CC0 NFT projects exist on the work and skill of a dedicated community, and thus indisputably requires time to nurture and grow. As Braiden tells us: “any benefits that can be realised, will only be realised in the medium to long term. Not many people are ready to wait for the long term”.

In a bearish climate, NFT projects are continually sourcing for ways to reach out to a greater audience and consumer pool, whether is it through bridging back to web2.0 with merchandise, or through going CC0. If there’s one thing that this downturn has taught founders and prospective NFT creators however, it would be to always prepare for emergencies such as this. “Projects need to be stress-tested to survive in a bear market,” Braiden tells us with concern. “This applies to both NFT and DeFi markets – founders need to think two steps ahead and be able to weather the storm when it hits, because it will hit at some point, like now.”

Indeed, NFT projects just as what Darren argues, have the potential to bring about the next stage of development and uptake of web3.0. Yet it is an increasingly volatile sphere that demands only the utmost care and foresight in project curation.

This is an Op-ed article. The opinions expressed in this article are the author’s own. Readers should take the utmost precaution before making decisions in the crypto market. Coinlive is not responsible or liable for any content, accuracy or quality within the article or for any damage or loss to be caused by and in connection to it.

Written by: [Coinlive] Darren