a16z: Why do NFT developers choose cc0?

Original title: "Why NFT Creators Are Going cc0"

Original author: Flashrekt & Scott Duke Kominers, a16z

Original translation: Lao Yapi

This article comes from the WeChat official account: Lao Yapi

Every New Year's Day, January 1, is also "Public Domain Day", when thousands of creative works automatically enter the public domain for the first time. This means that the original author or copyright holder loses their exclusive rights (for example, to copy, adapt or publish), and the relevant work can be used by everyone for free. This happens to movies, poems, music, artworks, books, and the protection of these works usually lasts until 70 years after the author's death, and in some cases even to source code.

Opening creative works to the public domain also opens the door to all sorts of new uses. Earlier this year, an estimated 400,000 pre-1923 recordings of Winnie the Pooh became public, as did the famous Winnie the Pooh. (That’s the hyphenated version, not the newer, shirt-wearing version from 1961 that’s still owned by Disney). With most of the characters from A.A. Milne’s 1926 Winnie the Pooh book now public, we’re starting to see creative adaptations and expressions that Milne probably never anticipated or intended. In fact, an older version of the honey-loving bear has been adapted into a horror movie, Winnie-the-Pooh: Blood and Honey…with Winnie and Piglet as the villains.

Counterintuitively to many classic intellectual property (IP) strategies, experimentation and remixing can sometimes increase the value of an IP. This is a core motivation of the open source movement, which explicitly allows the public to build on (or fork and copy) existing technology. A big part of the reason why Android, Linux, and other successful open source software projects are so competitive is because of their embrace of this permissionless innovation. Crypto’s success in attracting public development is also due to its general acceptance of open source, as well as “synthetic culture”, which is particularly true for some NFT communities.

Catch the meme produced

Strategies for building brands, communities, and content through intellectual property vary widely among NFT projects. Some projects maintain more or less standard intellectual property protections; others only give NFT owners the right to innovate with the relevant intellectual property; and still others go further and choose to eliminate copyright and other intellectual property protections entirely.

By releasing digital works through a "Creative Commons Zero" ("cc0") license, a rights waiver tool released in 2009 by the Creative Commons nonprofit organization, creators can make an informed choice to "not retain rights." This option allows anyone to make derivative works and profit from those efforts without worrying about legal consequences. There is still a lot of confusion among the public about copyright as it applies to NFTs, so nothing said here should be considered legal, financial, tax, or investment advice (but check out this article for information on copyright vulnerabilities in NFTs and how creators can take steps to ensure the rights of their owners:

https://medium.com/initc3org/copyright-vulnerabilities-in-nfts-317e02d8ae26) However, this article will focus solely on cc0.

The use of cc0 in NFTs was popularized by the Nouns project, which launched in the summer of 2021. Many other projects quickly followed, for example: A Common Place, Anonymice, Blitmap, Chain Runners, Cryptoadz, CryptoTeddies, Goblintown, Gradis, Loot, mfers, Mirakai, Shields, and Terrarium Club are all cc0 projects, and there are many, many derivative works created from them.

Meanwhile, popular pseudonymous crypto artist X_COPY placed their iconic 1-of-1 NFT artwork "Right-click and Save As Guy 右扣及載為佬" under a cc0 license in January, just a month after selling the work. This cc0 designation has led to a large number of derivative works.

X_COPY's "Right-click Save As Guy 右扣載為佬"

Derivative works based on X_COPY originals

The following Monday, XCOPY decided to go further, announcing his intention to "go all in" and apply cc0 to "all of his existing art." "We haven't really seen a cc0 summer yet, but I believe it's coming..." the artist said, alluding to a possible period of growth similar to the "Summer of DeFi" in 2020, when decentralized finance attracted more followers.

Why are so many NFT creators going the “copyright-free” route?

One reason can simply be said to be to promote the expansion of the original project for the sake of “culture” to bring about a more vibrant and engaged community. This is particularly meaningful in the context of cryptocurrency, where open sharing, finding and building community, is part of the core philosophy of many.

Creative works live and die by their cultural relevance. While NFTs may allow for provable ownership of any digital item regardless of licensing issues, CC0 also enables “meme-ability” by actively, rather than passively, inviting the creation of derivative works. When new derivatives are created and shared, attention flows to the original work, strengthening its place in the collective consciousness. This in turn inspires more interpretations, creating a flywheel effect where each additional derivative increases the value of the original, similar to the platform network effect where the platform becomes more valuable to users as more users join.

In other words, cc0 licenses make it easier for creators to “catch the meme that was produced.”

“Catch the meme that was produced Season 1 – Card 2”

The proliferation of cc0 across the digital sphere is just the beginning, though, with real-world physical products also leveraging cc0 NFT assets. The iconic square-framed glasses seen on each new NounsDAO NFT (with the tagline: “One pair a day, forever”) have been made into actual luxury sunglasses that you wear on your face by the Nouns Vision project. Blitmap has seen their pixel art freely depicted on shoes, clothes, and hats, all from different entities. This contrasts with more traditional intellectual property models, where a single owner typically controls creation, licensing and production.

The Blitmap logo cap actually comes in multiple cc0 levels: The physical “blitcap” (level 3) is a derivative of a feature from the cc0 Chain Runners set (level 2), which uses the “logo” original from the cc0 Blitmap (level 1), which is actually Blitmap’s token #84, one of several from the Blitmap set that have been used as features in other standalone sets. (“Dom Rose,” token #1, is another popular choice.) These homages allude to Blitmap’s influence as a cc0 leader, one of the first major NFT projects to announce its public domain intentions. And the references continue to proliferate; for example, last week’s new set, “Citizens of Tajigen,” includes a version of the Blitcap feature.

These kinds of derivatives are a win-win for everyone, not just the original creators, but especially for projects that are building new brands with NFT assets. Derivatives borrow some of the brand awareness from the source project; then, as people independently become aware of the derivative, new interest in the original project is generated. If you see someone wearing Nouns glasses on the street (or in a Super Bowl ad), you might be tempted to buy a pair of your own, but you might also be interested in buying the original NounsDAO NFT or other related derivatives. In fact, the second author of this post first discovered Blitmap through Chain Runners, and while Blits was well beyond his reach, he ended up buying a few “Flipmap” derivatives.

Physical Blitmap Logo Hat

Chain Runners #780 ft Blitmap Hat trait

Blitmap Original “Logo #87”

Open Source as Co-creation

Part of the power of NFTs comes from the inherent composability of the technology, since they are built on smart contract technology. Many smart contracts are explicitly designed as building blocks that can be combined or stacked with each other to create richer applications.

The term “money Legos” was coined in this way to describe the combination of decentralized finance (“DeFi”) smart contracts, connecting to each other to form new financial use cases. (For example, yield aggregator Yearn interacts with MakerDAO’s stablecoin $DAI and exchange liquidity provider Curve, etc., simply by calling public functions on their smart contracts.) From the same composability perspective, NFTs and their underlying smart contracts can serve as a foundational layer on which culture and creativity can be recombined and connected to each other.

And cc0 allows all of this to happen with the explicit permission of the original creators - giving the NFT enthusiast community a literal license to build new layers of value whenever, wherever, and however they want.

Game concept from HyperLoot (a spinoff of the Loot Project), showing multiple cc0 projects as playable characters in a fictional game

Comparisons can be drawn to open source more broadly, and to the rise of Linux in particular. When the internet was still new, Microsoft controlled much of the operating system market with its closed operating system, Windows. But Linux (and its creator, Linus Torvalds) championed a community-first ethos, with open source code available for everyone to use, modify, and distribute without restriction. This (among other things) led to developers around the world collaborating and creating new software for Linux - from web servers to databases and everything in between. As people (and companies) continued to create world-class open source software, Linux's value proposition strengthened, ultimately driving explosive growth and further innovation across the industry. Today, Linux has over 96.3% market share in the top 1 million web servers, and 85% market share in smartphones, according to market analyst Truelist.

As cc0 licenses begin to empower NFT community builders in a similar way, one might hope for a long-term trajectory of innovation here, too. Building on the logical legos provided by punk4156, the anonymous co-founder of NounsDAO: combining cc0 with NFTs “turns adversarial games into cooperative ones.” This is important on several levels: First, decentralized systems, from open source to crypto, are about trust and coordination between strangers, so providing opportunities for collaboration is critical. Second, this dynamic of collaboration works particularly well in the context of NFTs, because giving people ownership of their digital assets allows them to internalize the results of co-creation through the value generated by their assets and contributions — thereby incentivizing them to participate in co-creation in the first place.

Licenses Created

If cc0 projects are akin to individual open source “applications” or “platforms,” then NFT artwork, the metaverse, and smart contracts provide the “user interface,” while the underlying blockchain (e.g., Ethereum) is the “operating system.” However, in order for these applications to reach their Linux-like potential, more supporting infrastructure services need to be created and readily available so that people can maximize the synthetic opportunities created by cc0.

These services are already starting to take shape. For example, the “superstructure” Zora Protocol and OpenSea’s open source Seaport Protocol enable open, permissionless marketplaces to be built for trading NFTs. Recently, a pixel art rendering engine was released entirely on-chain to the Ethereum blockchain, which has been integrated into projects such as OKPC and ICE64. Each successive application will advance blockchain capabilities “out of the box,” driving new applications to be built from these now richer, enhanced building blocks.

While growth in web3 developers is at an all-time high and expanding rapidly, the total is still a small fraction of the total number of active software developers worldwide. However, as more developers enter the space, aspiring NFT projects may find more creative and infrastructure legos to build upon, providing a foundation for cc0 projects and others.

Electric Capital Developer Report (2021), p. 122

Composability is key to growth. Because these digital assets are built on public standards that build on interoperable infrastructure, it is easy for users to plug their assets into a variety of different platforms. The Loot project is an example of this scalability in practice, one of the earliest examples of NFTs We share this example because it’s aesthetically distinctly understated and even “incomplete,” leaving more room for community imaginative co-creation.

For context, Loot started as a series of loot pack NFTs, each of which included just a simple black-on-white list of eight “adventure items” (like “Katana, Divine Robe, Great Helm, Wool Sash, Divine Slippers, Chain Gloves, Amulet, Golden Ring” for loot pack #5726). These loot packs were released for free by the original creator, Dom Hofmann, as a starting point for community building.

Several projects have indeed begun to flesh out everything from metaphorical world-building (Lore) to physical world-building (game development) in a short period of time, with creators from all sides contributing to the collective “Lootverse.” They’ve made games (Realms & The Crypt); characters (Genesis Project, Hyperloot, and Loot Explorers); storytelling projects (Banners and OpenQuill); and even level infrastructure (The Rift).

How do cc0 and composability apply here? Because users own and control the base loot packs (an original that makes sense in many different gaming and storytelling contexts), they can use those core assets anywhere, simply by connecting their cryptocurrency wallet. This enables them to participate in numerous spinoff projects, including one like Genesis Adventurers, whose special characters are featured in many other projects, essentially enabling a decentralized franchise that doesn’t belong to any one entity.

In addition, cc0 projects can greatly benefit from the community's recognition of the value and contribution of the core asset. Community cohesion and participation are crucial here. Building on the examples already mentioned above. While developers can in principle create adventure games around any themes and item concepts they want, the fact that many choose to develop around loot bags reflects the community cohesion in the Lootverse. Meanwhile, Blitmap spinoff project Flipmap shares some of their revenue with original Blitmap artists in recognition of the project's centrality to the community — a move that could foster a healthy culture within the cc0 project ecosystem. As cc0 project commentator NiftyPins noted: "It's a smart move, paying homage to the people who built the foundation for their universe. It also fosters an environment where many of the OG Blitmap artists pop up in Flipmap conversations to provide information and dialogue."

However, cc0 is not a one-size-fits-all solution, and NFTs built around already established brands, for example, may prefer to choose a more restrictive license as a way to protect their existing IP and potentially enforce exclusivity. In addition, while cc0 has some superficial similarities to strategies that allow NFT owners to exclusively commercialize the IP associated with their NFTs, such as Bored Ape Yacht Club, there is a key difference: cc0 holders do not have the right to exclude others from using the same IP. This may make it more difficult for holders to build commercial brands on top of cc0 assets, or grant specific rights to partners, although holders can still introduce extended IP (such as backstories or derivatives) that they fully control.

Decentralization and open development are core elements of blockchain technology and the broader crypto ethos. This makes it very natural for cryptocurrency projects to build around the cc0 content model, which builds on the work of the Creative Commons Foundation and several open source pioneers, and perhaps represents the purest formal embodiment of this open source philosophy to date.

Like the initiators of open source software projects, NFT creators who choose cc0 must decide how big a role they play in forming the surrounding ecosystem. Some leaders of cc0 projects, such as the creators of Chain Runners, continue to build on the original cc0 assets, actively establishing an environment that derivative projects can plug in and build on. In contrast, Dom Hofmann stepped down from Loot and let the community take charge. (That said, Dom is developing other cc0 NFT projects as part of the company he founded to develop Blitmap, etc.). Other creators have chosen to exit completely, such as the recent announcement by the pseudonymous sartoshi that he would withdraw from the cc0 project he developed, mfers, and completely withdraw from the NFT market. He released a final version, aptly named "The End of Sartoshi", and then deleted his Twitter account. The smart contract of the mfers project is now controlled by the multi-signature wallet of seven mfer community members.

Regardless of the creator’s ongoing involvement, CC0 licensing enables a strong community to co-create in a way that provides value to all members. As the NFT market continues to grow and mature, we expect to see more organized infrastructure and design patterns supporting these efforts. There may also be innovation in frameworks around value capture, just as there has been with open source software. (For example, we might envision a version of the “Sleepycat License” that requires proprietary software products to pay a licensing fee when they embed certain open source components). As creators continue to advance this market, we expect to see them develop and experiment with new rights and licensing models, far beyond what is in use today. But regardless, CC0 provides NFT creators with a way to launch projects that may one day take on a life of their own.

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