a16z: Why should NFT creators choose cc0?

Original Title: “Why NFT Creators Are Going cc0”

Authors: Flashrekt & Scott Duke Kominers, a16z

Compiled by: Paimon

Thousands of innovative products automatically enter the public domain every January 1st, which also means that on "Public Domain Day," copyright holders or creators relinquish all ownership rights to their artworks, including reproduction, adaptation, or publication, allowing everyone to use them freely. Movies, poetry, music, books, and even source code are all fully subject to this principle, and the protection of works in the public domain typically lasts for 70 years after the author's death.

The public domain copyright opens up a new world for non-creative works. In the first half of the year, approximately 400,000 recordings from before 1923 and the original version of the "Winnie the Pooh" comic, which had not yet donned the red short-sleeved shirt to become a famous Disney character, entered the public domain and had their copyrights released. Author A.A. Milne could never have imagined that Winnie, born in 1926, and her friends would be given new colors and expressions by the community's creators in 2022. In fact, in the hands of some creators, the bear holding a honey pot has become the protagonist of the horror film "Winnie the Pooh: Blood and Honey," with Winnie and Piglet taking on the roles of the villains.

Compared to many classic IPs that continue their original creative styles, experimental reconstructions may add more value to technological IPs, allowing the public to create derivative works based on existing technologies, which is also the core driving force of the open-source movement. The success of crypto systems, especially in the NFT community, in attracting public development is similarly due to their widespread recognition of open-source and "remix culture."

Capturing Product Memory Points

The strategies for building brands, communities, and content through IP vary significantly across different NFT projects. Some projects maintain more or less standard intellectual property protection systems; others only grant NFT owners the rights to innovate on the relevant IP; while some projects choose to take off directly, completely removing copyright and other IP protections.

By issuing digital works under "Creative Commons Zero," or "cc0," creators can choose not to retain ownership while keeping the right to be informed. This permission allows everyone to create derivative products without bearing the legal consequences of "derivative creation." [Special Note: There are no complete regulations regarding NFT copyright, so the copyright referred to here is unrelated to legal, financial, tax, or investment matters. This article focuses on cc0, the copyright loopholes of NFTs, and the actions creators can take to maintain ownership rights.]

The widespread application of cc0 in the NFT field began with the Nouns project in the summer of 2021. Projects such as A Common Place, Anonymice, Blitmap, Chain Runners, Cryptoadz, CryptoTeddies, Goblintown, Gradis, Loot, mfers, Mirakai, Shields, and Terrarium Club quickly followed suit, generating an increasing number of high-quality new derivatives based on their foundations.

At the same time, renowned crypto artist X_COPY placed his iconic 1-of-1 NFT artwork "Right-click and Save As Guy" under cc0 licensing in January, and just one month after its sale, a large number of derivatives appeared.

“Right-click Save As Guy” by XCOPY (Left) / XCOPY Original Derivative (Right)

On Monday, X_COPY made a big move, announcing plans to "all-in" and apply cc0 to all his artworks. The artist added, "We haven't really seen a cc0 summer yet, but I believe it's coming soon…" ------ perhaps hinting at a potential growth period for cc0, similar to the "DeFi summer" of 2020 that attracted countless decentralized followers.

Why are so many NFT creators going the "no copyright" route?

One reason can be simply summarized as "everything for culture," which is to promote the development of native projects to bring about a more vibrant and participatory community. This is particularly meaningful in the context of crypto, where open sharing, seeking, and building community is part of the core philosophy of many crypto enthusiasts.

The survival of creative works depends on their cultural relevance. While NFTs inherently possess the ability to prove ownership of all digital projects, allowing authors to avoid licensing issues, cc0 extends the "memory curve" of the original work by granting everyone unobstructed rights to recreate it ------ as new derivatives continuously emerge and spread, people's attention naturally flows back to the original work, enhancing its visibility in the entire crypto world, thus stimulating more recreation and creating a flywheel effect ------ each derivative can increase the value of the original work, similar to the platform network effect, where the addition of users makes the platform more valuable to them.

In other words, cc0 makes it easier for creators to "capture the memory of the product."

However, the application of cc0 in the entire digital realm is just beginning ------ physical products in the real world are also producing derivatives of cc0 NFT assets. The iconic square glasses on NounsDAO NFT ("one per day, forever") have been turned into luxurious sunglasses that can actually be worn by the Nouns Vision project. Blitmap's pixel art has freely appeared on shoes, clothes, and hats from various production companies. This stands in stark contrast to the traditional intellectual property model, where a single owner holds significant power over creation, licensing, and production.

The hats bearing the Blitmap logo actually have multiple cc0 levels: the underlying cc0 entity "blitcap" is actually a derivative with features from the second layer cc0 Chain Runner series, while it is also a product of the first layer cc0 Blitcap logo "original." This logo is actually token 84 of Biltmap and is one of several "originals" in the series that often serve as inspiration for creation (other works include "Dom Rose," token #1, etc.). The influx of derivative creators paying "homage to the classics" reflects Blitmap's role as a cc0 leader and one of the first major NFT projects to announce its entry into the public domain, showcasing its significant influence in the entire crypto world.

These derivatives are a win-win for both original creators and derivative creation brands, especially for derivative manufacturers. Derivatives borrow some brand recognition from the original project, and when they are presented to the public as independent products, people may develop new interest in the original project. For instance, seeing someone wearing Nouns glasses on the street or in advertisements might spark interest in buying a pair of their own glasses, which could also lead to interest in purchasing the original NounsDAO NFT or other related derivative products. [In fact, the second author of this article discovered Blitmap for the first time through Chain Runners, and although the Blits were far beyond his purchasing power, he eventually bought several "Flipmap" derivatives.]

Physical Blitmap Logo Hat (1), Chain Runners #780 ft. Blitmap Hat trait (2) and the Blitmap Original “Logo #87” (3)

Open Source Embracing Co-Creation

The power of NFTs, built on smart contract technology, partly comes from the inherent composability of the technology. Many smart contracts are designed as "building blocks," allowing for richer applications through combination and stacking.

Just as "money legos" are used to describe the composability of decentralized finance ("DeFi") smart contracts, they connect with each other to form new financial use cases. (For example, yield aggregator Yearn interacts with MakerDAO's stablecoin $DAI and exchange liquidity provider Curve simply by calling the public functions on their smart contracts.) From the same composability perspective, NFTs and their underlying smart contracts can serve as the basic conditions for cultural and creative reorganization and stitching.

Cc0 is the assurance that the above actions can be smoothly realized with the permission of original authors, allowing NFT enthusiasts to gain clear authorization from the community to create new layers of value anytime and anywhere.

Game concept from HyperLoot, a derivative of a Loot project, showing multiple cc0 projects as controllable characters in a fictional game

For the more far-reaching "open source," cc0 can even be placed on the same level as the rise of Linux. In the year when web2.0 was still a new concept, Microsoft controlled most of the operating system market with its closed-source operating system Windows. However, Linux (and its creator Linus Torvalds) advocated a community-first spirit, opening the source code for everyone to use, modify, and without any restrictions on distribution. The open-source nature of Linux directly enabled "developers from around the world to unite" to create everything from web servers to databases to connection systems for Linux. The value proposition of Linux was enhanced by the global open-source software within the system, ultimately leading to explosive growth and further innovation in the entire industry. According to market analysis firm Truelist, today Linux accounts for over 96.3% of the top 1 million web servers and 85% of smartphones.

As cc0 licensing begins to empower NFT community builders in a similar way, one can envision a long-term trajectory of innovation. According to NounsDAO co-founder punk4156's "logic-lego" concept, combining cc0 with NFTs "transforms competitive games into cooperative games." This concept has several key points: first, since the decentralized systems from open source to crypto are about trust and coordination among strangers, facilitating cooperation opportunities is key to success; second, in the world of NFTs, this cooperation reinforces people's ownership of digital assets, motivating them to continue creating while holding assets, thereby enhancing the artistic value of the original digital assets and forming a virtuous cycle.

The "License" of Creativity

If cc0 projects are akin to individual open-source "applications" or "platforms," NFT artworks, metadata, and smart contracts provide the "user interface," while the underlying blockchain (such as Ethereum) serves as the "operating system." However, to realize the potential of these applications similar to Linux, more supportive infrastructure services need to be created and reach a level where they can be called upon at any time, allowing people to maximize the "reverberation" opportunities created by cc0.

These services have begun to take shape. For example, the "hyperstructure" Zora protocol and OpenSea's open-source Seaport protocol are the technical foundations for building open and permissionless markets for NFT trading. Recently, a pixel art rendering engine was publicly released on the Ethereum blockchain and has already been integrated into projects like OKPC and ICE64. Each successful application adds fuel to the blockchain's ability to reach "ready-to-eat" standards, and more new applications are born from the increasingly enhanced blocks.

Although the growth of web3 developers is at a historical high and rapidly expanding, the total still only accounts for a small portion of the globally active software developers. Fortunately, as more developers enter this field, ambitious NFT projects may seek more creative "legos" to provide a technical foundation for cc0 projects and others.

Composability is key to growth. Since these digital assets are built on public standards based on interoperable infrastructure, it is easy for users to deploy assets across various platforms. The Loot project is an example of this scalability in practice, being one of the pioneering projects that showcased decentralized co-creation and world-building aspects in NFTs. We share this example also because it has obvious "flaws" or even "incompleteness" from an aesthetic perspective, but this leaves more room for the imagination and community co-creation of all crypto enthusiasts.

Here’s some background knowledge about Loot: Loot began with a series of Loot NFTs, each NFT containing a simple black-and-white list of eight "adventure items" (e.g., the "Katana, Divine Robe, Great Helm, Wool Sash, Divine Slippers, Chain Gloves, Amulet, Golden Ring" from loot bag #5726). These loot bags were initially released for free by creator Dom Hofmann as a starting point for community building.

Several projects have indeed begun to develop everything from worldview construction to world modeling (game development) in a short time, with creators from various backgrounds contributing many derivatives to the "Lootverse." They have created games (Realms & The Crypt); characters (Genesis Project, Hyperloot, and Loot Explorers); storytelling projects (Banners and OpenQuill); and even level infrastructure (The Rift).

So, how are cc0 and composability applied here? Users control the foundational Loot Bags ------ a type of "initial backpack" that makes sense across many different games and worldviews ------ and after connecting their wallets, they can use these core assets anywhere. This feature also allows them to participate in numerous derivative projects, including Genesis Adventure, where their unique roles stand out in other projects, essentially achieving a decentralized franchise that does not belong to any single entity.

When Will the cc0 Summer Arrive?

As mentioned above, NFT projects can adopt many strategies when developing and establishing their IP. When it comes to cc0, the important word is "reality." Licenses are not magic lamps that can easily turn any project into a sensation ------ expecting the public domain to suddenly make something achieve unprecedented success is simply wishful thinking. Just like open-source software, cc0 works best for potential NFT projects that can empower the ecosystem.

So far, many of the most successful cc0 projects have succeeded by introducing intellectual property that can be flexibly used in a variety of different contexts. The Nouns brand is as intuitive for beer advertisements and physical glasses; Loot Bags are the initial items for grand adventures; Goblintown's artistic style looks just as good on dwarves, zombies, and grumpy owls as it does on Val Kilmer.

There is reason to believe that ideal cc0 NFT projects create value-adding opportunities for builders, both vertically, by directly stacking new content and features on the original cc0 assets (e.g., games built on the Loot ecosystem), and horizontally, by introducing different but related intellectual properties that help spread the brand of the original cc0 project (such as various Goblintown derivatives).

Because cc0 NFT projects often earn ongoing royalties from secondary sales, third-party expansions and derivatives can become revenue sources by driving increased demand for the original cc0 assets, allowing the business model surrounding cc0 NFT projects to benefit directly from these activities.

Additionally, cc0 can reduce commercial disputes. An obsession with copyright may lead some "rebellious" brands to ignore licensing and forcibly launch derivatives, even creating them in a "bypass" manner. As Robbie Broome, head of the cc0 project A Common Place, explains: "By giving the intellectual property to cc0 instead of 'protecting' it, it can avoid the next bad replay. For example, if Urban Outfitters wants to put my design on a T-shirt, rather than hiring someone on their team to design something that looks like it, they can directly use the actual work." Sometimes, adopting cc0 can effectively turn competition into cooperation.

Moreover, cc0 projects can greatly benefit from the community's recognition of the value and contributions of core assets. Community cohesion and participation are crucial here. Building on the examples mentioned above, while developers can theoretically create adventure games around any theme and item concept they want, many choose to develop around Loot bags, reflecting the community cohesion within the Lootverse. At the same time, the Blitmap derivative project Flipmap shares part of their revenue with the original Blitmap artists to acknowledge the project's core position within the community, promoting a healthy culture within the cc0 project ecosystem. As cc0 project commentator NiftyPins points out, "This is a wise move to pay tribute to those who laid the foundation for their universe. It also provides a space for many OG Blitmap artists to express themselves."

However, cc0 is not a solution that the entire crypto world is enamored with ------ for example, NFTs built around already established brands may prefer to choose more restrictive licenses to protect their existing intellectual property and enhance exclusivity. Furthermore, while cc0 shares similarities with strategies where owners specifically commercialize NFT-related IP (such as à la Bored Ape Yacht Club), the key difference is that cc0 holders do not have the right to stop others from using the same IP. Holders thus find it more challenging to build commercial brands on cc0 assets or grant specific rights to partners, although the rights introduced remain in the hands of holders, who can still choose to retain complete control over the IP (such as background stories or derivatives).

Decentralization and open development are core elements of blockchain technology and the broader spirit of cryptocurrency. This makes it very natural for cryptocurrency projects to build around the cc0 content model ------ a model based on creative consensus and several pioneering open-source forerunners ------ and it may represent one of the purest embodiments of the "open-source philosophy" to date.

Like the initiators of open-source software projects, NFT creators who choose cc0 must decide what role they will play in building the surrounding ecosystem. Some leaders of cc0 projects, such as the creators of Chain Runners, continue to build on the original cc0 assets, actively creating an environment where derivative projects can take root. In contrast, Dom Hofmann stepped back from Loot, leaving it to the community to manage. (It is said that Dom is developing other cc0 NFT projects as part of supporting companies like Blitmap.) Other creators have chosen to completely withdraw, such as the recently pseudonymously named sartoshi, who announced his exit from the cc0 project mfers he developed and fully withdrew from the NFT space, releasing a final version aptly titled "The End of sartoshi," and then deleting his Twitter account. The smart contract of the mfers project is now controlled by a multi-signature wallet of seven mfer community members.

Regardless of the original author's ongoing level of involvement, cc0 licensing allows a powerful community to co-create in ways that provide value for all members. As the NFT space continues to evolve and mature, there is hope that more organized infrastructure and design patterns can support these creators' efforts. Frameworks around value acquisition may also see innovation, just like open-source software. (For example, we might envision a version of the "Sleepycat License" that requires proprietary software products to pay licensing fees when embedding certain open-source components.) As creators continue to advance in this space, they are gradually revealing new rights and licensing models in the crypto world that far exceed today's application scale. But in any case, cc0 provides NFT creators with a way to launch projects ------ allowing these projects to explore the infinite possibilities of existence on their own.