image: depositphotos
Brief
Important lessons from the NFTs market in 2022.
Moonbirds' promise breaking by converting to CC0.
The 0% Royalties policy by default to the creators.
The drop of DeGods and Y00ts from Solana surprising the community at Christmas.
One of the most beautiful pillars of Web3 was also the first to collapse in real life.
The concept was nothing short of fantastic:
A world where things are done by the community and for the community.
Nothing new, since Solon had already said that 500 years before Christ. But now it was different as the security and transparency of smart contracts on blockchains could make the magic happen.
Not really.
(At least for now)
Hey 2022! Close the bill for us there, buddy!
Cuz it's time to leave.
Have you, like me, never wondered if we are really prepared for all this democracy?
If so, a final balance sheet for 2022 brings us some very interesting answers.
There were many examples, but 3 very emblematic ones are enough for us:
Moonbirds turns into CC0
In August 2022, the giant Moonbirds became a Creative Commons Zero (CC0) project. Its intellectual property rights and those of all its holders are delegated to the public domain. Without any consultation with community members, one of their most valuable assets collapsed like a house of cards.
If you owned a Moonbird and were investing $100,000 in a restaurant with your little owl as the theme, forget it…
At the slightest sign of success, your competitor will be able to open another one just like yours (and with the same little owl) right in front of your business.
A very rich and important debate was opened at the time. (One of Web3's greatest treasures!)
After all, what are intellectual property rights?
Do we really need this?
What would a free world look like in this sense?
There are no right answers to these questions, but there are interesting ones.
Nouns DAO was born and grows stronger every day, fully based on CC0. Moonbirds intended to expand its capillarity among the public with this freedom of image use, but it suffered a strong drop in valuation in the market after August and, so far, does not show signs of a recovery.
The key to success here seems to be PROMISE: What did you promise the Community?
Nouns said what they came for and keep their word.
Moonbirds broke a promise without consulting its audience. It showed us that the concept of “decided by the community for the community” was, at least here, a bad joke.
Magic Eden goes 0% Royalties
Here, it wasn't the holder's community to be conned, but the creators.
Due to competitive pressures in the market, the Magic Eden marketplace enforced an optional royalty policy on all its transactions.
In theory, buyers could choose whether or not to pay creators' commissions on secondary market transactions. In practice, it was almost a decree to extinguish recurring revenue for the NFT projects based on this business model.
Once again, the vital pillar of a Web3 community is demolished with just 1 tweet, without any word to its members.
Again, very rich debates were raised. The conclusions, despite that, were not so rich. The theme ended up divided between 2 fan groups (Yes, fan groups. With love, passion, finger in the eye, and a lot of "fuckyouasshole":
The DEFENDERS OF ROYALTIES said that projects not funded by venture capital would go bankrupt, collapsing another valuable pillar of the web3: The absence of Gatekeepers.
In addition, to generate recurring revenue, new collections would be continually dumped on the market, generating an inflationary effect due to excess supply and resulting in the chronic devaluation of all assets.
The CRITICS OF ROYALTIES said that the charge was sometimes abusive and that was the law of the market. Holders have the right to negotiate without paying royalties and creators have a duty to reinvent themselves by finding new ways of earning, otherwise, they would be breaking the natural evolution of the ecosystem.
Roughly speaking, it was the market (lovely called 'community' sometimes) saying with all the letters: "Hey, find your way because, if the flour is little, my mush comes first".
Really cute...
Fan groups aside, there's a lesson that no one discusses: The creators did not have a word on the decision. Everything was resolved by the management of Magic Eden and the community came later just for tons of AMA Spaces: "Ask me anything but I'm sorry".
DeGods and Y00ts dropping of Solana.
Our last example is also the most heartbreaking.
Solana is the blockchain with the most valuable community of fans. Yes, here we can call it a COMMUNITY in the upper case because it's a passionate crowd like football fans. So much so that, even with the strong devaluation of its cryptocurrency and many people jumping off the ship, the Solana community remains firm and faithful.
DeGods and Y00ts are very powerful NFTS collections, considered by many to be the heart of Solana. So large that their departure could mean the "death" of the blockchain.
However, this Christmas both projects brought a surprise gift: Solana dropped off to Ethereum and Polygon.
There are many sensible points here.
The Solana community is powerful, but the blockchain has been showing persistent declines, which threatens its holders and projects. Migrating to another blockchain with a more stable coin, and disappointing passionate fans is really a difficult decision.
The classical decision for tuff guys, where each alternative brings also a severe loss.
However, here we have our recurring lesson: Once again, there was no public consultation with the community about such a drastic change. Things were decided by the founders and tweeted to the planet.
Was it the best decision? Maybe there will never be an agreement on that! 😅
Certainly, they made it for the best of holders, but it was not a collective decision and left many people orphaned.
Like Ronaldo Fenômeno, who swore his love to Flamengo all his life, and ended his career wearing the Corinthians shirt.
Conclusion: Let's take it easy on the beautiful speech?
Technical knowledge and experience are fundamental for good decisions in any business. Innovating here is not giving up on that due to the wishes of a community, but opening opportunities for both (community and management) to get stronger together.
The Web3 revolution forces us to review some values.
Some will fall by the wayside, others will come out even stronger.
The romantic idealization of communities has faced challenges in practice.
This is Web3 getting mature.
Conducting business through communities is one of the most daring challenges that this digital revolution brings to us.
It is passionate but requires a balance between concept and application. An important balance yet to be reached between the will of an audience and the experience of the managers.
We will need time for this.
Until then, recalibrating our promises is an urgent mission.
For now, community-driven looks like a utopia we love to believe in, like looking at the world through Instagram filters.
But if you were going to build something today, based on some truths, I would ask you:
How could those truths really look like?
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