How NFTs Will Revolutionize IP Crypto’s Killer App Is Fueling the ‘Passion Economy’

In January 2022, Italian luxury fashion brand Prada and sportswear giant Adidas teamed up to create a groundbreaking NFT project. By providing credibility and authenticity, NFTs are poised to redefine collaborations and create a safe space where all collaborators can equally benefit from the partnership.

This, combined with the inherent scarcity of NFTs, could usher in an era of meaningful collaborations where each collaborator’s contributions are acknowledged, stored, and accounted for on the blockchain.

Single work

They asked people to submit unique artworks and photographs and selected 3,000 of them. They were compiled and featured in digital artist Zach Lieberman’s largest NFT and auctioned on SuperRare. About 80% of the proceeds from the auction went to a non-profit organization Slow Factory. This project shows how NFTs unite brands, artists, creators and social organizations around the world.

Recently, NFTs have undergone a rapid transition from the periphery of blockchain innovations to the forefront of emerging digital economies. Whether it’s art, entertainment, fashion or insurance, these digital collectibles are having a positive impact on major global industries. Investors love them. In 2021 alone, NFT sales exceeded $17.7 billion, with artists and digital creators being the main beneficiaries.

Standalone NFTs from individual creators laid the groundwork for the market, but it was the projects of giant corporations that took center stage and propelled digital collectibles into the mainstream. These projects, coupled with the underlying technology, foster a collaborative culture for brands, artists, creators and animators from which stakeholders also benefit.

Why do creators collaborate?

Venture capitalist Li Jin coined the term “passion economy” in 2019 to describe a new wave of entrepreneurship. This passion economy has spurred the rise of digital artists, creators and gamers. When the success of these creators and their influence on fans was revealed, global brands entered the passion economy to collaborate with the creators and claim a piece of the profit pie.

Today, the passion economy is worth over $100 billion and is fueled by collaborations between brands and creators, benefiting from each other’s influence.

NFTs further enable royalty collection mechanisms where all parties involved receive immediate financial benefits.

Yet every employee undergoes a tiring process of agreements and legal documentation to protect their intellectual property. And even then, there are instances of content theft or one party benefiting more from the collaboration than the other.

The rise of NFTs is therefore a welcome tool for creators. They improve collaboration and protect legitimate content ownership and automated revenue sharing.

Make way for NFT-based collaborations

Terms of service and any other required agreements can be established as smart contracts in an NFT. And no matter how many edits or changes are made to the content, the original creators will always benefit from using that content.

NFTs also have hybrid ownership standards, for example, ERC-1190, which allows multiple parties to own a single piece of content. When creators collaborate, they can share ownership of their work and benefit equally.

For starters, the need for complicated documentation and third-party involvement is avoided. Collaborating parties can set their terms and conditions, establishing working relationships themselves.

NFTs further enable royalty collection mechanisms where all parties involved receive immediate financial benefits. So there has been a surge in NFT-based collaborations recently. Mercedes-Benz collaborated with five different artists from fashion, architecture, real estate, graphics and music to create an NFT for its G-Class lineup. The NFT project went live in January 2022 on Nifty Gateway.

Additionally, SINCE3000, a company that creates NFT collections, collaborated with content production company Live Rocket Studios and 3D artist Isaac Udogwu to create an NFT collection of dresses worn by Oscar-winning actress Julianne Moore. The collection is called Gowns for Good and includes three iconic dresses worn by the actress on red carpets.

Such collaborations bring new recognition to artists and brands, creating a symbiotic relationship.

Building the metaverse through collaborations

NFTs have come into the limelight as digital collectibles. However, they are also the building blocks of virtual economies and the entry point into the metaverse.

Now the metaverse itself is like a blank canvas. To bring it to life, creators from different industries must collaborate to create content and experiences. NFT-based collaborations will allow artists, brands, creators, and influencers to join forces and build the metaverse and the future of the internet while reaping equal financial and social benefits for their efforts.

James Fraser is the Business Development Manager at Mogul Productions, a DeFi and NFT marketplace platform for the film and entertainment industry.

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