Comprehensive NFT Framework Collab

SLIDE DECK: https://bit.ly/NFTDAO

A MODULAR FRAMEWORK FOR NFTs ON CARDANO

Vision Statement

NFT-DAO envisions an open-source composable NFT framework for all—instead of multiple point solutions only benefiting some.

NFT DAO envisions a comprehensive NFT strategy and open-source framework that enables all users (technical and non-technical) to easily deploy industry specific tokenized asset marketplaces.

We seek an organized community effort to fully define comprehensive requirements for the penultimate NFT platform of any blockchain and build it as a Cardano asset anyone can use to build their specialized marketplaces or NFT solutions upon. We can build better together.

Problem

42 Catalyst proposals address NFT point solutions—yet we lack an overarching DApp strategy to dominate as the de facto NFT platform choice.

While Cardano is behind in the NFT market, it is poised to leap frog with Goguen. The foundations will be in place and needing standard scaffolding that is well thought out and open-source to benefit the community of builders.

Solution

Coordinate an NFT DAO that implements all NFT DApp requirements to build a penultimate composable NFT Framework—a WAX Killer on Cardano.

By open-sourcing an NFT DApp development framework that anyone can build a marketplace or NFT business on, we benefit the community by getting to market with many different specialized NFT solutions faster. We save precious community resources building standard frameworks once, instead of redundantly for many projects. This allows teams to focus on their core business logic and UI/UX instead of the complete system.

Relevance Experience

The 42+ proposing teams cover the range of skills and experience needed to build the best possible solution to dominate the NFT space.

If we can successfully engage the 55 team members and 774 supporters of the 42 NFT focused proposals, we will have a great deal of talent and horsepower to build infrastructure that is possibly unmatched in the industry to date. In order to incentivize them and encourage cooperation we will imitate the Catalyst Project and successful DAO structures.

Rationale

As growth and competition within the Catalyst community increases, we feel it imperative that we as a community consider how to collectively and strategically align our efforts to generate greater synergy: where the whole becomes greater than the sum of its parts. We feel this is not only a unique selling point for this proposal within Cardano's NFT space, but also for Cardano as a social, financial and governance infrastructure.

Our rationale for this approach lies in the open and decentralized ethos of Project Catalyst, Cardano and blockchain technology: We can build better together.

Of the 188 fund-seeking proposals for Project Catalyst Fund 3, we identified NFT's as a core area of interest within the Catalyst community, and an area of major growth within the blockchain economy at large. Based on a hashtag search for #NFT within Catalyst, 42 proposals (22.34%) identified an aspect of NFT's as being applicable to their project (an analysis of these proposals is included further down). The NFT space as a whole has seen over $150 million in total sales volume since mid-2017 with the majority of growth occurring in 2020, with 115% growth in December alone [2].

The reasons this project may be more successful than other solutions is:

1. Vision - A macro NFT strategy and DAO will better support the sustainable development of NFT community growth, use, DApp development and tokenization on Cardano than through the limitations of individual competition.
2. Collectivism - Each individual NFT project is better served by the collective experience of the community (as is the case with Project Catalyst itself), rather than being limited by the experience of one individual or team alone;
3. Effectiveness - For NFT proposals that will not be successful in this or future funding rounds, due to a cap on the amount of funds available, NFT proposers will be able to contribute ongoing value rather than be overlooked;

MARKET OPPORTUNITY

Market Validation

Our goal is to mobilize the Project Catalyst community to stimulate NFT development.

However, we don't think of this community as a market, but as peers. This talent pool of innovators, developers, entrepreneurs and early adopters mark one of the fastest growing DAO communities in the blockchain space. According to a Crypto News Flash article, Cardano's 'decentralized funding platform currently has more registered voters than all of Ethereum's top 100 DAO's combined' [#]. In a recent Catalyst Town Hall (January 27 2021) it was identified that there were 5614 members registered with Project Catalyst, a 10% increase from the week before, including 808 members registered as community advisers.

We aim to reinvest in this rapidly growing community, starting with proposers of NFT related projects.

Cardano's Project Catalyst Fund3 saw 42 proposals (22.34% of total fund-seeking proposals) interested in a diverse range of NFT use cases. These proposals included 55 team-members in total. As of writing, there were also 774 total kudos given to these proposals, as per IdeaScale's community engagement metric. This represents a broader community of supporters that may or may not be engaging specifically with the NFT elements of each proposal.

This project will seek to approach and invite all of the 55 NFT proposers to contribute to an NFT DAO, as well as making wider invitations to the roughly 774 supporters of those projects, and the broader Catalyst and Cardano communities as a whole. By way of deliverable, this project aims for 30% engagement at the lower bound and 50% engagement at the upper bound.

We will look at engaging these peer groups to build a strategic alignment around NFT development on the blockchain, for the purposes of delivering NFT initiatives to the established Cardano and Crypto communities, and the new crypto and DeFi adopters. This project will be pitched to anyone who wants to build NFTs on Cardano, with the purpose of increasing development and new users to the blockchain.

Market Size

According to NonFungible.com, the all-time NFT market cap (since June 2017), involves 5,227,502 NFT sales with a volume of US$173,885,185.60. The leading NFT sales came through ETH, MANA & WETH with an average price of $33.15. From the year beginning Feb 2020 and ending Feb 2021, the number of daily trades have diminished from 3108 to 1820 (-58.56%), however the value of the trades have increased: from a daily volume of US$113,980.23 (US$36.67 per trade) to US$1,374,030.61 (US$757.46 per trade) [CITE]

This represents a 1105.5% increase in NFT market valuation for the previous year.

Target Market

Our target market comprises developers, creatives, entrepreneurs, intellectuals, and Cardanians who want to create NFT marketplaces, NFT businesses and attractants to the new capabilities of Cardano that allow anyone to tokenize digital, intellectual, and real world assets.

Marketing Fundamentals

What is Needed for Success:

• Market — robust transactional spaces
• User — mass-scale adoption
• Product — outcome driven utility

Markets do not occur without Users. Users do not arrive unless there is something to use, a Product (or service). Many of the ideas proposed offer these components and collaborating can amalgamate the best of these.

Example of how we need to think about solutions: Taking a scientific-method, first-principles approach is what brought CryptoKitties to market, the most successful NFT to date. Axiom Zen is a Canadian Venture Studio who's research and processes launched DapperLabs, who brought the CryptoKitties to market. Now they are building FLOW blockchain, a $6MM market cap blockchain. We have Cardano, a $32B market cap blockchain as our tech base. We have a large community of project managers, developers, marketers and researchers who can collectively match any organization in the world. We need to work together.

COMPETITIVE ANALYSIS

Synopsis of Catalyst NFT Proposals

1. NFT use cases primarily fell into three categories: a) Digital Asset, b) Intellectual Property Representation, c) Physical World Asset Representation.
2. Majority of proposals intend to build both minting functionality and their unique marketplace or use case.
3. Total treasury cost to fund proposals can be significantly reduced if majority of proposers focus on building their unique use case / marketplace, while we build out comprehensive modular minting solution.

Detailed Analysis of Catalyst NFT Proposals

Based on the collation of 42 total Project Catalyst proposals tagged as #NFT at the date of writing, it was found that 27 proposals had non-fungible tokens as a substantial part of the proposals offering. From a spot analysis of these 27 proposals, four NFT groupings were identified as having direct similarity with other proposals and another five groupings were identified as having an indirect similarity with other proposals on the platform. Of the groupings with direct similarities – where proposals shared the same idea - four proposals were for an NFT art market; three proposals were for NFT gaming apps; three proposals were for NFT's for event ticketing; and two proposals were for NFT trading cards. Of the groupings with indirect similarities - where proposals shared a similar theme but not necessarily the same idea - three proposals suggested NFT's as a business revenue stream (for decentralized cinema funding, a children's education program and an e-book marketplace); two proposals were for lottery-based initiatives; two proposals were for general NFT marketplaces (including one for general creative specializations); two proposals were for porting NFT protocols from other blockchains; and one proposal generally addressed issues related to game DApp development.

Seventeen existing NFT platforms were identified by the community within the 27 proposals, including Cryptokitties and Superrare (both referenced two times), Shimeji, Decentraland, My Crypto Heroes, Somnium Space, Gods Unchained, CryptoVoxel, Blockchain Cuties, CryptoSpaceCommander, Rarible, Known Origin, OpenSea, Mintible, MakersPlace, CryptoArt and CryptoBrewMaster. An online search found 133 other NFT platforms whose offerings generally ranged from collectibles in the form of digital art, characters and game assets. From NonFungible.com's platform listing, 45.8% (56 of the 125 NFT platforms listed on the website) had made trades within the last week, while 18.4% (23 of the 125 platforms listed) had an all-time sales volume over $1M. The top three, Decentraland, Cryptokitties and Cryptopunks held a combined all-time volume of $88.55M (almost equal to the all-time volume of the other 122 platforms combined; a point also referenced within @pavpowell's proposal). Other direct NFT or NFT DAO competitors include: Rarible, Mintable, Flamingo, Aragon, Wax, Ergo Auctions and Mintbase.

Market Competitors

• Rarible (NFT DAO)
• Mintable (NFT DAO)
• Flamingo (NFT DAO)
• WAX (NFT Market)
• ERGO Auction House (NFT Market)
• Aragon (DAO Market)

WAX.io Messaging:

"The safest and most convenient way to create, buy, sell, and trade physical and virtual items — to anyone, anywhere in the world."

We can build a better WAX alternative on Cardano!

Recommendations From Research

From this initial survey of NFT proposals within Project Catalyst, and NFT platforms currently on the market, it is proposed that:

• Consideration be given by the Catalyst community to support a strategic alignment regarding NFT initiatives in a way that will maximize and streamline the collective interests and efforts of the community in this domain;
• As it is forecast that NFT proposals will only proliferate over time, it is proposed that an NFT steering group (a community within the community) composed of those with an interest in NFT dev., including recent proposers, may provide a more effective strategy for guiding and fast-tracking Cardano's NFT development. This is in contrast with a scatter-gun or competitive approach, which runs the risk of wasted effort, resources and decreased community morale for unsuccessful proposers;
• It is proposed that the NFT steering group be fluid and open to the community for wider consultation, and act as a resource to NFT proposers or initiatives wishing to remain autonomous;
• It is proposed that the NFT steering group hold a secondary function of monitoring and evaluating its processes for the purposes of knowledge sharing with prospective steering groups that seek to align around other strategic topic areas. It is not intended that such steering groups replace Community Choice campaigns, but that they serve to support the ongoing implementation of past or prospective campaigns.
• It is of note that in the course of this funding round, at least two of the NFT for art market projects did merge their proposals together.

BUSINESS MODEL

We intend to create a self sustaining DAO that will incubate NFT innovation and collaboration.

• Marketplace Liquidity Mining: Earn NFTDAO governance token by minting, selling, and buying NFTs.
• Transaction Fees: There will be a small predictable fee involved with the minting of each asset.
• DeFi offerings: NFT liquidity pools. Revenue rights granting NFTs.

DAO Governance

Create a DAO structure to support NFT lifecycles for the Cardano community. Nest the DAO in the Catalyst Project at origin. Obtain community funding for several Fund cycles to build the tech stack.

Collaboration

Build the frameworks, scaffolding, schemas, patterns and integrations required for a robust NFT offering. Once the tech stack is launched, charge appropriate licensing fee structure justified by service and support to fund the DAO treasury to maintain and enhance the technology and sustain the DAO model.

The DAO may decide to build and operate NFT businesses of their own as well and create an endowment revenue stream to further enhance leadership of Cardano NFTs.

All 35+ proposals do not have a chance to be funded standing alone. However, amalgamating all the NFT ideas and insights stands a great chance of becoming a truly collaborative project that will benefit all the proposers should it create the optimal platform to dominate the NFT space going into the future. It will propel Cardano as the go-to blockchain for NFTs and position us for many point solutions based on NFTs. Together we can become that de facto NFT blockchain choice.

This will take several rounds of progressive development and we intend to further this proposal in future Funds.

NFT DAO Pillars

• Community
• Technology
• Governance
• Sustainability

NFT DAO Goals (short term)

• Unique Asset Tokenizer MVP
• Build community through existing social channels (Discord, Twitter, Telegram)
• Collaborate with community to identify NFT use cases to be included in MVP
• Map governance and tokenization framework for NFT DAO

USE OF FUNDS

NFT DAO Fund 3 Deliverables & Projected Costs

Community - $5,340

• NFT DAO website with links to Discord & Telegram
• Establish NFT collaboration culture
• Realize 50% participation rate from Cardano Catalyst NFT related proposers
• Identify most impactful NFT use cases
• Marketing and outreach

Governance - $19,893

• DAO structure framework
• DAO on-boarding flow maps
• Incentive framework that ensures sustainability and aligns interests
• Governance token distribution model
• Forge and distribute governance token as outlined in token distribution model (if multi-asset wallet is ready)

Development - $23,732

• Policy scripts that allow the forging of NFTs for the most impactful use cases as identified by the community.
• User stories for identified use cases
• User flow diagrams outlining forging of NFTs and launch of industry specific marketplaces.
• Wireframes of industry specific NFT marketplace launcher
• Establish NFT metadata standard
• Identify decentralized storage solution
• Project Research

Total: $48,965 (Detailed Pro forma on Github)

These funds will be allocated to community members who join with us to make this vision happen and be disbursed with transparency in the spirit of the DAO methodology and input.

Intellectual Property Strategy

As an open-source initiative, an initial IP proposal for consideration is for the community to consider setting a precedent for how IP within open-sourced projects (including DAO's/DCO's) might be managed. Instead of using a Creative Commons licensing structure, which is relevant for completed works, the community may consider how NFT's can be applied to ideas-in-development (uncompleted works) though the application of a Contribution Token, which may or may not align with the tokenization of Voting, Governance or Equity sharing.

Team

Our team is drawing talent in. We're embracing everyone who strongly desires an overarching NFT framework on Cardano—especially those who proposed NFT solutions—and invite you to join our NFT DAO that will open-source the patterns we build as a community. Join us in a coordinated and consolidated effort. Others have already merged their proposal. You'll join:

Rich Kopcho, a life-long entrepreneur building 18 start-ups in his career. He has owned and managed a development shop and open-sourced the successful 'Restore' backup solution. He taught manufacturers around the world Holonic manufacturing (1997-2007); a heterarchical systems and technology approach that is the foundation DAOs are based on. He currently operates a venture studio in Laramie WY building technology solutions with partners. Rich is the executive producer of the Wyoming Blockchain Stampede - an annual conference by UWYO that IOHK/Cardano/Emurgo and others sponsor to educate the blockchain community.

Finley McIlwaine, a PhD candidate (UW) in computer science; a developer working in the University of Wyoming Advanced Blockchain Lab—a R&D lab focused on Formal Verification, Smart Contracts, and Secure Hardware related to Real-world Blockchain Applications funded by IOHK. Finley is very familiar with the Cardano ecosystem; and the winner of the IOHK Marlowe Challenge at WyoHackathon 2020 and Plutus Extension Challenge at WyoHackathon 2019.

Troy Egan, a PhD candidate investigating how to support peer communities to compete against corporations in the development of immersive transmedia projects. He is a creative entrepreneur with experience in the creative, health and community development sectors in New Zealand and Australia. His interest lies in how NFT's can be used to tokenize emergent creative projects.

Tyler Wales, an entrepreneur with product development and management expertise, and experience bringing new solutions to market. He has launched multiple profitable businesses in media and technology and has established relationships in film production and distribution. Tyler is currently a mentor at Portland Incubator Experiment.

Community Member n+1, is passionate about NFTs and has aligned themselves to a previous proposal seeking funding for a NFT point solution. They are eager to build their business model on top of a solid framework. Since none has existed for Cardano, they were planning to build one for themselves from scratch. They are one of ~120 individuals who could potentially pool their expertise into an all-embracing open-source version to benefit the entire community rather than one project. Their expertise is multivariate in development, SPO, marketing, design, business, and more.

Roadmap

• Fund 3: Smart contracts, Minting policies, Establish Community, Front-end prototype
• Fund 4: NFT-DAO Governance token, Alpha version live
• Fund 5: Pegged value NFTs, Fractional NFTs, NFTs + DeFi
• Fund 6: Launch beta, Scale Marketing, learn and iterate

Conclusion

All 42 NFT-related proposals do not have a chance to be funded when competing for a limited funding pool. Some ideas may have great potential, but may be let down by poor proposal writing, lack of feedback or lack in other areas. This project supports an amalgamation of Catalyst's NFT community so that the skill-sets of the community can be leveraged to deliver a more robust NFT framework for Cardano, for the purposes of supporting an NFT economy. As a DAO, each NFT project stands a greater chance of becoming a truly collaborative effort that will benefit the wider Cardano community. It is envisioned that a Fund3 investment in this project will better position Cardano as the go-to blockchain for NFTs (with lower gas fees) with many NFT-based point solutions. Together we can become the de facto NFT blockchain of choice.

Honorable Reviewer:

Your positive funding vote for NFT DAO is a vote for a community driven development program to support all current and future NFT projects and development of open-source technology that will benefit all.

Appendix / Additional Reading

What is an NFT?

Nonfungible.com describes 'Non-fungible tokens (NFTs) [as] unique, digital items with blockchain-managed ownership. Examples of NFT use-case includes collectables, game items, digital art, event tickets, domain names, and ownership records for tangible assets. As of Oct, the total NFT market volume reached $134m with close to 5m sales. Other NFT use-cases may include:

• Physical art representation
• Digital real estate
• Tokenized real estate
• Intellectual property
• Warranties
• Insurance
• Badges
• Certifications

This is just scratching the surface. NFTs allow for representation of both digital and real-world value. Consider any unique asset (tangible or intangible) to which a crypto-token can be attached to ensure ownership, and that asset presents an NFT use-case. Because of the staggering potential for this crypto-class to be developed on Cardano, we believe it is important to build an infrastructure for unique asset tokenization in an open-sourced and modular way so that all solution contributors have the opportunity to monetize their unique contributions.

As NFTs become ubiquitous, we need a system on Cardano that ensures rapid development of emerging use cases, interoperability between all parties and that supports Cardano to become the de facto choice to launch NFT businesses.

Non-fungible tokens (NFTs) allow for representation of both digital and real world value. In fact, they blur the boundaries between digital and physical. NFTs can represent tickets to an event, physical art, digital art, in-game assets, badges, certifications and more… We're just scratching the surface. As NFTs become ubiquitous on Cardano we'll need patterns that ensure rapid development of emerging use cases and interoperability between all parties.

NFT Properties

NFTs will be distinguished through a set of properties:

• Lifespan: Different types of assets require different lengths of validity. For example, a sporting event ticket would need to be valid only after the conclusion of its corresponding event. IP ownership on the other hand would most likely be infinite until burned.
• Fractionality: Some NFTs need to be whole, meaning 1 token = 1 cryptokitty. On the other hand an NFT representing items of high value such as real estate could be fractional. See Cardano Multi-Asset Tokens Explainer
• Liquidity: How often does asset exchange occur? Generally real estate changes hands less frequently than something like trading cards.

Sources

• 42 Catalyst Fund3 Proposals mention NFTs (43 total - less 1 duplication) https://cardano.ideascale.com/a/ideas/search?templateId=0&query=NFT
• About CC Licenses https://creativecommons.org/about/cclicenses/
• Grounded (2020, Nov 3). The Revolution of NFT DAO. https://medium.com/grounded-work/the-revolution-of-nft-dao-5684c2cc054
• Multi-Asset Tokens Explainer https://developers.cardano.org/en/development-environments/native-tokens/multi-asset-tokens-explainer/
• NFT Market Overview https://nonfungible.com/market/history
• Pettit, P. (2020, Dec 1). Bonding Curves - The What, Why, and Shapes Behind Them https://www.linumlabs.com/articles/bonding-curves-the-what-why-and-shapes-behind-it
• Project Catalyst Fund3 weekly town hall and Q&A #4 (00:08:20) https://www.crowdcast.io/e/fund3-4?utm_source=Fund2&utm_campaign=f74a104b2d-EMAIL_CAMPAIGN_2020_09_01_09_39_COPY_01&utm_medium=email&utm_term=0_2451b43b07-f74a104b2d-76670965
• Simmons, J. (2021, Jan 7), Cardano: Catalyst fund 3 launches with $500k, trumps all Ethereum DAOs combined https://www.crypto-news-flash.com/cardano-catalyst-fund-3-launches-with-500k-trumps-all-ethereum-daos-combined/
• Troncoso, S. & Uratel, A. M. (2019, Nov 15). If I only had a heart: a DisCO manifesto — Value sovereignty, care work, commons and distributed cooperative organizations. Joint Publication: DisCO.coop, the Transnational Institute, Guerrilla Media Collective. Retrieved from https://www.tni.org/files/profiles-downloads/disco_manifesto_v.1.pdf
• What Does Copyright Protect? https://www.copyright.gov/help/faq/faq-protect.html#:~:text=Copyright%20does%20not%20protect%20ideas,your%20written%20or%20artistic%20work.