NFTs + smart legal contracts

[IMPACT] Please describe your proposed solution.

The problem

Copyright infringement is a rampant practice in today’s world, for example almost every movie-related experience isn’t being run legitimately like many Harry Potter tours advertised in event platforms today. It is a problem that IP holders are well aware of, but because of the legal overhead of pursuing these cases simply aren’t worth it to them so they simply accept their losses.

On the other side of the spectrum, digital content platforms like YouTube or Twitch are using DMCA takedown notices to target creators who violate copyright through their content (whether intentional or not). For creators, this is a constant fear they have to live with. They do not have a means to negotiate directly with the original IP holders, it is simply too expensive or time-consuming so it’s now commonplace to rely on copyright free media.

This problem is even manifesting in digital platforms of the future. In platforms like OpenSea, plagiarism is commonplace and the original artists are at risk of losing credit for their work to scammers looking for a quick buck.

We need a solution to the problem that looks at the IP issue from the ground up.

What we are building

Instead of trying to identify and punish copyright infringement, we want to take an alternative approach: facilitate and reward collaboration. We are proposing the development of a marketplace where we will build in a hassle-free IP agreement negotiation system. This will be powered by a series of smart contracts to store contents of the agreement, and also automate the execution of these agreements. We hope this will encourage sharing of creative assets between multiple parties through our smart legal contracts. These contracts will include the standard royalty distribution, but also capture other use cases present in legal contracts. We like to think of it as lego blocks, where contracts are built from composing agreements from different entities. Through this network of contracts, we can build a system that automatically executes terms suitable to all parties.

We like to think creators have good intentions when they incorporate other IP into their works. By facilitating these collaborations through our platform, we hope to welcome a new age of creative freedom and collaboration where all parties can benefit.

Goals of the Proposal

Our aim is to have a fully functional web application by the end of this project where IP holders can collaborate with creators. Our first use case will be an NFT-based ticketing platform, where event organisers can use our smart legal contract framework to wire royalties back to the original creators. Because everything is on the blockchain, we can also generate a stamp of approval for these events, almost like a “verified” tick on social media platforms like Twitter.

The smart legal contracts themselves will also have limited functionality to begin with. For the scope of this project, we will support the following behaviour:

• Conditional royalty distribution
• Fixed fee for the agreements
• Attribution requirements
• Degree of modification of original content

Our platform will be first built to address the issue of illegitimate tours/events being run. To that end, we intend to serve the following groups:

• Independent tour organisers or small tour agencies
• Event organisers
• Film studios
• Museums and archives

Why a ticketing platform

Just managing IP rights by itself isn’t going to be something that we can easily get others on board with, the platform needs to demonstrate a little more utility to be attractive. By also building in utility, we can add guarantees to the contracts we host on the platform.

We believe one of the greatest utilities of NFTs today is its use in the ticketing industry. Whether this is for selling event tickets, or club membership, we believe there is enough utility to create a simple and focused value proposition for our first customers. We aren’t big fans of how NFT artwork are being flipped for quick cash, and quite frankly it is already an over-saturated space with big players like Rarible, OpenSea and JPG Store already operating in this space. We wanted to focus (at least initially) on a space that isn’t the main focus of these big players.

Desired outcomes

At a minimum, we want to produce the following technologies:

• A marketplace which will support minting NFT-based ticketed events or club memberships
• A series of smart contracts to attribute and compensate the original creators/IP holders when used in a derivative content on the marketplace

We want to prove that this marketplace model that incorporates IP content usage can work in today’s world. Our goal is to provide IP holders and creators a place to rapidly experiment with collaborations with all parties having any agreements upheld by the blockchain.

Beyond this proposal

If this project gains momentum, we will be looking at expanding the features on the platform to cover more use-cases through future proposals, including but not limited to supporting traditional digital artwork NFTs, more flexible legal terms and incorporating a DAO to police content on the platform.

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

We are proposing a marketplace that has real-world utility in a space that needs much attention. We believe that a marketplace like this will add a lot of value to the Cardano ecosystem and demonstrate how the technology can be used to not only monetise but also foster creativity. We think that this would be a valuable step forward that is much needed in the creative industry.

This project also has the potential to benefit other apps in the ecosystem. In later iterations, we plan to open up our legal framework through APIs and SDKs to enable other apps to integrate their contracts or assets to our platform. This will let us spread the benefits of the system to the entire ecosystem.

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

Risk: We cannot always execute various clauses in these legal contracts on-chain

Mitigation: Some clauses like specifying the degree of modification of the original content cannot be easily verified on-chain. Since the derivative content can be quite arbitrary, we will need a human to verify these contracts are being upheld. For the time being, we are not providing any guarantees and will rely on manual moderation of the content to remove content in violation of these agreements. A future proposal may automating this approach, by developing a DAO-like mechanism to flag content in violation of their agreements.

Risk: The contracts we produce ultimately may not be fit for purpose for all possible use-cases

Mitigation: We plan to support additional freeform clauses on top of our base contracts. In terms of functionality on the platform, this will simply mean none of these clauses will get guarantees of execution or be emphasised in the UI (for example, we can add “verified”-like badges to the event page/material to automate the attribution clauses, but we won’t have anything to support freeform clauses).

Risk: It will be difficult to onboard the established film studios

Mitigation: The creative industry are no strangers to NFTs, they will likely have many ongoing projects on their plate. To mitigate this, we will be focusing on smaller independent studios or individuals who will be more willing to explore new solutions. This will give us time to develop a frictionless process to onboard new partners, which we can then use to approach the established film studios with stronger IPs.

Risk: Legal agreements may not be fit for purpose

Mitigation: To mitigate this issue, we will be seeking legal advice regarding the technicalities of these agreements. To make sure we start on the right foot, we will be using open-sourced solutions like the Accord Project which will give us a good starting point for when we seek legal advice.

Risk: It may be difficult to get users to adopt the platform if they had to pay in crypto

Mitigation: Not all of our target audience will be comfortable managing a crypto wallet. To mitigate this issue, we plan to also support payments in Fiat currency (GBP at a minimum for the scope of the project).

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

We estimate the project will take a total of 9 months from the middle of Q3 this year to achieve it’s goal, the breakdown is roughly as follows:

Development of the MVP (~6 months)

• Development of the smart contracts to codify and render legal agreements
• Development of the NFT-based ticketing platform (inc. ticket sales & resales)
• Acquire a number of early signups for the platform
• Identify the minimum set of legal clauses for the platform to be attractive to customers
• Work together with legal consultants to polish the rendered legal agreements

Beta testing the MVP (~2 week)

• Release the platform to a small subset of users for early feedback and testing
• Identify missing features that could be attractive to future customers

Releasing the MVP (~2 months)

• Release the MVP to the public – Bryan
• New features resulting from the beta testing/early adopters feedback
• Acquire more signups and convert existing to active users
• Start approaching established industry players (like the BBC in the UK, Netflix, etc.)
• Begin preparation for the next funding proposal

Buffer period + Preparing for next proposal (~1 month)

• Additional time in case any items go over time
• Prepare for next proposal using traction gained through the project

[FEASIBILITY] Please provide a detailed budget breakdown.

We are requesting a total of $50,000 for the project:

Development – $16,000

Project management – $8,000

Business development – $8,000

Legal – $6,000

Promotion & marketing – $3,000

Web Design – $2,000

Technical infrastructure – $2,000

Contingency – $5,000

Total = $50,000

[FEASIBILITY] Please provide details of the people who will work on the project.

Ana Domina – Project manager and business development lead. She did research in ocean physics (3D models, turbulence data, Matlab/Python), and also has experience working as a project manager in startups. In addition she has experience as a supporting artist in the film industry, working with established film industry players. Through her experience she has built up the contacts, leads and network which led us to this solution.

LinkedIn: https://www.linkedin.com/in/ana-domina

Bryan Yap – Tech lead for the project. He has 7+ years of experience working in the SaaS industry across a range of products including eCommerce, data visualisation and IOT applications. A recent graduate of the Plutus Pioneers programme (3rd cohort) and has participated in a number of Web3-related hackathons with various early incarnations of this proposal.

LinkedIn: https://www.linkedin.com/in/bryan-mh-yap

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

We are considering returning to Catalyst for future rounds of funding. The scope of this project is small to investigate feasibility. With the successful execution of the project, we will need more funding to grow the platform to scale and support a wider set of use cases. We don’t see ourselves being able to sustain this growth solely from the project revenue, so we will rely on funding programs like Catalyst in the interim.

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

Much of this project will be to understand the feasibility of developing and selling this solution, so we are keeping the scope of the project narrow and focused on building a small community of early adopters. We have a few metrics we will use:

• Number of signups on the platform from creative industry businesses
• Number of end-users signed up to purchase tickets on the platform
• Number of smart contracts created and exercised on the platform

[AUDITABILITY] What does success for this project look like?

By the end of this project, we want to prove that the following two goals are achievable:

• Creative industry businesses are willing to lend their IP if we can provide guarantees on how it is used and how they will be compensated
• Creators are happy to share profits with the original IP holders if a frictionless mechanism exists to do so

We have the following modest metric targets as proxies for the above goals:

• At least 10 creative industry businesses (e.g. film studios, tour providers, creators) signed up on the platform
• At least 250 end-users signed up on the platform
• At least 5 smart contracts for IP registration or lending agreements on the platform
• At least 50 tickets sold on the platform to end-consumers

Finally, we will also want to be in a good position to warrant another round of funding to develop more features on the platform by the end of the project (targeting Fund 12). We will use the additional money to expand the team to develop new features and support more use cases while also investing further in marketing.

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

This is an entirely new proposal