This one begins with a question: ” How do you make money off your NFT without selling it?”

https://twitter.com/Loopifyyy/status/1547565349293330433?s=20&t=sO2ECxI236HzkEgA7tYdFA

I think I’ve got an answer.

As demonstrated by @loopifyyy’s tweet, there is an ongoing discussion about how best NFT projects can deliver scalable incentives for holders without breaching existing regulations. I personally think the answer is under our very noses.

Tokenised IP is one of the most interesting things to come out of the web3 movement. Projects like the Bored Ape Yacht Club offer token holders an opportunity to make money off of their growing brand by monetising IP.

In theory, the Yuga-verse is one of the most visible to the general populace and should be very easy to monetise. Per this line of reasoning, every BAYC or MAYC holder is sitting on thousands of dollars of potential IP-driven profit and should be scrambling to capitalise on that.

We know that this doesn’t actually happen in reality, though. This is largely due to the monetisation gap, the difference between the skills and resources needed to monetise IP effectively and those most IP holders possess.

Creating a business using your ape could take a couple of forms: media licensing, original media content, and branded merchandise are a few that come to mind.

The problem with all these is that they all require significant groundwork that most casual holders can’t or won’t do.

Media licensing usually requires an agent and money or personal effort, a vast network and time. Branded merchandise usually requires a significant following or a particularly aesthetic piece of art and a partnership. On the other hand, original media content requires hundreds of hours of personal work or a production team and capital.

Basically, most monetisation avenues in the status quo require significant amounts of capital/time and particular skillsets. Most people either lack the capacity to monetise or can’t be bothered.

The new IP meta doesn’t revolve around creating valuable IP but instead on bridging the IP monetisation gap.

To visualise this jumble of words in the real world, you need look no further than the “Bored & Dangerous” project by @Jenkinsthevalet and the writer’s room.

The “Bored & Dangerous” NFT book is the culmination of the combined efforts of “3,000 members of Jenkins the Valet’s “The Writer’s Room” banding together to drive the creative direction of the work. Neil Strauss, a 10x NYT Bestseller, wrote the novel. All characters featured in the novel, in the illustrations, in the game of ‘Where’s Jenkins’ and in the acknowledgements are owned by members of the community and licensed to Tally Labs.”

I don’t know much about the specifics, but here are the things that I’m aware of that I think are very important:

• At least 3000 people contributed to the success of the project

• The creative direction of the work was shaped by community members, but the final storytelling was outsourced to an established writer.

• The characters contained within the book were all licensed to Tally Labs by the respective IP owners.

• The licensooors of the IP used in the book all earn a fraction of the net profit generated by the book.

Why do I think these are important? Because they highlight the core features of the new meta:

• Large-scale decentralised input: The simple fact that over a thousand people were contributing in some way significantly reduced the burden placed on the individual contributors. This reduced the IP holders’ contributions to perhaps voting in polls and discussing with other holders on possible actions to take (easier-to-do) as opposed to trying to run a one-man show (harder-to-do).

• Outsourced heavy-lifting: The most technical aspect of the book’s production (the writing) was outsourced to an author with significant experience and success in the field, further reducing the burden on IP owners while simultaneously improving the odds of the project’s success. Tally labs also handled all of the work involved in NFT minting and other technical aspects of the launch, eliminating IP holders’ need for specialised knowledge.

• Easily accessible IP monetisation: Licensing tokenised IP to Tally Labs for use as characters in the novel created a pretty straightforward way for IP owners to monetise their IP.

• Scalable: The Bored and Dangerous book licensed 4,075 BAYC/MAYC characters (about 13.58% of all BAYC/MAYC NFTS), enabling a very large number of Yuga IP holders to earn royalties in continuity, all without breaking securities laws (as far as I’m aware).

The bridge meta is about allowing casual IP holders to monetise in a relatively straightforward and stress-free manner. In this regard, I think Bored & Dangerous greatly succeeds as proof of what is possible in this new meta.

Accounting for the ~8k initial sales, the figure earned per ape is probably in excess of $150. Also, splitting the OpenSea 5% creator royalty in half would leave 4,075 licensors with about 35 eth to share among themselves as of the 6th of August, 2022. Each licensed ape has earned roughly 14 dollars for its owner from secondary sales, so, not really life-changing money.

P.s. The calculations contained in this essay are based on rough estimates using publicly accessible information.

For this reason, I would term the Bored & Dangerous project a proof of concept, a foretaste of what is possible for IP holders.

Overall, I think this meta holds a lot of hope. It answers the question posed by @Loopifyyy and the space at large about monetising for holders at scale without flouting securities laws.

I believe the future is bright for this meta, and I expect to see more instances of IP issuers and independent groups like @Jenkinsthevalet coming up with similar endeavours.

A few more things…

This meta has great potential with respect to onboarding mainstream consciousness onto the web3 bandwagon.

First off, the market is larger on the other side. Bestselling projects tend to earn different kinds of currency depending on what audience they cater to.

A bestselling novel in the status quo makes a lot of money and gets an even greater amount of traction. A web3 creative project, on the other hand, makes its creators insane amounts of eth without necessarily generating an equal amount of mainstream traction (BAYC is an exception, not the rule).

I believe this is for the most part because web3 product sales revolve around an existing community of a few thousand willing to buy at a premium, as opposed to mainstream literary and media publications that rely on large-scale, lower-priced sales to form a community.

The bridge meta has the capacity to get the best of both worlds. Picture a double book release with characters that are licensed from IP holders. Fresh hardcover copies are coming to your local Barnes and Nobles, as well as an NFT book mint. This book isn’t necessarily web3-themed, just plain, old-fashioned storytelling.

When executed properly, such a release will drive sales in traditional media and web3. This translates to a significant amount of profit because the mainstream populace remains the larger market. It also introduces NFTs to some people that would never have otherwise considered them.

Basically, it’s a win-win situation. Mainstream awareness and community-building are achieved, IP holders are happy, and the bridge builders also smile to the bank.

The Bored & Dangerous mint illustrates this very well. Most of the B & D NFT minters (~14890 mints) were affiliated to Jenkins the Valet or Yuga in one way or the other - the public sale accounts for <20% of all mints - and were willing to pay over 100 dollars for the book. B&D presently has about 4k holders.

The newest entry into the New York Times bestseller list under hardcover fiction, on the other hand, retails for ~$30 but has done over 40,000 copies in sales.

Web3 projects make more money around existing communities. On the other hand, traditional media launches bring new members into a community through sales.

Projects that leverage this reality effectively are the ones that will reap the benefits of the bridge meta.

It’s often said that the best businesses are those that relieve widespread pain points. Web3 projects are businesses too. If tokenised IP monetisation were a pain point on your body, it would cover everything from the neck down.

The bridge meta is here to stay.