This past week has seen a firestorm ignited with the web3 community, as the popular Moonbirds collection (managed by parent company Proof Collective) has transitioned into a CC0 licensing format. Some are happy about this move, others are angry, and many more are downright confused. I’m going to try and collect my thoughts here on CC0 in general, and the benefits and drawbacks versus other licensing schemes.

First, an important explainer on CC0 – it stands for Creative Commons Zero, the “zero” part referring to “no rights reserved.” The creator or owner of the property reserves no rights to the piece of media, and it can be freely used by anyone else for any purpose – even commercial. The work is fully in the public domain and can be adapted or copied freely. The classic works of Shakespeare, for example, are completely in the public domain.

Some prominent examples of CC0 projects in the NFT space: Nouns, mfers, Goblin town, Cryptodickbutts, Cryptoadz, tubby cats, and tiny dinos. Although each collection has a limited number of tokens and unique “official” artwork tied to those tokens, technically the artwork can legally be copied an infinite amount of times. Derivatives can also be made by anyone, in any manner they please, and sold freely with no legal barrier to doing so. The token owners truly own just the non-fungible token, but none of the rights associated with the image or character.

Despite this legal setup that confers no rights beyond the cryptographic token itself, some CC0 collections have seen astronomical success in terms of token value appreciation. The 6,969 Cryptoadz and 10,000 goblins each have current floor prices of around $3,250. Each Noun is worth over $160,000. People are paying large sums for these CC0 tokens despite not attaining any rights to the underlying artwork, often because they come with other benefits such as community, DAO membership, or knowing it was created by a legendary artist like Gremplin.

There’s also the thesis that CC0 projects in the public domain will actually be more successful because of their licensing structure. Because anyone can copy them into other derivative works, the brand can spread further out into the culture and increase awareness of the property. The freedom to create copies and derivatives, the argument goes, makes the art more likely to become a meme that gets shared over and over – ultimately driving value back to the original token.

CC0 is a strong contrast against another popular licensing model in NFT projects, which grants commercial rights to holders of a particular token. This model was first proven by Yuga Labs and the Bored Ape Yacht Club, in which ape holders have full rights to their own ape’s artwork – they can make it their identity, build a business around it (like a restaurant), license its image to movie studios, or really anything else they can think of. And technically, nobody else has the legal right to do the same with somebody else’s ape. Many more NFT collections have adopted this model, giving their holders full commercial and licensing rights to their own character or image.

Now back to the Moonbirds issue. The Moonbirds collection originally minted for 2.5 ETH each to a whitelist that included Proof members and a lucky few thousand that won a Premint raffle. Post-mint the collection quickly rose well beyond a 10 ETH floor, even reaching 40 ETH after just one week. People were happily paying over $100,000 for a brand new collection, betting mostly on the perceived genius of Kevin Rose, his team and roadmap, and a “nesting” mechanic that would incentivize long-term holding.

But one other factor of the Moonbirds project also contributed to its success, to some degree. Like many other profile-picture projects, birb holders received commercial rights to their artwork. Similar to how Bored Apes have launched their own ape-themed businesses such as a restaurant or their own NFT project, some Moonbird holders hoped to build their bird into a brand and possible business. This was essentially baked into the terms they agreed to when spending six figures for a Moonbird on secondary markets.

However, last week’s announcement by Kevin Rose and Proof Collective shattered those possibilities of commercial possibilities and licensing rights. Like the flip of a switch, Moonbirds were now under the CC0 licensing model, meaning that they are in the public domain and anybody has the right to copy, redistribute, remix, or resell any bird from the collection – no questions asked. So why would any Moonbirds holder invest the additional capital and energy into building a business around their bird, when anybody else can copy the same bird and do whatever with it?

The backlash against this change was swift and immediate, with many in the community criticizing this decision and losing some degree of faith in the project. It was less of a criticism of CC0 itself, and more of a reaction to a shift that appeared like a bait-and-switch. The project founders presented the collection as having one property – commercial rights – only to change this a few months later. The move was also made with basically no community input and no warning. Since the announcement, Moonbirds floor has tumbled from 19 ETH to around 14 ETH – a drop of over 25% in just one week.

I don’t know what the best licensing model is for NFT collections. I’m partial to the commercial rights model employed by Bored Apes and many other collections, but I also appreciate the memetic aspirations and openness of CC0 projects. I also see the benefits of other, more restrictive collections that actually grant no rights to their holders or anyone else, reserving full control for solely the project team as they attempt to build essentially a corporate brand. This space is, by its very nature, full of experimentation and different approaches – and nobody knows for sure what is going to work best.

I do believe, however, that selling a collection as one thing with one set of rights afforded to holders, only to completely reverse that and take away those rights with no community input, seems like a monumental misstep that breaks some level of trust between the project team and their holders. I do like Kevin Rose and Proof Collective a lot, which is also why this sudden move was so surprising and perplexing. I hope they learn from this mistake and can make better decisions in the future as the Moonbirds community navigates this strange transition.