Earlier this month the NFT project, Pudgy Penguins raised over $9m in a funding round for their new venture, an IP brand.
The interest and success of this funding round represent a wider investment in the idea that NFTs could be the basis of profitable content ventures. In much the same way that toys and games like Barbie have become tv and film franchises and vice versa.
CEO Luca Netz wants to transform Pudgy Penguins into a ‘transcendent IP brand that provides a community of both crypto-native and non-crypto-native consumers with products, experiences, and content.’
Opportunities for cross-industry collaboration, especially beyond the crypto space, promise NFT owners and community members a strong return on their web3 investments. The monetisation potential is huge, but the distribution of these returns will be determined by IP rights.
All NFTs are composed of a smart contract, this contract details the distribution of IP rights for the NFT. These rights determine how an NFT owner can use, and profit from their NFT content/image. For instance, one Bored Ape owner, used their NFT as a brand and launched Bored Ape #35000 lager, individually profiting and bringing attention to the NFT project by appealing to the wider BAYC brand.
What we’re seeing now is a move to decentralized and non-exclusive IP rights. This means that, increasingly, NFT owners have a larger claim to the IP rights while the project can include these NFTs expansions and franchises. Done well, this results in NFT owners receiving royalties and the collection becoming more valuable.
This is where Pudgy Penguins and other projects are beginning to position themselves. Last August Pudgy Penguins released a line of toys based on select NFTs and the floor price spiked 18% in 24 hours. Arguably, this strategy is already paying off, during a window of relative downturn for most NFT projects, Pudgy’s have prevailed and even increased in value – largely due to the speculative value for their future merchandising and franchising. Pudgy Penguins has also signed a deal with Hollywood agency, WME. Pudgy’s are not the first project to move to the big screen, Forgotten Runes Wizard Cult has a TV series in the works. In which the cast will be made up of NFTs, whose owners are eagerly anticipating a return of royalties.
The NFT space is fuelled by attention, and developments like these keep a constant spotlight on both collections and NFTs. Owners dedicate time and resources to kit out their NFTs in the hopes of getting leading roles and project owners look for new ways to expand and bring the community into the fold. Which bring the best out of everyone in the space and convergence of web2 and 3.
Here at Stratisphere, we will be eagerly following it.
