VC #5: The Web3 Studio Stack
Lots of talk about IP these days, yet Tally has already built a way to connect avatars to projects and share profits
It’s been over a month since Yuga Labs announced their acquisition of the intellectual property (IP) rights to CryptoPunks and Meebits from Larva Labs, and I think the shock of the whole thing has settled. But it wasn’t just an Avengers moment where the mightiest NFT avatars in the space came together under one roof. It was also a triumph for the future of Web3 commercial rights. Here’s the snippet from their announcement:
As a first step, we will soon be granting CryptoPunks and Meebits holders the same commercial rights that BAYC and MAYC owners enjoy. We’re working with our legal teams to draft the new terms and conditions for both collections, and expect to share these with the community soon. By handing over these rights, we’re further aligning CryptoPunks and Meebits with the web3 ethos, and we expect a wide-range of third party developers and community creators to incorporate CryptoPunks and Meebits into their web3 projects. We’ll be building the overall brand right alongside them.
While most of the community’s reaction to the acquisition was highly positive, there were some respected voices who downplayed the significance of freeing the commercial rights for holders. DCinvestor, a big collector and clear thinker, had this to say:
His argument is larger than simply: people won’t monetize their pfp. He gets into CC0 rights, ownership, and corporate overlords. All fun topics, but we’ll save those for another day. I want to focus solely on monetizing those beautiful pfps in our wallets — and a company we know well that’s building products to make that easier.
The Journey to pfp Glory
Everyday new pfp projects launch with great art, interesting traits, and fun backstories. The project releases into the world, we mint or buy a lovely pfp, it gets stored in our wallet, and sometimes is used as a Twitter or Discord avatar. Occasionally, their owner elevates them from a static 2D image to a being — this thing with a voice, a perspective, a way of approaching a conversation. That’s fun! And a ton of work.
Let’s say you actually put in the hard work and build out this character into a unique voice in the community. People are excited to hear more from you, maybe buy something that you build with your character. An animation, comic, ebook, novel, derivative. Guess what? That’s even more work! Now you have to get the right kind of resources to craft a story and execute on an artistic vision (and the money to fund it all).
Cut forward about six months and you’re finally minting your own project based on this fun pfp you bought 12 months ago. Let’s say, because of tons of organic support and partnerships with like-minded communities, it’s a massive success — mint out in 30 minutes. Wow! Congrats! You’re in the top 0.001% of all pfp owners. You actually made money from your pfp!
The journey from changing your Twitter profile to minting a project based on that pfp is a long and winding road. One that most people won’t take. In that regard I agree with DCinvestor — most people won’t monetize their pfp.
But what if I told you there was another way.
The Web3 Studio Stack
The combination of Tally Labs, The Writer’s Room (TWR), and the impending launch of Media DAO is an answer to this challenge. Let’s take a look at Stars, Projects, and the Web3 Studio Stack.
Stars. We’ll start off with our beloved pfps. Every book or movie needs a star! But when I say star, I don’t mean the NFT equivalent of Denzel Washington (GMoney?). I mean anyone with a twinkle in their eye. With over 1 million avatars today, there are plenty of characters to draw from. If you put even the most “basic” pfp from a collection in the hands of a capable storyteller, they can bring out their nuance and drama. But how does a star find its way into a book or movie?
Projects. On the other side are projects looking for stars. Want to tell a boardroom coup story? Wouldn’t it be fun to use a Boss Beauty? How about a love story featuring a lost cat (Gutter Cat Gang) and a frenly alien (alien frens)? Oooh, how about the heist of an experimental serum by a Deadfellaz that is accidentally consumed by a Creature?
The ideas are endless — and will have various forms and sizes. Maybe it’s a single NFT launch. Maybe it’s chapters spread out over six months. Maybe it’s a whole freaking book. But how does a project find the stars to populate their world?
Tally + TWR + Media DAO. While Jenkins the Valet started as a character study, Jenkins and Safa quickly turned a discrete concept into a larger set of Web3 products through Tally Labs, TWR, and the soon-to-be-launched Media DAO. They enabled stars (Apes + Mutants) to license their pfp to a project (Book 1) with contractual agreements to share profits. Probably nothing.
But it’s more than that. They built a way to infuse community-generated content into a project through straightforward proposals and voting mechanisms. They developed an onboarding process to connect TWR holders with stars — and even created a shared licensing concept that enabled even more granular profit sharing agreements to be put in place. And the technology and tooling built and tested to support over 4,000 Apes + Mutants licensing their pfps is now capable of supporting more projects and pfps.
A full product stack built to realize the dream of bringing Jenkins the Valet to life. That’s today. But what’s next?
I could see them opening the product to any project looking for stars — or any star looking for a project. I own a MetaHero with fantastic hair. Doesn’t someone want to feature him in their upcoming project?! My artist rider only contains copious amounts of hair spray. On the flip side, I’m noodling my way through the development of a project of my own: I sure would like to license your cool pfp to be featured in it!
I could also see them providing additional value added services. Need marketing for your project? They can help. Need community management, publishing, production services? They could do that too. The team hasn’t talked about these kinds of services, but the competency is there.
What’s the benefit to a star or project? They don't have to create these complex tools and capabilities from whole cloth. And what’s the benefit to Tally Labs, TWR, and Media DAO? See the very bottom of my illustration? Profit sharing. As each project and star connects to create something of value, a portion goes back to the stack to keep it growing. Think of the Apple App Store model. App companies get 70% of the revenue, Apple gets 30%. Maybe the 70/30 split feels a bit aggressive for our Web3 ethos, but you get the idea.
The next six months will be exciting. As Book 1 releases, the Media DAO launches, and we get more opportunities to use our TWR assets (maybe in the upcoming audio experience?!), we’ll learn more about how this stack grows. FilmBook and I are ready to cover every aspect!
Some Disclaimers: None of this is financial advice. DYOR. And yes, FilmBook and SpaceWalk are TWR collectors and long-term hodlrs.