NFT Projects are the new bubble in the NFT world, quickly filling the speculation space after the NFT crash of March and the Musk-Defi Crypto crash of April. Every day, new NFT projects are launching, and its hard not to recognize a considerable decline in quality and lack of innovation with each new project.
After spending yet another week combing through smart contracts and founder claims and badly rendered images and broken OpenSea metadata, NFT Culture has had enough of the poor rollouts and decided to put together a declaration of rights for digital citizens for future NFT Project builders.
NFT Project Bill of Rights
- Reveal the NFT when minted.
- Include all promised file formats.
- Provide clear terms of the licensing agreement.
- Make source code of contract available.
- Earned Anonymity
In the crypto space, and definitely in NFTs, innovation is constantly happening, and that means that sometimes projects are in progress down to the wire, and many are being bootstrapped with little to no funding by their creators. We understand that making too many demands of the creators would stifle creation, however we feel our list of rights still leaves plenty of room for creativity.
Seasoned collectors in the space will certainly recognize why each of these items is important, but for the newer folks or the people considering whether to try to build a project, let’s dive in to each individually.
1. Reveal the NFT when minted.
Outside of very limited pre-sales, we strongly believe that NFTs should be revealed immediately upon minting. When the NFT is minted, in order for it to be revealed, not only does the smart contract need to be functional, but also the token uri needs to be defined and the metadata needs to exist somewhere and provide details of the token and the token’s corresponding primary asset. By revealing the NFT at this time, it proves the project’s basic functionality as well as completes the transaction with the buyer in a concrete manner. If the NFT is not revealed until a later time, then it requires trust and execution that is not backed up by any programmatic mechanism, and most non-programmatic mechanisms that would have worked in the traditional world will not have much value in a global digital system.
2. Include all promised asset files.
Building on the idea that NFTs aren’t well suited for trust and execution outside of the smart contract, the second right is focused on delivery of the actual assets promised with the NFT. Just as it would be a violation to deliver the NFT without the primary asset itself (typically a image file or a video), it would also be a violation to not include promised secondary asset files. If the NFT is described as a 3D model, then the model files should be included. If the NFT is described as compatible with VR/AR, then the appropriate asset files for those mediums should also be included. After the minting transaction is complete and the NFT has been transferred, there is no enforcement mechanism for the delivery of additional asset files, and it is all to easy for the creator of the project to drop the ball, whether innocently or otherwise on a commitment to deliver additional assets.
As a note about this right, we have no qualms with projects that define roadmaps and project future plans for the NFT Project, where we quickly grow uncomfortable is when a project is promised to be “3D interactive characters” and described as such in numerous places in the project’s documentation, however when the NFTs are minted and transferred, they are only 2D jpgs.
3. Provide clear terms of the licensing agreement.
When a NFT is purchased, users expect to know the limitations on what they are buying. It is rapidly becoming a trend for users to make derivative works with the NFTs that the purchase. Often times, this is a fun exercise, to showcase an artwork that they love, but it could also be shrewd business or just a casual side project as well. It is unfair to the end users if they make a purchase of a NFT with one expectation and then have that expectation challenged legally later. This is an easy step for a NFT Project to undertake — How do we want our users to use the NFTs we create — and it is a huge step for clarity and transparency for the buyers.
Even though we love the great communities and art work that often blossoms out of NFT Projects with full commercial rights passed to the NFT owner, we also have no problems with NFT Projects that would like for their art to only be monetizable by its creators. All we ask is for this to be well defined, clear, and provided up front when the NFT is minted.
4. Make source code of the contract available.
The final item on our bill of rights is perhaps the most important in the NFT Project space. The source code of the contract should be made available in some fashion. NFT Projects are complicated, have many moving parts, and ERC-721 tokens grant a lot of privileges to the creating address that should be up front and clear when NFT minting occurs. As a word of caution to NFT Project consumers, ERC-721 contracts allow the contract owner to change max supply, change metadata, completely break metadata, and a pretty unlimited set of other actions that could be mundane or nefarious depending on the owner’s intentions. The main protection for users is that the contract is immutable after it is published. To complete the circle on the immutability, the source code should be provided and available for review.
5. Earned Anonymity
The cryptocurrency space is full of pseudonymous creators, artists and authors. Most of the time, these participants are creating small pieces and projects, and often giving them away for free or as open source. Many people worry about their online identity affecting their family or possibly their current or future employment opportunities. This is understandable, and we don’t discourage people to do what is right for themselves. However, when forming a NFT Project, and pre-selling large volumes of NFTs, we feel that allowing full anonymity as a community is ripe for abuse. We feel that at least one member of the project, preferably the project’s primary founder or creator, should be public about their identity. This breeds accountability, and helps to prevent bad actors from being able to easily repeat their actions without consequences.
Further Thoughts and Conclusion
The last request we have, which is not to the level as a Right (as described above) is to clearly and openly define the contract’s parameters, such as max supply, how metadata could/will be altered, and any other non-standard elements in the contract, in a human readable fashion in the project’s documentation. Additionally, a template for the metadata for each NFT in the project should be made available as well, so that external dapp developers can plan and develop supportive tools prior to the NFT Project’s launch date.
Our goal here is to continue to drive the NFT ecosystem as a whole forward, and try to turn around the chaotic NFT Project space. We hope future project creators stumble upon this page and take this credo to heart. As always, please reach out to NFT Culture if you have ideas or suggestions to the list, or if you are working on a new NFT Project and want to see if something passes muster.