Loot NFT for Creators

I am delighted to finally be able to write about the creators whose creations are embodied in the NFTs sold in the Arena! Over the past few weeks, I have been devoted to the foundational work of the Arena platform, and I am now glad to be able to discuss some of its outstanding features.

Firstly, we do not refer to “artists” in the Arena; instead, we use the term “creators” to refer to anyone who originates NFTs for auction. This term captures more than just art; it includes sculptures, videos, captured historical moments, audio files, mechanical objects (such as the Batmobile!), and more. Additionally, NFTs on our platform are linked to digital or digital-physical creations.

I am often asked, “Why is NeoWorlder better for creators?” Rather than thinking about one thing being superior to another, I think about things being different and what is better suited for a particular situation. To answer this question, I typically use an analogy and then expand upon it until it is clear why NeoWorlder exists.

Suppose someone creates a painting and brings it to an auction house to sell it. The initial considerations are: Who will bid on it? How much could it go for? Who is the creator? How many followers do they have? If I were to take my artwork to Christie’s, I would not even get past the receptionist. This is because I cannot paint, and the result would probably look like a dog’s breakfast. Additionally, the amount of people that would be willing to bid and purchase the art is most likely zero (and that includes my family members and closest friends — if they did, I can confidently say that it would not be displayed anywhere and would be discarded before they even made it home).

This demonstrates that the strength of a creator’s brand is paramount in this process. Building a brand takes time, marketing dollars, dealing with curators, gallerists, critics, and hours of networking with people creators like and those they are less fond of. The price of their creations reflects their brand power (and talents) and sets the tone for their future work and expectations. Unfortunately, many talented creators miss the exposure reflecting their skills.

The NFT craze of 2021 enabled many lesser-known artists to be successful, thanks to what I call the “crypto nouveau riche” (i.e., those that bought cryptocurrency at a low price and made a lot of money due to the increase in the crypto markets). However, shortly after, DIY NFT auction houses were inundated with creators who should not have created artwork. Thus, creators who came later to the party were crowded in a noisy environment…once again!

Something about me: my first degree is in Aeronautical Engineering, and I view life with a mathematical filter; this is beneficial in some cases but not so much in others. The factors required to discover the price of creations at auctions are as follows:

Value = Brand Value + Talent + Desirability,

where,

Brand Value = Function (Time [Critics, Gallerists, Marketing, etc.])

and,

Brand Value = 10 x Talent

Desirability = Function (People who can afford and want the creation)

Good luck!

When we initially set out to create NeoWorlder, the equation above was the first thing we wanted to address. If we could not solve it (or at least provide a suitable solution), we would not have pursued building a business in the space. Thus, we needed a way to break this equation or significantly reduce the importance of brand and desirability. In other words, we needed to find a way to construct a brand and simultaneously achieve price discovery (i.e., collapse the normal process into a single event).

Our solution resulted in something like this:

Value = Brand + Talent + Desirability

But where,

Desirability = Function (Fans + Gamers + People that want the creation)

and,

Talent = 10 x Brand

Note the subtle differences. Talent weight flips with Brand, and Desirability is diluted by removing purchasing power disparity and including Fans and Gamers in the Desirability function. This is similar to shows like American Idol, the X-Factor, etc. It, however, goes further by immediately commercially valuing the work, much like if Kelly Clarkson won American Idol and, in the same breath, immediately sold the rights to her first album for a gazillion.

To achieve this on NeoWorlder, we have created the following:

(i) A new kind of time-limited auction whereby anyone can get a creation at a discount in a pay-to-bid manner. Each bid is reasonably priced at $0.20 per bid that is spent and not returnable, whether or not bidders win the item. If a request is received in the last 15 seconds, it resets the timer to 15 seconds. This means that auctions could last days, and the last person to bid when the timer expires gets the creation.

(ii) A novel time-locked wallet and a fixed supply of bid units (locked in at a certain amount forever). The time-locked wallet collects all BUNs spent by bidders and only releases them at a particular time every week (i.e., every Sunday). However, bid units are “trapped” in the auction and only get sent to the time-locked wallet once that auction concludes. Since there is a limited supply of the bid units, whenever they are spent, their circulating supply decreases. Hence, at some point, there must be an auction winner.

(iii) All bid units collected in an auction get converted back to a USD value and locked in as the auction proceeds. As more bid units are spent, the NFT (and creation) value grows.

(iv) Each bidder has a maximum cap on the number of bid units they can have in their account at any time. They can buy more, but they cannot buy beyond the cap. With a decreasing circulating supply, NeoWorlder may run out of bid units to sell. Hence they can only sell more once the auction concludes and the time-locked wallet releases them. This significantly reduces purchasing power advantage.

(v) All NFTs are part of a themed set of five. This means that work is commissioned from creators to fit in that set. If bidders collect a complete collection of those works, they get a fantastic mystery gift. If they collect a majority of the group, they get a status level called a degree. A degree rewards them with “free” bid units based on their participation in auctions.

(vi) As we have significantly removed purchasing power from the equation, it means that family, friends, and fans can participate in using bid units to show support at a relatively low cost, whether or not they win the creation. Since NFTs may be in auctions that last hours or days, people’s eyeballs are likely on them, providing two benefits to the creator: future brand value and price discovery of the creation.

Following this exposure and a price achieved for their creation, creators can move on to bigger and better things.

In addition, NeoWorlder’s mechanism to value brands commercially is based on creating a theme, such as “The Master Influencers,” and tokenizing a 10-second video from five influencers. This reveals the number of their followers who are super fans and deconstructs followers into a direct commercial value. Furthermore, creators are paid the proceeds of each auction, and fewer fees, thereby making their brands liquid. In return, fans can own a piece of unique memory from their favorite influencers.

NeoWorlder is a theoretical experiment whose outcomes may not be fully anticipated. To discuss this further, join our Telegram group (t.me/lootnft), and let’s learn from each other.