An Open Source Framework for Utility
NFTs or non-fungible tokens are unique digital assets with ownership captured by blockchain or a form of distributed ledger technology. Why should you care about owning something digitally if anyone else can access it? If you think beyond the idea of owning a GIF or a digital photograph, some pretty interesting possibilities start to surface. Over the course of the last six months, I’ve talked to musicians, labels, managers and platforms to explore ideas at the intersection of music and blockchain. As these conversations began to evolve, I noticed that in order to concept and execute NFT-related projects, we needed a common language as a starting point.
Frameworks help us collaborate, coordinate, create, assign value, determine feasibility and many other important stops on the path to groundbreaking innovation. Remember the OSI Model? Its seven layers describe the roadmap of how data is transmitted and received.
A structured cabling system is measured by how well it adheres to industry standards like BICSI and ANSI/TIA/EIA. Those standards describe specific distance limitations, termination requirements and testing parameters that help ensure the performance of the system. In music, tonal centers, scales, modes and rhythm shape the output of songs that are pleasing to the ear. Marketing initiatives are measured by KPI’s like customer acquisition cost, follower growth and conversion rates.
In the world of NFTs, utility refers to the usefulness of a digital asset. During the early stages of the NFT craze, this usefulness seemed rather subjective, especially if those NFTs targeted a particular group of collectors. Utility is a much larger philosophical construct that deserves proper attention, which is why I want to explore an Open Source Framework for Utility. My intention is to present an outline that is useful when considering NFTs as a unique method of artistic expression, experience encapsulation or a means of organizing the building blocks of the Metaverse. The open source aspect is based on the idea that multiple perspectives are better than building something in a vacuum.
Consider this a spark for dialogue rather than a formal proposal.
So, you have an idea for your NFT, but aren’t sure of its market viability. You can start by building a short narrative and running your idea through the lens of this six step framework. After considering your narrative, assign a value of 0 (low utility) and 5 (high utility) for each of the categories to determine an overall utility estimate.
#1 — EMOTIONAL CONNECTIVITY (0–5)
The non-financial value attributed to owning a digital asset.
One manifestation of this concept is proof-of-fandom. We all had that one friend in middle school who had an incredibly culturally-connected older sibling. They knew all of the new music before anyone else, and our friend was our guide. As soon as we discovered something new, we wanted to be a part of that culture and share it with others. In the past, people kept concert tickets from their favorite artists, while today we capture killer moments from the show to share on Instagram. Either way, we want to remember those experiences, while a part of us wants to share it with the world. Another aspect of emotional connectivity could be collecting something that was meaningful to you or someone you love. Maybe you worked with your grandfather on old muscle cars, or you traded baseball cards with your neighbor. These foundations of emotional connectivity are inherently non-fungible, meaning my emotional connectivity to CryptoPunk 6788 is likely different from yours. However, in niche communities, emotional connectivity could be a shared mindset that translates to utility.
#2 — EVOLUTIONARY CAPABILITY (0–5)
The value created by the digital asset evolving over time.
The creation tools for digital assets as well as the adjacent technologies surrounding them are pretty remarkable. Algorithms, artificial general intelligence, and quantum computing could start to allow these assets to become more than something captured in a moment in time. Imagine these creations being a collective capability or a universal potential rather than something fixed and limited. Consider Mad Dog Jones and his REPLICATOR project, which is a multigenerational NFT that algorithmically releases new versions of itself over the course of a year.
#3 — PARTICIPATORY ACCESS (0–5)
The value created by unlocking a participatory experience or a means of hyper-connectivity between creators and fans.
Creators and fans are on parallel paths to hyper-connectivity, and NFTs can be a vehicle to make it a reality. While VIP experiences are nothing new in the music industry, NFTs present an opportunity to take it a step further. The highest bidder for EDM artist 3LAU’s auction won the opportunity to co-write a song on his upcoming record. Artists are rewriting the book on fan interaction, and fans can now move from consumers to co-creators.
#4 — DOMAIN TRANSPORTABILITY (0–5)
The ease in which a digital asset can move between the physical and digital domains as well as between different digital domains.
Domain transportability is more than just interoperability. Web 2.0 is structured by disparate platforms acting as the gatekeeper for the experience. Web 3.0 will offer the ability to move seamlessly between the physical and digital worlds as well as between various digital worlds. In this case, friction would decrease the value of the digital asset. How well can this asset move to and within the Metaverse and back?
#5 — SECOND ORDER VALUE (0–5)
The potential for appreciable value beyond the initial auction or purchase.
Many NFTs are released without considering how likely they are to be purchased by individuals on the secondary market. For example, if an artist releases an NFT that unlocks a VIP experience at a single concert event, there would be limited second order value.
#6 — SOCIAL IMPACT (0–5)
The ability to introduce meaningful change to lingering social challenges.
This category describes the ability of the unique digital asset to change the world for the better. While somewhat of a grandiose concept, social impact investing is gaining ground and measuring the success of projects is moving toward incorporating these less tangible returns. Consumers will continue to make decisions with their wallets and their hearts. Similar to Bombas giving away socks or Tom’s giving away shoes, is there an actionable social impact mission tied to the release of a unique digital asset?
Over the next few weeks, we’ll take a closer look at these categories and the Open Source Utility Framework.
