Go beyond the drop
By Tara Fung, Co-Founder and CEO of the Co:Create Protocol
Today we are excited to announce the upcoming launch of Co:Create, a new protocol that unlocks the potential of NFT communities and ecosystems. We’ve raised a $25M seed round led by a16z crypto, with participation from VaynerFund, Packy McCormick’s Not Boring Capital, Amy Wu, and the teams behind RTFKT and fractional.art, along with 50+ investors and web3 angels who support our mission:
Empowering NFT projects to “go beyond the drop”
Co:Create provides the foundational infrastructure for decentralized brands of the future. It enables projects to mint NFTs, as well as launch their own DAOs and fungible tokens associated with their collections. This serves to expand individual communities, incentivize the growth of dApp ecosystems, and decentralize project governance. The Co:Create protocol will provide the tooling to support these communities in achieving their full potential.
Enabling decentralization
NFTs have made the un-ownable, ownable and the limitless, scarce. They have the potential to be the building blocks of the most important brands of the future.
We believe in the promise of NFTs, and we recognize that structurally, NFTs as standalone assets are limited in what they can do. Web3 presents the opportunity for an alternative system where decisions are transparent, governance is decentralized, and networks are permissionless. Within this context, NFTs and native fungible tokens come together to create a powerful combination:
- NFTs are scarce and discrete. Native tokens are many and divisible.
- NFTs create small, tight communities of collection holders. Native tokens are able to expand to include millions of participants and contributors.
- NFTs excel as proof of membership and the key to unlocking certain benefits (games, events, experiences). Native tokens excel as a way to account for, pay and incentivize the actions of others.
When done thoughtfully, the decentralization of NFT projects facilitated with native tokens can result in a whole that is greater than the sum of its parts.
We’re seeing this play out in real-time. The recent launch of ApeCoin expanded the Bored Ape ecosystem beyond its few thousand collection holders. By introducing a native token, the project now has the potential to reach millions of community members. The governance and utility benefits of ApeCoin are still being defined, but we have a peek into the manifestation: exclusive benefits and access — merch, games, events, films, and any number of other goods and services — even for those who aren’t holders of a Bored Ape.
Why Co:Create?
Today, the majority of NFT projects are in their infancy with limited native utility. They are collections of art driven by hype and potential. They’ve proven the initial power of digital communities, but in order to maintain momentum, they will need to find sustainable means to:
- Expand communities beyond direct collection holders.
- Build dynamic ecosystems around collections through incentivized participation and co-creation.
- Decentralize control of NFT networks over time.
These goals can be achieved through thoughtful token economic models that align network incentives and enable community members to be active participants and decision-makers.
The Co:Create protocol empowers NFT projects to decentralize control, issue native tokens, manage and engage their community through a DAO, and incentivize dApp ecosystems to emerge around collections. With flexible tooling and configurations, Co:Create will be a core piece of infrastructure for ambitious NFT projects who see a more engaged and connected future for themselves and their community.
How does it work?
At its core, Co:Create is a factory method enabling projects to implement an individual instance of the protocol, called a Create instance. This means NFT projects can benefit from a simple way to deploy the necessary smart contracts for their projects according to the parameters that fit their needs. The factory method acts as a customizable template with four components: the NFT minting mechanism, a native utility and governance token, a DAO, and a treasury.
An NFT project implements a Create instance for the minting of protocol-controlled NFTs. Once the project is sufficiently decentralized, which can be accomplished through curated partnerships initially driven by the founding team, the protocol is used to generate the native token and treasury. NFT royalties going forward will be paid out in the native token. This is achieved by the protocol sending the royalties to a DEX and swapping the proceeds for the project’s native token. Those royalties are then distributed to the NFT creator, the NFT project’s DAO, and the NFT buyer. Every sale of a given project’s NFTs results in demand for the project’s native token, creating a powerful connection between the two assets. Demand for the NFTs drives demand for the native token.
This protocol design drives three major outcomes:
- Expands the community: NFT collectors are added to the community (by receiving the NFT) and to the DAO (by receiving native tokens with their NFT purchase). If they sell the NFT later on, they can still participate in community governance. Furthermore, individuals excluded from participating in an NFT community due to elevated floor prices now have a way to join the ecosystem by purchasing the native token directly.
- Incentivizes ecosystems to develop: Developers can receive grants in that project’s native token to build games, events, or experiences. As the ecosystem becomes more valuable, demand increases for the project’s NFTs, resulting in more demand for the native token through the royalty swaps.
- Decentralizes creation and governance: The native token will be used to propose new NFT mints as well as vote on future NFT additions and the use of the DAO treasury. Decentralizing creation and governance enables projects to create more sustainable futures and evolve with input from their community.
Each Create instance of the protocol provides the tools needed for NFT projects to go beyond the drop. Additionally, all Create instances are part of the Co:Create network and have a say in how the governing protocol develops over time. This is achieved through token swaps that occur in proportion to NFT sales between each DAO’s treasury and the Co:Create treasury. In doing so, any future Co:Create native token, e.g. $CO token, would begin to reflect all of the projects that have implemented a Create instance. Additionally, each Create instance is able to participate in the network governance in proportion to their NFT sales.
Read the full whitepaper here.
What’s next
The Co:Create protocol is the first endeavor from Gesso Labs, a team of web3 entrepreneurs, engineers, artists, and operators. Gesso, (pronounced “Jesso”, the Italian word for chalk) is a primer applied to blank canvases that serves as the foundational layer all other paints adhere to. Our name speaks to what we aim to deliver: tooling and infrastructure that empowers creators to realize the promises of web3 — dynamic, decentralized experiences that benefit all participants.
We are backed by some of the best projects and technical minds in the space and we’re excited to have many of these partners along for the ride as investors, advisors and future users of the protocol. We will be launching a full site with developer documentation this summer with initial partner launches in the fall.
To learn more about Co:Create, follow our launch progress on Twitter or sign up here for updates.
