Hey, good afternoon! I was going to write an article on a completely different topic, to talk about the global market, about the possibilities of NFT in the patent field… But I decided to return to where I started: to the digital art in form of NFT.
Why? It's very simple: I came across something interesting once again. And this “something” interested me so much that I dropped an almost finished article, which, by the way, described my own project. What happened now is happening more and more often — the pieces of the puzzle explaining the possibilities of NFT now and in the future fell into place (of course, Pure NFT, since classical NFTs are unsuitable for the underwritten points, alas).
I hope you’re intrigued.
What can Pure NFT technology offer?
If you have read the previous articles, you can imagine what a coup Pure NFT technology can arrange, which has the ability to attach an agreement on the transfer of rights. This is both digital distribution and a new type of market for text content… What can be done even better in this field?
If you look at the classic NFT market… Its main advantage is its accessibility. NFTs are produced by hundreds and thousands, and the price for them depends only on the author and the buyers’ desire. Yes, buyers of such NFTs don’t get any rights to the purchased content (and the content itself, in fact), but it’s cheap! You can buy a NFT for a couple of dollars in the hope that the price will rise, or immediately put the content up for sale.
Everything happens quickly and simply. And quite profitable for the author. He doesn’t lose anything by releasing classic NFTs, he doesn’t need to wait for a buyer who is ready to pay for the content itself along with the rights…
At first, I decided that it would be the same with Pure NFT. With one small difference: users, thanks to the connectible agreements, will receive at least basic rights to the purchased content. I thought that there will be the same market with a huge number of usual NFTs and several large lots of exclusive unique content exposed with full transfer of rights.
And I was wrong. In fact, the next level of development of trading platforms based on Pure NFT is marketplaces with the possibility of collective ownership.
It’s so obvious that it’s strange how no one noticed it! The entire structure of Pure NFT with the possibility of content’s indefinite storage, all plug-in agreements, voting functions, all this directly leads to such a possibility!
By the way, I’d like to thank the NFT-authors team named Pangea for having given me this idea. It was their approach to creating NFT that was the catalyst for the idea.
But let’s continue. What is the main disadvantage of exclusive works that become yours immediately at the time of purchase? The obvious answer: it’s banally expensive. An ordinary user is unlikely to think about buying, for example, a painting for 100500 thousands of dollars. Even when he’s sure that the price will definitely increase in the next 5-10 years.
Collective ownership of NFT
Therefore, the only options for an ordinary user are:
1) purchase of mass NFTs that don’t imply any rights. 2) participation in the collective art-fund.
With the second, everything is quite interesting, since even blockchain-based solutions, instead of granting buyers the rights to manage an asset, mostly issue “certificates”, in theory granting the right to own part of an art object. And this, to put it mildly, is not quite the same.
In order for collective ownership to work, several specific mechanisms are needed at once.
A transparent and understandable content storage system.
A transparent and understandable asset management system.
Mechanism for assessing equity participation.
An understandable share purchase and sale system.
And the system of shared ownership based on Pure NFT supports all these mechanisms!
The content is stored directly in the blockchain in the form of a non-fungible token. There, in the blockchain, a system of voting and viewing the ownership history (provenance) is implemented. And the built-in marketplace allows to easily divide the declared value into any number of parts, while allowing holders to trade their shares, increasing the cost of the share and the total capitalization of the content!
If you are familiar with stock trading, you can already imagine how it can work. But an example in any case won’t be superfluous. Let’s imagine that a well-known artist has decided to release his new painting as an NFT. He’s serious, he doesn’t produce reproductions without any rights, but immediately creates an unique Pure NFT with an attached agreements for the full transfer of rights to the buyer. After that, he puts the token up for auction with a starting price, for example, 50,000 FOIL.
Users see a new lot, but the price for many seems unaffordable. They sigh and switch to something else… Or not?
Next to the Quick Purchase button there is another one that directs a possible buyer to the Shared Pool. And it’s filled with each new participant.
For example, the NFT author immediately put a limit on shared holding — there can be no more than 1000 shares at a time… That means that the price of “entry” into the pool will be 50 FOIL
This price suits the potential buyer, and he deposits the funds.
An important point is that before the purchase, the funds are deposited, but not transferred. This eliminates the fraud possibility and allows users to not worry about the loss of funds.
So, the pool is full, 50,000 FOIL is collected and transferred to the author. The painting is bought out and goes into collective ownership. No, it isn’t torn into a thousand pieces and isn’t issued to buyers. Situation is more interesting…
The NFT is transferred to a specially created account, which is accessed via the voting system on the blockchain!
And the owners of shares (I will offer a nice word Shard as a substitute, perhaps) can collectively manage this account. Sending it back to the auction with the distribution of profits among the holders, putting the painting to the museum, even renting it out to release merch! All this is done in a few clicks via the blockchain.
But this isn’t the most interesting thing! Within the marketplace, the painting’s owners can put their Shard up for auction, sell it at a fixed price, or simply transfer it to another account.
All these actions as a result affect the painting’s final capitalization and, hence, the income of its owners. In this case, Shards are analogous to a regular, fungible token, since all Shards are equal to each other.
This means that the marketplace isn’t overflowing with the similar NFTs that differ only in the release number, but on the contrary, it becomes a showcase of unique, exclusive art objects. In addition, it providing absolutely everybody with the opportunity to touch art objects and participate in the growth, directly bringing the moment when the digital market based on Pure NFT will become a healthy alternative to offline purchases of art objects.