How to tokenize artistic creation

Many freelance artists face a problem when it comes to creating their work: poverty. In other words, the creative process takes a long time (such as making an independent film, developing an independent game, or writing a novel), and they have no income until the results are achieved. Existing strategies for this problem can be summarized into four types:

  • Already having enough funds to support their own creations (the life of the wealthy, nothing much to say).
  • Becoming a worker and doing part-time creative work (this usually extends the time it takes to complete the creation).
  • Pre-selling to target customers (usually with a certain discount; "pre-sales" has become an important sales form in the gaming industry).
  • Finding supporters and obtaining early-stage investments (a common model in the film industry).

The emergence of the concept of token economy provides a new approach to obtaining early-stage investments: tokenizing one's artistic works and raising funds through token issuance.

Taking novel creation as an example, the process I envision is as follows:

The first step is to evaluate one's creative time, cost, and final benefits. Assuming you want to write a novel and have already completed the creative concept, you can estimate the required creative time. Let's assume it is 2 years. Then continue to estimate: how much funding do you need to sustain a healthy life during these two years? Let's assume it is 50,000 yuan. And after this book is completed, how much income do you think it can generate over what period of time? Let's assume it is 200,000 yuan over 10 years, 300,000 yuan over 20 years, and no longer considered after 20 years; let's also assume that these incomes are after-tax income.

The second step is to set an ideal return on investment and calculate the proportion of tokenization based on this. Assuming you are willing to provide a double return on investment over 10 years after the completion of the 2-year creation. Then you need a total of 100,000 yuan, an average of 10,000 yuan per year, and an annual return rate of 10,000/50,000=20%. It's still acceptable, after all, it's not a high-profit industry. Over a period of 10 years, the estimated income is 200,000 yuan, so your tokenization ratio is 100,000/200,000=50%. (Note: The work should not be fully or largely tokenized, as this may cause the author to lose motivation to create.)

The third step is to issue tokens. You plan to tokenize 50% of the work you plan to create, for example, by issuing 50,000 "New Novel Coins (XXS)" with a price of 1 yuan per XXS. Assuming you can successfully sell them, you will obtain 50,000 yuan in creative funding.

The fourth step is to start creating and regularly announce the progress of the creation (or agree not to disclose it), while XXS is traded on CeFi, DeFi, and other trading platforms. Of course, users can also transfer XXS privately.

The fifth step is to complete the creation, publish and sell the work, and start generating income for you. For every income you receive as a result, you need to use 50% of it to repurchase the issued XXS and destroy them. To ensure transparency, the repurchase should be conducted on public trading platforms, and you must unconditionally accept the market price. Let's assume that you repurchase using the income from the previous month on the 15th day of each month at 10:00 am. Let's consider the following scenarios:

  • After your work is listed and sought after, the price of XXS tokens has been speculated to 5 yuan per coin, and early investors have already made substantial returns. At this time, if you earned 40,000 yuan from the book last month, you need to take out 20,000 yuan to repurchase 4,000 XXS. Then you transfer these XXS to a burn address.
  • Suppose XXS ends up concentrated in the hands of a single investor who sets a price of 10 million yuan per XXS. In this case, during the monthly repurchase, you may only be able to destroy 0.002 XXS.
  • Your novel is favored by a film company, which buys the adaptation rights for 10 million yuan. In the next month, you need to take out 5 million yuan to repurchase XXS, even if you initially only received an investment of 50,000 yuan.
  • If your work turns out to be worse than expected and does not generate any valuable income, depending on the agreement, investors can only admit the investment failure or receive other compensation.
  • If you fail to complete the creation, you will compensate according to the agreement.

The sixth step is to continue the "repurchase and destruction" process until the specified conditions are met, such as no XXS orders on the market for six consecutive months (although XXS still exists, it may be held by supporters without compensation or the keys may be lost), or the repurchase termination time is reached (such as 30 years later).

Finally, let's talk about another idea. Initially, I imagined that the creator himself cannot retain any XXS and cannot directly or indirectly hold them in any way to avoid manipulating the price and repurchasing more XXS at the same price. But the reality is that this is impossible to regulate, as no one knows who owns the anonymous wallet address. And it seems that it would be more beneficial for long-term investors if the creator repurchases more XXS this time.

Of course, considering that many creators do not have the technical ability to issue tokens themselves, it is necessary for someone to create some user-friendly service platforms to realize this artistic creation tokenization model.

This is just a pure idea and does not take into account factors such as inflation and the cost of revising the work after publication. However, I hope it can inspire readers to further consider the potential value of token economy in artistic creation.

Ownership of this post data is guaranteed by blockchain and smart contracts to the creator alone.