Appendix A. Creativity Value Model

Describes creativity value model and types of metadata associated with it

Marcus O’Dair in his book Distributed Creativity - How Blockchain Technology will Transform the Creative Economy, breaks down the value of creativity into economic and cultural, where cultural is further subdivided into six other values:

  • Economic

    • value represented by money

  • Cultural

    • Aesthetic

      • the pleasure we take from listening to a song or looking at a painting

    • Social

      • the connections with others, and the sense of identity and place, that the creative economy helps to cultivate

    • Spiritual

      • the understanding and insight promoted by сultural work

    • Historical

      • a sense of the past, embodied in a work of art , helps illuminate the present

    • Symbolic

      • the meaning conveyed by cultural objects

    • Authentical

      • which derives from the originality and uniqueness of a work

There could be other values, aside from the economic and cultural listed here, for example, contextual, by providing some important context, but for now let’s focus on the ones that are listed.

We can make an argument that the economic value of an instance of creativity is a function of the other value categories represented in some units. For example social value can be represented by the number of likes and comments on social media, spiritual and symbolic by the quality of cultural notes explaining the meaning behind the artwork. So essentially we have a model of a temporal value chain, where over time the changes in the vector of cultural values will impact the output economic value and where the instance of creativity can be represented by an NFT.

Just as we said, NFT can be anything. Just an idea passing through your mind that seems interesting, can be captured into some form of digital media, a text, a video, or a sound and be used as an initial seed of some creative process represented by a minted NFT token. It may just stay there, on Cardano blockchain with no attention, or it could be further developed by you, or by others who will be collaborating with you, and will be adding layers of value, like an onion and increasing its economic value potential.

We don’t have to look far for the concrete examples. All the recent NFT collections minted on Cardano blockchain, transform authentical value of originality and scarcity straight into the economic value of ADA tokens. Nathan Evans’ initial aesthetic value of the Wellerman sea shanty on TikTok, has been complemented over time by added aesthetic value of the other talented singers and musicians, and later by historical value of articles about sea shanties and 19th century seamanship, then by social value of creating a fan base, and even, arguably, a symbolic value when a symbol of our times Elon Musk had twitted about it.

The creative value chains can be premeditated and contractual, where a group of musicians work together on a song with clearly defined roles and expectations, but could also happen completely organically, like being picked up on social media.

If we can’t formalize this function to derive the economic value of NFT automatically, at least we can preserve all the metadata that is associated with NFT with complete history and let people make their judgement about it’s economic value by making this metadata available and presented in some easy to understand fashion.

We already do this every day. When we shop at Amazon, we look at the customer reviews. In this instance, the product that we shop for is the NFT and the customer reviews is it’s metadata. Despite the product being already priced for us, we make our own judgment about it’s true value and if it is worth the listed price. An economic potential of a scientific whitepaper (NFT) can be judged by how many of the peer reviews (metadata) have stated that it has a chance of successful monetization.

Once NFTs, which currently mostly represented by digital art collectibles, will get over it’s initial craze, and people will start being more careful of what they purchase and how much they spend, availability of such rich metadata collected from the creative value chains, will be crucial for forming an informed opinion about true economic value of the NFT and it’s potential for increase in order to attract investors and collectors.

NFTs can also be looked at as micro-startups of creative people on the planet. Everyone has creative potential, but only a few of us get lucky to be able to consistently monetize it. Once you have an idea either to record a song, or create a digital drawing, or write a book this is when this micro-startup is formed and in order to bring it to successful monetization, it has to go through certain stages of development that will increase its value in the eyes of a potential customer. This is not unlike business startups, which could be VC-backed and go from seed financing to the successful IPO.

In this micro-startup analogy we can clearly distinguish between a “value forming system” and “payment distribution system” for NFTs. Value forming system is a value chain that consists of processes that help a creative asset represented by NFTs to be produced and to grow in value. And if someone invested in it or interested in potentially buying it, they need to see progress in real time. And then, once the economic potential of NFT is reached, it can be monetized and the proceeds have to go to everyone involved, either with a contract that includes royalties to the original creator and key collaborators, and even some little tips to someone who helped promote the NFT product with likes and comments, or by community voting how the proceeds can be fairly distributed if the resulting product has created organically, like Nathan Evans’ Wellerman.

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