Wearables: Licensing and Economic Modeling

To solve the complex topics of licensing and economic modeling, we’re inviting you to discuss this. Get involved. Where? How about here:

In the first instance, however, we need to settle the economic model of NFTs, especially the number of collections that should be issued. For example, if we issue too many licenses there’s a risk we’ll flood the market, which would defeat the purpose of a licensing program.

How do you guys want to decide on the number of collections? Any thoughts or frameworks?

What is a collection comprised of exactly? How many items?

Hat, Upper, Lower, Feet, Accessory so 5?

Should we start with an Epic or with a Legendary?

User creations should probably not be Uncommon, right?

How will these be distributed initially and at what price?

The average of the last 100 sold Epic or Legendary items?

Is this a good place to start or do we need more advanced questions?

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  • I don’t think collections should be comprised as specific things. For example you shouldn’t say a collection should have one of each (hat, top, bottom, accessory, etc). Maybe limit a collection to say 5-10 items.

  • I think for now collections should have a general theme. A collection should be like a brand. It is fun to collect sets or an outfit. It increases the value of a collection when you own all pieces.

  • I think to start collections should be Epic-Legendary with a few mythic.

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:wave: Thanks for starting this thread @SWISS.

I agree with @Ambrose that collections don’t need to be composed of items for each area (head, upper body, lower body, feet and accessories).

Growing up I made t-shirt collections. Sometimes I would also design a matching hat. So in this example, a collection would be a series of 4-5 branded shirts and maybe a hat.

Also, I think items in a collection should be Mythic and possibly Legendary. There is greater value in exclusivity, imo.

Its tricky with Mythics and Legendaries. When you have too many Mythics then those go down in value because mythics then become too abundant. If we all sold Mythics they wouldnt be so exclusive.

One thing I had suggested to DCL blogger in discussing who should be able to mint Mythics and Legendaries was to have tiers for vendors based on sales. So let’s say starting off all vendors could only mint Uncommon and Swanky. This wouldn’t flood the market with 10k items as they’re minted as they’re bought. As a vendor sells more he accumulates points and can then redeem these points for a Legendary mint or Mythic Mint, etc. Or have some kind of system that gives higher quality vendors the privilege to be able to mint rare items. A sort of prestige mechanism that rewards the better creators with the chance to sell the more expensive rare items.

I’m not sure I understand your logic regarding Mythics. Mythic only means there is a hard cap of 10 editions. How can Mythics (as a rarity level) go down in value?

There’s a hard cap of 10 and thats one level of rarity. Say on the market right now there was 5 (50) different types of mythic boots and tomorrow there was 100 (1000) different types of mythic boots, overall market value of mythic boots would probably drop because now you have 20x to choose from.

Im basically trying to say that Mythics should be hard to mint. I don’t think everybody with a license should automatically be able to mint all Mythics if they wanted to. There has to be a balance.

In CryptoVoxels there’s no level of rarity to wearables. You can mint 1 or 10000 and the value is determined by free market. In DCL there are levels of rarity that automatically give items value. It could be the least desired item but because it is a mythic it will carry some value. If you want to maintain that then you have to keep an order and not flood the market with Mythics.

In this example, the design of the boots would be different. They would also have to be approved first. So although the boots are Mythic, they are created by different brands/designers and thus unique in appearance. It’s like having a Mythic Yeezy, a Mythic Air Jordan, a Mythic Balenciaga and a Mythic OFF-WHITE.

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Well take Yeezy for example, they used to be really expensive if you bought on the secondary market. Now they resell for not much over retail. They have flooded their own market with so many different Yeezys there’s not enough to sustain the high resale they used to have. Some don’t look much different than the last.

And who would approve of designs? Maybe this was already established and I don’t know about it.

And in this example who would want to be Pay Less or Sears? Wouldnt eveybody want to be Off White and just solely sell Mythics?

These are branded collections. If your brand is Payless, or Sears, or OFF-WHITE, or whatever, that’s YOUR brand. I think you are missing my point.

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I understand what you mean about branding and that every brand will be different. My point is there has to be something to prevent you or me from producing solely Mythics.

What about Female vs Male ? Could 1 collection contain a mix of both as long as it is limited to 5 items lets say?

The DCL team clearly states that this is going to be an experiment. While I am not a Mythic holder, from an economic point of view I think this category must be protected, and most definitely at first. The large denominations like Uncommon are definitely more useful for corporate promotions. So I would also lean towards Epic for the experiment and then Legendary.

I think the licence itself should define what level of rarity the item will have. 1 licence for 1 item or collection of items (for example 5).

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1 thing I would recommend to stay away from is providing specific priviliges to a select few, even if it is based on merit such as sales or votes. Down the line this will lead to monopolies and guilds that are motivated by profits only, which will inevitably lead to an economical collaps as new users will have less opportunities (and they will become the majority eventually)

I see both points here. I would say, that the number of valuable items has to be somewhat proportionate to the size of the economy. We also do NOT want to have Mana glasses that are worth 1000000 Mana (and I do own a few) because there are only a few value storing items on the platform. Some dilution is required and is healthy.

Just to be sure this is not missed. The rarity should be defined at the licence level and not picked by the creator. That seems like an obvious one to me. At least I do not see an argument for the other side unless NOT having mixed collections is a deal breaker for the majority.

More important is the question about Who is going to approve? We should be really careful in designing this process with the future in mind. Otherwise you are destined to put the whole industry at risk by selling out to a few select who might or might not like YOU or your associates, or just your tase in wearables. It is bad enough that it is inevitable to have wealth decide your weight in the DAO voting, which seems inevitable and at least somewhat fair in one dimension.

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I hear you, but that’s exactly what the License does.

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It depends on how you decide who gets the licences.

And what is a licence in the first place? For me this is a ticket to create one collection for 1 rarity type. Should it be tradable and should it be valid for a limited time frame only?

I would think the license is for a creator to be able to make and sell wearables period. That the creator has been vetted and deemed to make wearables that meet a quality standard.

I understand the idea here, but having someone to decide who gets a licence or not is not a decentralized. Who gets to decide? And why? I think we need to find scalable solutions that are trustless and without subjective opinions. Everything should be based on that principle. If I want to waste a licence on the ugliest collection ever, that should be my right. Can we find a solution with that in mind other than opening it up completely? What could that look like?