Jack Butcher, the minimalist design wizard behind Visualize Value, is making waves once more. This time, he’s the one sparking a debate about NFT royalties. His stance? "You're getting paid on churn." Ouch. But is he right? Absolutely, and here's why it matters.
Is Royalties a Ponzi Scheme?
Let's be blunt: the current NFT royalty model is unsustainable, and Butcher’s rebellion is a much-needed wake-up call. It's all about incentives. Artists do live on secondary sales, and they should! This begs the question: are we creating an environment where hype and churn are prioritized over real authentic artistic creation?
Think about it like this: Imagine a painter who only gets paid every time their painting is resold. Would they focus on long-lasting art? Or would they just be interested in creating the market hype and making their work “flippable”? The incentives are misaligned. This change is quiet but nefarious. It converts artists into marketers and art into a speculatable asset, like some kind of Ponzi scheme where the early adopters benefit at the cost of the people who come after them.
Butcher’s approach with Checks and Opepen is a compellingly innovative alternative. Checks explores questions of digital identity, while Opepen dives into the waters of collective authorship. Both are experiments that depict a passionate commitment to building culture over cash flow. He made Checks $8 and Opepen a free mint. It’s about re-engagement with place, accessibility, community, and allowing the work to speak for itself. He says the intention is to gauge how much developers might be willing to pay for access. His goal is to know why they want to infiltrate the culture.
This is not to devalue the art, rather we are calling for a re-examination of the economic model.
Web3: Utopia or Pyramid Scheme?
Web3 promised to liberate creators, a naïve-sounding belief rooted in utopian ideals. Instead, it sometimes turns into a dogged pursuit of “number go up.” Royalties, though on the surface appearing to be creator-friendly, can make this issue worse. Unless that is, they want to turn Web3 into a pyramid scheme. Rather than drive real value, the impetus will be on wringing fees out of an erratic marketplace.
Consider Naval Ravikant’s influence on Butcher, particularly the idea of "How to Get Rich (without getting lucky)." Ravikant emphasizes leverage and building long-term value. Royalty-dependent artists are at the mercy of luck – the luck of their work remaining “hot” and therefore tradable.
Here's where the "uncomfortable truth" comes in: we need to rethink the fundamental economics of digital creation. Are we building an art ecosystem that encourages artists to make more art? Or are we creating one that incentivizes them to push their current creations?
| Feature | Royalty-Driven Model | Sustainable Web3 Model |
|---|---|---|
| Primary Incentive | Secondary Sales | New Creations |
| Focus | Trading Volume | Artistic Merit |
| Risk | Hype-Driven Bubbles | Slower Growth, Solid Foundation |
| Long-Term Vision | Short-Term Gains | Lasting Cultural Impact |
Global Regulations: A Necessary Evil?
Butcher’s position has far-reaching global regulatory ramifications. If NFT royalties are considered a type of potentially harmful market distortion, regulators could take action. We know the SEC is already sniffing around the NFT space. Imposing new regulations on royalties would only hamper innovation and push creators to other platforms. Without a sustainable model, the case for government intervention grows stronger.
The challenge is to establish a framework that fosters responsible, long-term expansion. This framework will safeguard artists from harm while maintaining a fair and open market free from scams and manipulation. We have a short window to construct an inclusive web3 ecosystem that is secure.
- Mandatory Royalty Disclosures: Requiring platforms to clearly disclose the royalty structure and how it impacts pricing.
- Caps on Royalties: Limiting the percentage of royalties that can be charged on secondary sales.
- Sunset Clauses: Implementing time limits on royalty collection, forcing creators to continuously innovate and engage with their community.
The answer isn’t getting rid of royalties, but to create more diverse streams of revenue and incentives to create long-term value. 7 revenue streams to consider — I’m talking subs, gated content, community memberships, and yes, even double gasp good old-fashioned patronage.
Butcher’s rebellion It’s not just NFT royalties that Butcher’s rebellion is taking aim at—it’s the soul of Web3. Are we creating a decentralized utopia or a decentralized casino? The choice is ours. And it begins with an open and honest dialogue about the unflattering realities of creator economics.
Butcher's rebellion isn't just about NFT royalties; it's about the soul of Web3. Are we building a decentralized utopia or a decentralized casino? The choice is ours. And it starts with a honest conversation about the uncomfortable truths of creator economics.
