Brands versus fans: an NFT tale
“While brands have traditionally been planned and designed directly by corporations, the rise of networked media has challenged the coherence of centrally-managed brand identities. New blockchain-based decentralized organizations take this a step further by giving users financial incentive to spread brand narratives of their own.”
Historically, small groups of people with brilliant ideas congregate, forming a centralized authority to realize their dreams. Sometimes these dreams are realized by a wider audience, thereby surpassing the realm of the few to the realm of the many, transforming into a brand. Legal protections, federal or otherwise, have long been in place to distinguish and protect brands that benefit from such exclusionary measures. But to what extent are such measures necessary when brands’ consumers create and remix their favorite brand’s offerings to grow the brand’s audience? Does such behavior dig into a brand’s market, diverting resources away from brand growth, creating competition and confusion in the marketplace regarding what is and is not part of a brand?
Over the next few years, a litany of cases is bound to rise reflecting the lack of consensus between brands and their fans as both attempt to grow their spheres of influence in the web3 metaverse. The nature of the problem is that brands wish to maintain control and micromanage every aspect of their public perception and image, while fans have some idea of the brand that is extra-control; the human mind can certainly be hacked by marketing specialists and specialized marketing teams but ultimately, the human experience is too complex to be controlled fully by any centralized party, even if the point of contention is a lovable and loved product or service that is distinguished by a federally protected mark.
The weirdness of these points of conflict arising from fans’ overzealous brand involvement is that ultimately, these fans’ efforts seem to build upon brand perception and offer free publicity by tapping into unconventional (whereas “conventional” pertains to web2 or previous methodologies) network effects that grow a brand’s sphere of influence into unexpected markets and in refreshing ways.
Of note, brands need not be built solely by companies anymore. Indeed, small groups of decentralized nodes on a blockchain network offer the high propagation and throughput needed to build a brand of reputable size whereas yesteryear, to build such a brand would require traditional media techniques and middlemen. Today, any artist or celebrity who builds themselves out to be such can indeed be a brand. Basquiat and Warhol would have been proud. It is much easier now to align brand owner incentives and customer preferences using the real-time effects of social media discourse.
In this paper, many new network effects will be discussed including how users of a brand’s products can interact with each other and the brand itself using social media, thereby pumping the brand through their network and those who interact with it, passively or actively. Key analysis in this paper includes NFT PFP (profile picture) projects, which are indeed the apogee of customer brand engagement. Such NFT projects are central to the idea of brands collaborating and working with their stakeholder fans because these users pump their own bags. But who benefits the most, the brands, or the fans, or do both parties benefit equally?
On one level, not often are particular PFPs independently valuable because more often than not, outside perception of a brand consists of the brands’ offerings as a whole, i.e., the totality of their PFP collection, rather than individual PFPs. Consumers mostly think of Bored Ape Yacht Club or CryptoPunks as whole collections rather than thinking of a particularly rare example from each set as one that stands apart in new and exciting ways.
Yet, some of the PFPs from these collections are independently valuable because of the commercial rights offered to all owners of these NFTs and what some token owners do with their PFP. For example, some BAYC token holders have started other brands using their NFT’s particular ape. Later in the paper, there is an analysis of Bitcoin and Ethereum as brands, which are great examples of intentionally decentralized brands. Perhaps analogies can be driven from these examples to other areas, including political parties or ideologies.
II. What is a Brand?
As famous brands and their loyal customers venture into web3 and the metaverse, conflicts have arisen, sometimes in the form of lawsuits. For example, a couple of months ago Hermès International and Hermès of Paris, Inc. filed a lawsuit against Mason Rothschild for trademark infringement under the Lanham Act. Rothschild made the grave error of creating an NFT collection that amounts to a brand, “MetaBirkins,” perhaps a brand that is not too dissimilar from the one exuded by Hermès’ famous Birkin bag that fans have adored for decades. But do these digital representations of the infamous Birkin bag infringe upon a brand so carefully curated and marketed by Hermès to its fanbase? Why should centralized entities like Hermès have all the fun? Rothschild certainly is not drawing away Hermès’ rich market to his brand by selling these NFTs, or is he? In the past, brands have been built by companies. In more recent history, network communications through the Internet allowed a variety of challenges to the identities of centralized brands and these brands’ various ethos. Blockchain technology takes these challenges a step further by introducing decentralization and facilitating monetary gains to those who wish to question a centralized brand identity, perhaps to begin a new or different story associated with a famous mark. But perhaps some of these challenges are in fact a natural consequence of capitalizing on successful branding. Community-driven and decentralized brand initiatives have started to take hold on the Internet thanks to blockchain technology. These projects often do not have a centralized way to manage themselves.
A federally registered trademark associated with a brand offers federal protections to a set of ideas, speculation, perception, and clout associated with a business. This business can be either a seller of goods or a good itself. Different brands mean different things to different people and the goals of a centralized authority that operates a brand often differ from the market of the brand’s customers. While a product and a brand are not interchangeable, each rather influences the other in astounding ways.
Customers and noncustomers alike interact with brands, forming individualized perceptions of what that brand’s product means to them. Since a trademark-protected brand is not a particular product, copies of it, the brand’s ethos, or the brand’s aesthetics, what is a brand? Brands are carriers of cultural clout and culture is established by people, both customers and noncustomers alike. All those who know about a brand have a rent-free location in their mind for it.
As a brand expands its influence, its reputation often precedes it. Sentiments abound, a brand is a consensus made by people who either believe in it or do not believe; facilitating a uniform set of beliefs that enter both the economic and social spheres of culture.
III. Centralized Brands
Before the Internet swept through the dot-com era and established the web2 economy, broadcast media offered companies ways to control their exposure to various audiences. Consistent messaging in advertisements by various centralized middlemen media entities reached markets, potential or otherwise. But peer-to-peer communications about brands were rather limited by the lack of the Internet and all of its wonderful capabilities.
Thus, middlemen aggregators of information, like the “Yelp-before-Yelp” magazines like TripAdvisor grabbed the opportunity to produce information about brands that reached millions of people, establishing themselves as arbitrators of brand credo and credibility. Now that the Internet has allowed ways to circumvent these middlemen, centralized brands have become increasingly volatile in their ability to maintain consistent messaging about themselves. Thanks to Section 230 of the Communications Decency Act, barriers to publishing have fallen through the floor and anyone with an Internet connection can access published information facilitating peer-to-peer communications like never before.
Thus, online platforms offer ways to make information aggregating middlemen less relevant, introducing new peer-to-peer communication channels about brands and branding. Social media sites are now an essential part of any brand, especially because of the dominant reach that social media has with respect to public discourse. Brands are defined by the people that notice them. Thus, the ease of accessibility to information about brands affects them.
And since consumer goodwill is suddenly brought to the limelight, both positive and negative publicity about brands circulate rapidly throughout social media networks. Smaller companies often will have a small team associated with brand management, including managing consumer expectations and perceptions about a brand. However, thanks to social media, the rapidity of important information dissemination occurs in real-time, posing a tough challenge to marketing departments to keep up with consumer goodwill of their preciously trademarked product.
Think for example, of the recent media storm when Elon Musk announced his bid to buy Twitter outright. Or how Netflix’s apparent downfall echoed in whispers across Twitter, all the way down from the infamously popular hashtag #netflixandchill.With such a multitudinous feed of information generated by social media, centralized brand managers are forced to employ both reactive and proactive measures to maintain a certain brand impression across cultural spheres of influence. Reactive strategies usually involve using current events to manage consumers’ impressions of a brand in real-time, while proactive measures attempt to generate information that proliferates widely throughout a brand’s perceived market.
Some other proactive measures try to convince consumers and fans of a brand that they must act to identify themselves strongly with the brand. And so, users can be used by brands to promote awareness and even stand up for the brand against negativity. That being said, in today’s climate, such efforts by a centralized management team to control brand image, with real-time and widespread peer-to-peer discourse, is a Sisyphean task. Today, brand management is better seen as distributed and permissionless rather than top-down hierarchical. A lie may travel faster than the truth, but memes travel the fastest of all.
IV. Decentralized Brands
Centralized brand owners employ governance tactics like employing the use of trademark protections and strategy-based management to maintain control over assets associated with a brand. Thus, proactive measures previously mentioned including employing a userbase to fend for the brand would detract from the centralized entity’s ability to control brand image fully. But this is just one instance that indicates there is a paradigm shift impending with regards to what a brand is and can be.
What if a brand was instead based on the ownership of a set of rules that is proliferated amongst a market that supports it? When the distributed network of users of a project also generates the project’s productivity, who has the authority on brand management? If consumers own a portion of a brand, say in the form of an NFT, they are well positioned to gain financially from that brand’s increased adoption.
Therefore, these brand consumers would likely be incentivized to increase awareness of their affiliated brand to generate clout about their involvement with it. Think for example of the Bored Ape Yacht Club (hereafter BAYC), whose brand users are feverish about constantly, daily, and sometimes hourly, posting and generating hype about their involvement and their good fortune to “ape” into the BAYC back in April 2021, or to have bought a BAYC NFT soon after the tokens first went on sale by their creator, the centralized entity Yuga Labs.
Yuga Labs presents an exciting approach, in fact, their success may likely be attributed to their ability to remain a steward of their associated brands, rather than a centralized entity that prizes control above all.
For example, recently Yuga Labs acquired several key copyright franchises from Larva Labs. This acquisition, in the NFT space, is akin to Microsoft purchasing the iPad, iPhone, and iPod IP in toto from Apple, which imaginably would require a princely sum. The most interesting aspect of Yuga Labs’ purchase, however, is that Larva Labs always remained unclear about the copyrights that owners of their NFTs were given along with the purchase of that token.
For a long time, Larva Labs refused to specify what rights those token holders were given, which was a thorn in the side of the encampment that trusts in clout over control. Then, in September 2021, Larva Labs signed a deal with United Talent Agency which allowed UTA to represent Larva Labs’ foremost franchise, the CryptoPunks, in movies and television, among other media sources.
When Yuga Labs bought CryptoPunks and other key intellectual property created by Larva Labs, they expressly said: “As a first step, we will soon be granting CryptoPunks and Meebits holders the same commercial rights that BAYC and MAYC owners enjoy.” Indeed, Brian Frye, who has written extensively about the two ends of the copyright licensing paradigm existing in the NFT art space indicated that brand longevity was more likely in BAYC compared to CryptoPunks because of the commercial rights afforded to BAYC token holders.
CryptoPunk NFT holders on the other hand merely could boast that a particular punk belonged to them, and that was it. The BAYC token holders have since enjoyed the fruits of their freedom to help build this brand from the inside out as distributed consumers across a network that are separated by all but the most fundamentally important thing: they all own a BAYC, or perhaps another lesser-valued Yuga Labs token, like one from the Mutant Ape Yacht Club or the Bored Ape Kennel Club. For one thing, BAYC tokens have now surpassed CryptoPunks as the most expensive PFP (profile picture) NFT collection of all time.
Further, these BAYC token owners have been able to use their BAYC token’s likeness to brand a fast-food franchise, make skateboards, and create sculptures and art, to name a few. Indeed, there is even a BAYC beer, Cranky Ranky IPA. CryptoPunk token holders, meanwhile, have mostly remained stagnant with regard to distributed brand building and wealth generation. Perhaps this is because Yuga Labs has consistently, since their BAYC token offering in April 2021, created new but lesser-valued projects that feed into the BAYC brand universe.
Larva Labs’ creations post-CryptoPunks had little to nothing to do with building a brand around CryptoPunks, which were in fact a forgotten NFT project from 2017 that suddenly blew up in late 2020. Indeed, CryptoPunks holders consider their respective tokens to be certificates of authenticity of works of art, whereas BAYC token holders use their tokens to compound wealth creation via decentralized brand management tactics. BAYC token holders can be considered brand advocates of the Bored Ape brand universe.
On Twitter, #apefollowape is a common hashtag used to encourage network connectivity between these distributed token holders and brand consumers. Web1 and web2 network innovations removed any marginal cost to disseminate brand image, thereby empowering cultural networks to drive the narrative of a brand, which caused many overhead issues, including dealing with real-time social media issues and relying upon influencer marketing. The decentralized ownership, clout, and contribution model espoused by web3 create a threat to brand cohesiveness, while also offering a new opportunity to capitalize on driving community unity.
Another pertinent example can come from Bitcoin, an early pioneer in the emerging decentralized brand model. Bitcoin and Ethereum are the foremost cryptocurrencies and can be compared to look at decentralized brand strategies and what makes some more successful than others. Bitcoin is a strong brand for several reasons, not limited to the almost legendary origin story of the brand. The pseudonymous creator of Bitcoin has since completely disappeared from public discourse. Subsequent brand assets including visuals, communications, and placement have been since developed by community users who are also stakeholders in the Bitcoin brand. Rather dissimilarly, the Ethereum core team remains active and the founder of this blockchain brand, Vitalik Buterin, is fairly outspoken as a public figure.
Buterin often voices his opinions on decentralization, the future of Ethereum, and his thoughts about the crypto space, and is heralded as a celebrity by those involved in the web3 community. Despite these differences, Ethereum also maintains a strong brand impression among its stakeholders and noncustomers alike. While the core stakeholder-contributors of Bitcoin have driven the brand narrative there are also other stakeholders who have also significantly contributed to brand dynamics.
For example, Ross Ulbricht built a peer-to-peer Bitcoin-based transaction network to facilitate the purchase of absolutely anything, including illegal goods and services, called the Silk Road 2.0. Others have acted less deleteriously toward brand perception. The narratives woven by different Bitcoin stakeholders may conflict with one another, but nevertheless, contribute to the brand’s publicity and broader awareness. These differing perspectives by contributing stakeholders drive market dynamics and ebb and flow with respect to capturing and losing different buyers.
Relatedly, Ethereum was originally positioned as a “global computer” whereas now some popularly consider this blockchain technology more like “money lego.” These perceptions of the Ethereum brand are contributed toward by the brand’s stewards, who are well known, and also by the millions of stakeholders who actively contribute to the brand’s image. Recently, with the boom in NFTs especially since most NFT smart contracts are implemented on the Ethereum blockchain, a flood of new stakeholders has entered the brand’s sphere of influence.
Some NFT artists have significantly improved upon the positive impact of Ethereum as a brand, such as uplifting artists out of poverty, redistributing wealth more evenly, and providing a means to develop new ways to interact and improve the human experience using this peer-to-peer, decentralized payment system. On the other hand, environmentalists and blockchain detractors have criticized Ethereum’s contribution to climate change due to the monumental computational power required to transact NFTs on the Ethereum blockchain. This is because Ethereum uses a “proof of work” system to verify transactions as they occur in real-time.
This verification system is far less energy efficient than a “proof of stake” system. Countering this negative brand image, Buterin has, over the past few years, promised an Ethereum 2.0 that will use a proof of stake transaction approval system. The core development team behind the brand is working fervently on this new product but has kept most details away from the public eye. Bitcoin has succeeded in ways Ethereum has not.
Bitcoin maximalists, for example, are people who believe in some future hyperbitcoinization event, where Bitcoin supplants fiat currency to become a single, sovereign alternative that has no ties to any nation-state. Bitcoin’s founding stakeholders put together in place several design decisions that have since allowed the brand to grow organically in the absence of structured and centralized brand management.
The immutability of these core Bitcoin tenets has allowed various stakeholders to join the brand and build their own story; this is crucial for the growth and development of a strong brand. Most famously, Bitcoin has two brand variations that are most famous, BTC and BCH. When Bitcoin forked, BTC and BCH were the results. However, BTC holders dumped their equivalent BCH on cryptocurrency exchanges while holding onto their BTC with diamond hands. Since the fork, BTC has strengthened as a brand while BCH has floundered after suffering several forks thenceforth.
Bitcoin’s evolving brand stems from three main aspects of its brand. First, Bitcoin is completely decentralized, so there is no centralized brand management team that attempts to seize control of the brand and perform this tantalizingly difficult task in today’s world rife with Internet and peer-to-peer blockchain innovations. Second, Bitcoin’s brand is built upon immutable design protocols that do not need centralized or decentralized management to fully function. Third, Bitcoin stakeholders are workers within the network itself, both categorizations of which are likely to benefit from increasingly widespread adoption of the Bitcoin brand and protocol.
Bitcoin consumers have a financial interest in spreading the recognition of the brand to non-users. Since brands are a cultural consensus mechanism, the multiple brand images and perceptions as developed by stakeholders converge upon the dominant brand representation, BTC. The Bitcoin hard fork into BTC and BCH constituted a divergence in the brand’s impression as narrated by its most controlling stakeholders, who are also Bitcoin consumers. This fork ultimately has resulted in two Bitcoin brands. Decentralized brands like Bitcoin and Ethereum are at risk of brand dilution due to narrative differences in the brand community.
Much like the tearing of the Bitcoin brand asunder, Ethereum also suffered a fork (due to a major hack), resulting in two Ethereum brands. This begs the question; to what extent is it necessary to control and mitigate narrative divergences within a decentralized brand that results in multiple brands? Should we allow such organic activity to allow decentralized brands to naturally develop their own respective images and impressions? These are questions that remain to be answered.
At any rate, decentralization seems to be the best way forward with regards to brand management in the age of web3 and social media, compared to centralized brand management.
V. Reconciling Decentralized Brand Building Tactics with Centralization’s Need for Control
The traditional product development lifecycle has massive limitations when applied to the modern crypto economy, where many blockchain networks are not corporations. While startup teams can attempt to make a product fit into a market segment, a decentralized brand design must instead rely upon distributed network efforts and collaborative incentives to survive and thrive. This decentralized branding design begins with widespread distribution of tokens, fungible or otherwise, and a permissionless brand-building protocol that allows product innovation that activates the tokens for utilization.
The stakeholders in a decentralized brand, who often are holders of a brand token, generate competing brand imagery and use cases that are simultaneously experimented with in a real-world setting. Indeed, projects, decentralized or not, find the market for their product offerings in web3 by not actively searching for such a market.
Since web3 is highly decentralized, brands do not seek the right market, but instead allow decentralized communities to find their own solutions, and perhaps, the right products. Brands must then simply allow themselves to evolve organically to capture markets with potential products and services.
Narrating multiple ongoing brand impressions, along with developing new use cases and testing the new products is decentralized work spread among the stakeholders of a brand ecosystem. That being said, it must be stressed that decentralized brands do get pitched, they just get pitched in a different way than how a centralized authority would pitch any brand they are in control of.
Decentralized brands then must take advantage of token distribution to incentivize and build brand loyalty. There are three main ways this can be accomplished. First, a decentralized project can sell a compelling idea to an open market that is subject to a few rules. Second, early community stakeholders can participate in the testing of new prototypes, some of which drive utility and thence growth of the brand. Third, the network that the brand relies upon strengthens the value of the brand’s tokenization and pushes that brand design to converge upon one powerful narrative.
Tokens at their inception are not digital stores of value, but rather promises of “future celebrity” or “future success.” Tokens attract an audience by drawing upon consumer goodwill. Simple promises of trust have created empires in the crypto industry. When Bitcoin and Ethereum first became public, neither held any inherent value but merely promised the ability to transact over the Internet without regulatory intervention. Neither Bitcoin nor Ethereum could be called money as neither had value in exchangeability.
A particular brand’s nonfungible tokens or NFTs hold the essential promise that one day these tokens will have actual value, if not already. Consider NounsDAO, for example. When this decentralized protocol was first released, each NFT associated with the collection was sold for peanuts. Now, a single Nouns NFT goes for over $200,000 at a minimum price at minting. NounsDAO was started by an anonymous NFT collector who famously sold his CryptoPunk during the period prior to Yuga Labs’ acquisition of Larva Labs’ key IP.
The challenge for a DAO, or decentralized autonomous organization, is to avoid any centralized management of brand impression and consumer expectations as soon as they are able to, thereby allowing the community of stakeholders to fulfill their promise of positive brand involvement to grow the brand. This would satisfy the decentralization requirement of a DAO or decentralized brand to sustain itself via the distributed network of the brand’s consumers.
The notional value of Nouns NFTs at their early stages is controlled by consumer expectations and brand impressions more so than the actual utility of these NFTs. Speculative desire drives the movement behind a growing NFT brand like Nouns.
⌐◨-◨ ⌐◨-◨ ⌐◨-◨ ⌐◨-◨
Nouns are defined by this “meme-able” pair of sunglasses, ⌐◨-◨, which some claim are as iconic as the Nike Swoosh, and are plastered all over Crypto Twitter like graffiti on a wall.
When DAO projects stagnate at the narrative or brand design stage without going further, they simply illustrate that marketing a brand is a form of proof of work. Here, blue-chip or Veblenesque spending indicates the intention of stakeholders to continue their investment in this DAO. Indeed, it would seem with the Nouns NFT floor price tag to the tune of 65 ETH or $200,000 may currently be stuck at this stage.
However, several spin-off projects that utilize Nouns IP have emerged, indicating that the community is driven not only by the investment potential of this DAO but also by their ability to explore narratives beyond that which is illustrated in the brand design or marketing protocol. One example is a Nouns coloring book. Another is 3D printed fashion design inspired by the Nouns’ distinctive illustrations that are associated with each NFT generated each day, forever. The most exciting example comes from a known person who does not live pseudonymously on the blockchain as is often the case in web3.
Salvino D’Armati is building commercial pairs of the Nouns sunglasses that are a popular meme in the crypto community and easily spotted from a mile away for their distinctive look. D’Armati is a proponent of CC0 creative commons licensing that allows anyone access to the use of potentially valuable information free of charge. CC0 NFTs may yet pose the best transition from centralized brand management and its control paradigm to decentralized DAO branding that prizes clout above control.
Fundamentally, copyright is incompatible with NFTs, as tokenization allows an IP creator or DAO brand to simply offer the future promise of value of that IP rather than to play “literary landlord.” Before the web3, IP owners who are usually centralized brand hubs could only monetize upon their IP by extracting value from fans and consumers of that brand. DAOs propose something else entirely; fans and consumers could further the brand by investing in the future success of that brand via the brand’s tokens.
Tokenizing IP via NFTs allows DAOs to capture the value that becomes inherent to the asset. The incentives thus change; noncustomers and so-called “others’” usage of that tokenized IP build the DAO’s brand organically, thereby increasing the value of the consumers’ efforts to invest in that brand. DAOs are not necessarily open-source protocols as this may likely result in an unsuccessful result recalling the previous discussion of Bitcoin and Yuga Labs who began their respective branding by setting specific brand design and marketing protocols that steward each brand’s direction without the need for centralized management.
A free-for-all chaotic and anarchical system is likely to result in the brand’s demise. What is the right organizational structure for building an NFT DAO IP protocol? How does a decentralized brand incentivize its stakeholders to produce a flourishing ecosystem of derivative and second-layer integrations of their IP, as in Yuga Labs’ collaborations and NounsDAO’s ability to generate spin-off, but on-brand, projects? With respect to the first question above, one example is Blitmap.
Blitmap is a project that attempts to start using a centralized brand management strategy focused on the top-down development of brand components, while progressively decentralizing different components. NounsDAO began as a decentralized brand that maintains a continuous source of funding by allowing one lucky minter to auction that day’s Noun. NounsDAO thereafter aggressively funds stakeholders’ efforts to proliferate Nouns IP, including the projects mentioned above.
Even Budweiser bought a Nouns NFT that was unique because it had the iconic sunglasses on top of a character with a beer can for a head. NFTs truly revolutionize CC0; nobody can own the copyrightable aspects of key brand IP, yet blockchain technology still proves that the brand stakeholders own the token signifying the original art, image or other CC0 nonprotected work.
CC0 NFT decentralized brand protocols have the potential to grow and connect consumers and noncustomers alike in brand universes that are owned by the stakeholder community, driven by community narratives, and proliferate community-grown technology and intellectual property that fits the brand’s market and ethos. The forays of fans into the wonderful world of NFTs as a community-driven decentralized brand experiment against the wishes of centralized brand management teams continue to irk these centralized teams, thereby earning media scrutiny. Nonfungible Olive Gardens received a cease-and-desist letter from Olive Gardens for simply selling NFTs depicting Olive Gardens storefronts across the nation to loving fans of the franchise.
Burnt Banksy received no communications from Banksy after he burned one of the legendary graffiti artist’s stenciled works and sold the video of the act as an NFT. The guy who blew up a Lambo also received backlash from Lamborghini who was appalled that anyone would destroy one of their perfectly functional and beautiful vehicles for “artistic reasons.” MTGDAO, a decentralized branding protocol attempt was swarmed by Magic the Gathering fans who hated the idea that their beloved card game was being NFT’d without their overlord Wizards of the Coast’s centralized brand management team’s consent.
Thus far, however, there are only a few legal actions by a centralized entity to crush the efforts of a fan community to begin a decentralized brand protocol. One comes from Hermes vs. Rothschild regarding the MetaBirkins vs. Hermès dispute. Other forays involve Nike vs. StockX and Tarantino’s unfortunate attempt to web3 Pulp Fiction. Perhaps now is the time to focus on competition policy. What can we achieve differently with trademark law and how should that shape the way we perceive brands as decentralized but collaborative nodes on a network? What can these emerging web3 paradigms teach us about how technology is changing markets and thereby changing competition equilibria?
These are questions to be answered as we observe the effects of these new technologies on existing and nascent markets alike.
A decentralized DAO movement is essentially a meme. Memes do not belong to anybody and can be infinitely passed on and edited by anyone with an Internet connection. A decentralized brand offering cannot be designed in full, top-down, forever, especially with the advent of web3. What a brand needs are a very limited set of starting rules, much like the Constitution of the USA, that allows a brand to grow organically as it evolves over time to capture not only markets but the hearts of people.
This will, unfortunately, lead to the age-old textualist versus intent debate, but so far U.S. America is doing well for a decentralized brand protocol. DAOs are decentralized brands. DAOs internalize enforcement and incentive, thereby allowing their stakeholders to produce narratives that spread like wildfire memes and evolve in new and delightful ways. Indeed, a true DAO is a type of egregore; a self-governing community that thrives upon the innovativeness and the belief of many in its dominant expression, much like how BTC swallowed BCH to become the Bitcoin brand. A decentralized brand is autonomous, created by the contributions of varying stakeholders who believe and consume in the brand voraciously and in unity.