Meta’s NFTease and AI’s Impact on Web3

This week, Meta Platforms announced it was ending its support for NFTs after less than a year from its initial test program. The move is a setback for Web3 creators who use social media to promote their art and interact with their community – and signals that Meta maybe hasn’t yet figured out how to dive into Web3.

Meanwhile, artificial intelligence (AI) continues to make its way into Web3 and we dove into the rules around intellectual property (IP) rights of works created with the help of AI. We also spoke to NFT artists about their view on utilizing AI in their work.

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This Week's Alpha

Meta’s NFTease: Meta Platforms, the parent company behind Facebook and Instagram, announced it would be winding down its NFT program after testing it out for several months. The feature allows some NFT creators to mint and sell their creations on the platforms and collectors to display their NFTs. Stephane Kasriel, Meta’s head of commerce and financial services, said in a statement the company “learned a ton” and would continue to build products “to support creators, people and businesses on our apps, both today and in the metaverse.”

• Time and place: The limited rollout of the feature began in May 2022 – months after the NFT boom but just before NFT trading really dropped off – and expanded in September as NFT sales were still slow. Also, while some NFT creators found success on Instagram, others were skeptical that a Web2 platform like Instagram would really be the platform of choice for supporting the creator economy.

Robo rights: Artificial intelligence (AI) tools like ChatGPT and Midjourney are being used to build in Web3, with artists and developers finding creative ways to integrate machine learning into their workflow. Beyond the moral and ethical questions, AI also raises some legal questions, like is art created using AI protected under intellectual property laws?

• Artists weigh in: Contributor Megan DeMatteo digs into the question of how AI Is changing artistic creation and challenging IP laws, talking with creators using the tech as well as looking at what the requirement of "Human Authorship" means in copyright law and how it might apply to AI.Legal gray areas: Since AI technology is still new and progressing quickly, the laws around copyrights have not yet caught up. “The question here is to try to figure out where the copyright ownership begins,” trademark and copyright lawyer Jessica Neer McDonald says.

Metaverse drip: Metaverse platform Decentraland will host its virtual fashion week later this month, with brands including Adidas, Coach and Dolce & Gabbana showcasing digital clothing for avatars. Brands and experts are excited by the potential utility of digital wearables and are hopeful that they can right many of the wrongs that currently plague the fashion industry. But it appears that people still aren’t hanging out in the metaverse as expected, leaving many to wonder: Who is actually buying digital clothing?

• Style evolution: Many builders have suggested that in order for digital fashion to find its target market, creators of virtual goods must continue to evolve. “To expand customer bases and utilize these technologies to their full potential, interoperability between metaverses must be at the forefront of creators’ minds to help better onboard their audiences,” writes CoinDesk’s Cam Thompson.
• Fashion feedback loop: Cathy Hackl, chief metaverse officer and founder of Web3 consultancy Journey, says brands are also trying to figure out if virtual fashion can influence physical fashion. “What culture is being created that impacts what you see on people wearing on the street?” she writes.

Projects on the Rise

Nouns

Who: NounsDAO

What: Nouns are not a new NFT project. The generative art project was created in August, 2021, with a simple vision: One Noun, every day, forever. The 32x32 pixel characters live on the Ethereum blockchain and grant owners membership to NounsDAO, which controls a 28,237 ETH ($48.2 million) treasury to allocate to community proposals. Nouns scored a high-profile appearance in a Bud Light Super Bowl ad in 2022, but they’ve recently kicked up their efforts to expand their reach and approved an animated TV series, feature-length animated Nouns film project and a comic book series.

Where: You can vie for a Noun of your own each day on https://nouns.wtf/ or on secondary markets like OpenSea. But be prepared for a steep price: The floor price is currently over 28 ETH and Nouns have fetched as much as 200 ETH.

In Other News

• Everyday art: Several NFT artists have committed to creating a piece of art everyday, a practice that has shaped their art and relationships.
• Salesforce to be reckoned with: Customer relationship management platform Salesforce has launched a suite of Web3 tools for companies, including a management platform for NFT loyalty programs.
• Silicon Valley Bank collapse spooks NFT traders: According to a new report by DappRadar, the collapse of Silicon Valley Bank caused NFT trading to drop. Since the beginning of March, NFT trading volume has fallen 51%.

Non-fungible Toolkit

NFTs and Intellectual Property: What Do You Actually Own?

When you buy an NFT, what are you actually buying? Not every NFT project allows its holders to monetize the underlying artwork, and NFT creators will need to outline the terms and conditions of how their artwork can and cannot be used by new owners.

Preset rules are outlined by intellectual property laws, which protect certain inventions or works of art from being copied or sold by those that did not create them.

Learn more IP rights when it comes to NFTs.