Embracing Degeneracy, Part 1 – Decred NFTs
NFT's The Trojan Horse of entertainment. This article explores creating genuinely good looking NFTs that live on ETH, but can only be minted by Decred holders.
Back in 2019 there was a thesis, popularized by people such as Murad Mahmudov, that every new crypto cycle would become more and more rational. At the time, coming out of a massive capitulation and with Bitcoin dominance soaring, this thesis made a lot of sense, but reality turned out to be something entirely different..
Years later, we’re going through the dismantling of one the biggest, if not the single biggest scam this space has ever seen – FTX – and we’re starting to hear voices echoing those from 2019, stating that this is a ‘cleansing’ and that the crypto space will now ‘finally learn’ and become rational.
It’s just slightly ironic that some of the strongest looking coins at the time of this current ‘cleansing’ are: BNB (a token with the same model as FTX) which is currently sitting close to its all time high vs BTC, and DOGE (no comment needed) which went up around 30% in the last 2 weeks. All the while Bitcoin dominance is consolidating near all time lows, ETH - crypto's biggest casino - seems to be finishing this 'brutal' bear sitting close to its cycle high vs BTC, and fundamentally sound projects like Decred are completely forgotten and back to their last cycle bear ranges.
So I think it’s safe to say that this thesis of cycles getting more rational has been proven wrong, and we need to adapt to a new base case: a perpetually escalating Clown World.
So how does all this relate do Decred?
In my personal view Decred is a glimmer of hope in this stupid reality. A product built with strong principles, true to the original cypherpunk ideals that cryprocurrencies were supposed to achieve, and built on an incredibly sound technical foundation.
However, in the current reality all those values that Decred represents are fragile: they are not meme-able and don’t provide entertainment or shock value, and so they are ignored and replaced by those that focus primarily on appealing to the masses.
In my personal view, one of the only ways to preserve Decred’s values in this environment is to package them inside a Trojan Horse of entertainment.
This is what I’m trying to achieve with this NFT idea.
The idea is to create genuinely good looking NFTs (we want to take advantage of degeneracy but in a way that makes Decred stand out from the crowd) that live on ETH, but can only be minted by Decred holders.
In this way, it can be seen as using ETH as Decred’s ‘second layer’ – the NFTs would live on ETH so they don’t bloat the Decred chain, but at the same time the value would flow back to Decred, as the more valuable the NFTs become the higher the demand for DCR in order to mint more of them.
This would in turn create a sort of ‘moat’, similar to what ETH has achieved in the recent years, but without sacrificing any of Decred’s core values, or making any changes to the Decred chain.
At the same time those NFTs could provide great marketing value. Just the fact that Decred related jpgs would be traded on popular marketplaces like OpenSea would be immensely valuable for spreading awareness, and if the NFTs look good, they could also be used by Decred community members to show their support for the project.
I will preface this by saying that I’m not a developer. A friend of mine has written an existing and relatively popular NFT contract and they expressed interest in working on this project, and so the ETH side of this seems very doable, but the technicalities on the DCR side are mostly assumptions on my part.
Overall, it seems to me that there are 2 potential ways of implementing this:
1) NFT minting tied to Decred tickets
In this scenario everyone who has a live Decred ticket can prove their ownership of the ticket through signing a message, and then submit the proof to the NFT website along with their ETH wallet address.
An automatic algorithm would then check if this proof hasn’t been submitted yet, and if not, add the provided ETH address to a ‘whitelist’ allowing the user to mint their Decred NFT for free. So the process would be different from regular 'minting' where all the NFTs are minted at once, but it would instead be much more similar to 'mining', where the NFTs are slowly created by the Decred stakeholders over multiple years.
The main benefit of this approach is that it should already be possible with the tools available in Decrediton, and so the user experience would be relatively straightforward, which is essential for this project. Requiring tickets to mint NFT also means people have to put real skin in the game to get them, as well as learn a lot about Decred’s consensus and voting in the process.
The negative sides of this are that it would price out more casual users, which is not ideal for a project like this, which tries to be appealing to the masses. Another negative is a privacy issue related to proving ownership of something as valuable as a ticket, and submitting that online. The final negative that I can see is that it could make the process of staking ‘too fun'- I think staking should be seen as a serious activity and associated with voting and decision making rather than fun NFT stuff.
2) NFT minting based on DCR timelocks
This is an idea that I like much more in theory. The overall concept is that in order to mint an NFT you would have to lock up a certain amount of DCR for a certain amount of time, and then prove your ownership of those locked DCR in the same way as with the first approach. The overall process would be similar to the ticket-based approach, in the sense that the NFTs would be minted gradually over a number of years.
The benefits of this are that it allows setting the lockup amounts to something low enough to be appealing to a wider audience, while also allowing for the creation of NFT ‘tiers’.
For a ‘basic’ tier NFT you have to lock up 1DCR for 30 days
For a ‘mid’ tier NFT you have to lock up 5DCR for 1 year
For a ‘high’ tier NFT you have to lock up 10DCR for 2 years
For an ‘epic’ tier NFT you have to lock up 50DCR for 3 years
For a ‘legendary’ tier NFT you have to lockup 100DCR for 4 years
In this way we could appeal to a wide range of people with different budgets and preferences. People who just want to experiment would be able to mint the basic option while hardcore supporters could mint the higher tier ones to show their commitment to the project.
This could also provide an interesting social ‘reputation’ value where newly made accounts on various platforms could invest in one of the higher tier NFTs to be taken more seriously by others in the community, as everyone can see their timelock commitment.
This approach is also great in the sense that it’s completely separate from staking, so it doesn’t impact that whole process or the perception of it.
Additionally, the privacy problems are greatly minimized as you’re only showing an address with a certain amount of coins (which you can mix beforehand and setup a separate wallet for this), and the amounts of coins are much smaller as well, especially for the lower tiers.
The only problem with this approach is that as far as I know there is currently no way to timelock coins within Decrediton. It should be possible according to this reddit post:
but it’s not currently implemented inside any GUI wallet, which is very problematic for this use case.
So choosing this solution would likely require some cooperation from the Decred developers, which I’m not counting on, given how silly this idea is. At the same time having timelocks in Decrediton could provide a lot of value unrelated to this NFT idea, so maybe there’s a chance.
I commissioned 2 great pixel-artists to create simple rough mockups of what those Decred NFTs could look like. Here are links to their social media profiles:
The idea I came up with was to have art that would look great as profile pictures, and express the support of Decred.
I noticed a lot of people in the Decred community already use Bisons to show their support, and Diamonds are often associated with commitment and ‘hodling’, so I decided to go for ‘bison heads that look a bit like they are made out of diamonds or crystals’. In the end I slightly diverged from this original idea, but that was the overall premise.
Keep in mind those are just rough mockups.
I think the middle one is my favorite and would require the least amount of work due to the low resolution and isolation of parts. A collection of around 10,000 randomly generated NFTs in the style of the middle one could be created for under $1k for the art, and then likely around $10k for the ETH contract + verification algorithm + website, putting the total cost around 10-12k usd.
To me this seems like a good price/potential ratio for a unique marketing experiment.
I’m curious to hear your thoughts about this whole idea.