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Brands Taking A Deep Dive Into NFT Market

By Gary Symons

TLL Editor in Chief

As many have predicted, the licensing industry and in particular companies involved with collectibles like comics and trading cards, have dived headfirst into the world of Non-Fungible Tokens, or NFTs.

Some of the examples include DC Comics, Dark Horse Comics, Funko, and the collectible giant Topps Company, which has been into NFTs for close to a year now.

Among them, Funko has likely taken the biggest step yet, as the company announced on April Fool’s Day that it has acquired a majority ownership stake in TokenWave, LLC, the developer of TokenHead, a leading mobile app and website for showcasing and tracking Non-Fungible Token (NFT) holdings. TokenHead is available on iOS and Android, and currently displays over 10 million NFTs and has more than 100,000 visits per day. Financial terms of the investment were not disclosed.

The company says its investment accelerates Funko’s initial entry into the NFT market and will extend the company’s pop culture platform to include digital assets. Funko expects to launch its initial NFT offerings in June, featuring a unique property each week at a starting price point of $9.99. Products will be sold on the WAX platform, the leading decentralized wallet on the blockchain, which provides verifiable authenticity for purchases of Funko NFTs.

“Funko is thrilled to advance another platform that our fans and collectors will love and find valuable,” said Brian Mariotti, Chief Executive Officer of Funko. “Our strategy in this space is clear—bring the value-added NFT opportunity to our licensing partners to leverage our broad range of existing pop culture content across television, movies, sports, music, anime, video games and comic books. Our amazing licensing partners are excited about our entry into this new digital space and we believe the diversity of our licensing portfolio sets us up for long-term success.”

As reported last week in TLL, Topps continues to build on its reputation as one of the first innovators in digital collectibles, celebrating Toho’s iconic monster movie franchises by bringing the studio’s classic monsters, including the King of the Monsters, Godzilla, to the modern platform of NFTs via the WAX blockchain.

Topps has been the preeminent creator and innovator of physical cards and digital collectibles for more than 70 years. Generations of fans have enjoyed the pleasure of collecting, trading and showing off their card collections, leading to the rapid and popular adoption of Topps’ sports and entertainment digital collectibles apps which it first brought to market in 2012. By establishing that digital collectibles are valued assets, Topps says it has “spurred the reimagination of what a collectible is and means to fans, helping set the stage for the NFT craze that is now sweeping the globe.”

The release of the Godzilla Collection joins a rapidly growing portfolio of  licensed Topps NFT collectibles, including Topps’ own IP, Garbage Pail Kids.

“We’ve been one of the first brands to fully embrace the potential of non-fungible tokens (NFTs),” said Tobin Lent, VP and General Manager of Digital at The Topps Company. “By partnering early with WAX and their state-of-the-art trading platform, we’ve been able to create a fun and accessible digital ecosystem for fans with all levels of experience. We are excited to debut our latest NFT set, featuring iconic imagery from the Godzilla franchise, and build on our initial successes of digital collecting to include interactive elements, increased security and transparent transactions.”

The comic book industry is another sector that most lends itself to NFTs, as comics have been avidly collected and traded—sometimes for vast sums—for almost as long as comics have been published.

On April 2, Dark Horse Comics announced its entry into the NFT sweepstakes, with its partner, the NFT platform Curio. 

Curio says it is creating NFTs based on the Concrete Park comic series. The digital collectibles are being released in two series (five characters and five covers) starting April 2 and continuing throughout May with varying tiers of rarity.

“At its core, Concrete Park is a true underdog story,” says Erika Alexander, co-creator, Concrete Park. “A major Hollywood executive once told us—two Black sci-fi enthusiasts and comic book creators—’Black people don’t like science fiction because they don’t see themselves in the future.’ He was wrong because, in a post-Black Panther world, Hollywood has come knocking for Concrete Park.”

To accompany the drops, Curio will release five behind-the-scenes videos featuring Alexander, the graphic novel’s making, and how the series is embracing new blockchain NFT technology.

“Like Curio, Concrete Park and its creators have always been innovators,” says Juan M. Hernandez, chief executive officer, Curio. “As lifelong collectors ourselves, we know that building connections to audiences is the most important thing for any fandom. This collaboration presents an entirely new digital experience that allows fans, collectors and NFT enthusiasts alike to embrace a direct relationship with the artists.”

The first drop on April 2 included 100 editions of official Concrete Park character art of the lead character, Luca.

“The environment is completely different than it was four years ago,” says Tony Puryear, co-creator, Concrete Park. “When we first released Concrete Park, we were outsiders. Now, with NFT technology, we’re taking full ownership of our art and story world to create a fan experience that is rich and meaningful, allowing our fans to collect the future.”

And then there’s DC, which on the one hand is diving into the NFT market with a Batman-based collection, but at the same time, threatening legal action against other creators who produce artwork based on DC characters, and then applying NFTs to that art.

The DC saga also highlights a serious issue for the NFT industry, which is how NFTs can also be used to claim false ownership of someone else’s work. In TLL’s Special Report The Downside of NFTs we exposed how some NFT creators are claiming rights to works created by other artists, or in other cases, people buying NFTs for other people’s Tweets on Twitter. The trend is now hitting the corporate world, as DC issued a legal warning to anyone offering for sale any digital images based on DC characters, particularly those with NFTs. This ban also extends to freelance artists that DC may have employed at some point to create art for their comic books.

“Dear Freelancer, Non-Fungible Tokens (NFTS) are becoming the newest fan collectibles and have generated significant buzz in the digital space,” reads the letter. “DC is exploring opportunities to enter the market for the distribution and sale of original DC art with NFTs including both new art created specifically for the NFT market, as well as original digital art rendered for DC’s comic book publications.

“As DC examines the complexities of the NFT marketplace and we work on a reasonable and fair solution for all parties involved, including fans and collectors, please note that the offering for sale of any digital images featuring DC’s intellectual property with or without NFTs, whether rendered for DC’s publications or rendered outside the scope of one’s contractual engagement with DC, is not permitted,” the letter continues. “If you are approached by anyone interested in including any of your DC art in an NFT program, please let Lawrence Ganem, DC’s VP, talent resources, know.”

The letter is signed by Jay Kogan, the company’s Senior Vice President of Legal Affairs.

At the same time, the collectible maker Veve is teaming up with DC to produce a series of digital ‘statues’ of the Batman character that are tied to NFTs. Veve has drawn on three classic Batman artists for the designs, as with previous physical versions of the statues. The new digital line includes three Batman statues, based on the art of Jae Lee, Gary Frank, and Darwyn Cooke, as well as a statue of Nightwing based on the art of Jim Lee.

That plan has also created some controversy, the type that is becoming common for NFT announcements, as some comic artists have said they don’t want their work connected to NFTs due to the negative impact they have on climate change and the environment. Because NFTs and cryptocurrencies in general use an enormous amount of energy when they’re created, some artists are saying they should not be used.

For example, the widow of Darwyn Cooke has asked DC not to use images created by her late husband, like the one pictured here, as a basis for NFT crypto art. Marsha Cooke, who manages Cooke’s estate, said on Twitter that she did not approve of the use of her husband’s art for NFT crypto art, citing the environmental costs associated with it. “Back briefly to put notice up that I will not be participating in NFT crypto art, it’s an environmental disaster and you shouldn’t participate either,” Cooke posted on her previously dormant Twitter account.

“Consider this legal notice that no Darwyn Cooke artworks that I have control of will be offered as NFTs and any that appear are with the objection of his estate,” her Twitter thread continues. “I will reconsider this at a point where the environmental issues had been addressed.”

Another artist whose work was used as the basis for the Batman NFT ‘statues’ also says NFTs should not be used to create an aura of scarcity around artworks. Artist Gary Frank, whose design from Batman: Earth One forms the basis of another of VeVe’s most recent line of NFT art, also criticized the use of NFTs in an interview with the  pop culture news site Newsarama.

“I’ll echo what Marsha said,” Frank tells Newsarama when reached for comment. “This is the first I’ve heard of it. I have no interest—financial or actual—in NFTs beyond bewilderment at what people can be persuaded to pay for.”

However, some are giving DC credit for choosing to work with VeVe. The Singapore-based firm is a subsidiary of tech company Ecomi, which uses a type of blockchain known as Proof of Reputation (PoR), through a provider named GoChain.

Proof of Reputation is just one type of NFT, and is said to be less energy intensive than both Proof of Work and Proof of Stake. In the case of Proof of Reputation, crypto transactions are not ‘mined’ by computer networks which distribute the processing power necessary for blockchain algorithms across multiple systems. Instead, Proof of Reputation is anchored by large, well-known corporations promising the authenticity of their NFT products and securing the information in GoChain’s database, which adds to an NFT’s blockchain not by decrypting bits of code, but by inserting the information directly from the provider.

While still energy intensive, POR is said to be less damaging to the environment than PoW or PoS.

 

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