Can “Number of References” be a KPI for NFT Collection｜”Homage,” a product that remints NFT

gm everyone, I’m derio, ethereumnavi’s owner.

Recently, founder of VeryLongAnimals Akim updated his article “The Disease of the Floor Price Complex“. It was very interesting and in-depth.

In summary, the following objectives are discussed:

• NFT projects (especially collectors’ items) are often judged based on floor price
• However, the importance of floor price as an indicator is being questioned, and there are other more important factors such as world view and community
• Even for luxury brands, relying on the secondary distribution market is risky, and building brand strength through primary distribution pricing is more effective
• There are many ways to monetize other than NFT, and it is important to reduce the focus on secondary distribution revenues
• It is unsustainable to stand out with high floor prices; need to focus on creating new experiences
• The future will be an era of pursuing “fun” and “convenience” rather than money, which will lead to a healthier market

The author generally agrees with the above assertion, and has also been researching for some time to see if there is any related subject matter, as I believe it is necessary to find important indicators other than floor price and total volume, and to establish the value of these indicators.

At that time, I found the introduction to “Homage” at the beginning of the article in Bspeak! #272 and thought it was a very interesting subject for overcoming floor price complex disease, which led me to write this article.

In this article, I would like to explain the Overview and appeal of “Homage,” which advocates a new value system as an NFT evaluation indicator, as well as my personal view on whether the number of references can be used as a Key Performance Indicator (KPI) for NFT projects.

Let me begin by describing the structure of this article.

I hope that this article will be of some help to those who are interested in understanding the Overview of the NFT Remint protocol called Homage, the benefits of its use, and its potential for future development.

※This article is for general informational purposes only and is not intended to be and should not be construed as legal or investment advice. Therefore, it is not a recommendation to purchase any particular FT/NFT and should be used only as a study.

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What is Homage?

• Website
• Twitter

Overview

Homage is a protocol for reminting your favorite NFTs.

Homage is a French word meaning “to pay respect. It is also used in English to mean the same thing, such as an act done to pay homage to something.

It will be an NFT collection that pays homage to the original NFT while maintaining the original NFT and duplicating another NFT.

Homage was born out of an awareness of the problem that popular NFTs are too expensive and out of reach. And to solve this problem, this project offers “the option of reminting your favorite NFTs“.

Anyone can remint a replica of their favorite NFT, and a portion of the royalties paid (※see below for details) will go to the creators of the original NFT work, creating a situation where the work is distributed to more fans.

At the time of writing, it is possible to remint NFTs (ERC-721) in Foundation or SuperRare on Ethereum. Also, the chain to be reminted is Optimism (L2), not Ethereum (L1).

Since the current Optimism costs only about 30 yen for gas when reminting, the ease of reminting many NFTs that you like is considered an advantage.

Status of Funding and Team

At the time of writing, Homage has announced that it has received investment from VC and angel investors, including

• Variant Fund
• Nascent
• Seed Club Ventures
• Robert Leshner (Compound)
• Nadav Hollander (Dharma + OpenSea)
• Kayvon Tehranian (Foundation)
• Tarun Chitra (Gauntlet)
• Graeme Boy (Mirror)
• Trevor McFedries (FWB, Lil Miquela)
• Chris Kalani (Phantom)
• Sabrina Hahn (ConstitutionDAO)
• Gabby Dizon (YGG)
• Seb Delgado (Fei Protocol)

Since Kayvon, co-founder and CEO of the Foundation, is an angel investor, I can speculate that the Foundation’s NFT collection may be the initial response, but I can’t find anyone who might be involved with the other SuperRare, so the details are idk.

SuperRare has already raised $9M in Series A on March 30, 2021, but there was no overlap with Homage investors.

However, from reading the description of Homage’s products, it seems that Homage’s founders themselves have a strong desire to “support artists who create 1/1 NFTs. This may be why Homage initially chose Foundation and SuperRare.

Incidentally, Homage is currently building its core team and is primarily looking for engineers.

Benefits of “Rimint”

1. Earn HOMAGE tokens (users)
2. Have first-mover advantage (users)
3. Earn royalty fee (original NFT creators)

① Earn HOMAGE tokens

This is the “reminting users” side benefit.

By reminting, users earn HOMAGE tokens, which keep track of how much they have used Homage.

② Have first-mover advantage

This is another benefit for the “reminting user” side.

In Homage, the cost of reminting NFTs increases as the number of NFTs to be reminted increases.

Therefore, the advantage is that the “cost required to remint” for any original NFT is lower in the beginning.

③ Earn royalty fee

This is an advantage for the “original NFT creator” side.

When reminting NFTs using Homage, some royalties are required as a cost, but the original NFT creator can claim the royalties from this reminting.

In other words, NFT creators can earn unearned income from reminting without having to transfer or pledge their NFTs. As a concrete example, you can earn royalty income by encouraging your NFT fans to remint your NFTs.

Recently, there has been a trend of secondary distribution fees on the NFT marketplace approaching zero. As a result, NFT projects have been looking for ways to secure funding other than royalty income. In such a situation, Homage’s Remint system could be one of the solutions to this problem.

Founder

Homage was founded by Chris Min. He previously worked as one of the first engineers for Dharma. (※Dharma has now been acquired by OpenSea).

He appears to be the one who helped build some of the first lending protocols and smart contract wallets on Ethereum while working at Dharma.

Actually reminting NFT using Homage

At the time of writing, Homage is implemented using ERC1967 (the standard used for implementing upgradable contracts). If you consider using this service, please DYOR and use it at your own risk.

In this chapter, I will actually try reminting an NFT using Homage to get a better understanding of the procedure and the big picture.

First, access the website and connect your wallet from “Connect Wallet” in the upper right corner of the screen.

Then a “Royalties” item is added to the menu bar. It seems that when an NFT owned by your address is reminted, you can CLAIM royalties from this screen.

Now, let’s return to the home page.

The home page has a search field. You can search for a creator/NFT by selecting the “Creator” or “NFT” tab, typing in the respective information, and clicking the “Go” button.

Postscript:
At the time of writing, it appears that NFTs from Foundation or SuperRare are eligible for reminting. The reason is that “Homage wants to make sure that creators receive the revenue they earn from reminting their works“. (Without knowing this, I tried to remint Blitmap. Please bear with me for a moment.)

Searching for Genesis in the search field of the “NFT” tab, the image above was displayed.

The lower right corner of the image shows “Remint Price 0.0005 ETH,” which corresponds to the royalty.

However, Blitmap does not seem to be eligible at this time and could not be reminted.

You can’t remint this NFT because I currently can’t determine the creator onchain.

So, I will remint the NFT work of Blitmap Founder, dom, at the Foundation.

At the time of writing, there were 13 different 1/1 NFTs in existence. Since none of the NFTs seem to have been reminted yet, this article will review the overall process while reminting “a rose” on the right side of the image above.

Unlike in the case of the previous Blitmap, this time the “Remint” button is clickable.

I clicked on the Remint button and a MetaMask’s popup opened. The royalty is 106 yen and the gas fee is 28 yen. Low price.

Reminting is now complete. I will now check how the process was actually performed internally.

An examination of the transactions in Optimism Explorer confirmed the following two main results:

1. The ERC20 token “Homage” was transferred to the creator (strictly Homage’s contract) and the author, 0.0005 Homage each
2. One ERC721 token (a reminted replica version of the NFT) was transferred to the author

The replica NFTs reminted on the Optimism chain can also be found on OpenSea. The collection name is “Remint of {contract address} Token ID {token ID}“.

As described above, by easily and cheaply reminting a new NFT of your choice, you can show that you are a fan of that NFT. It may also be possible to use that replica version of the NFT to create a new ecosystem and for NFT creators to explore new avenues for fundraising.

Author’s discussion and consideration

Now, I have reviewed the Overview of Homage, points of interest, and the actual process of reminting. In this chapter, I would like to discuss the author’s vision for Homage based on these points, which are summarized below.

1. Can the Number of References be a KPI for NFT Projects?
2. Possibility as “a new monetization method for 1/1 NFT creators
3. Supplement: Current Issues and Solutions

Can the Number of References be a KPI for NFT Projects?

In the introduction to this article, I theorized that the KPI for the NFT project may be too centralized on floor price.

This is actually the case, as seen in the current ranking format of the NFT marketplace. Floor price is currently treated as “an easy-to-understand indicator for everyone” in the NFT space.

Of course, I think such values and ideas should exist, but I feel uncomfortable with the current situation where the value of a project can only be measured numerically based on such values and ideas.

For example, in academia, the “number of times a paper is cited” is sometimes used as a measure of evaluation. A high number of times cited can indicate that a paper is important in its field.

The reason for such an evaluation is that a paper with a high number of citations is considered to be beneficial to other researchers. In other words, it indicates that the paper has played an important role in prior research.

Furthermore, a paper with a high number of citations may play an important role in setting the direction of research in the field. Therefore, a study that references that paper or extends the research findings of that paper may be highly cited.

This phenomenon can actually be expressed as an indicator of “how many derivative projects have been generated” in NFT projects.

As a simple example, the NFT collection called Nouns has created 92 derivative NFT projects up to the time of writing, as well as many other event and character goods.

I think this is a sufficient indicator to measure the value of NFT projects in terms of “expanding ecosystem”.

However, in the case of Nouns, “the creation of derivative projects cannot be referenced as on-chain information,” but with Homage, “the number of core fans (number of remints)” can be measured as on-chain activity.

If the value can be measured as on-chain activity, it will be possible to visualize it and appeal to users.

One thing to keep in mind is that both papers and NFT projects have one thing in common: “There is a limit to evaluating the value of a paper based on the number of citations (references) alone.

For example, even if a certain paper has been cited many times, if the claims of the paper are later shown to be false, the paper’s evaluation will be lowered. It would be meaningless if only “low-quality works” are spreading in the NFT project just to increase the number of references and derivative project cases.

Therefore, it is necessary to evaluate not only the number of citations (references), but also their content, credibility, and influence in a comprehensive manner. It is desirable to visualize a composite of indicators that can be evaluated numerically, such as floor price, the number of citations (references), and what kind of influencers are holding NFTs (not Airdorop, etc., but those who are hitting the mint/transfer function themselves).

Of course, these ideas are still in the minority in the NFT space, but a single catalyst can easily turn existing concepts and values upside down.

The fact that the NFT project’s belief in floor pricing has only been around for a few years suggests that a paradigm shift could well occur with a product like Homage as a starting point, and I look forward to the emergence of services and culture that will follow Homage and promote a shift in the value of NFT collections. I expect to see the emergence of services and cultures that promote a shift in the value of NFT collections following Homage.

Possibility as “a new monetization method for 1/1 NFT creators

Another hope is “the possibility of building a stan economy around 1/1 NFTs”.

In the case of a type of NFT project with a large number of issues (or no issue limit), when the original NFT is too expensive to buy, buyers can “buy NFTs from derivative projects” to make fan announcements, participate in the ecosystem, etc.

Derivative NFT projects have in fact been able to satisfy the demand for Nouns, such as “I can’t buy Nouns because they are too expensive, so I will buy Lil Nouns” or “I can’t buy Blitmap, so I will buy Flipmap,” and have helped create a fan community.

However, in the case of a 1/1 NFT, as the name implies, the number of original NFTs issued is limited to one.

• High degree of difficulty before a derivative project is born
• Low liquidity (royalty income from OpenSea, etc. cannot be expected)
• There are cases where derivative projects are not recommended due to copyright issues.

The author is aware of the above and other issues such as the difficulty of practicing monetization methods like existing multiple-issue NFT projects, and the lack of established monetization methods other than first sale (the creator’s main source of income is to continue to publish new NFT works).

Therefore, I believe that the use of Homage may create “the possibility of building a stan economy around a 1/1 NFT” and may provide a new means of monetization.

It is, of course, the upper-level fans who Purchase that support the revenue of a work, and without them, the work would not continue. However, in the communities I saw, there were fans who spent little or no money, but spent almost all of their time and contributed to their favorite works, characters, and talents. Rather than the amount of money spent, it was the “regular triangle” (a world in which the top leaders of the otaku community are not looked down upon as “otaku” were before, but rather are visible on social networking sites, and earn respect within the work community) in which the users have become a community, and the degree of involvement is a key factor in how they rise to the top of the hierarchy. The structure has changed in such a way that people rise to the top of the hierarchy depending on the strength of their involvement. The indifferent class became involved members who expressed and shared their works on SNS, became subscription members and salon members who were permanently connected to the works, and gradually began to teach and influence beginners like guild masters in the analog and digital communities. Finally, they become second creators, drawing pictures and uploading videos introducing their works. Eventually, they grow to the stage where they can make the work “their story” as if they themselves were the original creators as the work spreads throughout the world. Fans grow up. (omission) Except for personal creation as therapy, the one point that fans make creators is the starting point of all work creation. This pyramid of involvement in the work by the fans, not a “reach” to show what you have created 100%, but a “reel” to elicit involvement. While raising the level of enthusiasm, we continue to raise the quality of the service by “operating” it. This is the essence of the fan business of the 21st century otaku economic sphere, the very essence of the stan economy that Japan has created.

Source: Atsuo Nakayama, Stan Economy: “Virtual First Class” Changes the Future of Entertainment (Nikkei BP, 2021), p151.

One of the key pieces of information in a fan economy using NFT is on-chain data, and Homage’s model, which has the core of this information, could be a web3 version of a fan community building tool.

Until now, 1/1 NFT creators have struggled to build a fan economy by playing the role of CEO alone. However, in the future, there is a possibility to build a new community by forming a web3-type stan economy and providing replica NFTs to fans at a low cost.

Furthermore, a few of the top fans in that community could be given COO-like positions. This allows a new form of community to be created through the enthusiasm and abilities of the creators. I believe this would have greater implications beyond monetization.

Creators are inherently unsuited to running organizations. This rule applies to entrepreneurs as well. Even for the dreamy, super-offensive entrepreneurs who are called serial entrepreneurs, running a mature organization can be tedious. The reason why COOs are so valued is that when entrepreneurs and creators who had absolute dominance in the “zero first” phase become CEOs, their dominance in some cases hinders growth when they become large organizations with hundreds or thousands of employees. COO personnel who are highly salaried but speak in terms that those around them can understand are essential to support CEO personnel.

Source: Atsuo Nakayama, Stan Economy: “Virtual First Class” Changes the Future of Entertainment (Nikkei BP, 2021), p145.

Although the product has just been launched at the time of writing, I expect Homage’s challenge to break through the problem of KPI being biased toward floor price to be a meaningful one.

Supplement: Current Issues and Solutions

The author’s current issues with Homage are as follows

1. Fewer NFTs are supported.
   • This is due to the fact that there is currently no standard way to determine all NFT creators based on on-chain information alone, but this will be resolved as the company has announced plans to integrate more types of NFTs in the near future.
2. There is a separate collection for each replica version of NFT.
   • It may be difficult to implement, but it would be better if it could be linked with CollabLand, etc., to expand the possibilities.
3. Lack of visualization functionality
   • I would like to see a visualization function for on-chain activity, but development costs are high, so it depends on the order of priority.

However, these problems are only current issues and should be improved with each day’s progress.

And as the culture of remint is embraced by those in the NFT space, the value of the NFT collection may be measured by other metrics than simply floor price or total volume.

Summary

Nouns DAO JAPAN aims to be the best Nouns community in the world. Click here to join the Discord.

In this article, I have provided an Overview of “Homage,” which advocates a new value system as an evaluation indicator for NFT, and its appeal, as well as my personal view on whether the number of references can be a KPI for NFT projects.

I hope that this article has been helpful to those who are interested in understanding the Overview of the NFT Remint Protocol called “Homage,” the advantages of its use, and its potential for future development.

If you found it helpful, please feel free to share it on Twitter or comment on it.

🆙posted an article in English about Homage.@homage_xyz @cminxi https://t.co/WmdxksA7gL

— でりおてんちょー｜derio (@yutakandori) March 13, 2023