NFT Part 2: It’s all about what to create!
13 July 2022 01:05
Authored by: Alison Cripps, Legal Writer, Practical Guidance: Cybersecurity, Data Protection and Privacy
You may recall that a couple of weeks ago LexisNexis announced a creative and we think ambitious project – we are going to launch the first ever NFT of one of our Guidance Notes.
Today I wanted to share with you some of the initial questions that we, as a large multinational corporate, were required to ask and answer as we embarked on our journey to creating (and ultimately minting) our very first NFT.
We have a pretty smart and creative bunch of people at LexisNexis who make up our NFT project team. Legal writers, marketing professionals, lawyers and tech friendly executives. So, of course, the first question we posed - “what are we actually going to NFT?” resulted in a myriad of creative and interesting solutions. What you can actually NFT on the blockchain is excitingly diverse (we have all heard of digital art and ridiculously expensive memes) so we spent a great deal of time considering the varying formats that could be incorporated into our NFT. Ideas were floated amongst the project team - including visual digital representations of our Guidance Note, embedding audio readings and URLs. We discussed the ongoing maintenance requirements of each format of NFT e.g. ongoing management of URL link to ensure it is active in perpetuity. In the end, we collectively agreed that we should really use this opportunity to showcase content from our Cybersecurity, Data Protection and Privacy module in its truest form – by NFTing a digital representation of the actual Guidance Note that exists on our platform –so that future subscribers can see what they could have access to. Initially we thought we would do this with a simple PDF digital representation of the Guidance Note – but you will see further down in this blog why we ended up with SVG format!
We also wanted an opportunity to tokenise our NFT so that it represented ownership of a real-life asset of value, to encourage bidders to see the physical use case of NFTs in everyday life. We decided to dedicate a shoutout in the actual Cyber module recognising the current owner/holder of the NFT with bragging rights! Whenever the NFT changes ownership we would allow the new owner to claim an update to the Guidance Note in our module with their ownership shown prominently. Pretty cool right?
But not all was yet solved on the creation side. On occasion, we commission our content through partner authors who have specific expertise in the field. In this case, we had commissioned our NFT content through Bishop & Fang so we needed to ensure we had the rights to NFT the selected content and we reviewed our commissioning contracts for this.
We also needed to consider if or how the NFT would be licensed for further use and who will be responsible for drafting and coding this license so that it becomes an immutable part of the NFT. For example, would the NFT of the Guidance Note be licensed for further fair use, commercial use or social media use? Did the NFT contain any LexisNexis trademarks?
After considering the restrictions we wanted to impose and whether these restrictions would apply beyond the initial owner, time was spent with Legal to draft out these additional terms and conditions to ensure there was no assignment of intellectual property.
Deciding on the format of the NFT was only half of the creation battle.
NFTs are created, stored and transferred on the blockchain and as such, having decided on the form of our NFT, an obvious question arose - which blockchain to use? We could have picked any blockchain, but we chose Ethereum as this is the most widely used blockchain that supports NFTs.
The next practical question was which platform to use to mint and auction the NFT? Whilst there are a multitude of providers, our initial choice was to go with the largest NFT marketplace, OpenSea (opensea.io) for more widespread accessibility. OpenSea started with the Ethereum blockchain and now also supports other blockchains (Polygon, Klatyn, Solana in Beta). It also allows for low/no gas fee transactions when the NFT is not yet minted on the blockchain (‘Lazy Minting’). OpenSea does not allow PDF’s to be created as NFTs but does allow for other file types such as SVG. A PDF can be converted to an SVG so that is why the SVG format was chosen!
Our Practical Guidance - Cyber module has a great checklist setting out what should be considered when creating an NFT. We used our own checklist to ensure we had reviewed the terms and conditions of the OpenSea NFT marketplace and considered applicable AU protection laws on misleading and deceptive conduct, and that we had properly considered the rights of the buyer and what they would be purchasing – ensuring no intellectual property was being transferred.
Once the legal elements were checked off - we then took our Guidance Note extract to Marketing to validate for brand requirements and enhance the visual aspects, ready to mint.
Tune in for Blog #3 to hear about the financial and legal questions to answer for a large multinational creating an NFT including how to set up a crypto wallet. We will also be talking about our intentions of auctioning the NFT to raise funds for one of LexisNexis’s charity partners. This is an exciting addition to this project that also created new and exciting challenges to overcome.
READ NEXT: Blog 1 on Creating an NFT.