This article is written in partnership with DEIP (find out more)
Fostering innovation through blockchain
In 2010, the creative and innovation economy generated $ 2.2 trillion in profits and employed more than 30 million people. According to a Deloitte report, released in June 2021, it has the potential to grow by 40% over the next 10 years, becoming one of the main drivers of the global economy.
Despite growth in the sector and growing potential, the creative economy is still based on the rules, mechanisms and codes that govern the global economy and constrain it in its progress. This is where blockchain comes in, whose innovative technology can allow the emergence of new business models.
With the blockchain, it is now possible to reinvent the economy, so as to place the creator at the center of the economic system. It will have the ability to simply, instantly and securely capture and transfer the value it creates. This so-called “designer economy” is redefining the way millions of creators around the world create, collaborate and monetize new inventions, technologies, works of art and other types of intangible products.
In any case, this is the observation and the mission of Collective Intelligence Labs, a group of architects, researchers, developers and designers specializing in blockchain. Founded in 2015, this start-up was born “with the ambition to help realize the potential of humanity” by using collective intelligence technologies.
DEIP Creator Economy Protocol project logo – Source: DEIP website
In 2018, Collective Intelligence Labs launched the DEIP project. Its ambition is to build this decentralized, blockchain-based infrastructure that the creative economy needs to explode. Upon launch, DEIP became the world’s first Web 3.0 protocol for the tokenization of high-value intangible assets, such as intellectual property.
👉 To find out more, find the DEIP project litepaper
DEIP, the protocol for the economy of creators
The DEIP project aims to build a decentralized infrastructure for the economy of creators: the “Creator Economy Protocol”. It provides Web3.0 applications and tools for the entire industry, and “enables the transition from the creative economy to the designer economy”.
Creators will have access to a very easy-to-use platform to develop their application directly on Web3.0. Two interfaces will be available to them, one without code and one with a little code. This is what one could compare to a WordPress from Web3.0.
Ultimately, DEIP will be a multi-chain protocol designed specifically for creators by allowing the development of an innovative project directly on the Web3 and the tokenization (as F-NFT) of the patent associated with this project.
Tokenization of assets by NFTs
The intangible assets imagined by the creators must be implemented on the DEIP protocol in such a way that it can interoperate with, without their properties being corrupted or altered. As such, non-fungible tokens (NFT) fulfill the role perfectly. Each creation being unique, they correspond by definition to the intrinsic concept of NFTs.
DEIP’s protocol plans to exploit the concept of non-fungible tokens a little more deeply, by splitting and tokenizing each of the assets that will be produced by the creators. In other words, each NFT could therefore be exploded into a certain number of pieces, called F-NFTs, and distributed to several different individuals.
Example of an F-NFT implementation on the Ethereum network – Source: whitepaper DEIP Creator Economy Protocol
The name F-NFT comes from the contraction of “Fractionalized Non Fungible Token”, which stands for Fractional Non Fungible Token. Logically, an F-NFT can be thought of as a combination of an NFT and an ERC-20 token. Moreover, on the Ethereum network, some protocols effectively combine the ERC-721 and ERC-20 processes.
One of the peculiarities of F-NFTs is the pricing system. As soon as a fraction of the asset is sold over the DEIP network, the sale price will define the actual current price of the entire asset.
Governance through F-NFTs
DEIP’s Creator Economy Protocol makes it possible to tokenize an intangible asset (or a set of several). Thus, it will be possible to own a fraction of an asset, an F-NFT, and to collectively share its governance. By splitting and tokenizing the possession of an intangible asset, the DEIP protocol opens the door to various models of decentralized economy, financing and governance.
Tokenized intangible assets generate income, and most of the time, that income comes from the sale of copyright to third parties. As these are implemented directly in the Creator Economy Protocol, it is possible to automate the distribution of royalties among the F-NFT holders of the asset in question.
Moreover, for each royalty distribution transaction, a part is kept for the DEIP network and is then distributed in the form of rewards for the liquidity and yield farming protocols, which we will discuss in the rest of this article. This distribution model is called automated royalty distribution.
Decentralized finance at the service of creators
For beginners or not yet recognized creators, obtaining funding is not easy. On the contrary, traditional banks are even reluctant to grant them loans. To allow creators to access funds without an intermediary, DEIP introduces a concept of decentralized banking offering various financial services specially designed for the economy of creators.
In order to encourage investors to provide liquidity, DEIP is deploying its liquidity protocol called “Dynamic Liquidity Protocol”. In short, it is possible to borrow dX stablecoins (dUSD, dEUR, etc.) from the protocol in exchange for locking an F-NFT into a certain smart contract (this is called the Vault).
How the Dynamic Liquidity Protocol works – Source: DEIP technical documentation
This locked F-NFT therefore acts as collateral. For security, its value must be at least three times greater than the volume of dX borrowed. However, this may change over time depending on the value of the underlying intangible asset. As explained above, it is the price of the last transaction made on the secondary market for the same F-NFT that determines its current value.
If a borrower wishes to withdraw his F-NFT from the protocol, he will therefore have to return the total amount of dX borrowed initially, with additional interest. These are then equally distributed among the Ecosystem Funds and for the liquidity providers, which we will discuss in the rest of this article.
👉 If you want more information, find the DEIP project whitepaper
At the center of the protocol, the DEIP token
By definition, being a blockchain-based protocol, the Creative Economy Protocol requires financial instruments to attract and reward users. This is the role of its native token, the DEIP. It has three major functions and we will detail them below.
The utilitarian role:
The DEIP token is the native currency that is used as a means of payment in any financial transaction (e.g. payment of transaction fees, execution of smart-contracts, etc.)
The governance :
Due to the decentralized nature of the protocol, DEIP is not governed by a single entity. We therefore need independent individuals to participate in the maintenance, development and securing of the network and the protocol. The first role of the DEIP token is therefore to reward these people for the work they provide.
The governance of the protocol is organized in the form of a council. When it was created, it has 12 seats, but 3 will be added each year, until it reaches its final number of 30 seats. In order to get a seat, all you need to do is staker more DEIP than one of the people on the board.
Staking and Yield Farming:
The sector of the designer economy is separated into several categories. For example, in the technology category, we can find the heading biotechnology, nanotechnology, or green-tech. In addition, each F-NFTs has metadata, including this information. The success of an underlying asset (and therefore of the project) will lead to the success of the entire associated sub-category.
Each participant has the opportunity to bet on a particular category if he believes in its growth potential. To do this, he just needs to stack his DEIP tokens on a specific F-NFT (or a specific project) in the protocol.
In parallel, the members of the board also manage what is called the Ecosystem Funds (or the Ecosystem Fund). They decide how the capital is allocated to the various projects up to 80%. The distribution of the remaining 20% depends on the distribution of the whole community.
Thus, each participant has the possibility of wagering DEIP tokens on a category in order to increase the number of funds allocated by the Ecosystem Fund to that specific category of F-NFT. Depending on the performance of the board and the community, the allocation of capital may change.
When it was launched in 2018, DEIP became the first Web 3.0 infrastructure to tokenize intangible assets such as intellectual property. The protocol wishes to refocus the economy around creators, allowing them; first to develop their innovative project directly on a decentralized Web3 infrastructure, and then to access resources, funding, and visibility.
To do this, the DEIP protocol facilitates the flow of rewards to content creators thanks to the staking of its native token, the DEIP. It also rewards investors who believe in the project, its technology or the sector.
This year, the company raised $ 2 million to support the development of its platform, which ultimately will allow engineers or business leaders to build applications faster than any other existing solution. Part of the funds raised will be used to launch the Portal Builder Program, the aim of which is to facilitate the development of 1,000 new Web 3.0 projects using DEIP technology.
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About the Author: Lilian Aliaga
Freelance writer located between Paris and Toulouse. I want to share my passion for the world of cryptocurrencies with as many people as possible. I am also interested in technical analysis and trading.
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