Oct 17, 2021

NFTs that Think

An investigation into the inner lives of pixels.

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If you only have a couple minutes to spare, here’s what investors, operators, and founders can learn about NFTs and intellectual property in today's piece.

  • NFTs have galvanized disruptive forms of IP. We are witnessing the creation of new IP empires. Projects like CryptoPunks, Bored Ape Yacht Club, and others are not just pieces of art, they're invaluable IP that can be extended across formats.
  • Traditional talent agencies recognize their potential. Others agree with that assessment. The organization behind CryptoPunks signed a representation deal with United Talent Agency while Bored Ape's creators inked a deal with Madonna's agent, Guy Oseary. Niche crypto artwork is heading for the mainstream.
  • The IP of NFTs is "thin." Though these projects are extremely popular, the IP they've created is very different than traditional creative works. Unlike novels or comics, NFT projects have no lore, or character depth to draw from. That could present challenges.
  • We will see NFTs with greater narrative weight. So far, "profile picture" (pfp) NFTs have focused on physical traits. That makes them visually searchable, but doesn't give creations true personality. To address that, we may see NFT creators give their characters interior attributes that reflect an identity full of motivations, conflicts, and secrets.
  • The Generalist has a new experiment. Philosophical Foxes are an attempt to add dimensionality and narrative to NFTs. Rather than physical traits, foxes are made unique by the philosophies, virtues, baggage, and secrets they posses. These are pixels with inner lives. 

In 1928, Walt Disney unveiled his first creation: Oswald the Rabbit. That was the beginning of a $300 billion empire, galvanized by one accumulating asset above all others: intellectual property. 

Mickey Mouse, Donald Duck, Snow White, Ariel, Mulan, Luke, Yoda, Thor, Iron Man— Disney’s success is a testament to the power of stories. Not only to their appeal and endurance, but the value they create and capture. 

We are witnessing the greatest disruption to IP since Walt’s rabbit. The attention generated by non-fungible tokens (NFTs) has energized a wave of artistry that may give us multi-generational characters. In a few years’ time, your Netflix account may bear more than a passing resemblance to OpenSea’s homepage, dotted with toads, punks, apes, androids, and other creatures that began their lives in the world of web3. 

But while these inventions have achieved a popularity that has surely made even Disney CEO Bob Chapek take notice, they differ fundamentally from Mickey and Co. Of course, this is true of their use of blockchain to establish provenance and rarity, but also involves IP and where it resides. 

We’ll unpack this subject in today’s piece before unveiling an experiment in IP of our very own. I hope you’ll like it. 

Thin IP

In 2016, Union Square Ventures published a blog post that quickly became canonical in the crypto world. “Fat Protocols,” written by Joel Monegro, explained how blockchain captured value differently than the traditional web, particularly with regard to protocols and applications. 

The internet, Monegro argued, was composed of “thin protocols” and “fat applications.” The protocols that make the internet work — things like HTTP or TCP/IP — capture very little of the value they create. Instead, it’s the applications sitting on top  that thrived and grew “fat.” Companies like Google, Facebook, Twitter, and many others are part of this thick application layer. 

The blockchain reverses the order. Underlying protocols like Bitcoin, Ethereum, Solana, and Terra have reached massive market capitalizations. Meanwhile, though still staggeringly valuable, applications — think Coinbase, OpenSea, and so forth — are much smaller. Sure, Coinbase has a market cap of $50 billion, but bitcoin’s surpasses $1 trillion. The location of value is flipped. 

Adapted from USV

Though blockchain has contributed to the fattening of protocols, it has an inverse effect when it comes to intellectual property. We are living in the age of “thin” IP — not necessarily in terms of value capture but narrative heft. This is particularly true in reference to the “profile pictures” (pfps) dominating much of the NFT space, discussed in last week’s piece on OpenSea.

What does it mean for IP to be narratively “thin” or “fat”? 

We can better understand by contrasting this new wave with traditional properties. Last month, Daniel Craig made his final appearance as James Bond in No Time to Die. It represented the character’s 27th film and is expected to contribute handsomely to the $7 billion grossed by the franchise to date. It lags behind only Star Wars and Marvel from a global box office perspective, which is to say that the character of James Bond is extremely valuable IP. He has proven dozens of times that he is magnetic to consumers and their wallets. 

But what does that IP actually look like? What is the defensible, protectable essence of Bond? 

It’s the name, of course, but also a rich lore, a story, that carries with it his traits, personality, likes and dislikes, flaws and virtues. Bond is a character with an interior life, even if it can be a coldly pragmatic one. 

All of this is the IP and it was, for the most part, baked in from the beginning. The effect is that extensions of the Bond IP focus primarily on the superficial. Certainly, Roger Moore’s Bond is tonally different from Daniel Craig’s, but the primary elements remain unchanged. Bond is always a debonair agent in her Majesty’s service. He is always unreasonably good at his job, he is permanently, absurdly handsome. He will, inevitably, drive a very nice car, meet a beautiful woman, and escape a perilous scenario. (I know, I know.)

Different directors may change the order of these occurrences and emphasize one over another. In some instances, they may even subvert these expectations, as when Craig’s manifestation chooses a beer over a martini in Skyfall. The very fact this is worthy of mention is because of the canon to which it refers; it is a knowing wink to those that understand the world we are in. 

Visualized, that architecture might look something like this: 

Now, a reasonable rebuttal to this framing is that most of Bond’s value has been captured by these superficial extensions. After all, Bond the literary character has grossed far less than Bond the movie star. Fleming’s books have sold 100 million copies — a remarkable amount, but surely not enough to surpass the $7 billion brought in by Brosnan, Connery, and other strong-chinned celebrities. 

This is true, but I think misses the point. The true power of the IP does not rest in these vehicles, but in the source. Without question, they add to the Bond myth and serve as opportunities for evangelism, but the value doesn’t come from the actors or screenplay, the car chases or shootouts. It comes from Bond, the character. Make the exact same movie but call the protagonist “George Stock” and one would gross a fraction of the figures commanded. 

Something different is happening with pfps. CryptoPunks, Bored Apes, Toadz, and other projects are radical, in part, because they give their creations effectively zero narrative context. When you buy CryptoPunk #7560 you know nothing of their character, personality, inner life. There is no lore, or story attached to them. They reflect IP, but only in their superficial features — their complexion, hairstyle, and accessories. 

CryptoPunk #7560

Other projects may make a passing gesture towards a richer universe for its characters, but it is cursory. Bored Apes are well, bored, and have access to a yacht club. Cryptoadz hail from a place “formerly known as Uniswamp,” and are fleeing the evil king Gremplin. These are enjoyable touches, but compared to traditional IP, the narratives are broad and add minimal context to the personality of individual pieces, beyond what is aesthetically represented. 

This is not a criticism. In many instances, this flattening is more feature than bug. The cleanest example is perhaps Loot, which is not a profile picture project but exemplifies the point. Rather than creating a character with certain abilities and possessions, the project offers only a black-and-white list of items. The expectation is that others will build on top of this primitive, creating the narrative value themselves. 

Larva Labs (CryptoPunks) and Yuga Labs (Bored Apes) are taking a different approach from Loot. Rather than leaving this additive process open, they’ve looped in traditional talent agencies. Larva signed with UTA in September, while Yuga announced it had teamed up with Madonna’s agent, Guy Osear,  this past week. 

It’s not hard to imagine how this partnership plays out. Presumably, UTA and Oseary will be tasked with shepherding a string of creative projects built on the established IP, whether that be a film, TV series, game, or something else. 

That sounds straightforward in theory but is fraught in practice. What exactly is there to be adapted? What are the core principles, characters, and parameters of a CryptoPunks movie, or a Bored Ape TV show? Each NFT has become a kind of protagonist to its owner, but a protagonist with no defined personality, no depth. They source material is flat, which may give them broad appeal, but presents a problem for storytellers. 

Even the simplest of questions are made difficult. Is CryptoPunk #7560 good or evil? Are they smart or dumb? Are they introverted or extroverted? Are they kind or cruel?

Someone will have to fill in this narrative vacuum. Will NFT makers take this on themselves? While that might preserve the project’s spirit, the skillset needed to create a compelling pfp differs considerably from constructing traditional narratives. 

That leaves outsiders. Do film and gaming studios understand crypto culture enough to interpret it effectively? Will they be able to give different avatars (or their look-a-likes) storylines and personalities that adhere to the original ethos? 

Adaptations are tricky at the best of times; they seem to be harder with shallower source material. Novels and comics provide the detail and context necessary to reinterpret — but has there ever been a great movie inspired by a video game? If it’s hard to find depth when adapting from a high-definition, interactive world, how hard will it be to find drama in a static, 8-bit image? 

All of these factors contribute to a very different IP construction for NFTs, in which the narrative heft sits on top of the original creation. Everything except physical characteristics is added after the fact. This is thin IP. 

With no real boundaries set, this means that everything is narratively permissible. Should alien CryptoPunks be the villains? Sure. Should the Zombies be heroes? Why not. Maybe anyone wearing a hat is part of the same family? Go for it. 

You can change these roles around however you like because beyond preconceptions lifted from other narratives (aka aliens = bad), there’s no reason we should have meaningful sentiments about these characters, except with regard to their monetary worth (aka aliens = valuable).

Can we solve this? Can pfps carry the thickness of other forms of IP? Can these protagonists receive something like a true backstory?

Over the coming years, I think we will see NFT avatars take on greater dimension. We will see pixels with inner lives, NFTs that think. 

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An experiment: NFTs that think

There is a quote from Gabriel Garcia Marquez I think of often: 

"Everyone has three lives: a public life, a private life, and a secret life." 

There is something undeniably, intuitively true about Marquez’s observation. None of us are singular beings — not really. Instead, we live in series, a sequence of masks, collapsed into a single body. Our discreteness is a mirage — we are fluid not solid, and we change with time, circumstance, depending on who is looking at, or talking with us. These rotating lives and the interplay between them are a big part of what makes us interesting. 

Conflict, deception, heroism, sacrifice; these ideas make sense only in the context of a character’s interiority. We only know the heroine is conflicted because we know something of her heart and circumstance. We only know the hero has been corrupted because we have seen what he once was. 

Can this nuance fit the form of an NFT? Can we capture it within the confines of the profile picture or do we need to set new boundaries? If we do want it to adhere to existing pfp conventions, can we add depth without destroying the mimetic, visual value that leading projects have created? 

This is experiment seeks to answer those questions, or at least begin to. Introducing….Philosophical Foxes. There are only 100 of them, each unique not only in their image but personality.  

This is an NFT project architected to create narrative weight. Though the imagery — individually crated by two extremely talented pixel artists Gordon Zuckhold and Gustavo Pezo — may follow some conventions of other pfps, each character has surreptitious depth. If James Bond is “fat” IP and CryptoPunks are “thin,” Philosophical Foxes are “sneaky fat” (also the way most people describe my physique). They may look thin, but baked into their design and metadata are ingredients needed to create a multi-dimensional character. 

We’ve done that with five different approaches: 

  1. Foxes have thoughts
  2. Foxes have philosophies
  3. Foxes have virtues and baggage
  4. Foxes have secrets
  5. Foxes accumulate backstory, over time

Let’s go through these (and look at some cute foxes).  

Foxes have thoughts 

Philosophical Foxes are thinking about something. 

Every Fox in the collection has something on its mind. Some are deep, some are shallow, some are jealous, some are angry and some are romantic. One fox ponders Nietzche, another plot something dastardly, a third only wants a slice of bread. 

With just a few words, we can add texture to the character, giving a sense of their personality and motivations. The fox that thinks of arsenic is very different than one that fantasizes about frenching Elon. 

There’s a reason this happens: humans are contextual creatures. An experiment devised by Russian director Lev Kuleshov deftly demonstrated this point, illustrating that humans create meaning based on the context in which it is presented. Kuleshov did this by making a short film in which an actor’s expressionless face was followed by three different shots: a casket, a bowl of soup, and a reclining woman. 

Rather than recognizing that Kuleshov had used the same image of the actor each time, the audience left impressed by the actor’s ability to delicately portray sadness, hunger, and lust. 

Kuleshov imagery

We are using the same effect here. A line of text gives our minds a narrative spark, helping to turn a static image into a story.

Foxes have philosophies

If you wanted to convey as much information about someone but could use only one word, which would you pick? 

Maybe you would focus on their physical attributes, noting whether they’re tall or short. Maybe you would reference their personality, calling them sweet or funny or mean. All are reasonable ways to begin, but they don’t tell us much. 

What if, instead, you described someone as a “nihilist?” With one word, you’ve conveyed something fundamental about that person’s worldview and mode of living that creates a series of run-off imagery and offers a glimpse of their inner life. 

This is because philosophical descriptors are semantically dense. By definition, they encapsulate a sprawling, complex doctrine into a singular label. Someone portrayed as a “Transcendentalist” sparks meaningfully different associations than a character deemed “Hedonist.”

This is why every Philosophical Fox has a specific ontology, written into its code. Some follow old schools of thought like “Stoicism” or “Manichaeism”, while others align themselves with modern philosophies like “the Church of Thiel” or “r/WallStreetBets.”


Just as CryptoPunks can be searched by their accessories, PhilosophicalFoxes can be filtered by what they believe in. 

Foxes have virtues and baggage

You can search for foxes by more than just philosophy. As with other projects, there are superficial attributes you can search by, including species and fur color. In total, there are 14 species with two fur types. 

This is fun but is probably the least interesting way to delineate between them. (At least I think so). That’s because every fox has specific “virtues” and “baggage.” If applying a philosophy to a fox gives us an high-level picture of their personality, these additional traits add finer detail. 

Both virtues and baggage vary in severity and rarity. Virtues include positive attributes like “Kind to the Elderly,” “Good Credit Score,” “Has HBO,” “Can Do Mental Math w/o Crying” and many others. Baggage includes things like “Forgetful,” “Grew Up in the Shadow of a Golden Child,” “Legume Allergy,” and “Big Gary Vaynerchuk Guy.” 


Though tongue-in-cheek, together these create a cloud of identity. Let’s take “The Will to Power” Fox, for example, and see what we know about them: 


(I really love this little maniac.)

This is the beginning of a personality. It does not have the nuance or depth of a novel, but it is a characterization, a set of guidelines. If you were to make a film about “The Will to Power” Fox, not everything would be permissible. It would be against canon to make him a guileless, happy-go-lucky fool, for example. In place of opacity, a shape is emerging.

(Some) foxes have secrets

A small percentage of foxes are what we might call “Marquez Complete.” 

They have a public life (their appearance), a private life (their thoughts), and a secret life — a secret that can only be unlocked by its owner. For example, this fox thinking about a (hypothetical?) fourth Collison brother is hiding something... 


Secrets are purposefully rare. Just as in real life, some may wish to share their secret with the world, while others may choose to keep it to themselves. 

In a medium in which every attribute and personality trait is recorded on-chain, secrets are a type of definitive obscurity. That sounds paradoxical but isn’t here — you can tell who has something to hide, but you do not know what unless they decide to tell you. 

Stories require tension; secrets are a subtle introduction of it. It is usually not fun to know everything.

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Foxes can accumulate narrative weight

One of my favorite words is “palimpsest.” 

A palimpsest is something that has been reused but still bears the markings of what came before, like a piece of printed paper that shows traces of a previous handwritten message. 

Our personalities are palimpsests, I think. We don’t so much add to as add on top of, gently modifying, amending ourselves layer by layer. Old selves are not obliterated or forgotten but superseded. When Walt Whitman said, “Do I contradict myself?/ Very well then I contradict myself/ (I am large, I contain multitudes)” he was speaking of these stratified, competing psyches. 

How can we give NFTs the same depth? Good stories usually require it from their characters, after all. 

Though non-fungible, Philosophical Foxes are capable of a kind of change — change by addition. Foxes can augment themselves, give their character more backstory and greater complexity over time. They doso by collecting standalone thoughts. In addition to 100 foxes, we’ve released 10 ownerless thoughts

As with foxes, each thought carries with it a philosophy, set of virtues, and a medley of baggage. Thoughts can be bought by anyone and applied to any fox. This allows foxes to take on a new constellation of characteristics in addition to their own. Transitively, they develop new depth; some will even acquire new secrets. 

Through this mechanism, owners can evolve their fox, giving them greater narrative weight over time. In the process, they effectively write their fox into a leading role — we are always drawn to people with dimension, substance, and secrets. Foxes grows evermore sneaky fat with storylines.

New mediums create new art. Disney’s empire would not have developed without the moving picture; Pixar needed digital animation. And CrytoPunks, BoredApes, and other leading projects couldn’t have succeeded without the conception of NFTs. 

Some things never change, though. Humans have always been drawn to characters with emotion and motivation; protagonists with real depth. These are the requisite building blocks not only for great stories but winning IP. As NFT projects attempt to make the jump from digital avatars to narrative beings, this may prove a challenge. In trying to solve it, artists may surrender the task to outsiders. 

It needn’t be this way. We can have profile pictures that not only draw visual appreciation but have distinct characteristics and attributes that can grow into a meaningful body of IP. We can, in short, have NFTs that think, and feel. 

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The Generalist’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice. You should always do your own research and consult advisors on these subjects. Our work may feature entities in which Generalist Capital, LLC or the author has invested.