Can You Own a Color? A New NFT Marketplace Is Trying To Find Out
Can you own a color? An experimental blockchain collective says yes. The group, which is starting a new marketplace for non-fungible tokens called the Color Museum, has quickly garnered online interest (and extreme skepticism) since launching its presale waitlist.
“Own the building blocks of the future,” the collective states at the top of its site.
The concept is what Omar Farooq, the 31-year-old leader of the collective, refers to as “a meta NFT,” meaning that by owning the rights to a specific color, people stand to earn “royalties” each time a NFT image that uses that color is sold through the marketplace. The amount they make depends on what the image sells for and the proportion of that color used in the NFT image.
“We’re going to be turning colors into money,” the New York-based Farooq told Motherboard.
The collective is starting by selling ownership to 10,000 distinct shades pulled from the sRGB, or Standard Red Green Blue, which is a standardized color grid developed by Microsoft and Hewlett-Packard for computer software programs in the 1990s.
To its early detractors, the Color Museum represents the worst of the supposedly decentralized, blockchain-fueled Web 3.0 concept, in which every concept, even something as core to the human experience as color, can be commodified, sold, owned, and speculated against. But Farooq believes his Color Museum offers hope for a more communal form of capitalism, where financial gains are not hoarded by the few and instead more evenly distributed throughout the web—in this case, to the 10,000 people holding the NFTs.
Farooq sees the Color Museum as a competitor to OpenSea, the dominant NFT marketplace valued at $13 billion in a recent funding round. While OpenSea charges sellers a 2.5 percent transaction fee, Farooq hopes to split that fee evenly between sellers and buyers, 1.25 percent each. The Color Museum’s development team nets half of the proceeds and then disperses the rest proportionately among the color owners through a self-executing, pre-coded smart contract.
Such a setup will prove attractive to sellers, who will in turn want to sell their art there, potentially at lower prices because of the lower fees, according to Farooq. Most of all, it will benefit those who bought into the initial concept, all the more if they bet on the right shade.
“Fair is fair,” the website states. “Let’s build a better OpenSea, together.”
Once someone picks and purchases their color, they can name it or even write an essay about it. (“Every color has a personality,” the website states. “Tell the universe what your color means.”) Maybe more significantly, they can also trade it on open marketplaces, including OpenSea, or hold it “for eternity—or as long as Ethereum exists” and earn a profit each time an image is sold that includes that particular share.
On its website, the Color Museum takes the theoretical example of a photo of a Bored Ape on sale for 247.1 ETH, or around $700,000 as of this writing. The Color Museum would impose a 1.25 percent transaction fee on both the seller and the buyer, pulling in a total of $17,564.
Half of that would go to the Color Museum team, and the remaining $8782 would be split up proportionately among the owners of the various colors, based on what percent of each color could be found in the image’s 398,161 pixels, excluding eight that made up less than 0.1 percent. If a color is used that is not owned by anyone, the money goes to the owner of the next closest color on the sRGB colorspace grid “as determined by Euclidean distance,” according to the website.
While sRGB has 16.7 million distinct colors, the Color Museum plans to only sell 10,000 of them, which the site notes makes the color NFTs “1600x rarer” than Bitcoin and “400X rarer than Ether.” (“Just so you know, the human eye can see about 2.3 million colors. Who said that? Scientists,” the website teaches.) The reason for the artificial scarcity is so clear as to make it unnecessary to state explicitly: People who want to profit need to get in now, before it’s too late.
Farooq considers himself a “bonafide Bitcoin OG,” but feels regret that he didn’t buy and hold Bitcoin early on, focusing more on Satoshi’s “electronic payment narrative” than on the “digital gold narrative.” “I was young,” he said. “At the time, it seemed more like a toy than something that would eventually have global financial impact.” He admitted that the regret from “missing out” partially inspired his decision to start a crypto venture. Even though he wanted to start an Ethereum-based NFT project, he faced an issue. “I can’t draw like these artists that are out there,” Farooq said. He noticed that colors are represented as numbers in computer programs and realized that he could use the color hexadecimal as the distinct token ID for the NFTs. He thought to himself, I can do this.
After initially announcing the concept online, Farooq faced a rash of criticism from people who took umbrage with the concept of owning a color. Farooq claims that was based on a “misconception” that the Color Museum would try to claim “universal color ownership” over, say, cerulean, taking legal action against those who used its trademark shades in the future. He says that the owners of the colors will only stand to profit from NFTs sold and bought through the Color Museum. In that case, he argues, such ownership actually makes sense.
“You can own a color in a specific context,” Farooq said. As evidence, he pointed to the fact that UPS was able, after initial pushback, to register its characteristic share of brown with the U.S. Patent and Trademark Office many years ago, making sure no other delivery companies could use the particular shade. “That’s exactly what a color NFT is,” Farooq said. “It’s ownership of a color within a specific context of a digital object on a digital smart contract.” (Showing how little power these have outside a highly specific context, a separate but similar project called The Colors NFT has already completely sold its own unique collection of NFTs.)
Motherboard took a look at the Color Museum’s Discord, where the conversation was much more optimistic than it had been elsewhere online. Farooq is optimistic too.
“We’re getting through the mud,” Farooq said. “The people that understand it, the people that are willing to read the website themselves and come to their own conclusion—they’re coming.”
This content was originally published here.