financing Can Anyone explain how Cryptocurrency can be used in film funding

Nate North

Nate North

So a group of us have been trying to understand cryptocurrency, and how it can be used to help create financing for film/game/tv projects. It was first brought to our attention by a poster who directed us to a website. A group of kids had built a simple project that nobody wanted, and took about 1% of the effort we have already put into our project. They were using cryptocurrency to create their financing. I looked into it further, and found that this project is giving away 5 million dollars in cash, that's spare money that they apparently don't need. It looks like this, not even at the level of a mobile phone game. There is less work here than any of us spent making a single film. These people who made an inert lego village with no story, have recieved more funding than I expect has been recieved by every filmmaker on this site combined over a period of a decade. The reason, cryptocurrency. It seems like it's time for a discussion about how we filmmakers can use this new financial medium to raise funds for our projects. It doesn't make sense that every person here should be scrambling for a few thousand dollars in financing while somewhere else a teenager copy pastes assets from the unity store, and receives enough funding to make 100 indie films. I think the options are, we can complain about it, or we can learn how this happened, and use it it to enhance the prospects or our community.

This is a screenshot from a creator with 5 million in spare cash -

1629929944752.png


This is a screenshot of a finished city in better quality, it costs $10 on the unity asset store.

1629931219790.png


I understand that this is not a film, and to a degree we're comparing apples and oranges, but I think if you can copy paste a few hundred dollars of low grade assets, and then add crypto to the equation and end up with 15 or 20 million dollars in funding, perhaps we as independent filmmakers should spend some time learning about this, considering we actually need real financing, far more than the people who are apparently getting it. It would cost me 20 million to make a good movie, the project above could be made for under $1,000.

Here's the Question, does anyone on this forum have any experience with cryptocurrency funding, and if so, could you help the rest of us understand how we can use it to raise money for our projects? I'm sure a lot of us would appreciate the help in understanding this extremely difficult to parse area of modern technology. We don't need boilerplate explanations of how the blockchains work, that's readily available, we're looking for any explanation of a practical solution that can help filmmakers here utilize this technology for our creative projects. The project I administrate is finally moving towards a solution, but there are still so many questions, and attempts to seek help on other forums have been met with outright hostility. Any person with expertise that's willing to help would be appreciated. As filmmakers, where should we go to get started? Are coins or tokens the right pick? How do we create value in project NFTs?

I eagerly await the 0 responses this thread will get, lol.
 
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Over at Save Point, we're actually making some headway on this. Learning about the blockchain has been a labrynthene nighmare of epic proportions, but the team developed a coordinated approach to unravelling the mystery. There's no question that we still have an immense amount to learn about it, but today we have managed to get the first frames of Save Point art listed on the NFT exchange, and within a few days we will have 2 seperate currencies in place, SaveCoin and Save Point NFTs. To start adding some information here that can be of potential use to others, SaveCoin is an ERC20 token on the etherium blockchain. Save Point NFT's are an ERC721 token that serves as tamper proof digital packaging for collectible assets from the show/game and it's production.

The information that led to this was very difficult for us to parse at first, and many a headache was endured in route, so I'll try to simplifiy it a bit here for other filmmakers that may have an interest in pursuing this popular route of project financing.

Think of the NFT or ERC721 token as a box with a security tag. It can't be removed, it can't be copied. Inside the box can be one of your assets, something that might have value to a trader or collector. So let's say you made Star Wars, and you wanted to sell the footage of Mark Hamills original audition footage for the Luke Skywalker role. You could embed that footage in an ERC721 token, and then list it on a marketplace online, such as opensea, or your website, and sell it. Because there could be only one legitimate copy, that digital item would have value, similar to a physical piece of memorabilia, such as Darth Vader's helmet. Once purchased by a collector/investor, these could be resold from person to person like a stock. You can set a transaction fee for a specific token, and get an automatic royalty payment of a set percent each time that item is bought or sold. Convert that blockchain payment into cash, viola, you now have some film funding!

Though it might be less relevant to some film projects here, the ERC20 token is a fixed value coin, like a silver dollar. It may go up and down, but all coins are the same value as each other always. In our use case, they function like arcade tokens. People can buy them, or we can give them to people for various reasons. These can be exchanged for money, or used to purchase the NFTs.

In our specific system, we have come up with a very interesting use case, or set of use cases. We can reward contributors with these tokens, we can sell them as the equivalent of stock shares, but without mortgaging the company itself, and most interestingly, we are going to award players these tokens for being the first to reach each new video in the decision tree that forms the story. This gives people actual financial rewards for playing a free game well, and for exploring our world. We will simply add new videos as unlisted, and the first time a person arrives at the video through a choice branch, they will be the winner of that videos tokens. At that point the video is listed, and offers no additional rewards.

I know this is all difficult to process, especially how the overall economy of it works, but I hope that what I've written here can be helpful or useful to others.

As an example, here is a small gallery, currently under development, of Save Point art that we are selling on the Opensea marketplace. It just went live an hour ago, so obviously no sales yet, but it demonstrates how you can take cells from your film and sell them to the public in an effort to raise funds for your indie film project.

 
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Nate North said:
The reason, cryptocurrency.
Click to expand...

Are you sure? That's the only reason they received funding?

Yep, that screen shot looks terrible. I understand you think the project is
awful. But since you don't post a link or any info about these creators I'm
left wondering if there wasn't something else that allowed then to raise
so much money.

We all know that “influencers” manage to raise millions of dollars due to
nothing more than their following. The quality of a project often doesn't
mean much to those giving them money.

But if the reason they raised so much is crypto, I'm in!
 
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Looks like you've made some good headway on this already Nate. The reason I suggested this approach might work for a project like Savepoint is that it has a similar concept to community projects like Decentraland. When you talk about the obscene amounts of money these projects are now “worth” you need to remember that most (in fact, nearly all) of the people who have money invested in that Crypto token don’t have any interest in the project whatsoever. They have bought tokens purely for speculation, they hope (at whatever point in time) to sell them for a healthy profit. As such, the market is extremely volatile and if Bitcoin takes a dip of about 10%, these other types of tokens will likely drop by about 30-50% in value. At the moment, we are in the midst of a crypto bull-run so everybody is happy and flourishing with even the most useless of crypto tokens making millions for their creators. It won’t last though. Prices will drop significantly at some point, probably this year or next, and return to the mean. Expect many of the lower cap tokens to reduce to about 5% of their current market value, in fact 90% of the tokens around probably wont even exist in 4-5 years-time when the next bull run is expected. So, those projects aren’t really “worth” as much in reality, just in theory and at this point in time.

In terms of quality of the graphics, that is not necessarily an indicator of how much the project "should" be worth. Ultimately, it's a game. Minecraft graphics for example are pretty awful but it's one of the most popular games in the world. That really is the key to the project success, will it attain widespread adoption? You might have the best graphics in the world but if people don't find the game appealing and entertaining, it means little for your long-term prospects. Not saying that's the case with savepoint, just need to bear it in mind when comparing.

In terms of “how” you do it successfully and make lots of money, well, it mostly comes down to marketing and awareness. The basic model you would employ would be something like this-

1. Decide what functionality you want your cryptocurrency to have. Is it used to pay each other for work? For digital assets? NFTs? Will it be distributed as shares, commission? Will it be used to pay to watch movies or buy things in-play etc etc? How much of the token supply will be sold to the open market, how much will be given to developers, how much will be allocated to liquidity. Sounds like you've already made some decisions on this point.

2. Create your own token (not a coin) on an existing blockchain. Although the terms are used interchangeably, the difference is that a coin runs on its own blockchain whereas a token utilises an established blockchain like Ethereum or BSC to function. Creating a coin is a million times more difficult than creating a token but from your post above it sounds like you've already got this step covered so well done.

3. Spread awareness. This is where most cryptos will live or die, it’s down to your marketing campaign. What you need to do is create social media accounts for your project on every platform out there and actively seek out followers with your vision. Ultimately, you need to convince people to buy some of your tokens because it’s going to make them rich! This is where most of your revenue is going to come from and most people won’t care about using the tokens for what they are actually intended for in terms of savepoint. All they’ll care about is “does the project look useful enough that other people will be attracted and buy into it”. Obviously, you would market to the people who would use savepoint as well, having a large user base is the first key to getting that investment from the wider population. Where you have an advantage is the user base you've already got - use them. Get each one of your members to create accounts on the platforms, follow the official savepoint channel and re-tweet and forward every message to all their followers and people they know too. If you can get someone with a big following to shill your token for you, that is the holy grail so identify some key people to get in touch with and see if they are willing to help. Popular gamers, influencers and crypto gurus on twitter are the kind of people you should seek out.

4. Undertake an Initial Coin Offering (ICO). Here you would put up a % of your token supply and offer people the coin at a fixed price. Price needs to be quite low at this point since you want to incentivise people that they can make 100x or even 1000x their investment. So, say your total token supply was 1 billion tokens, and you want to get to a similar level to Decentraland who have a market cap of over $1bn. For that to happen, your token would have to reach a price of $1 per token. So in that example, in order for your early buyers to make a 100x profit on their tokens, you may want to be offering them up initially at say, a price around $0.01 or $0.02 each. The investors are taking a big risk since, at this point, they have no way to sell those tokens. You need therefore to set out your plan to them in the form of a professional roadmap and whitepaper which explains in detail the steps you are going to undertake with the project and how you intend to get the token listed for sale on exchanges so they can be confident you aren’t going to run away with their investment (it happens).

5. Audit. For any new cryptocurrency, you need to get the code audited to ensure it is not susceptible to attacks or hacks and that it functions correctly. No way around it, you will need to pay someone for this, lowest cost I’ve seen is about $5k but it's usually more. Luckily, you can do this stage after the ICO so in theory you can utilise funds already received to help pay for it.

6. Get the token listed on exchanges. This is where the real money comes and where it gets more complicated. If you want to get listed on a centralised exchange you will need to get in touch with them and hash out a deal (i.e. they’ll want something out of it). You can get listed on a decentralised exchange much easier though by setting up your own liquidity pool for the token. I won’t go into exactly how that works here but basically you’ll need to put up some of the invested funds (probably ETH in your case) as liquidity along with a bunch of your own tokens that allows people to trade against the pool. The price of the token will be set by how much of one token is in the pool versus the other. As more people buy your token, the proportion of your token in the pool to the other coin (ETH) decreases, making it more expensive for the next buyer that comes along. Conversely when someone sell their tokens back for ETH, the price of your token will go down. All the while, you will earn a % of the transaction fees in every trade for having put up the liquidity pair.

7. Develop the functionality of the token in terms of how it interacts with your platform and can be stored and transacted on there securely. You’ll probably need to get some specialist developers in at this stage to maintain security and ensure that you cannot be easily hacked and have funds stolen.

8. You’ll also want legal advice which you’ll need to pay out for. Crypto is a very complex area with varying regulations across the globe which you'll want to stay on the right side of.

Anyway, wish you the best of luck with it.
 
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Ok, thanks for taking the time to walk me through that. As you said I'd already made some headway, but you also gave me some new information in a concise format, so much appreciated. Here's a proposal for you, join our team, take a share of the initial stake, and manage the blockchain side of our operation as a founding partner. SP brings a lot to the table, and with a skilled and knowledgeable person running the crypto end of the operation, Directors like me, animators like Lago, etc, could return to the jobs we are good at, such as building an unprecedented modular animation system worth investing in. I pitch this to you, because I've spent all week trolling crypto forums trying to get this whole thing rolling, and there's nobody at the wheel over at the Blender, 3ds max, AE, CTA4, desks. Morning meetings have degenerated into artists and composers trying to parse the finance lexicon, and I personally feel like this whole thing would be a lot more efficient if we had a business guy doing business, and let the design guys do design. I can probably take your template above and spend 2 months setting up a system, and if I have to, I will, but SP will slow to a crawl while I retask to becoming an investment broker, and I'd like to avoid that if possible.

Also, update, Save Point accidentally made it's first 104 dollars in profit last night, as I was blindly trying to set up the opensea store by filling out forms with random numbers. Perhaps you can get my frustration, that I keep having to tell a guy composing a symphony orchestra score that I can't pay him anything, and then I go over to this crypto space and accidentally make money by typing the wrong number of zeros into a field. Skill is not being rewarded proportionally out here. Any why is the worst art on opensea selling for the highest prices? What is a cryptopunk and why can't they learn to draw a picture with 70 million dollars in financing? @IvonV says the world is simply paying people who provide value. does the picture below actually have value. I understand the art market, or I did, when a Monet sold for more than a child's crayon drawing.

1630111853011.png

This is a single image, apparently sold for 320,000 dollars. It's owner can now buy 5 houses in my area, for what appears to me to be under 3 minutes of work.


This is the current WIP video from Save Point. It's unfinished, and we haven't released it because we don't feel like it's a good piece of art yet. Needs work. Too much lens flare, needs VO added, bad flow in some of the later cinematography edits. Between 17 of us, we have recieved $104 dollars in funding in 7 months. I often work 80 hours a week. Now I have a new job on top of that, trying to understand and implement all of this blockchain stuff.
 
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directorik said:
Are you sure? That's the only reason they received funding?

Yep, that screen shot looks terrible. I understand you think the project is
awful. But since you don't post a link or any info about these creators I'm
left wondering if there wasn't something else that allowed then to raise
so much money.

We all know that “influencers” manage to raise millions of dollars due to
nothing more than their following. The quality of a project often doesn't
mean much to those giving them money.

But if the reason they raised so much is crypto, I'm in!
Click to expand...

ok first off, here's that link

decentraland.org

Welcome to Decentraland

Explore the first decentralized metaverse that is built, governed, and owned by its users. Discover different districts, meet people, party at events, and more!
decentraland.org decentraland.org

I get what they're doing, but making a game or terrible second life clone isn't it. What they are really doing is designing a proxy for a stock.

In my analysis, which is admittedly of limited value as I view these type things as hype driven plastic garbage, these people are making money by promising to make money.

So to summarize, yes, I think this is all about crypto, and that this 20 million dollar project would be worth about 10 grand without that word involved.
 
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