What is the NFT Lore Layer?
Alternatively referred to as “Layer 2 NFTs”
The NFT Lore Layer (alternatively referred to as “Layer 2 NFTs”) is a conceptual framework to describe any community-driven project that builds off of existing NFT intellectual property (IP) and leverages pre-existing community enthusiasm to create a sub-community with a unique culture and identity. Lore Layer projects are composed of the following key elements:
On-chain assets: The project includes one or more on-chain NFT collections that act as the project's foundation. There are typically various types of NFTs, including PFPs, ticketing/access (factions), pets, items, and achievements.
Storytelling: Storytelling is the fundamental component of a Lore Layer project. The project's brand and NFTs are designed to tell a story that engages users and creates a sense of purpose, community, and longevity.
Sub-community: The project is focused on creating a sub-community within a broader ecosystem by leveraging existing intellectual property (IP). This sub-community is centered around its NFT collections and is built on shared interests, values, and goals.
Multifaceted: The project is all-encompassing and includes some or all aspects of a lifestyle brand, storytelling, social media community, IRL events, and gaming.
By leveraging pre-existing community interest and enthusiasm, building off of existing NFT IP, and creating a compelling brand that includes storytelling, social media, and gaming, Lore Layer projects are unlike any entertainment brand that has come before. These projects are creating vibrant and sustainable ecosystems that are highly valuable and engaging for their user base.
Evolution of the Lore Layer
The definition of the Lore Layer is evolving, but it can be traced back to the launch of one of the first NFTs, Crypto Kitties, in 2017. After the initial launch of Crypto Kitties, the Dapper Labs teamed explained the licensing rights of all kitty holders via their NFT license. This license enabled third-party projects to leverage the Crypto Kitty ecosystem and community to launch their own projects, provided the holders made $100,000 or less. This brought about hundreds of side projects and derivatives.
However, the true catalyst of the Lore Layer came later with 10k PFP NFTs, specifically, the Bored Ape Yacht Club (BAYC) created by Yuga Labs. After the launch of BAYC, a project which granted full license rights to its holders, projects leveraging the BAYC name and individual NFTs exploded. Due to this, the best example of Lore Layer traction exists within the Yuga Labs ecosystem. Harry Liu of Forj Research did an excellent job outlining IP usage across the Yuga Labs ecosystem, as seen in a recent Tweet: Harry Liu @ Forj on Twitter.
While NFT IP licensing set the stage for the Lore Layer, the Lore Layer has since become a large branch on the evolution tree of standard 10k PFP projects that extends far beyond leveraging underlying IP.
After the initial launch of a new PFP or NFT, projects recognized the value of providing ongoing utility for their token holders. This utility came about through storytelling, community, and gaming.
Specifically, within the Yugaverse, these projects are further driven by efforts from The Otherside to eventually integrate their projects directly into the game via the ODK (learn more about The Otherside in our previous post).
Check out lorelayer.xyz to view a complete list of current Otherside-based Lore Layer projects or to submit a new project.
10KTF, one of the most prominent Lore Layer projects recently acquired by Yuga Labs, set the stage for BAYC/MAYC IP leveraging with the launch of their NFT “gear.” 10KTF gear can be minted with your NFTs image embedded in the asset. Outside of their gear, 10KTF is developing an enormously complex story and an NFT-gated mission/questing system, among many other elements.
Beyond the Yugaverse, there are several other ecosystems with a burgeoning Lore Layer, including but not limited to:
TreasureDAO (Specifically, Smolverse)
The Role of Gaming
Recent advances in gaming technology have streamlined both game development and gameplay. Nvidia and Epic games' cloud gaming efforts, such as GeForce NOW and Pixel Stream, bring high-end gaming graphics and gameplay to browsers and mobile devices. Simultaneously, frameworks such as Unreal Engine 5 and Unity make AAA game development significantly more accessible. This technology has the potential to dramatically impact the gaming industry, allowing the web's capabilities to merge with high-end graphics gaming and enabling smaller companies to build incredible gaming experiences on a budget. With gaming more accessible, it is now easier than ever to merge Blockchain, gaming, storytelling, lifestyle brands, and community into a single cohesive experience.
Redefining the “Platform”
Web3 companies that take advantage of The Lore Layer framework are redefining what it means to be a “platform.” Historically, digital platforms, such as Facebook or Steam, enable third-party companies to tap into the platform's network effects at the expense of being tightly coupled to and beholden to the platform itself. Unfortunately, this often leads to the loss of control over user data and privacy, as well as having limited ability to customize the user experience.
Unlike previous platforms, Lore Layer projects can leverage existing communities and network effects without being beholden to a specific platform. Ultimately, this setup is a win-win scenario, enabling parent brands to expand their reach (and revenue in the form of NFT royalties) while simultaneously providing external projects the freedom to operate and expand as they see fit.
Unique to Web3 companies is the ability to garner dedicated fans and engagement through the use of tokenomics and ownership over their assets with NFTs. A mental model to describe this new paradigm is the Fandom Flywheel.
The Lore Layer framework exponentially affects the Web3 Fandom Flywheel, as each additional project builds on top of the original IP. This can also occur at any number of depths. For a real-world example take can look at:
Mutant Ape Yacht Club —> The Mutant Cartel Hounds —> Lil Hounds.
Ultimately, the Lore Layer has the potential to change the way we think about digital platforms and provides a small glimpse into the future of how a decentralized Metaverse could one day operate.
Lore Layer Analytics
The following analytics cover projects listed at lorelayer.xyz.
Analytics as of Mar 28, 2023
Total trade volume: 23,013 ETH
Average Twitter Followers: 47,479
Average Active Discord Members: 1,846
Average Floor Price: 0.204ETH
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