NFTs (non-fungible tokens) are a type of digital asset created using blockchain technology. Unlike cryptocurrencies like Bitcoin or Ethereum, which are fungible and can be exchanged on a one-for-one basis, NFTs are unique and cannot be exchanged on a like-for-like basis. An IP-NFT in particular is a digital representation of a intellectual property (this could be a filed patent or underlying data that can be used to file a patent) which can be transacted via the blockchain.

If that all seems a bit complicated, the main point is this: IP-NFTs allow creators (in this case, researchers) to monetize their work directly without needing to go through traditional publishing and licensing bodies (which in academia are seen by many scientists as increasingly problematic).

However, following multiple news rounds of controversial stories about the usage of NFTs, as well as their involvement in rug pull schemes used by the rich to get richer, many were left sceptical about the value of blockchain technology. And whilst the dust has settled somewhat, the reputation, to many, was left tarnished. Now according to answerthepublic.com, the top search term for NFTs is "Are NFTs dead?"

The answer to that is a resounding no. ValleyDAO, for instance, has just minted their first IP-NFT, and will very soon be minting more. But in order to build up trust so that the public can see the true value that lies in these IP-NFTs, we have to first address the elephant in the room. Can NFTs even be ethical?

We've put together a comprehensive red flag / green flag list that will help you screen for whether or not a company or organisation using NFTs is worth your trust - or if they’re just the dying breaths of an exploitative system used by the already mega-wealthy to become mega-wealthier.

🚩 The organisation behind the NFT is anonymous and popped up out of nowhere – they have no demonstrable experience in cryptocurrency or other blockchain industries. Though anonymity is often a key feature of the blockchain and cryptocurrency world, it can also be a red flag when it comes to trust and accountability. This becomes particularly important for an NFT if it’s being marketed to retail customers. If a company or organisation (org) has no demonstrable experience or reputation in the industry, it can be difficult or even close to impossible to hold them accountable for their actions. 💚 The org holds Twitter Spaces and Discord events with other communities, and relevant industry players.

🚩 The org lacks clear community values and engages only with paid-for bots - and are constantly inflating the price of their NFTs. A company that lacks clear community values and relies on artificial engagement (i.e. bots) can’t be trusted to have the best interests of its community at heart. They’re more likely focussed on short-term gains over long-term sustainability / community building. And that’s not very web3 at all. 💚 The org encourages and grows organic engagement and is welcoming to newcomers.

🚩 The org’s marketing strategy is largely DM-based, and primarily focuses on immediacy of the sale. One of the oldest tricks in the scammer’s handbook is to pressure their targets into making a decision on the spot, without time to think or do their own research. A marketing strategy that focuses on immediacy and direct messaging often stems from a lack of care for transparency, and instead a focus on quick sales. There’s little-to-no interest in supporting and building a sustainable community. 💚 The org is dedicated to the NFT or blockchain project across all its social media.

🚩 Members on the org’s allowlist (a VIP guest list for NFT launches) have been previously involved in exploitative schemes, and deploy marketing schemes primarily revolving around hype. If members on the allowlist have been involved in exploitative schemes, at best it indicates a lack of due diligence or ethical standards on the part of the company. At worst it indicates a willingness to participate in this sort of exploitation. 💚 The org establishes real partnerships with blockchain projects and Web3 orgs that themselves have a proven-track record.

🚩 The org actively discourages questions, accusing those who express concerns of spreading FUD (fear, uncertainty and doubt). A company that engages in this sort of practise is almost certainly not open to criticism or accountability. This red flag may as well read, “We have utter and blatant disregard for community concerns”. 💚 The org is ready to engage with the community and answer questions, and provides a freely available resource bank for the community to upskill and learn from.

🚩 The org’s UGC marketing (user-generated content) around the NFT is opaque and misleading – i.e. when influencers and celebrities publish content about the NFT, they make false claims and hide their involvement. This one is slightly more difficult to navigate. UGC and influencer use is a tool employed by many companies. And even if paid-for (and thus “fake”), this doesn’t automatically mean they’re out to exploit their consumers or community. Influencers are just a large part of modern marketing, and are a neutral tool that is neither inherently good nor bad. However, if the UGC around the NFT is misleading or false, then it’s a clear demonstration that the company doesn’t have its community’s best interests at heart. 💚 The org is involved in quality conversations and shares resources and knowledge freely (see previous point on resource banks).