Framework
CRAFT-I's framework flow is achieved as below:
An SME creates a design and submits it to CRAFT-I.
CRAFT-I turns the design into an NFT and lists it on an NFT marketplace.
NFT investors purchase the NFT.
When the fund reaches CRAFT-I's target, CRAFT-I allocates the funds back to the SMEs to make the tangible products.
The SMEs sells the product to a customer.
Profits
Profit for the SMEs:
The SMEs earn a royalty on each NFT sale.
The SMEs earn the full sale price of the object when they sell it to a customer.
Profit for CRAFT-I:
CRAFT-I earns a commission on each NFT sale.
CRAFT-I earns a fee for facilitating the sale of the product to the customer.
Profit for the NFT investor:
The NFT investor hopes to profit by selling the NFT for a higher price than they paid for it.
The NFT investor may also benefit from the appreciation of the value of the object when it is sold to a customer.
Here is an example of how the profits might be distributed in a specific transaction:
The SMEs create a design for a handmade handbag and aim to have 10 ETH to make more of the tangible products.
CRAFT-I turns the design into 10 NFTs and lists them on an NFT marketplace for 1 ETH each.
An NFT investor purchases the NFT for 1 ETH.
When the fund reaches CRAFT-I's target (10 ETH), CRAFT-I allocates 80% ETH back to the SMEs and 20% to itself.
The SMEs then use the 80% ETH to purchase the materials and labor to make the handbag.
CRAFT-I earns a profit of 20% ETH.
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