Swiss-based Arts 3’s involvement in Duwayne Dunham’s film, premiering at Locarno, proves how crypto-financing can operate within hybrid production funding models

Legend of the Happy Worker by Duwayne Dunham (© Arts 3 GmbH)

As independent filmmakers face increasing pressure to secure diverse and reliable sources of funding, blockchain-based financing is emerging as a viable addition to the traditional production financing toolkit. While still in its early stages, this model is gaining traction as a way to supplement, rather than replace, conventional funding channels such as pre-sales, grants and equity investment. By leveraging blockchain technologies and decentralised tools, it introduces mechanisms for community engagement, micro-transactions and international support, offering filmmakers fresh strategies to close their budgets and reach global audiences.

One of the latest examples of this emerging model is Legend of the Happy Worker by Duwayne Dunham, a US-produced movie that is premiering at the Locarno Film Festival (see the news). The film was co-financed through blockchain infrastructure as part of a broader funding strategy employed by Arts 3, a Swiss-based company that owns the Decentralized Pictures platform (DCP+). The organisation has already employed hybrid crypto-financing on two other features, Sour Party and Cold Wallet. According to Leo Matchett, who served as executive producer on Legend of the Happy Worker alongside the late David Lynch, Arts 3 leverages decentralised tools not only to raise capital, but also to reshape how creators connect with audiences and how projects are curated. “This technology is breaking down those barriers to entry by virtue of the fact that the creators and the consumers can become closer together through the use of smart contracts,” he explains.

Filmmakers submit their projects through a decentralised submission platform, paying a nominal fee that goes into a smart contract-based rewards pool. Community members can then vote on submissions, and those who participate in the evaluation process are compensated from the same pool, creating a self-sustaining, incentivised system for surfacing promising work. “The way we do it is that we have people pay to submit ideas, and those fees go into a contract,” Matchett explains. “Anyone who wants to earn that money from the rewards pool can vote and give their opinion on which projects they like the best. Through that process, we can determine which projects are the most commercially viable and the most deserving of support.”

While Arts 3’s model emphasises curated, community-driven support, blockchain technology offers a wider range of tools that can be tailored to different types of film projects. Some filmmakers, for instance, have raised substantial budgets through the sale of NFTs tied to their work. In one case cited by Matchett, a director raised nearly one million dollars by minting and selling still images from a short proof-of-concept film, effectively transforming artwork into equity. “There are many ways you can use this technology to help raise money that weren’t really possible before,” says Matchett. Whether through NFT sales, token-based DAOs (decentralised autonomous organisations) or milestone-based smart contracts, blockchain-based financing allows filmmakers to experiment with new forms of participation, accountability and co-ownership.

While Europe offers more soft-money opportunities, state grants, co-productions and tax incentives, the blockchain layer can complement these avenues, particularly when matched with international co-financiers or transnational audiences. Moreover, blockchain-based financing differs from conventional crowdfunding models. Through blockchain-based governance mechanisms such as DAOs, funds can be released incrementally, tied to clearly defined milestones like script development, casting or post-production. “Whereas traditional crowdfunding asks for blind faith, crypto-tokens let your backers become active participants in the production process,” notes Matchett. “It’s a trustless system, meaning it doesn’t require trust, because the contract enforces the rules.”