IP Assets and xNFTs

Leveraging Technology and Legal Frameworks for Intellectual Property Protection

Safeguarding intellectual property is crucial in both technological innovation and legal frameworks. We have partnered with Story Protocol to utilize their on-chain license templates, providing artists and creators with a robust legal infrastructure.

What is an IP Asset on Story Protocol?

IP Assets are blockchain-based digital representations of intellectual property, created by Story Protocol to transform how creative works are managed and monetized.

These assets function as unique NFTs that encapsulate the essence of an intellectual property, whether it's a piece of art, music, software, or AI model. Each IP Asset comes with a Token Bound Account (Similar to ERC-6551) that enables sophisticated on-chain management and interaction.

The core innovation lies in providing creators a transparent, programmable way to track ownership, define licensing terms, and enable direct monetization. By converting IP into a blockchain-native asset, Story Protocol allows creators to establish clear provenance, manage rights, and create new revenue streams with unprecedented efficiency.

IP Assets support complex interactions like fractional ownership, collaborative development, and automated royalty distribution. They essentially transform intellectual property from a static legal concept into a dynamic, programmable digital asset that can be traded, licensed, and evolved in real-time.

How are xNFT IP Assets registered?

Every time a xNFT token is minted, register function is called on a IPAssetRegistry and a default royalty policy is attached to the xNFT token using registerLicenseTerms from PIL (Programmable IP License) template.

The default royalty policy on Story Protocol is the Liquid Absolute Percentage (LAP). This policy allows any asset to determine the downstream distribution of royalties, meaning each IP that is a derivative and sits below in the tree. The LAP policy enables creators to:

1. Set specific royalty percentages for derivative works

2. Maintain consistent royalty structures across derivative chains

3. Ensure fair compensation throughout the lifecycle of their IP assets

How can creators and users use the registered IP Asset?

Creators can set up customized licenses for their IP Assets, enabling derivative works, automated royalties, and revenue sharing mechanisms. They can define precise rules about how their intellectual property can be used, modified, and monetized. Through Story Protocol, creators establish clear pathways for collaboration, allowing others to build upon their original work while maintaining control and ensuring fair compensation. The platform's smart contract infrastructure automatically tracks and distributes royalties, removing complex administrative burdens.

Users gain unprecedented flexibility in interacting with IP Assets. They can create derivative works, engage in commercial projects, and expand creative boundaries with transparent ownership and usage rights. The protocol simplifies licensing processes, eliminating traditional legal complexities.

Licensing models range from completely open frameworks that encourage widespread community engagement to highly restrictive models protecting core intellectual property. Creators can implement nuanced approaches like limited commercial licenses, collaborative frameworks, and AI-specific usage terms.