Story: Tokenizing Creativity on the World’s IP Blockchain
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Story: Tokenizing Creativity on the World’s IP Blockchain

Story Protocol

Story Protocol

09 July 2024

Story is launching the world’s IP blockchain, a layer 1 solution to tokenize the multi-trillion-dollar asset class of intellectual property, making it programmable, sovereign, and liquid—transforming the internet into an IP Legoland.

Overview

Intellectual property is the world’s biggest asset class, and it’s not only Hollywood movies and billboard charts: IP means AI models, memes, game assets, character traits, and so much more. Beyoncé’s voice and likeness are IP; a blueprint for a new invention is IP; Mickey Mouse is IP, just as Pepe is IP, and a Fortnite skin is IP. The immense value of this multi-trillion-dollar asset class, however, remains untapped and inaccessible for the masses; it’s stuck in an antiquated legal system that makes it illiquid, while more and more other assets move to the digital sphere.

By building the world’s IP blockchain, Story onramps the immense value of IP to Web3, making it a liquid, accessible, and programmable digital asset. On Story’s layer 1 blockchain, IP turns into IP Legos—programmable, onchain assets, ready for remixing and composing across thousands of applications. By tokenizing creativity, Story is ushering in a digital renaissance. In short: what Bitcoin did to money, Story is doing to IP.

Intellectual Property: The Sleeping Giant

From $0 to $2.46 trillion—that immense explosion is what happens when you unleash the true potential of an asset class. Sure, digital money existed before Satoshi Nakamoto published the Bitcoin whitepaper in 2009, but it wasn’t until the advent of Web3 that money became programmable and autonomous. What followed was a sheer explosion of onchain value.

Beyond the superlatives, there’s a quite sober explanation for this: from five days in the office to fully remote, from newspaper pages to social media and the metaverse—like it or not, our world is gradually shifting towards the virtual sphere. And with us, we do not only take our time and attention—we also take our value. The number of assets making their way into the digital world is increasing day by day.

Currency was only the first step in this explosion, but what an impactful one. Bitcoin, Ethereum, and others have shown how much shared value can be generated when a centralized, gated asset is fully unleashed. The NFT boom painted a similar picture for use cases beyond currency, and this cycle RWAs are making their move to enter the digital, decentralized realm. IP is the last major asset class—and perhaps the biggest yet—to be tokenized.

Worth multiple trillions of dollars, IP is bigger than the entire crypto market, but it’s stuck in an antiquated and analog system that makes it extremely opaque and illiquid. That’s why, even though everyone owns some sort of IP, few know about its value and its possibilities. At the same time, the exponentially growing abundance of AI-generated content demands provable scarcity. On top of that, IP lends itself as a tokenized RWA, since it’s a type of property without a physical correlate, making it an ideal digital native property.

Story’s Technical Foundation

Story provides a vertically integrated technical solution for tokenizing IP. As an infrastructure foundation, our layer 1 blockchain treats IP as a first-class citizen, unlocking use cases that are impossible to execute on other layer 1 and layer 2 solutions. We have brought technical improvements to a standard EVM execution environment, leveraging precompiled primitives to traverse complex data structures like IP graphs within seconds at marginal costs. For instance, our layer 1 can manage the exponentially growing computational demands of downstream royalty payments, efficiently distributing royalties for an IP with hundreds of parent IPs, which themselves may also have numerous parent IPs. Simultaneously, compatibility is key: Story is fully EVM-equivalent, so developers can bring their existing applications to Story. The consensus layer is based on the mature CometBFT stack to ensure fast finality and cheap transactions.

l1 blog diagram

Another dedicated layer is our modular Proof-of-Creativity Protocol, which enables programmable IP functionalities like permissionless licensing, automated royalty payments, and much more. The protocol, which is natively enshrined in our layer 1 blockchain, hooks directly into the legal system via our Programmable IP License (PIL), a universal IP license agreement that interlocks code and law. In combination, these two layers are to IP what fiat is to USDC: the Proof-of-Creativity Protocol onramps IP to the blockchain, while the PIL helps to off-ramp it for traditional use cases. Our modular approach gives flexibility to developers and creators to build their own custom solutions for specialized use cases.

Creating The IP Application Ecosystem

This technical foundation opens up endless possibilities for builders to capture the next wave of IP and consumer applications. Already today, 200+ teams totaling 20M+ IPs are building on Story across verticals including IPFi, AI, and consumer.

Magma, for example, is a suite of browser-based professional design tools that brings real-time creative collaboration to its 2M+ users. Using Story-powered features, creatives can register their work as an IP Asset with a few clicks, generating a blockchain record (ERC-721 token) for their IP. With Story’s Programmable IP License as a legal bridge, they can then seamlessly set the pricing and permission terms for how their work can be used. Anyone interested in using that work can then accept these legally binding terms and license it in a single click.

The team of Mahojin—building an open and decentralized version of Hugging Face—uses Story with a focus on IP tokenization for AI. Data owners, for example, can register their work as IP Assets on Story, equipped with the license terms they favor. AI models can then license big batches of data quickly at marginal cost to train their models. Additionally, AI models themselves can be registered as IP Assets, enabling complex remixes of different models with fair and correct attribution.

Beyond that, tokenized IP is making intellectual property accessible for financial participation, unlocking the new sector of IPFi that integrates the world’s largest asset class into the existing onchain liquidity. That’s possible because Story uses dedicated tokens to handle licensing (ERC-721) and royalties (ERC-20). Applications can tap into valuable IP assets, for example, by creating liquidity pools for a certain IP’s royalty tokens or trading its licensing tokens (liquid licensing).

The Future of Intellectual Property

With the launch of the world’s IP blockchain, Story makes IP programmable, sovereign, and liquid, transforming the internet into an IP Legoland: IP can be remixed and monetized across mediums and platforms, just like DeFi enabled money Legos that move permissionlessly across thousands of applications. This way, Story unlocks a future of creator-owned AI, allowing artists to empower their fans while capturing upside; a future of IPs as RWAs, unleashing liquidity and composability into a multi-trillion-dollar asset class; a future of every app accessing a Roblox-like economy of IP Legos.

All of these use cases are already being built on Story, yet there is so much opportunity left to explore. Join us in ushering in a digital Renaissance.