Imagine a world where your creative work—whether an AI-generated artwork or a remix of your favourite characters—automatically earns royalties whenever it’s used. Welcome to the next level of intellectual property management with Story Protocol
What is Story Protocol?
Think of Story Protocol as the ‘Spotify of IP,’ but instead of just music streaming, it enables the remix, reuse, and royalty management of intellectual property on a decentralised stage.
More specifically, Story Protocol is a purpose-built Layer1 blockchain solution designed to make managing intellectual property (IP) more efficient by enabling “programmable” IP on a decentralised platform. Story allows creators to license, remix, and monetize their IP with transparency and automation. Through components like the Proof-of-Creativity Protocol and Programmable IP License, Story ensures that creators can protect, manage, and expand their IP easily, bridging the legal world with blockchain technology for a seamless experience in IP management.
In this article, we dive into what problem Story aims to solve and offer an overview of its unique aspects, such as Proof of Creativity and Programmable IP!
Why Does IP Management Need a Makeover?
Story Protocol addresses several key challenges in the current IP system including barriers of entry due to complex licensing, scalability issues and outdated Web2 IP systems. Below we expand on each pain point:
Complex, Costly Licensing: Traditionally, protecting, licensing, and monetising IP requires lawyers with associated costs and lengthy processes. To this end, IP management is often inaccessible for many creators, limiting their ability to license and monetise their work effectively.
Scalability Issues: Enabling others to use or build on IP typically involves one-to-one licensing deals, which are time-intensive, costly, and difficult to scale. Such inefficiency issues often mean that IP remains underutilised.
Outdated IP Systems for Digital Media: The explosion of AI-generated media has strained the existing IP framework, which was originally built for physical content. Current systems struggle to keep pace with the speed and volume of digital and AI-produced content, leading to issues in licensing, attribution, and control.
“Story is trying to tackle a timely problem with its tech — theft of copyrighted media on the internet by powerful generative AI models like OpenAI’s GPT” – Ryan Browne, CNBC
The Multi-faceted Solution:
Creators shouldn’t have to spend more time navigating legal hurdles than making art. Story Protocol brings the focus back to creativity by handling the bureaucracy for you.
To achieve the above, the Story protocol brings a blend of solutions including:
- A purpose-built Layer-1
- Proof-of-Creativity Protocol
- Programmable IP Licensing
Let’s break down each one below:
(Source: Story Docs)
A purpose-built Layer-1
Story Network is 100% compatible with the Ethereum Virtual Machine (EVM), which means it can seamlessly execute smart contracts written for Ethereum. EVM compatibility allows developers to deploy dApps without core modification, enabling them to leverage the vast array of tools, libraries, and development resources available in the Ethereum ecosystem. By maintaining such compatibility, Story Network provides a familiar environment for Ethereum developers while enhancing the capabilities needed to manage IP on-chain.
Furthermore, unlike general-purpose blockchains, Story Network is purpose-built to manage complex, graph-based data structures often used in IP and creative assets. IP data, including licensing terms, ownership history, and derivative relationships, can be intricate and involve multiple linked entities.
Story Network optimizes for this complexity through Precompiled primitives – functions specifically designed to handle IP-related data structures, such as IP graphs. They enable the rapid traversal and processing of interconnected data, such as relationships between original and derivative works or multi-party licensing agreements. These optimizations allow complex queries and actions to be performed within seconds at minimal cost, ensuring that creators and users can interact with IP data efficiently.
To ensure fast and economical transactions, Story Network’s consensus layer leverages CometBFT, a proven and secure framework commonly used in the Cosmos ecosystem. CometBFT offers several advantages:
- Fast Finality: Transactions reach finality quickly, meaning they are confirmed and added to the blockchain in a short time. This is essential for an IP system where speed and certainty are necessary for applications such as real-time licensing and distribution of royalties.
- Low Transaction Costs: CometBFT’s efficient consensus mechanism allows Story Network to keep transaction fees low, making it accessible for users to interact with IP assets without incurring significant costs. Fast consensus is especially beneficial for creators who want to mint, license, or track IP assets on-chain without prohibitive fees.
By combining EVM compatibility with targeted optimisations for IP and an efficient consensus model, Story Network is well-suited to support a dynamic and scalable ecosystem for managing and monetising creative assets on the blockchain.
Proof-of-Creativity Protocol
The “Proof-of-Creativity” Protocol is a core feature of Story Network that enables creators to securely register, license, and monetize their intellectual property (IP) on the blockchain. Deployed as a series of smart contracts, this protocol makes it easy for users to bring IP assets (IPAs) onto the Story Network.
Creators can register their IP as “IP Assets,” which are fundamental data structures that represent programmable IP metadata on the blockchain. Each IP Asset (IPA) includes:
- An On-Chain NFT: This NFT can either be an existing asset, such as an Azuki NFT that inherently represents the IP, or a newly minted NFT that symbolizes off-chain IP, like physical or real-world assets.
- An IP Account: This account is based on an adapted ERC-6551 (Token Bound Account) standard, which allows the NFT to function as a “container” for interacting with the broader ecosystem and managing permissions.
To enhance functionality, IP Assets can be managed using different protocol “Modules”:
- Licensing Module: Enables IP owners to define specific usage terms for their IP, such as whether derivative works can be created commercially and at what cost. Licensees can then create derivative works and obtain “License Tokens,” which are NFTs bound by the original terms.
- Royalty Module: Allows creators to set up automatic revenue-sharing for derivative works, so that each time a derivative work generates income, royalties are distributed seamlessly according to the original IP’s terms.
- Dispute Module: Facilitates the resolution of conflicts over IP use by allowing IP owners and licensees to raise disputes, which can be resolved within the Story Network ecosystem.
By streamlining IP registration and interaction with these modules, Story Network makes it simpler for creators to control, license, and profit from their IP in a transparent and automated way.
In case you would like to understand more about the Proof of Creativity, be sure to check out this keynote from the ETHGlobal 2024, San Francisco.
Programmable IP: Bridging Blockchain and Law
The Programmable IP License (PIL) is a critical off-chain legal agreement that supports and enforces the on-chain terms of IP Assets (IPAs) and their License Tokens on Story Network. By bridging on-chain and off-chain environments, the PIL allows tokenized IP to operate within traditional legal systems and lays out clear, enforceable legal terms for how IP can be licensed, remixed, monetized, and used to create derivative works.
On Story Network, the smart contract modules — including licensing, royalty, and dispute functions — automate and enforce the PIL’s terms on-chain, ensuring that any actions taken with IP Assets align with both blockchain protocols and established legal standards.
Much like how USDT is redeemable for fiat, the PIL provides a “redemption” mechanism for IP, meaning that, with the PIL, IP holders can confidently use tokenized IP in both blockchain-based and traditional legal contexts, securing legal protections and monetization avenues for their assets.
Real World Application
Before Story, if a digital creator wanted to craft a piece of work by combining their NFT (such as BoredApe) and someone else’s NFT (like PudgyPenguins), they would first need to hope that the BoredApe has a license and then find and contact the owner – this is a tough task due to pseudonymity and globality of blockchain.
Additionally, the artist would need to research the license terms for their PudgPenguines. Most likely, a digital artist would lack legal expertise, warranting a costly lawyer fee to create a new contract between the two IPs.
The combination of the above challenges, which are lack of IP attribution and IP clarity, creates a big burden on legally creating digital properties because few creators have the time, expertise, or money except large studios. Thus, IP is not easily composable.
With Story, BoredApe & PudgyPenguin owners can register their IP as IP Assets and set terms (using the PIL) that outline how others can license and utilise their IP. If the owner’s BoredApe is registered on Story, anyone can see those terms on-chain and license the asset automatically using the licensing module, which generates a real license agreement.
Story Today
Traction
Story protocol is currently in testnet, with 240+ million transactions processed and 21+ million wallets created according to the explorer.
As shown below, the number of total accounts on the Illiad testnet has been steadily rising to reach 6.793M, showcasing Story’s sustainably growing transactions.
When it comes to the number of IP transfers, the total number of assets being transferred has reached 10.128M. The erraticness of the trend can be attributed to the fluctuation in the NFT market, as well as to the fact that the protocol is still in the test phase.
Apps
Story protocol has attracted various applications focusing on different areas such as AI, Creator Economy and SocialFi. Below we offer you a bird’s eye view of the Story ecosystem, followed by an overview of Magma, Mahojin, Sekai and Ablo apps.
Magma
A digital art collective is hosting its first global collaboration event. Through Magma, artists from five continents contribute to a massive, evolving mural. Each brushstroke is recorded on Story Protocol, ensuring every contributor is recognized and compensated. When the final artwork is sold as an NFT, royalties are split automatically, rewarding everyone who left their mark on this digital masterpiece.
Mahojin
Mahojin is a remix AI layer that integrates generative AI power into 3rd-party apps. For end users, it offers an innovative remix UX and vast model repository to easily create high-quality images in their preferred apps. For AI creators, Mahojin enables IP tracking and fair revenue sharing with end-to-end connections to end-users.
Sekai
With Sekai, a fan of an indie universe co-creates a side story and earns royalties alongside the original author—a true collaboration across mediums. IP owners can create their universe and set the contribution rules, including monetization models.
Ablo
Imagine customising a digital sneaker design inspired by your favourite celebrity. Through Ablo, you can remix a fashion icon’s NFT collection and add your unique flair using generative AI tools. When the design is minted and sold, royalties flow back to both you and the original designer. Now, even fans can leave their creative mark on global fashion trends while earning recognition and revenue.
Conclusion
In conclusion, Story Protocol offers an innovative blockchain-based approach to managing and monetizing IP by addressing key challenges in traditional IP systems. By leveraging a purpose-built Layer 1 blockchain, it provides streamlined, automated solutions for licensing, scalability, and integration with real-world legal frameworks.
Through tools like the Proof-of-Creativity Protocol and Programmable IP Licensing, Story Protocol allows creators to securely register, control, and monetize their IP, facilitating seamless collaboration and transparency in digital content creation. As demonstrated in the testnet phase with millions of transactions, Story Protocol has the potential to solve the issues of costly licensing, scalability issues and outdated management issues across creative industries.
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