1. Background

The Expansive IP Market

As time progresses, more individuals and organizations are recognizing the economic potential of intellectual property (IP). IP has become a critical asset class, encompassing a broad range of areas, from software code and artistic works to scientific inventions.

Figure 1: Global Intellectual Property Market Value - Estimates and Projections (Self-made)

• Global Market Value: In 2020, the global intellectual property market reached an estimated value of approximately $180 billion. It is projected to grow at a compound annual growth rate (CAGR) of about 8.5% between 2024 and 2028.
• Growth in Patents and Trademarks: In 2020, over 3.27 million patent applications were filed globally, marking a 1.6% increase compared to 2019. Trademark applications saw even more significant growth, totaling around 17.1 million, a 13.7% rise. This surge highlights that despite the economic downturn caused by the pandemic, both businesses and individuals continue to use IP tools to drive innovation and expand their operations.
• Regional Contributions: Intellectual property activities in Asia are particularly robust, with the region accounting for 64% of global patent applications in 2020. China, in particular, stands out as a dominant player, holding the largest share of global patent filings.

Despite the global economic slump and the uncertain job market, the rising value of IP and the growing number of patents and trademarks, especially with Asia emerging as a key hub, indicate that the future of the IP market is highly promising.

Challenges of the digital age

As the IP market continues to expand, the complexity of managing intellectual property has also increased. Traditional IP management models rely heavily on centralized legal systems and manual verification processes, which are inefficient and difficult to adapt to the fast-paced digital era. At the same time, these traditional methods face several challenges, including easy infringement, difficult authorization, and a lack of transparency. Moreover, IP laws vary across different countries and regions, making it difficult to protect the rights of IP owners.

Challenges:

• Lack of Liquidity: Without a unified platform, IP trading and licensing must go through complicated legal procedures. This not only consumes time and effort but also results in high transaction costs.
• Protection and Transparency Issues: In the U.S. alone, losses from digital piracy reach up to $50 billion annually. Traditional legal protection methods struggle to track and address infringements, and the process of collecting evidence and enforcing rights is often cumbersome.
• Outdated Legal Systems: The current IP legal frameworks were primarily designed for the physical world and are not well-suited to meet the demands of the digital age.

Given these real-world challenges, tokenizing IP on the blockchain, making it programmable, and allowing IP owners to manage it directly may provide a potential solution.

2. Introduction to the Story Project

Story is a revolutionary blockchain-based IP management platform that aims to transform the way narratives are created in the creative world. Its core mission is to unlock a new method for creating, managing, and licensing intellectual property (IP) on the blockchain, forming an ecosystem of “story legos” that can be remixed and recombined. Through the Story Protocol, it provides a streamlined framework supporting the entire lifecycle of IP—from creation and management to licensing. This framework includes features such as provenance tracking, frictionless licensing, and revenue sharing, empowering creators to produce freely while benefiting financially. The platform also allows anyone to contribute to and remix existing works, ensuring that the value of these contributions is captured and appropriately distributed.

Development Timeline

• Initial Vision and Founding (Early 2022): Story Protocol was founded in early 2022, bringing together a team of blockchain technology experts, legal advisors, and leaders in the creative industries. Their goal was to develop a platform that would enable global creators and enterprises to manage and commercialize their creative assets.
• Technical Development (Mid-2022): The team focused on building a vertically integrated technical solution to support complex IP data structures and a decentralized management model.
• Launch of the Proof-of-Creativity Protocol (Early 2023): Story Protocol introduced its signature Proof-of-Creativity protocol, allowing creators to register, verify, and protect their creative works on the platform, while enabling automatic royalty payments and license management.
• Funding and Expansion (2023-2024): Story Protocol secured over $150 million in funding through three rounds, attracting top venture capital firms, including a16z, as part of its expansion efforts.

Figure 2: Story Development Timeline (Self-made)

3. Story Network — A Universal Layer 1 Blockchain

Story Network is a general-purpose Layer 1 blockchain specifically designed to efficiently handle complex data structures, particularly those related to intellectual property (IP). Built on a combination of Ethereum Virtual Machine (EVM) compatibility and Cosmos SDK, it leverages the strengths of both technologies to provide high performance and flexibility for IP operations.

EVM Compatibility and Cosmos SDK Integration

• EVM Compatibility: By offering the same execution environment as Ethereum, Story Network allows developers to easily port existing Ethereum applications written in Solidity without the need for extensive modifications. This compatibility reduces development costs and accelerates deployment, enabling developers to quickly build and launch applications on the Story Network. The integration of EVM compatibility lays a strong foundation for the rapid growth of the Story Network ecosystem.
• Cosmos SDK: Story Network adopts the Cosmos SDK as its underlying framework to enhance scalability and transaction efficiency. The Cosmos SDK delivers a robust consensus mechanism and cross-chain interoperability, allowing Story Network to maintain low latency and transaction costs even while processing a high volume of transactions. This combination not only supports the complex data processing needs of IP management but also enables seamless interaction with other blockchains, offering developers and users a wide range of application possibilities.

Advanced Data Processing Capabilities

The complexity of IP largely lies in its multi-layered relationships and interactions, such as a single creative asset involving multiple creators, versions, and derivative works. These intricate, graph-like data structures pose new challenges for blockchain technology. Traditional Layer 1 blockchains struggle to efficiently manage and process these complex relationship networks, especially when there are numerous parent-child relationships, often leading to data inconsistencies and confusion.

To address this issue, Story Network incorporates a graph data storage mechanism in its execution layer. This mechanism allows Story Network to traverse large IP relationship networks quickly and cost-effectively, ensuring that every creative asset’s connections and royalty distributions are accurately tracked and managed. This innovation enables Story Network to support a wide range of IP management and commercialization use cases, such as automated licensing, royalty payments, and dispute resolution.

Figure 3: Story Network Diagram (Self-made)

4. Proof-of-Creativity Protocol

At the core of Story Network is its innovative Proof-of-Creativity Protocol, which provides foundational support for the digitization and automation of IP management. Natively integrated into the Story Network, this protocol enables permissionless licensing, automatic royalty payments, and more, offering a decentralized intellectual property management system for creators and enterprises worldwide.

Figure 4: Proof-of-Creativity Workflow (Self-made)

A New Era of Intellectual Property Management

With programmable IP becoming a reality on Story Network, IP management evolves beyond static legal contracts into dynamic, self-executing smart contracts. This programmability brings automation, transparency, and reliability to IP management, making the entire structure more efficient and convenient.

The realization of programmable IP is based on two key pillars: asset tokenization and module-driven interactions.

• Asset Tokenization: On Story Network, any creator can register their creative assets as on-chain IP assets. These assets take the form of non-fungible tokens (NFTs), representing real-world intellectual property, and are stored in a unified registry. This on-chain record ensures the uniqueness and immutability of each IP, providing creators with transparent proof of ownership.
• Customizable Business Logic: Story Network is not merely a storage platform for IP assets. Each registered IP asset is equipped with its own IP account, capable of executing complex interactions and business logic through modules. These modules function like building blocks, enabling features such as permissionless licensing and automatic royalty payments. In addition to pre-configured modules for licensing, royalties, and dispute resolution, developers can create custom modules to cater to advanced business needs.

*Simplifying IP Usage and Licensing

In traditional IP management, licensing is often a complicated and costly process. The Proof-of-Creativity protocol simplifies this by offering pre-configured licensing modules, making the licensing process more efficient and manageable.

• Ready-to-Use Licensing Contracts: Story offers ready-made licensing contracts similar to Y-Combinator’s SAFE templates. These contracts cover all types of media, allowing creators to define and attach custom licensing terms in just seconds. This streamlined process drastically reduces the complexity of licensing, enabling creators to commercialize their works faster.
• License Tokens: Story Network uses license tokens to manage licensing. These tokens are digital assets that represent the licenses granted. Anyone can obtain a license token to create derivative works, with the creator’s preferred licensing terms automatically applied. License tokens not only simplify the licensing process but also create new use cases, such as IPFi (Intellectual Property Finance), allowing for the financialization of IP through tokenized license trading.

Automated Royalty Payments

Royalty payments are a crucial part of IP commercialization. The Proof-of-Creativity protocol ensures automated and transparent royalty payments by leveraging blockchain technology, providing secure and reliable distribution of royalties.

• Liquid Absolute Percentage (LAP): Story employs LAP policies to define how revenues are shared across derivative works. Each IP asset can pre-set downstream royalty allocations, meaning that income from each derivative work is automatically distributed to the original creators according to predefined percentages.
• Automated Execution and Transparency: Since all royalty calculations and payments occur on-chain, these processes are error-resistant and immune to third-party interference. Creators can be confident that their payments will arrive on time, eliminating common issues of delays and disputes in traditional royalty payments. This automated mechanism provides creators with a dependable stream of income.

Figure 5: Royalty Distribution Using Liquid Absolute Percentage Policy (Official Website)

5.Programmable IP Licenses (PIL)

The Programmable IP License (PIL) is a key innovation of the Story Network, enabling intellectual property (IP) to be brought onto the blockchain with programmability and liquidity. This technology opens up the possibility for a multi-trillion-dollar asset class to gain on-chain liquidity and functionality.

Bridging Blockchain and Real-World Law

On Story Network, IP is not merely a set of legal clauses but a programmable smart contract. Much like how USDC tokenizes fiat currency, Story Network tokenizes real-world intellectual property through a combination of tokenization and universal licensing agreements. This process doesn’t just involve transferring assets to the blockchain, but creating a bi-directional link between on-chain assets and real-world legal systems. PIL acts as a “Y-Combinator SAFE” for intellectual property, offering legal protection while ensuring creators retain control over their works. By providing this secure legal foundation, Story Network facilitates the reliable, on-chain management of intellectual property.

Universal Licensing Agreement

PIL functions as a universal licensing agreement, allowing IP owners to set rules for how their intellectual property is used. With PIL, creators can easily define the terms of use for their works without the need for complicated legal procedures. PIL comes with a range of pre-configured options, which creators can select and customize based on their needs:

• Non-commercial Social Remix: Allows others to remix IP into their own works and distribute the remix, but prohibits reselling or commercial use.
• Commercial Use: Grants others the right to purchase usage rights for display or publication, but prohibits reselling or creating commercial remixes.
• Commercial Remix: Builds on commercial use, permitting others to create and distribute remixes, with the option to set a percentage for commercial revenue sharing.

In addition to these pre-configured options, PIL supports customizable licensing agreements, enabling developers to easily attach and parameterize these licenses through the Story Network SDK.

Figure 6: Programmable IP License on Official Website (Official Source)

6. Application Rollout

Builder Program: Story Academy A mature blockchain ecosystem thrives on a wide array of applications. To foster such innovation, Story Network launched Story Academy, a program specifically designed to support, mentor, and accelerate projects built on the Story Network. The program offers comprehensive technical support, marketing strategies, financial grants, and access to an investor network, helping entrepreneurs bring their ideas to life. Thanks to the support of Story Academy, several projects have successfully applied Story Network’s protocols, including Magma, Mahojin, Sekai, and Ablo.

Magma: Collaborative Design Tool Magma is a collaborative online design tool suite with over 2 million users, allowing creative professionals to work together in real-time. By leveraging Story’s tokenized IP framework, creators can easily register their designs as IP assets and set usage terms through Programmable IP Licenses (PIL).

Figure 7: Magma Website (Official Source)

Mahojin: IP Tokenization for AI Training Data

Mahojin focuses on the tokenization of AI training data, models, and outputs as IP assets. Data owners can register their datasets on Story Network as IP assets and define licensing terms. This system ensures that AI model developers can quickly and affordably access high-quality training data, while also protecting the rights and interests of data providers.

Figure 8: Mahojin’s Integration with Story (Official Source)

7. Conclusion

The IP sector holds vast untapped potential, and Story Network’s early positioning gives it a first-mover advantage. With over $120 million in funding, Story Network has attracted strong interest from investors. The platform revolves around three core components: a universal Layer 1 blockchain, the Proof-of-Creativity protocol, and Programmable IP Licenses (PIL).

While Story Network has made notable progress in financing, technology, and practical applications, the IP market is still in its early stages and will require time to fully mature.

Disclaimer:

1. This article is a repost from [foresightnews], originally titled “Story Blockchain Empowering Intellectual Property”, with the copyright belonging to the original author [Trustless Labs]. If there are any objections to the reposting, please contact the Gate Learn team, and the team will address the issue promptly according to relevant procedures.
2. The views and opinions expressed in this article are solely those of the author and do not constitute investment advice.
3. Other language versions of this article have been translated by the Gate Learn team, and copying, distributing, or plagiarizing these translated versions without mentioning Gate.io is prohibited.