In one of my recent articles I discussed Story Foundation and their new Layer 1 solution, Story, a blockchain designed to create a programmable peer-to-peer market for Intellectual Property.
One of the core features of Story is its Proof of Creative protocol. I briefly mentioned it in my Story overview post but I decided it deserves an article of its own.
This article builds on some of the concepts introduced on a previous article of mine named Story - Bridging the gap between AI and IP. If you haven't read it and are not familiar with the Story blockchain, I recommend you take a look at that article before proceeding with this one.
Proof of Creativity Overview
The Proof of Creativity (PoC) protocol, which is deployed on the IP Core of the Execution Layer of Story introduces an open Programmable IP protocol, transforming intellectual property (IP) into a first-class entity within the blockchain ecosystem.
One important note is that PoC is not a consensus mechanism. Story uses a Proof of Stake (PoS) consensus mechanism.
The protocol consists of two main elements: data structures and modules. Let's take a look at them.
Data structures
Data structures store relevant IP metadata into "IP legos" on the PoC protocol. Each IP Asset represents an onchain IP and its associated IP Account, a smart contract account that acts as the core identity for each IP.
Modules
Modules are customizable smart contracts that define and extend the functionality of IP Assets in PoC Protocol.
Licensing Module
The Licensing Module empowers IP holders to create and manage license agreements using License Tokens and their associated license terms. These terms are derived from a predefined License Template.
Programmable IP License (PIL)
The Programmable IP License is essentialy a License Template designed to be easily adopted by IP holders, streamline the licesing process and establish a standardized legal framework.
While the terms of an IP Agreement (IPA) and the issuance of License Tokens
occur onchain, these are legally enforced through an offchain legal framework defined by the PIL. This legal contract enables tokenized IP assets to be integrated into traditional legal systems and provides clear guidelines on how creators can remix, monetize, and create derivatives of their IP.
Royalty Module
The Royalty module manages revenue distribution between child IP Assets and their ancestor IP Assets. This allows IP holders, as licensors, to define the percentage of revenue that a child IP must pay to its parent IP. Similarly, the holder of a child IP, acting as a licensor, can specify the percentage of revenue that its derivative IPs must contribute to the child IP.
Each IP Asset has its own Royalty Vault, which stores the revenue paid to the IP asset. Holders of Royalty Tokens can claim a portion of the funds stored in the Royalty Vault, proportionally to their ownership share.
Dispute Module
The Dispute Module allows users to resolve disputes through arbitration. The arbitration system is built around two key components:
- Arbitration Policies: An arbitration policy defines the rules, processes, and entities responsible for resolving disputes.
- Arbitration Penalty: Arbitration penalties determine the consequences for an IP Asset that has been “tagged” as part of a dispute.
Final thoughts
The Proof of Creativity protocol is an interesting mechanism that enables users to monetize their ideas.
The ability to easily set up license agreements, define royalty percentages and exchange IP on a fully decentralized market is a significant development toward a tokenized society.
This becomes especially important because of the context in which we currently live. Artificial Intelligence is built on IP and the current structure does not allow companies to generate all the license agreement it would need.
AI needs crypto, and Story might be at the center of this revolution.
Posted Using INLEO