What is Story Protocol

Introduction to Story Protocol

Introducing the Programmable Intellectual Property (IP) Layer

Story Protocol is making the legal system for creative Intellectual Property (IP) more efficient by turning IP "programmable" on the blockchain. That is, creating an API-like system where people or programs alike can license, remix, and monetize IP according to transparent terms set by creators themselves.

The "Why"

First, the problem: Creators want to make sure their IP (a legal concept) is protected, easy to license, and monetize. Right now this is done via the traditional legal system, where handling infringement on IP requires lawyers, is extremely expensive, and is time consuming.

Additionally, allowing others to use your IP and grow it requires cutting one-to-one licensing deals which requires more lawyers, more money, and is unscalable. As a result, most licensing simply doesn't happen.

The "How"

Creators can register their IP as “IP Assets” on Story Protocol. IP Assets (IPA) are the foundational programmable IP metadata on Story Protocol. Each IPA is composed of:

  1. an on-chain NFT. This could be an existing NFT like Azuki that itself is the IP, or a new NFT specifically minted to represent some off-chain IP like a real-world asset.
  2. its associated IP Account, which is a modified ERC-6551 (Token Bound Account) implementation.

To interact with IP Assets within the protocol, we use “modules” such as the licensing, royalty, and dispute modules. For example, the owner of an IP Asset can set terms on their IP such as whether or not derivative works can use the IP commercially (and at what cost). Creators of derivative works can then seamlessly extend their work by minting “License Tokens” - outlined by the terms and also represented as NFTs themselves - using the Licensing Module, create revenue streams from derivative works using the Royalty Module, or raise a dispute using the Dispute Module.

Although on-chain, an IPA’s terms and minted License Tokens are enforced by an off-chain legal contract called the Programmable IP License (PIL💊), which outlines real legal terms for how creators can remix, monetize, and create derivatives of their IP. The IP Assets and modules described above are what automate and enforce those terms, creating a mapping between the legal world (PIL) and the blockchain.

An Example

Before Story Protocol, if you wanted to create a comic with someone else’s Azuki NFT and your Pudgy NFT, you would first need to hope the Azuki has a license and then find & contact the owner. You would also need to research your license terms for your Pudgy. Since you’re not a legal expert, you would probably need a lawyer to create a new contract between the two IPs. This creates a burden on anything ever getting created legally, because few people have the time, expertise, or money for that except large studios. Thus IP is not easily composable.

With Story Protocol, Azuki & Pudgy holders can register their IP as IP Assets and then set terms - using the PIL - outlining how people can license and remix their IP. If your Pudgy is registered on Story, anyone can see those terms on-chain and license your Pudgy automatically using the licensing module, which generates a real license agreement. You can then register the resulting comic as a derivative, and any revenue that flows in can be distributed between you and the IP holders automatically.