image source: Story

Table of Contents

1. Introduction

2. The Underlying Tech Behind the ‘IP Legoland’ Vision

2-1. L1 Blockchain: The Foundation

2-2. PoC (Proof-of-Creativity) Protocol: The Lego Block

2-3. PIL (Programmable IP License): The Logo

2-4. Iliad Testnet Launch and Ecosystem Updates

3. Future Challenges and Potential Solutions

4. Conclusion

Special thanks to @jwpark02 for the invaluable feedback and review

1. Introduction

On August 19, 2024, authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson filed a class-action lawsuit against AI company Anthropic, accusing the company of illegally downloading copyrighted books to train its AI model, Claude. Just a month earlier, a similar copyright infringement lawsuit was filed against OpenAI and Meta by several authors, including Michael Chabon and Sarah Silverman. This marks over 12 such lawsuits filed in 2024 alone.

As AI models ravenously consume data from across the internet, the line between truth and falsehood, and the concept of ownership, becomes increasingly blurred. The Digital Millennium Copyright Act (DMCA), established in 1998 to protect copyrights in the digital age, now shows its limitations, leaving individual creators, particularly those not backed by major agencies, vulnerable and underprotected.

Enter Story, a platform that aims to tokenize creators' intellectual property (IP) on the blockchain, ensuring that rightful royalties are transparently and fairly distributed whenever these assets are used by others. As AI technology rapidly advances, Story is emerging as a pivotal example of how blockchain can serve as a powerful alternative for protecting creators' rights.

Moreover, Story has the potential to tokenize the $3 trillion IP market, acting as a new driver for the mainstream adoption of crypto. Conversely, the IP market itself stands to benefit from blockchain technology and incentive systems that foster the free and fair distribution of derivatives and remixes, leading to a richer and more expansive ecosystem. From this perspective, Story could evolve into one of the most innovative and influential protocols in the crypto space. Unlike many projects that rely heavily on technological advantages, Story, under the leadership of Co-CEOs S.Y. Lee and Jason Zhao, differentiates itself by focusing on solving real-world problems. The protocol’s $2.25 billion valuation, with a total investment of $140 million, is a testament to this unique approach.

While the potential of Story has been widely discussed, there has been less in-depth analysis of the concrete steps being taken to realize this vision, as well as the technical foundations that underpin it. This report dives deep into the nuts and bolts of Story, exploring its technical framework while also tackling some of the toughest questions the platform might face in the near future. For readers interested in a broader overview of Story and its vision, I recommend reviewing the following resources first:

Recommended Resources:

• Team Story Documentary, ‘$2B Web3 Startup Building the Future of IP in the Age of AI’
• S.Y. Lee, ‘Launching the World's IP Blockchain’
• Jason Zhao, ‘ The Purpose Built L1 Thesis’
• Jason Zhao, Keynote at the Programmable IP Summit
• S.Y. Lee, ‘Don’t Fuck with My IP!’
• Chris Dixon and Carra Wu, ‘Investing in Story’
• Story Foundation, Learn Story Foundation
• 4 Pillars, 'Why Do We Need Story Protocol?;'

2. The Underlying Tech Behind the ‘IP Legoland’ Vision

The technical structure of Story is built upon three key components: the L1 blockchain, the PoC (Proof-of-Creativity) protocol implemented through smart contracts, and the PIP (Programmable IP License). These components are interwoven to transform IP into programmable assets, ultimately creating an on-chain world akin to an "IP Legoland." Let’s delve into the roles and interactions of each component within Story.

Image Source: Story

2-1. L1 Blockchain: The Foundation

The L1 blockchain serves as the foundation of IP Legoland, providing a stable base on which all structures can be securely built. This ensures that IP assets are safely stored and traded, with all data and transactions transparently recorded. Story has developed its own blockchain, optimized for large-scale IP graph traversal, registration, and efficient computation.

Firstly, the consensus layer leverages the Cosmos SDK and the CometBFT (formerly Tendermint) consensus algorithm, which provides fast finality and ensures safety through Byzantine Fault Tolerance (BFT). Due to the structural characteristics of CometBFT, the number of messages exchanged increases quadratically with the number of validators, potentially impacting performance. Thus, the number of validators that can be practically managed on the Story blockchain is expected to be fewer than on Ethereum. However, given that Story prioritizes the efficient management and traversal of IP graphs over solving the blockchain trilemma, this constraint may not have been a major concern for them. Additionally, they have likely added custom modules using the Cosmos SDK, such as options to customize the storage and functionality of validator nodes, though specific details on this have yet to be disclosed.

Image Source: Bottlenecks in Blockchain Consensus Protocols

One of the key features of the execution layer is its EVM compatibility, supporting the use of Solidity and existing Ethereum tools (such as Foundry, Remix, Hardhat, and Truffle) for Ethereum dApp developers. It also supports precompiled primitives for efficiently processing complex data structures. These primitives are designed to optimize functions and modules frequently required for graph traversal in IP management. When a single IP is associated with multiple remix contents, the data is structured as a graph. To manage this efficiently, Story provides precompiled primitives that allow smart contracts to execute complex calculations more quickly and with lower gas fees by reusing existing optimized code. This approach is one of the primary reasons why Story has built its own L1 blockchain.

Image Source: X(@jwpark02)

Some have questioned why Story chose to build a L1 instead of L2, especially since rollups can offer speed and customizable execution layers as well. Story engineer jwpark02 explains the rationale behind this decision from three perspectives:

• L2s are centralized: Today, all rollups operate with a single sequencer, regardless of the proof system (fraud/zk proofs). This creates a Single Point of Failure (SPOF) and fundamentally conflicts with the decentralized ethos of blockchain.
• Want validators from IP companies for max alignment: Story is a blockchain for IP management, making it crucial to onboard major IP companies like Netflix or Disney and integrate their assets into the Story. A strategic approach to this is to involve these IP companies as validators, allowing them to earn token rewards and fostering long-term partnerships. This goal is challenging to achieve within a single-sequencer rollup structure.
• Support rollups in the future with blobspace* and custom data between L1 and L2 (e.g. The Initia-Minitia Model): Minitias are specialized L2 rollup instances on Initia, constructed utilizing the OPinit Stack. The OPinit Stack supports the development of VM-agnostic Optimistic Rollups, allowing each Minitia to tailor its execution environment and other stack components to suit specific business needs over rigid network infrastructure standards. Story also intends to provide similar options for dApps that will be onboarded in the future, but this would be technically difficult to achieve if the protocol were deployed as an L2.

*Blob: Short for Binary Large Objects, this is a new data type stored on the Ethereum beacon chain, primarily used as storage space for rollup data. Blobs have been implemented to the Ethereum network following EIP-4844. For more details, refer to the report "EIP4844 and Its Impact on Rollup Economics.”

2-2. PoC (Proof-of-Creativity) Protocol: The Lego Block

Architecture of PoC Protocol, Image Source: Story

The PoC protocol is a set of smart contracts that allows anyone to onboard their IP onto the Story L1 blockchain, effectively serving as the Lego blocks of IP Legoland. Each IP asset is transformed into an on-chain asset through the PoC Protocol, enabling it to be combined with various modules to create new forms. The PoC protocol comprises five key smart contracts: IP Asset, IP Account, Module, Registry, and PIP (Programmable IP License). These contracts work closely together to manage IPs on-chain.

A. IP Asset

The IP Asset is the cornerstone of Story’s IP management framework, consisting of an ERC-721 NFT and an associated IP Account that together represent a specific IP on-chain. If the IP exists off-chain, the process begins with issuing an ERC-721 NFT to represent the IP, followed by the creation of an IP Account. Once these steps are completed, the IP Asset is registered in the protocol’s IP Asset registry. Existing NFTs, such as Azuki or BAYC, can be registered directly without the need for additional wrapping.

Upon registration in the IP Asset registry, the NFT is officially recognized as part of the Story, and an IP Account is automatically created and linked to it. The IP Account manages the data associated with the IP Asset and facilitates interactions with various modules within the protocol. In essence, while the IP Asset itself is a static NFT with no inherent functionality, the associated IP Account enables the licensing, royalty distribution, and dispute resolution processes related to that IP. The metadata standard for IP Assets can be found here.

B. IP Account

The IP Account is a smart contract based on the ERC-6551 standard, linked to an IP Asset within Story. This smart contract serves as the Token Bound Account (TBA) for the IP Asset, managing its interactions and transactions. While "Token Bound Account" might sound complex, it essentially means that the NFT is equipped with a contract that allows it to perform various functions. The IP Account enables this through two key features:

• execute() and executeWithSig() functions: The IP Account uses the execute() function to call various modules supported by Story, enabling data processing or specific tasks. Additionally, the executeWithSig() function allows another party to execute transactions on behalf of the user via signature, enhancing user experience.
• Unique ID: In line with the ERC-6551 specification, each IP Account’s unique ID is deterministically generated based on the NFT address, token ID, and other relevant information. This ID serves as the address of the IP Account, ensuring consistent management of all data and transactions linked to the IP Asset. This address also is referenced whenever the IP Account interacts with different modules within the protocol.

C. Modules

Modules are smart contracts that can modify the data in an IP Account and handle tasks such as licensing, royalty distribution, and dispute resolution. Story provides built-in modules for licensing, royalties, and dispute resolution, while also allowing developers to customize modules as needed. Let’s start with the Licensing Module.

• Licensing Module: This module is responsible for setting licensing conditions on an IP Asset, supporting derivative content creation, royalty management, and commercial use. Its basic structure and components are as follows:
  • License Template: The License Template is the foundational framework for defining licensing conditions. It sets parameters such as whether commercial use is permitted, whether derivative content can be created, and the royalty rate. These conditions are implemented in code and applied to the IP Asset.
  • License Terms: These are the specific conditions assigned to an IP Asset based on the License Template. Once set, these terms cannot be altered and are represented by a License Token. Holding a License Token grants the right to create derivatives and remixes or use the IP commercially.
  • License Token: The License Token is an ERC-721-based NFT that embodies specific licensing conditions. Tokenholders gain the rights to utilize the IP according to the terms of the license.

Licensing Module Structure (blue boxes represent built-in modules, white boxes represent third-party modules), Image Source: Story

• Royalty Module: This module manages the revenue flow between IP Assets. It automatically distributes royalties to the original or parent IP whenever a derivative content is created or the IP is commercially utilized. The Royalty Module consists of the following components:
  • Royalty Policy: The Royalty Policy is customizable to match the creator’s preferences but generally follows the Liquid Absolute Percentage (LAP) policy provided by Story (see figure below). LAP considers the hierarchical relationships between IP assets to set royalty distribution rates, ensuring that revenue from derivative content is automatically shared with the parent IP.
  • IP Royalty Vault: Each IP Asset has a dedicated IP Royalty Vault where royalty earnings are stored. Holders of Royalty Tokens can claim their share of the revenue accumulated in this vault.
  • Royalty Token: A Royalty Token is an ERC-20 token representing a claim on the revenue generated by a specific IP Asset. The amount of revenue a user receives is proportional to the Royalty Tokens they hold. For example, if IP Asset A has a 5% royalty rate, 5% of the revenue generated by its derivatives is distributed to A. The Snapshot function is used to record the ownership percentage of Royalty Tokens at a specific time to ensure accurate distribution.

Example of Liquid Absolute Percentage (LAP), Source: Story

• Dispute Module: The Dispute Module is designed to resolve copyright and licensing issues between IP assets within Story. It consists of arbitration policies, a tagging system, and functions for dispute resolution and tag removal, aiming to address various problems such as rights infringement and license violations. The structure and key components of the Dispute Module are as follows:
  • Arbitration Policy and Raise Dispute: When a dispute arises, users can initiate a dispute by calling the raiseDispute function on the relevant IP asset. The disputant selects a tag, submits evidence, and pays a fee according to the arbitration policy. The final judgment is set using the setDisputeJudgement function, and once a decision is made, it cannot be changed. Initially, the Story Foundation will handle arbitration, but third-party arbitration services will be introduced in the future.
  • Set Dispute Judgement and Tag System: If an IP asset is tagged as infringed, the issuance of licenses for that asset is halted, its connection to the parent IP is severed, and all licenses are rendered void. The tagDerivativeIfParentInfringed function ensures that an infringement tag applied to a parent IP is automatically applied to all child IP assets. Tags are assigned based on a pre-defined list by the protocol’s governance, with PLAGIARISM (plagiarism) being a notable example. Once tagged, the IP asset’s commercial activities within the protocol are restricted.
  • Resolve Dispute and Tag Removal: When a dispute is resolved, the tag can be removed using the resolveDispute function. If the parent IP’s dispute is settled, the tags on its child IPs are also automatically lifted.
  • Cancel Dispute and Fee Handling: If a dispute is no longer necessary or was mistakenly initiated, it can be canceled using the cancelDispute function. However, the fees paid during the dispute process may not be refundable.

Dispute process, image source: Story

D. Registry

The registry serves as the central repository within the blockchain, managing the global state by providing necessary data when IP Accounts interact with specific modules or when new IPs or licenses are registered, ensuring that this information is updated accordingly. The registry is divided into three main components: the IP Asset Registry, the License Registry, and the Module Registry, each with its distinct function.

• IP Asset Registry: This registry is responsible for recording and managing IPs when they are registered on the Story. The IP Asset Registry primarily handles the state of all IPs, tracking ownership, metadata, license status, and other relevant details. The IP Asset Registry can be accessed here.
• License Registry: This registry manages data related to license terms, the relationships between parent and child IPs, and the specific licenses granted to certain IPs. For instance, when a license is assigned to an IP Asset, it is recorded in the License Registry. As new remixes are created, the License Registry tracks their relationship to the parent IP and provides the necessary data to facilitate royalty distribution. The License Registry can be accessed here.
• Module Registry: This registry oversees the various modules and hooks* used within the Story. The Module Registry controls which modules are approved for use within the protocol and records and updates their interactions with IP Accounts. Developers can register their custom modules through the Module Registry, enabling them to integrate and implement new functionalities with other IP Accounts. The Module Registry can be accessed here.

*Hook modules are smart contract interfaces that verify whether specific conditions are met. They typically include functions to validate configurations, check data settings, and determine interface compatibility. For example, the verify function ensures that conditions are satisfied, validateConfig checks that configurations are correctly set up, and supportsInterface determines whether the hook is compatible with specific modules.

2-3. PIL (Programmable IP License): The Logo

As digital content becomes more widely distributed and the ways to utilize IP become more diverse, traditional licensing methods have increasingly posed significant limitations for both creators and companies. In the conventional media industry, licenses such as Creative Commons are often used. However, these licenses typically require separate contracts for each condition, making the management process complex and costly. For instance, if Disney wants to use its Mickey Mouse character on different platforms, it may need to draft contracts that span dozens to hundreds of pages, a process that can take months or even years to complete.

In response to these challenges, the PIL was created as a smart contract designed to simplify the complex IP licensing process on-chain. It functions as the logo and legal emblem of IP Legoland. This logo not only clearly defines how the Lego blocks are assembled and utilized, but it also serves as a tool that ensures each block is legally protected and used appropriately. The licensing terms defined within the PIL are coded and automatically enforced, obligating both IP owners and users to comply. This ensures that when digital assets are assembled and used in various forms, their use is legitimate and fair.

Through the PIL, IP creators can easily draft licensing agreements, set terms for commercial use, remix creation, royalty rates, and more, all of which are automatically enforced via smart contracts. Furthermore, Story has collaborated with legal experts to ensure that PILs not only hold validity on-chain but also have legal enforceability in the real world, designed to adhere to international intellectual property standards. The goal of the PIL is to reduce the time and cost associated with the licensing process while minimizing the legal risks of IP utilization. Ultimately, PILs aim to serve a role similar to the SAFE* investment contracts provided by Y Combinator to startups in the IP contract market. The Legal Text v1 version of the PIL can be accessed here.

*SAFE Contract(Simple Agreement for Future Equity): A SAFE contract is commonly used by startups to secure initial funding. Developed by Y Combinator to simplify the complex investment process, this contract provides clear and fair terms for both investors and entrepreneurs. It has since become a standard tool used by many startups during their initial fundraising.

PIL Legal Text v1 excerpt, source: Story

The fundamental properties of the PIL are divided into on-chain and off-chain parameters. On-chain parameters codify the key terms of the license to manage the commercial use of IP assets, including whether the license is transferable (transferable), royalty policies (royaltyPolicy), minting fees (mintingFee), whether commercial use is permitted (commercialUse), and requirements for attribution (commercialAttribution). These parameters are enforced automatically through smart contracts.

In contrast, off-chain parameters define the specific conditions related to the environment in which the IP will be used. These include the geographical regions where the IP is permitted to be used (territory), distribution channels (channels of distribution), content standards (content standards), and the governing law of the license terms (governing law). These off-chain parameters are stored in the license’s URI field and can be referenced when necessary.

Story has pre-configured various versions of the PIL by combining the functions mentioned above to suit different purposes and environments for IP asset utilization. Notable examples include Non-Commercial Social Remixing, Commercial Use, and Commercial Remix.

Non-Commercial Social Remix License, Image Source: Story

2-4. Iliad Testnet Launch and Ecosystem Updates

On August 28, 2024, Story officially launched its public testnet, Iliad, marking the beginning of serious technical validation. Within the first three days of its launch, Iliad processed over 5.3 million transactions and created more than 2.5 million wallets. The network also saw the registration of 720,000 IP assets and the issuance of over 11,000 license tokens. However, the average block time was recorded at around 3-4 seconds, which is relatively slower compared to other blockchains like dYdX, Sei, and Injective, all of which also use the CometBFT consensus algorithm.

Meanwhile, Story has been focusing not only on technology development but also on ecosystem expansion. The Builder’s Academy, launched on July 24, 2024, is part of this effort and operates similarly to accelerator or incubator programs offered by VCs. This program provides developers and creators with education, mentoring, and networking opportunities, as well as extensive support for project planning and execution, including technical assistance, human resources, funding, and grants. The program particularly emphasizes IP finance (IPfi), consumer applications, and AI-related fields. Additionally, Story is actively supporting its ecosystem by offering tools like an SDK for developers (Typescript, React, Python) and an experimental environment where creators can mint IP assets and trial register them on the Story platform.

Image Source: Story

As of the end of August, Story has onboarded more than 36 projects in the AI+AIGC, creator platform, and DeFi/IPfi fields, with many more expected to be in the pipeline (According to Story’s co-founder S.Y. Lee in an interview with EO, over a hundred projects are currently preparing to launch services on the Storyl). Currently, four services—Sekai, Blockbook, Unleash Protocol, and Color Mp—have been released as apps and are in operation.

Image Source: Story

3. Future Challenges and Potential Solutions

Story has steadily built a robust foundation for its blockchain-based IP management platform, laying the groundwork to realize its vision of an "IP Legoland." Through its L1 blockchain and PoC protocol, it has created an environment where anyone can tokenize, incentivize, and manage IP assets on-chain. The introduction of PIL has further simplified the process of drafting and executing licensing agreements. Additionally, the Builders Academy initiative has been instrumental in onboarding projects and driving the expansion of its ecosystem.

However, realizing this vision requires more than just technical achievements. The real challenges ahead for Story extend beyond technology to encompass legal, economic, and societal issues. While blockchain technology holds the potential to revolutionize the IP market, its successful integration into the real world hinges on a deep understanding of existing regulatory frameworks and market structures. Thus, the primary obstacles Story will face are likely to arise in the real world, and its long-term success will depend on how well it navigates these challenges. In this context, I have outlined the key questions that Story must address, along with my personal insights.

Q1. Why should major IP giants, already thriving in the Web2 world, take a leap into Story?

Global IP giants are already generating substantial revenue through traditional Web2 models. For instance, in 2023, Disney reported approximately $88.9 billion in revenue, while Nintendo earned around $11.8 billion. Shueisha, which owns major Japanese manga IPs like One Piece, Dragon Ball, Naruto, Jujutsu Kaisen, and Demon Slayer, recorded about $1.8 billion in revenue the same year. Given these figures, one might question why these established companies should consider onboarding to an innovative blockchain platform like Story.

Image Source: Inven

On-chain IP management is still uncharted territory, making it an abstract concept for all. However, the current IP market is highly closed-off and operates inefficiently, suggesting room for new approaches. Typically, when an IP company wants to license a character for use on another platform, it must navigate a cumbersome process involving contracts that can span dozens, if not hundreds, of pages—often taking months or even years to finalize. This inefficiency stifles the full potential of IP utilization, restricting licensing agreements mainly to large corporations. In fact, Shueisha’s licensing revenue accounts for only 26.8% of its total revenue.

Image Source: @ManganiMY

Meanwhile, unofficial creations using Shueisha’s IPs are produced by the tens or even hundreds of thousands each year. For example, searching for "One Piece" on major fanfiction platforms like FanFiction.net and Archive of Our Own (AO3) yields over 70,000 stories, and One Piece doujinshi (fan comics) are produced in the thousands at large-scale events like Comiket in Japan. Despite their popularity, these fan creations do not contribute to Shueisha’s revenue.

Image Source: AO3

One might argue that such unofficial creations should be legally regulated. However, Japan’s doujinshi culture has a long history, and these works are largely tolerated. Even though doujinshi creators technically infringe on the original creators’ copyrights, publishers and rights holders often choose not to take legal action. This tolerance exists because doujinshi and similar fan works help expand the original fan base and maintain interest in the source material. Had Shueisha aggressively pursued legal action against every fan creation, it might not have achieved its current stature.

In this context, rather than merely tolerating unofficial creations, IP companies could consider using Story to officially manage and monetize these works. Story allows for IP to be opened up, enabling anyone to create remixes while ensuring that royalties are paid to the original IP holders. Conversely, creators would gain the opportunity to monetize their fan works through an official platform, potentially growing the doujinshi and other derivative markets several times over.

In conclusion, onboarding to Story offers major IP companies a level of scalability and revenue generation that would be difficult to achieve through traditional means. This approach could significantly boost licensing revenues while also providing fans and creators with the chance to earn from their work in a legitimate way. This strategy would help IP companies maximize the long-term value of their assets, allowing them to adapt to and thrive in future market environments. However, just as Disney opted to launch its own OTT service rather than distribute its content through Netflix, IP companies might choose to create their own protocols rather than adopt Story. This presents one of the most significant challenges that Story will need to address in the future.

Q2. Can Story truly protect registered IP from bad actors? And does its license hold water in the real world?

First and foremost, Story should prioritize creating positive incentives rather than relying on punitive measures. Instead of focusing on penalties for non-compliance, the goal should be to foster an environment where creators can freely engage in creative activities and receive fair compensation. Even today, countless unofficial and unauthorized creations are produced annually, and completely eradicating them is practically impossible. As mentioned earlier, the reason why original creators or publishers often turn a blind eye to such activities is because they recognize the positive impact—expanding fanbases and maintaining ongoing interest in the original work.

Story's role should be to bring these unofficial creations out of the shadows, providing a space where creators can freely use their favorite IPs to create and monetize content. Focusing too heavily on punitive measures may limit the protocol's potential for growth.

Having said that, it’s important to note that Story's PIL (Programmable IP License) carries legal weight, and bad actors who violate these licenses are subject to legal consequences. Story Protocol has collaborated with legal experts to design PIL in a way that ensures its validity not only on-chain but also in the real world, adhering to international standards for intellectual property. The Berne Convention, established in 1886, sets the framework for international protection of literary and artistic works, with over 180 member countries including the United States, United Kingdom, France, Germany, and Japan. PIL is designed to comply with these international standards, enabling legal recourse for IP infringement.

Berne Convention excerpt, Image Source: WIPO

However, it’s important to recognize that the Berne Convention, while foundational, does not fully address the complexities introduced by digital technology, and there are differences in how copyright is enforced across different jurisdictions. For instance, while countries like the United States enforce strict penalties for IP infringement, other countries may have more lenient copyright laws. As a result, the legal enforceability of PIL can vary depending on the legal framework and court rulings within each jurisdiction. Registering an IP asset on Story does not guarantee absolute legal protection everywhere. This is likely why Story may initially focus on regions with strong legal enforcement before gradually expanding to others.

Q3. Is revenue generated off-chain enforceable on-chain?

Yes. Story's licenses hold legal validity in the real world, meaning bad actors who violate these licenses can face legal consequences. One of the key conditions of the PIL (Programmable IP License) is that if a licensee generates revenue through off-chain transactions, they must report this revenue data to the licensor. This ensures that off-chain earnings are accurately reflected in the on-chain royalty system.

However, there are potential challenges, such as the risk of underreporting, deliberate omission, or manipulation of revenue data by creators. These issues can undermine the trustworthiness of on-chain data and pose significant threats to the integrity of Story. Additionally, the process of converting revenue from fiat currency to stablecoins for on-chain management can be cumbersome for creators, impacting the user experience.

To address these challenges, collaborating with payment and platform companies may be crucial for Story. While there currently isn’t an infrastructure that supports automatic conversion between fiat and stablecoins, this could become a reality in the future. Payment companies could collect revenue data from both online and offline sources, automatically converting it into stablecoins and integrating it into the on-chain system. This would streamline the process, allowing creators to manage their revenue on-chain without the hassle of manual conversion, greatly improving the user experience.

Furthermore, platform companies could offer transparent revenue management and seamless integration with on-chain systems. For example, when revenue is generated on a platform, it could automatically be reflected in Story’s on-chain system, enabling creators to efficiently manage their earnings without navigating complex procedures. Additionally, platform companies, with their established legal and regulatory frameworks, could play a crucial role in minimizing legal risks and ensuring compliance with regulations.

Meanwhile, jwpark02 noted that most interactions within Story are expected to occur through dApps within the ecosystem. Based on this, the goal is to collaborate with dApp developers to automate royalty payments and create an environment where users can easily trade licenses and IP assets without needing a deep understanding of the protocol’s technical complexities.

Q4. How can Story guarantee that its dispute resolutions are legitimate?

According to co-founder Jason Zhao, Story aims to establish a "Marketplace of Trust" to ensure the integrity of its dispute resolution outcomes. All IP registered on the Story must pre-select an arbitration policy. These policies can range from fully on-chain mechanisms executed via smart contracts to off-chain methods utilizing oracles, allowing IP owners and users to choose their preferred method of arbitration.

This marketplace of trust is designed to organically form through the free market, where users select arbitration policies they find reliable. For instance, IP assets that adopt decentralized, on-chain arbitration may gain credibility through collective user validation, while those relying on centralized arbitration could face skepticism, potentially leading users and creators to avoid them. Over time, less trustworthy policies may be naturally phased out by the market.

Additionally, Story integrates economic incentives and staking mechanisms to bolster the legitimacy of its decisions. For example, when users stake assets on a particular IP’s arbitration policy, the perceived trustworthiness of that policy increases, thereby enhancing the authority of its rulings. Conversely, in the event of a dispute, a mechanism allowing objections based on staked assets introduces an economic layer that further secures the fairness of the outcome.

Lastly, Story provides a fallback option for legal arbitration through PIL, allowing disputes to be resolved off-chain if necessary. This dual defense system prioritizes on-chain resolution but offers real-world legal recourse to safeguard creators' rights when needed.

4. Conclusion

“Pessimists are usually right and optimists are usually wrong, but all the great changes have been accomplished by optimists.” - Thomas Friedman

Photo: Steve Jobs and Steve Wozniak

Story is still in its early stages. It's true that it has yet to prove itself with tangible results, and its value is currently judged mostly on potential. Some critics may see Story as more hype than substance. Indeed, it will face numerous challenges and obstacles as it continues to develop.

Yet, even from an objective standpoint, the potential of Story is hard to ignore. In an era where AI is rapidly advancing, the vision of using blockchain technology to protect creators' IP and ensure fair royalties is both innovative and boundless in its possibilities.

Those who have changed the world have always been those who dared to tackle seemingly impossible challenges, and optimism has always been at the core of these endeavors. If Story continues on this path of optimism, it has the potential to become a key player in transforming the paradigm of the IP market.

Therefore, the true test for Story will extend beyond mere technical accomplishments. It will be in how effectively it navigates and resolves the complex, real-world problems it encounters. In this process, we must closely watch how Story redefines the IP ecosystem and creates new opportunities for creators and businesses alike. In doing so, Story could set a crucial milestone in shaping the future of the digital economy.