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NIFTSY NFT Digest vol. 37 (July). Key Takeaways from Financial NFTs and… | by Envelop DAO

NIFTSY NFT Digest

Key Takeaways:

New NFT chain Story makes the legal system for creative intellectual property
Buk Protocol brings RWAs to Rarible.
Cross-chain NFT lending soon on Metastreet
AI-powered agent NFTs
Dynamic NFTs without blockchain limits.
A new way of estimating the market value of NFTs.
Overall market performance is down, but there are counter-trend anomalies:
— Royalty on Solana and Tensor
— OKX Marketplace
— Immutable X

Main study | News | Development | Analytics | Market

Story makes the legal system for creative intellectual property (IP) more efficient by making IP “programmable” on blockchain. That is, by creating an API-like system where people or programs can license, remix, and monetize IP under transparent terms set by the creators themselves.

There are several elements that make up Story as a whole:

  • Story Network (the L1),
  • Proof-of-Creativity Protocol (the smart contracts),
  • Programmable IP License.

Story Network is a general purpose layer 1 blockchain achieving the best of EVM and Cosmos SDK. It is 100% EVM-compatible alongside deep execution layer optimizations to support graph data structures, purpose-built for handling complex data structures like IP quickly and cost-efficiently. It does this by:
– using precompiled primitives to traverse complex data structures like IP graphs within seconds at marginal costs
– a consensus layer based on the mature CometBFT stack to ensure fast finality and cheap transactions.

Proof-of-Creativity Protocol

The Protocol, made up of smart contracts, is natively deployed on Story Network and allows anyone to onramp IP to Story.

Story Protocol is transforming static IP into composable, living networks by using IP Accounts.

Every IP Asset on Story Protocol has an associated ERC-6551 Token Bound Account. These are called IP Accounts (IPA) that transform your IP into a composable entity, unlocking tons of features in the form of modules.

Licensing Module. Creators can attach License Terms to their IP so others can remix it by minting a “License Token”. This is an NFT that can be burned to create a derivative, used in DeFi, or traded on NFT marketplaces.

When you register your IP on Story Protocol, it is registered as a root IP Asset You can set the terms for its licensing such as:
• Can someone commercialize my IP?
• Can someone use my IP for free? Once these “License Terms” are set, others can license your IP

Although stored on-chain, an IP’s License Terms are enforced by an off-chain legal contract called the Programmable IP License (PIL) The PIL outlines how creators can remix, monetize, and create derivatives of their IP, and can be brought to court in the case of arbitration.

The license itself is an ERC-1155 NFT. When you license someone’s IP, a “License Token” is minted so that you can use it to register your own IP as a derivative of that IP When you do, it will burn the License Token and attach the same License Terms to your derivative IP. Because a license is really just a ERC-1155 NFT, if it is also marked as transferrable by the IP owner, you could trade/buy/sell it on traditional NFT marketplaces Or stake it on a DeFi platform, use it to back NFT-based loans, and more.

Royalty Module. When IP is registered as a derivative of another, automatic royalty flow is created between the two assets. Royalty is defined in code as ERC-20 tokens, which like a License Token, can be used in DeFi or traded.

Dispute Module. In the case of wrongfully registered IP, users can raise and resolve disputes through arbitration on-chain. Because License Terms are held accountable by the PIL (a real legal contract), disputes can also be resolved in the traditional legal system.

Programmable IP License

Although the IPA is on the blockchain, its terms and minted license tokens are enforced by an off-chain legal contract called the Programmable IP License (PIL💊), which allows anyone to transfer tokenized IP to the off-chain legal system and describes the actual legal terms of how creators can remix, monetize, and create derivatives of their IP. The IP assets and modules described above automate and enforce these conditions, creating a nexus between the legal world (PIL) and the blockchain.

Just as USDC enables the redemption of fiat, PIL enables the redemption of IP.

Case

Before Story, if you wanted to create a comic with someone else’s Azuki NFT and your Pudgy NFT, you’d have to first hope the Azuki had a license and then find and contact the owner. You would also need to research the terms of the license for your Pudgy. Since you are not a legal expert, you would probably need a lawyer to create a new contract between the two IPs. This makes it difficult to create anything legal, because few people have the time, expertise, or money to do this except the big studios. Thus, IP is not easy to create.

With Story, Azuki and Pudgy owners can register their IP as IP Assets, and then set terms and conditions — through PIL — that determine how people can license and remix their IP. If your Pudgy is registered in Story, anyone can see those terms on the chain and automatically license your Pudgy using the licensing module, which generates the actual license agreement. You can then register the resulting comic as a derivative work, and any revenue that comes in will automatically be split between you and the IP owners.

Buk Protocol is bringing RWAs to Rarible. You can bookings ETHCC Hotel Room via Dynamic NFTs From July 7th — 10th; that’s also resellable incase you have change of plans! This partnership is not just about listing assets; it’s about redefining the potential of RWAs. Together, BukProtocol and Rarible are setting new standards for utility and functionality in the RWA space.

Hedgey Finance introduced (the new) unlocked token claims
— Merkle tree based token claims for 50k-1m recipients.
— Spin up a custom claim page in minutes
— Recipients claim unlocked tokens
— Set custom start dates & times
— Supports any standard ERC20

Farcaster introduced Composer Actions that allows building apps that can automatically generate a new Farcaster Frame, e.g. an NFT-gated poll.

Analog partners with MetaStreet to revolutionize cross-chain NFT lending. The integration of Analog’s cross-chain protocols with MetaStreet’s NFT lending and object-oriented finance products could potentially revolutionize liquidity and yield opportunities for a wide range of onchain objects, including NFT, RWA, Points, #GameFi and other digital assets.
Key Points:
– Expanded Liquidity and Accessibility of LCTs: MetaStreet’s liquid credit tokens (LCTs) will receive enhanced liquidity and availability thanks to Analog’s GMP, making them easier to transfer and synchronize across ecosystems.
– Increased utility of LCTs: LCTs issued on Ethereum can now be easily used on other chains such as Solana or Avalanche, allowing holders to interact with different DeFi protocols and services on different platforms.

Autonomous OnChain Agents with erc6551. Erc6551 or Token Bound Accounts can bring to life NFTs and transform them into autonomous on-chain agents that can perform transactions for their owner.

AI-powered agent NFTs
Autonomous agent NFTs

RMRK introduced NFT project ME on Base network. It is the first real customisable avatar. You can equip NFTs on it and create your equippable NFTs — true freedom to create and customise.

Farcaster Frames now supports Polygon PoS transactions.

KnownOrigin Ceases Operations Two Years After eBay Acquisition.

Polymarket prediction marketplace crossed $1 billion in value processed and is accounting for ~6% of all transaction fees paid on Polygon.

EthCC — Dynamic NFTs without blockchain limits. Hands-on session to create Dynamic NFTs, using tools to obtain information off-chain from external APIs or creating NFTs that go from one chain to another. Unlock your NFT with tips and tricks to make it dynamic without blockchain limits.

ERC-7743: Multi-Owner Non-Fungible Tokens (MO-NFT). The MO-NFT standard allows a single NFT to have multiple owners, reflecting the shared and distributable nature of digital assets. This model also incorporates a mechanism for value depreciation as the number of owners increases, maintaining the principle that less ownership translates to more value.
Traditional NFTs enforce a single-ownership model, which does not align with the inherent duplicability of digital assets. MO-NFTs allow for shared ownership, promoting wider distribution and collaboration while maintaining secure access control. This model supports the principle that some valued information is more valuable if fewer people know it, hence less ownership means higher value.

Pudgy Penguin loans on NFTfi. “Outstanding debt” is the total value of all active loans.

Currently, Pudgy Penguins have an outstanding debt of $6.79M across all platforms, indicating strong market interest.

Pudgy Penguins have an outstanding debt of $6.79M across all platforms

The value of these loans is rising, with lenders offering more WETH and USDC for Pudgy Penguins. Over the past 3 months, the average loan value on NFTfi has been around $18k, depending on the loan duration.

Loan value is rising, with lenders offering more WETH and USDC for Pudgy Penguins

Arguably the most important metric for blue-chip status is the APR. This reflects the cost of risk. Higher APRs suggest higher perceived risk. For example, CryptoPunks attract an APR of 9–15%. Pudgy Penguins are rapidly catching up.

Most important metric for blue-chip status is the APR

Pudgy Penguins often get the longest NFTfi.com loans with repayments only at the end of the loan term.

NFT loans with longest duration

Lending data provides a deeper and more nuanced view of the market value of NFT collections than trade data alone.

Disclaimer. To date, analytical tools are still evolving and provide only approximate data that do not cover all chains, DAG systems and other types of distributed ledgers, as well as NFTs or less common types, such as utility or financial.

Global Markets (30D)

In July, the total number of users decreased, on Base, it’s almost 2 times, Polygon moved up to 1st place. Solana has overtaken Bitcoin in revenue this month.

Volumes fell proportionately and the leaders did not change. Royalties have dropped 2x overall, and 3x on Ethereum, but on Solana increased 1,5x.

Opensea still the number one.

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