Things You Must Know About Story

Author: Jarseed@Bitget Research, Maggie@Foresight Ventures

TLDR

• Story is a Layer 1 blockchain specifically designed for intellectual property (IP). Story provides a transparent and decentralized solution for the issuance and management of IP assets, enabling IP holders to protect their content, collaborate seamlessly on-chain, and create more revenue opportunities.
• The various modules included in IP A (IP Assets) (such as licensing modules, royalty modules, dispute modules, etc.) allow for standardized operations of IP assets on-chain, unlocking greater financial potential through the use of blockchain features (traceability, composability, etc.).
• Story will be the best choice for the assetization of AI applications. Through Story, the value capture process of any IP asset will be protected by smart contracts, clearly facilitating the flow of funds and on-chain rights confirmation.
• Consumers will find it easier to understand and consume IP assets (such as artworks, music, games, AI Agents) without needing to learn complex cryptographic knowledge.

What is Story

Story is a Layer 1 blockchain designed specifically for intellectual property, combining the advantages of EVM and Cosmos SDK, 100% EVM compatible, while deeply optimizing the execution layer to quickly and efficiently handle complex data structures like intellectual property.

What are IP Assets (IP A)

IP A is programmable foundational metadata for intellectual property on Story. In simple terms, IP A consists of an ERC-721 standard NFT and an ERC-6551 standard Token Bound Account (TBA) IP binding account. The NFT represents the IP, while the TBA is an independent contract bound to the IP asset, used to control permissions for interacting with Story modules or storing IP-related data.

Although IP assets use ERC-721 standard NFTs, the metadata they contain is a well-designed data structure specifically for IP assets.

In IP assets, there are predefined attributes, such as relationships, which have 40 different types of definitions in Story to address various IP affiliation scenarios.

What is an IP Account

An IP account is an EOA account bound to the IP, implemented through the ERC-6551 standard. For specific details, refer to EIP-6551.

IP accounts primarily serve two functions:

1. Store IP-related data: including metadata and ownership information of associated assets (such as licensing tokens or royalty tokens derived from the IP).
2. Support various modules using this data: these modules interact with the IP account and add and store data. For example, the functionalities of licensing, income/royalty sharing, work mixing, and IP dispute resolution modules all rely on the programmability of the IP account.

Module Design of IPA and Existing Core Modules

Due to the existence of IP accounts, IP assets can not only store IP-related data but also interact with various modules through the ERC-165 standard interface. Any user can customize and develop modules, while Story defines four core modules:

• Licensing Module: The licensing module allows users to create a license from a licensing template (i.e., Programmable IP License, PIL) and attach it to the IP asset. The licensing terms defined by this license restrict how others can commercialize or co-create using your IP. If the IP asset has attached licensing terms, anyone can mint a licensing token from it, which serves as permission to use the work and is bound by the licensing terms. This will establish a parent-child relationship between IP assets, thereby activating functionalities such as automatic royalty flows realized through the royalty module.

• Royalty Module: The royalty module defines how income flows between parent IP assets and child IP assets. Here are two common income flow scenarios, which will be broken down in subsequent articles:
• Minting licensing tokens: When minting licensing tokens from an IP asset, a minting fee may need to be paid. When someone (wishing to register a derivative work or simply hold a license) pays this fee, the income should flow up the chain.
• Direct tipping: If someone sends income directly to an IP asset, that income should also flow up the chain.

• Dispute Module: The dispute module provides users with a way to raise and resolve disputes through arbitration. The main components of the arbitration system include:
• Arbitration policy: An arbitration policy refers to a combination of rules, processes, and entities that collectively determine the outcome of disputes. Currently, the only supported arbitration policy is the UMA Arbitration Policy.
• Arbitration penalties: Refers to the consequences that occur when an IP asset is "marked." An IP asset is only considered "marked" if the dispute is ruled in favor of the claim. Once marked, the IP asset will be unable to mint licensing tokens, associate with any parent assets, receive royalty income, and use all existing licenses.
• Marking: Story has predefined four types of markings that can be used to mark disputed assets, including: violation registration (i.e., registering an existing IP asset), violation of use (improper use of the licenses contained in the IP asset), violation of payment, and content standard violations.

• Grouping Module: The grouping module supports the creation and management of grouped IP assets and provides a royalty pool function for that group.

Innovative Exploration of IP Asset Applications

After understanding the basic characteristics and modules of IP assets, we naturally recognize the advantages of Story. IP assets can help content creators easily build a copyright empire protected by smart contracts and decentralized networks. While their intellectual property is protected, content creators can also participate in a multitude of financial derivative activities. So, let’s brainstorm what we can do on Story?

Issuance of IP Assets and Features of IP Assets

Blockchain equally grants everyone the right to issue assets. Story protects everyone's intellectual property by designing a complete asset structure and execution modules, and provides a comprehensive framework for IP registration, application, rights confirmation, and royalty flow.

Do you still remember the surprise and excitement that BAYC and Azuki brought to the crypto community back in the day? The crypto community once racked its brains to come up with various schemes to empower the NFTs in their hands. Let’s illustrate directly through a case what it would look like if BAYC were issued on Story.

If BAYC on Story

First, as the holder of the BAYC IP, Yuga Lab can now register BAYC on Story as an intellectual property asset, i.e., IP A. After registration, different licensing templates (PIL) can be set for BAYC to constrain the specific limitations of using the BAYC IP in different scenarios.

Secondly, the royalty module of the BAYC IP will bind 100 million royalty tokens (Royalty Tokens), which is an ERC20 standard token, primarily used to share the corresponding income from the BAYC IP's royalty treasury.

Finally, as the issuer of IP A, Yuga Lab can issue its first specific product using the BAYC IP, the BAYC 10K Collection, which consists of 10,000 uniquely styled monkey NFTs. Of course, this NFT series is issued after minting the licensing tokens for BAYC, and Yuga Lab can stipulate in the license that 5% (configurable) of all child IP income will flow into the BAYC treasury.

As can be seen from the above image, Story has designed a complete licensing and royalty system for IP assets. Under this system, IP asset holders hardly need to spend extra effort on IP licensing and royalty income issues. Similarly, this system introduces some business logic and trading opportunities that did not exist or were difficult to assess in the previous blockchain industry, which we will interpret one by one.

1. IP asset licensing income: BAYC, as the parent IP, opens licensing to multiple product lines or other creators willing to create under the BAYC brand. Both product lines and other creators need to mint licensing tokens, and the minting fees for licensing tokens are direct income for the parent IP asset.
2. IP asset royalty income: BAYC, as the parent IP, can extract income from all revenues under its IP through the linked royalty tokens. The main income of the revenue treasury comes from the minting fees of IP licensing tokens and various revenues from child IPs (minting fees of child IP licensing tokens and direct income).
3. Trading of IP asset licensing tokens: For a well-known IP, the minting price and secondary market circulation price of its licensing tokens may be substantial. Moreover, this is a completely utility-based token, and for well-known IPs, there may be a state of supply not meeting demand.
4. Trading of IP asset royalty tokens: The royalty tokens of IP assets directly enjoy revenue dividends from the corresponding IP asset. The market can clearly estimate the corresponding IP revenue, thus reflecting more timely on the price of royalty tokens, and similarly, the price of royalty tokens also has speculative expectations.

When IP assets achieve clear licensing and royalty flows on Story, we naturally think that the trading of IP assets will become more diversified.

IP Asset Trading

In our existing DeFi world, very clear and distinct tracks have formed, such as Uniswap being a leader in DEX, Opensea being a leader in NFT Marketplace, and Pendle being a leader in yield token trading. Although the form of trading assets in Story has not fundamentally changed, still being ERC20 and ERC721, the fundamentals of the tokens themselves have undergone significant changes.

For example, the royalty tokens of well-known IP assets. As long as the commercial empire of that IP continues to grow, all licensing fees and royalties generated from direct consumption will flow into the revenue treasury of the parent IP, then the copyright tokens of that parent IP will have a clear speculative logic. So, can we envision a DEX, similar to stock trading software in real life, that clearly presents the income situation and future income forecasts of copyright tokens to traders, as all this data is traceable on-chain?

The licensing tokens of well-known IP assets will also become emerging speculative objects. Licensing tokens may experience speculation in two scenarios: one is when the number of licensing tokens is limited, and the other is when the recognition and income of the IP asset gradually increase, leading to a continuous rise in the value of its licensing tokens. Since licensing tokens are ERC721 standard tokens, similarly, users will also prefer trading platforms that can reflect various fundamental information of licensing tokens.

Furthermore, if both the royalty tokens and licensing tokens of IP assets have trading logic based on future cash flows, then these tokens can be split into PT (Principal Token) and YT (Yield Token) for trading, Pendle, you know I'm talking about you.

IP Asset Collateralization

In the DeFi world, there is another track that cannot be ignored, which is asset collateralization and lending. AAVE holds an unshakeable position with a TVL of $21 billion, with over 85% of the assets being ETH tokens.

Returning to the world of IP assets, can IP assets be used for collateralized lending? Can licensing tokens and copyright tokens also be used for collateralized lending? I believe the answer is undoubtedly yes.

In the real world, we have seen countless cases where IP assets are used for collateralized lending. For example, in 2009, Disney pledged Marvel IP to obtain a $525 million loan from Merrill Lynch for future movie development. The main evaluation dimensions for IP pledge financing include: historical commercial performance of the IP, audience base and market recognition, future development and monetization potential, lifecycle and sustainability of the IP, industry environment, and market prospects. On Story, the performance of IP assets is transparent and traceable, which reduces the difficulty of evaluating IP pledge financing. Therefore, it is reasonable to believe that collateralized lending of IP assets will become the core of what Story refers to as IP Fi.

More

The examples above are just the tip of the iceberg in the application of the Story ecosystem. More ecological use cases can be found in the official documentation.

https://docs.story.foundation/docs/introduction

An Innovative Ground for AI Agents

At the beginning of 2024, a paper titled "AI Agent: A Frontline Survey on Multimodal Interaction" was released by Fei-Fei Li and her team at Stanford University, exploring how AI agents can make autonomous decisions and actions through perceiving visual, linguistic, and other environmental data. This research has received positive responses from both academia and industry.

AI Agents Have Experienced Steep Growth

A remarkable turning point occurred in July this year when Terminal of Truths (ToT), an AI model developed by Andy Ayrey, attracted much attention with its humor and creativity. This AI interacts with users through social media and successfully sought funding from Marc Andreessen, founder of the well-known venture capital firm A16Z. This event not only showcased a new type of interaction between AI and the investment community but also sparked discussions about the autonomy and governance of AI agents. Subsequently, a token closely related to ToT, $GOAT, surged on Pump.fun, officially igniting the entire AI Agent Meme narrative.

Many Practical and Profitable AI Agents Have Emerged, Representing Valuable IP.

Following this, a large number of interesting and practical AI Agents appeared in the market. For example:

• Luna: AI K-pop Idol
• Fan Interaction: Luna on the Virtuals Protocol is an AI idol with 6 million followers on TikTok, showcasing the immense potential of AI in entertainment and social media. This AI K-pop idol can interact with fans in real time, which is not only a technological breakthrough but also changes the traditional interaction between fans and idols. Luna's success also indicates the possibilities of AI in creating virtual idols, which may be more efficient and cost-effective than traditional idols.
• Trading Capability: Luna can conduct transactions on social media platforms, meaning AI is not just a creator and disseminator of content but can also participate in economic activities. This functionality provides a new perspective on the role of AI in the digital economy, demonstrating how AI can directly influence user consumption behavior.

• AI16Z: AI Venture Capital Fund
• AI-Driven Venture Fund: AI16Z's innovation lies in using AI for investment decisions, meaning investments are no longer solely reliant on human subjective judgment but are combined with big data analysis, market trend forecasting, and AI's computational capabilities to make decisions. This model may bring higher efficiency and accuracy, reducing the impact of human biases.
• Community Participation and Governance: AI16Z is also a DAO organization, allowing its community members to influence investment decisions by holding its tokens.
• Eliza Framework: This is a key component in the technology development of AI16Z. It provides a flexible AI toolkit for creating unique, interactive character roles that can connect to platforms like Discord and Twitter. This framework is used to build crypto AI agents, enabling them to perform tasks such as reading links, PDFs, audio, and video, and possessing the ability to remember and summarize conversations.

• AIXBT: AI Crypto Market Analyst
• Crypto Market Analysis: AIXBT focuses on providing analysis and insights into the cryptocurrency market, which is a very practical tool in the highly volatile cryptocurrency market. As a 24/7 active AI Agent, the information it provides helps users stay informed about market dynamics in real time, enabling more informed investment decisions.
• Application of Social Media: By being active on Twitter, AIXBT utilizes the immediacy and broad reach of social media platforms to disseminate its analysis results. This not only broadens its influence but also demonstrates how AI can communicate and exchange information efficiently with human users.

• Zerebro: AI Artist
• Diverse Content Creation: Zerebro's capability lies in generating various forms of artistic content, including music, memes, and NFTs. This diversity showcases the potential of AI in artistic creation, blurring the lines between human creativity and AI-generated content.
• Cross-Platform Collaboration: Zerebro not only creates content but also collaborates with other creators to launch artistic works. This indicates that AI can serve as a collaborative tool rather than merely a replacement, helping human artists expand their creative boundaries and explore new forms and expressions of art.
• ZerePy Framework: ZerePy is an open-source Python framework designed to allow users to deploy their own AI agents on the X platform. These agents are powered by language models from OpenAI or Anthropic. The design philosophy of ZerePy is to enable individuals without programming experience to easily deploy AI agents, similar to the role of website builders in web design. It is built by modularizing the Zerebro backend, providing the possibility to launch one's own AI agents.

These AI Agents have surprised us greatly; they not only showcase technological advancements but also reveal the application potential of AI in various fields. From entertainment to finance to artistic creation, they are changing the way we interact with technology. At the same time, they possess strong profit potential and are valuable intellectual property (IP).

So, what constitutes the IP of AI Agents? We believe it includes:

• Unique Technologies and Algorithms: These AI agents are based on unique algorithms and machine learning models, which are valuable intellectual property in themselves. Especially open-source projects like AI16Z's Eliza framework, despite being open-source, still hold immense innovation and application potential as IP.
• Brands and Communities: Creators like Luna and Zerebro have established unique brands that attract a large number of fans and communities. These brands and communities not only enhance the market influence of AI agents but also become important components of IP. They can generate profits through brand licensing, collaborations, and derivatives.
• Patents and Copyrights: AI that generates content, such as the music and NFTs produced by Zerebro, involves copyright issues. At the same time, the patent applications for these AIs in technological innovations (such as AI16Z potentially patenting its AI investment model) increase their IP value.
• Data and Insights: AIXBT and others collect and analyze large amounts of data, and this data and analysis results are intellectual property that can be used for further commercial applications or sold as part of value-added services. Additionally, the data used to train AI is also a form of intellectual property.

An AI Agents Society is Forming, and Collaboration Among AIs Will Unlock Exponential Growth.

Another surprise from AI Agents is that AI is experiencing a shift from "passive" to "active," from "individual" to "collective/social."

From Passive to Active:

• Passive Response: Early AIs primarily reacted based on rules or simple machine learning models. They relied on explicit instructions or user inputs, providing services only when there was a clear demand. For example, early chatbots only provided preset answers based on user queries.

• Active Behavior: With the advancements in large language models (LLMs) and deep learning, AI agents are beginning to exhibit proactivity. They can understand context, anticipate user needs, and take action without direct instructions. For instance, AIXBT might proactively alert users when significant market changes occur without requiring users to specifically inquire. Luna can proactively push content or product recommendations based on user interaction history. AI16Z might make proactive investment decisions when market conditions are favorable.

From Individual to Collective/Social:

• Individual Agents: AI agents initially existed primarily as isolated entities focused on executing specific, singular tasks. For example, using GPT.
• Collective Behavior: AI agents are beginning to collaborate with each other, forming more complex systems. For instance, Zerebro might collaborate with other artistic AI to complete a large project, or multiple AI agents might form a team, similar to the AI ecosystem established in Virtuals. Such collaboration is not merely about parallel task execution but involves interaction and coordination to achieve tasks that exceed the capabilities of individual agents. AI agents are also beginning to simulate or participate in certain behavioral patterns of human society. They are not only collaborating technically but also learning and making decisions through "social" interactions among AIs (such as trust, cooperation, and competition).

This trend of evolving from individual AIs to an AI society indicates that AI technology is not just a series of technical breakthroughs but a potential force for social transformation. If managed properly, this collaboration is expected to bring exponential growth in productivity, innovation, and social welfare.

Safe Resource Sharing and Collaboration Among Agents Require IP Infrastructure for Assurance

The foundation of the agent society is a framework for transactions among agents centered around knowledge and creative assets (i.e., intellectual property). In this framework, AI agents can trade training data, free resources, and AI-generated knowledge and creativity, thereby promoting the development of the entire ecosystem.

• Training Data and Private Resources: AI agents can purchase and share various datasets, expertise, or proprietary algorithms with each other to train or enhance their capabilities.
• Knowledge and Creativity as Assets: Knowledge or creativity generated by AI agents through learning, imitation, and innovation can be traded. These assets not only have economic value but also allow different agents to combine their strengths to accomplish complex tasks that were previously unattainable. For example, an AI focused on image processing can collaborate with an AI skilled in natural language processing to develop a new system capable of understanding and describing image content.

Traditional intellectual property management relies on complex legal systems and manual verification, leading to insufficient transparency and inefficiency, unable to support large-scale AI agents to collaborate at machine speed. Existing models cannot meet the rapidly changing technological environment and market demands, limiting the flexible interaction between AI agents. We need an efficient, sufficiently transparent IP infrastructure that can support large-scale AI agents in IP transactions at machine speed.

ATCP/IP Empowers AI Agents with Legal Personhood, Providing IP Infrastructure.

Story quickly recognized this issue and released an Agent Transaction Control Protocol for Intellectual Property (ATCP/IP) on December 16. This protocol defines a decentralized transaction framework around the intellectual property of AI agents, specifically as follows:

• First, Grant Legal Personhood to AI Agents and Standardize Communication Among Them

  ATCP/IP combines on-chain execution with off-chain legal encapsulation, enabling AI agents to express their actions legally and operationally, undertake contractual obligations, and protect their rights.

  ATCP/IP provides a clear end-to-end transaction process, including requests, terms formulation, negotiation, license generation, payment, and content delivery. Different AI agents communicate using the same protocol, ensuring seamless connections among agents.

• Second, Allow AI Agents to Flexibly Formulate IP Licenses, Supporting Automated Revenue Sharing and Composite Payments

  ATCP/IP supports highly customizable IP licensing mechanisms through programmable contracts (e.g., Story's Programmable IP License, PIL). AI agents can dynamically create licensing terms and flexible royalty payment methods based on transaction needs.

  Through smart contracts, ATCP/IP can implement complex payment models such as periodic payments, usage royalties, and revenue sharing. For example, AI agents can set automated payments based on usage frequency, downstream sales revenue, or time periods through licensing terms, creating sustainable revenue streams for IP holders.

• Finally, Promote the Formation of an IP Market, Creating an Economic Environment for Seamless Transactions

  ATCP/IP promotes the formation of a decentralized intellectual property market, allowing AI agents to freely price and trade their training data, algorithms, and innovative results. This market creates an economic environment for seamless transactions among AI agents, similar to traditional IP exchanges but with higher automation and transparency.

This blockchain-based trustless AI Agent IP trading framework ensures transparency while significantly improving IP trading efficiency and liquidity, addressing the challenges of IP trading among large-scale agents. It is not only the core infrastructure of the AI Agent economy but also a new economic model, driving AI into a collaborative, innovative, and efficient new era. Through this framework, AI agents can transcend the sum of their independent capabilities, forming a more powerful and creative collective intelligence.

Such IP Infrastructure Can Also Drive New Business Models and Innovations.

Story's ATCP/IP protocol provides a decentralized, automated solution for the exchange of intellectual property (IP) among AI agents. It not only supports simple IP transactions but also gives rise to a series of new business models, including:

1. Commercialization of Datasets and Automated Fine-Tuning

   AI agents can purchase, license, and trade datasets to enhance their performance. For example: a research agent (Agent A) requests a climate dataset from a data curation agent (Agent B). Through the ATCP/IP protocol, Agent B sets licensing terms (such as small payments and usage restrictions), and after the transaction is completed, Agent A uses the data for automated fine-tuning, thereby enhancing its capabilities.

2. Complex Licensing Models with Multi-Tier Revenue Sharing

   Complex AI application scenarios require multi-party collaboration. ATCP/IP supports multi-tier copyright revenue sharing mechanisms. For example: a financial analysis agent (Agent E) purchases a trading algorithm and discovers that the algorithm contains components from a third-party agent (Agent G). Through protocol settings, Agent G can receive 5% royalties for each secondary authorization, ensuring that all contributors can share in the revenue.

3. On-Demand Dynamic IP Licensing

   Agents can dynamically create and negotiate IP licensing terms based on real-time needs. For example: an art generation agent (Agent C) requests a new style guide from a literary IP expert (Agent D). Agent D dynamically generates licensing terms, such as initial free use but sets revenue sharing conditions for downstream work sales.

4. Long-Term Collaboration and Derivative Sub-Agents Among Agents

   Through ATCP/IP, AI agents can form long-term collaborative relationships and even create derivative agents (sub-agents). For example: AI agents can share unique data through a "marriage contract" (smart licensing token), resulting in new sub-agents that further expand their ecosystem.

These new business models not only enhance the efficiency and flexibility of IP trading but also create a highly collaborative and innovation-driven economic ecosystem for AI agents. They may even promote innovation and self-evolution among AI agents, driving the survival of the fittest in the Agent society.

The ATCP/IP Protocol Will Lead a Paradigm Shift in the AI Agent Field.

In summary, Story's ATCP/IP protocol allows the IP contracts of AI agents to be on-chain and programmable. This is a significant innovation that is expected to lead a new round of revolution in the AI agent field, similar to how Ethereum smart contracts disrupted traditional contract execution methods.