Sep 15, 2023

Story Protocol, which describes itself as building open intellectual property infrastructure for the internet, has raised $54 million in funding from Paris Hilton's 11:11 Media, VC firm Andreessen Horowitz, and others.

Video transcript

What do Paris Hilton's 11 11 media and VC firm Andreen Horwitz have in common. Well, both firms have backed story protocol which describes itself as building open intellectual property infrastructure for the internet. Joining us now to discuss is Story Protocol co-founder, Jason Zhao. Welcome. Hi. It's a pleasure to be here. It's a pleasure to have you here. Now, first, we need um an overview of story protocol. Talk to us about the problem you're trying to solve here. Story Protocol's mission is to grow the creativity of the internet era. And as you mentioned, what we're trying to do is build open IP infrastructure on the Blockchain. And what we call the gift for IP S just to give a little bit of context on the situation that we're seeing right now. We really witnessed an explosion of creative content on the internet. Already, social media for the past decade has turned everyone into a creator but generative A I is making it extremely easy and cost effective for everyone to create extremely high quality content. And we think this is a very, very good thing, but we also think that we're leaving a lot of creative and also value capture for creators on the table. Right now, it's extremely difficult for creatives across arts, prose, music, you name any medium to really capture the provenance and attribution of where their IP is going as it's being remixed across the internet at lightning speed. And this is a problem because it means that we don't have a foundation for creatives to track where the value that they've created is going and who's actually using and licensing their work. So, so, so uh III I just want to stop you here because I, I let, let's sort of break it down simple because I'm a very simple person. So I, I'm gonna need some help here. Uh We exactly when, when you say they're tracking their IP, what's the process if I'm an artist? Right? Let's say, you know, is this, first of all, is this new art that I'm tracking the IP on? Is it digital art? Is it something that is something that I've created in the past that I've now been able to somehow put any information, any data that I can then track? What uh just sort of break down the process. How does this from start to finish? How does the artist use it? That's right. So essentially there's two components to how the protocol functions. The first component is that we've built data structures that are extremely scalable that allow you to move either existing off chain IP or brand new on chain IP onto the protocol. So you can think about existing NFC collections plugging into the protocol or entirely new apps that are being built on infrastructure that allow artists to create new IP. So the first step is capturing it on chain into these data structures. And once that's captured on the protocol, we have modules that we built that are essentially allowing people to permission, they license that IP in a legal way. And for us to be able to track how that IP is evolving across different platforms. Uh But uh this is all digital and this is all digital. Um In other words, uh digital production corrected. So in other words, this isn't like II I, if I'm a photographer and I and I have a back catalog of photograph of photographs that I want to uh license et cetera, what would I have to do to then uh convert it into this into this motor? Is this primarily a, are we basically just talking NFTS? No, this is extends way beyond NFT. So we're using NFTS, right? Which are essentially just data structures on the Blockchain to represent important metadata about either on chain or off chain intellectual property. So really, we're storing information, it could be a physical piece of art, it could be a song on soundcloud, it could be really any form of IP it's very flexible. But what's important is that we're tying the off chain world of legal contracts to the on chain world of unchain data essentially we want to have the properties, the como and the scale of the Blockchain apply to off chain IP. Does this depend on people being good actors here? Does this depend on people actually using story protocol to license an image? And I'll give you an example of what I'm thinking about a big problem for creators is that people can just right click and save. We hear that all the time or take a screenshot of something and that makes it a totally different file. How do you track if folks are using the content in that way? Is that possible? Yeah. So that's the whole reason for our existence is because it is so easy to create replicas of a piece of content. It's so cheap that we want to be the source of providence for when a creator first registers work on the protocol. And moreover, we wanna give people the option to like license legally work that is being put on the protocol, right? So this is really important where people are actually licensing uh the work and not just using it and remixing it without any compensation. So we want to give people the ability to do that in a seamless way without needing a complex legal team or a 1 to 1 bespoke legal negotiation. Why do I need the Blockchain? Why do we need a Blockchain to do this? Why can't it be done through a centralized database. Yes, it's a great question. The reason we believe blocking is essential to the solution is that we need an underlying source of provenance that's completely neutral. So of course, if you look at a platform like youtube or Facebook, there's IP moving all around the platform and they have probably 100% knowledge of what's going on within that platform. But the state of the internet today is not that everything is captured on one platform. IP is being remixed across platforms. I mean, I can give you an easy example. You look at Harry Potter, it's obviously gone through different mediums like books and movies. But recently with generative A I, people have been creating Harry Potter and Blea remixes on youtube and then, you know, there's like Drake in the weekend A I remixes happening on Spotify. And so these IP S are moving across platforms and we need a neutral infrastructure that can support any different platform. And we believe uh when it comes to developers and when it comes to building an internet native IP infrastructure that needs to be on the Blockchain because it's credibly neutral and it's entirely compos. So the rules that we are setting on the protocol are rules that we won't tamper with that we can tamper with because of the guarantees that the Blockchain offers. How do you track royalties because they, you know the royalty issue is of course, is the reason why everyone does this stuff I do, can people potentially pay their royalties using this this platform or you know, how do you do? Do you track it at all? Absolutely. So the royalties and economic upside is intimately associated with our licensing module. So as people license IP and grow that IP on chain, they can set certain parameters around not just upfront payment for a license but also recurring revenues. So as long as this uh revenue is happening on chain, we have partnerships and that allow us to track that royalty and to enforce that royalty instantly on the protocol. So that reduces complexity with these licensing agreements where you don't have the negotiations and, and, and the, and, and that's built on what pro what protocol are you building it on? In other words, are you getting paid in e are you getting paid? Like how is it, how is it paid? Yeah. So our smart contracts are all written in solidity and they're EVM compatible and we are going to launch not only on the theory main net but potentially on some layer twos, but that's a decision that we have yet to announce. I think a lot of creators are familiar with something like the creative commons which allows them to set um licensing rights to types of digital content. How is this different? And is there um a barrier for creators in going from something like the creative commons to this? It's a great question I think that Creative Commons is a really big inspiration for us. And we think that the spirit of the licensing that's happening on Story Protocol is inspired by Creative Commons, but we really aim to do is provide a spectrum of rights, uh a menu of rights that are extremely simple and tailored to internet native IP that ranges from closed and siloed and more traditional Hollywood rights where, you know, the creator has a lot of control and maybe doesn't give out many licensing rights at all, all the way to something that looks a lot like CC ZERO. And so we're, we're really providing people and creators the option for what they see as the right fit for their IP as well as what they see as the best fit for their community. All right, Jason, and on that note, super quickly, is this something that could help with um the issues that writers are experiencing in Hollywood right now? Of course, we know that they went on strike in May. Is this potentially a solution? Yes. So we've had a lot of conversations with writers and artists and actors in Hollywood. And it's, yeah, it's honestly a shame what's happening there. Um Obviously, there's a lot going on and we think that story protocol really provides an alternative to the more siloed traditional development process in Hollywood. Uh And we believe that by opening up IP S to more contributors around the world and by rewarding those contributors and the creatives that are owning the IP that we can provide an alternative model that may be, be better for everyone involved in Hollywood. Jason, thanks so much for joining us and good luck with your project. Thank you, appreciate it. That was Story Protocol co-founder Jason Sao.

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