Can Story Truly Revolutionize the Existing IP Market?

1. Background

On July 10, 2024, with the announcement of Story's Layer 1, CEO @storysylee addressed the "problems" that highly anticipated projects like Monad, Berachain, and other Web3 initiatives are trying to solve. Berachain’s co-founder, @SmokeyTheBera, responded, sparking a heated debate on Twitter over the past couple of days. @storysylee and the Story team emphasized their mission to "solve real-world problems," prompting various discussions and arguments among the community. The discussion wasn't dominated by one-sided criticism; rather, opinions were split between those who agreed with Story and those who opposed it : https://x.com/JuhyukB/status/1811245183788613881…

On July 11, 2024, content creator @JuhyukB from DeSpread shared a critical perspective on "why we need Story," tagging Story and its content creators and initiating diverse discussions. @JuhyukB's skepticism about Story can be summarized as follows:

The most crucial aspect of intellectual property is how disputes are handled and resolved. But Story, like any other system, cannot fully solve these issues. If dispute resolution cannot be conducted in a 100% reliable and accurate environment, creating another ambiguous system seems pointless.

For instance, if I cover a Radiohead song and someone prefers my cover over the original, how should we calculate Radiohead's contribution? If it’s solely because of my cover that the person listens to the song, should I receive some of the intellectual property rights? Or does Radiohead retain 100% of the rights just because they created the original song?

The fundamental premise of Story is to trust the protocol’s consensus as the "source of truth." But what is the truth here? No one knows.

2. Takeaway

2.1 Jay from Four Pillars

The importance of defining a problem can vary from person to person. As many would agree, blockchain intersects with numerous real-world issues, allowing individuals to view and define problems in various ways. However, the blockchain industry is still in its infancy, and we have yet to see cases where it has definitively solved real-world problems. Instead, infrastructure players seem confined to the so-called "trilemma" defined by @VitalikButerin, passing the responsibility of solving practical issues to application builders.

With the increasing interest and investment in Bitcoin and blockchain, evidenced by the approval of ETFs, it seems timely to anticipate the emergence of infrastructure focused on practical scalability rather than technical scalability. In this regard, the problems Story aims to solve are 1) clearer and 2) more impactful than those tackled by any other protocol.

Of course, it is challenging to determine if Story's vision alone can truly address real-world issues from both a technical and design perspective at the moment. Hence, I believe @JuhyukB's critique very valid. However, rather than being a issue that the Story team needs to refute, I see @JuhyukB's critique as a productive discussion to help Story grow faster and more robustly. Embracing and evolving through diverse community perspectives is the philosophy that decentralized systems and Web3 aim to uphold, isn't it?

Finally, I personally do not resonate with the overly pessimistic views that dismiss Story's potential just because it has not yet solved its targeted problems. The Story team is attempting to address real-world issues that no one else has tackled, and their efforts are already significant in spreading the belief among many stakeholders that the existing IP market needs to be redefined.

2.2 Steve from Four Pillars

Honestly, I don't have detailed knowledge about the IP industry or the disputes that occur within it, nor do I have domain expertise to discuss each specific case that @JuhyukB mentioned. However, the problem that Story can definitively solve is the "who, what, how, and how much" issue. For instance, if Radiohead were to register the copyright for their music on Story, questions like who, what, how, and how much can be significantly simplified. When someone uploads intellectual property to the Story network, Story predetermines how the license will be handled, how royalties will be set, and what arbitration policies will apply in case of disputes. This way, those who create derivative works can clearly understand how, based on what criteria, and how much royalty they need to pay when using Radiohead's intellectual property. They can use the intellectual property with full awareness and smoothly resolve economic incentives with the original creators.

The Story network cannot suddenly impose its rules on the existing IP market, nor can it protect what happens off-chain. Some may try to free-ride on this system. Nevertheless, as @jwpark02 mentioned in comparison to Spotify, the market is evolving towards a model where people are willing to pay to use assets. Therefore, the marketplace that Story proposes for IPs could become a very convenient tool for many.

Just like you can't expect to be full from the first spoonful, the Story network needs to build its network and gain experience from various cases to strengthen its system. The significance of Story is undoubtedly present.

3. Others' Opinion

*3.1 Jason Zhao from Story (**Supportive Opinion*)

Ultimately, the resolution sought through blockchain boils down to "consensus." In the case of Bitcoin, it was about establishing a consensus on money. The essence of Bitcoin's consensus is creating a monetary system without the need for force, coercion, or violence, which have traditionally been used to maintain such systems. Similarly, Story aims to resolve disputes over IP assets by establishing its own consensus (i.e., Proof of Creativity). However, achieving such consensus without any subjective elements is extremely challenging. Moreover, even in the real world, many dispute resolution modules involve subjective elements. While Story's consensus logic cannot entirely eliminate subjective factors, it will continue to evolve through the rich history of various blockchains and future trials and errors.

The current issue with the IP system is its complexity. Artists and content creators often do not register their creations because the process is difficult and cumbersome. As a result, those who wish to use these creations are left uncertain about the standards, royalties, and conditions, leading to the problems that @JuhyukB pointed out. Story aims to simplify this by allowing anyone to register their creations and specify the conditions, making it easier for third parties to use these works for derivative creations.

It's understandable to think that people might bypass paying for using creations, but nowadays, many, especially businesses involved in commercial activities, prefer to pay for using intellectual property. This is to avoid legal troubles or lawsuits from creators—there are already multi-billion dollar IP businesses, like Getty, based on licensing IPs online.

Regarding Story's arbitration policies, the platform offers a high degree of freedom to both creators and IP users. For instance, every IP asset uploaded to Story can choose its own arbitration policy, and users can review these publicly disclosed policies to assess the credibility of the IP. Moreover, anyone on Story can create arbitration policies and even establish an economic market for these policies. If someone feels an IP is being misused, they can challenge it, and if the challenge is successful, they receive a bounty. If the challenge fails, the challenger forfeits the assets they staked for the dispute(i.e., slashing system).

Of course, we can imagine a worst-case scenario where none of the arbitration policies work. In such cases, legal arbitration could be considered. This is feasible because all IPs on Story are backed by Programmable IP licenses, even if Story fails to protect someone's IP. Nevertheless, this worst-case scenario is something we aim to avoid, and thus, we are working to refine the dispute process, always prioritizing the protection of creators.

3.2 Simon Kim from Hashed (Supportive Opinion)

Story focuses on creating an IP ecosystem in a way that differs from traditional industries. However, this doesn't mean it can solve all the problems of traditional industry at once. Instead, it is significant in that it aims to redefine the IP ecosystem from the ground up through code-based contracts that ensure trust for everyone. Story is a team of experts who have thoroughly considered IP issues and have a clear vision to address real-world meaningful problems. The IP ecosystem they are defining on Web3 is expanding daily and is definitely worth keeping an eye on.

3.3 Corduroy from Berachain (Critical Opinion)

We are all looking forward to IP being brought on-chain. However, the reason this issue remains unresolved is not due to lack of effort, but because universal copyright protection is an incredibly complex field. This area has been studied for decades, with many people working on it. Numerous projects have attempted to adapt NFT-based IP rights management and creation, and various ERC standards such as ERC-5218, ERC-5553, and ERC-5554 remain in draft form. Additionally, existing blockchains, Chainlink's OCR (Off-Chain Reporting framework), distributed key management protocols, and protocols like Lit Protocol, Ocean Protocol, and TN Network, which allow access to private data, have all been combined to tackle intellectual property and universal copyright protection issues. Despite these efforts, a perfect solution has not yet been achieved. In this context, it is unclear whether a separate blockchain solely dedicated to solving this problem is necessary.

3.4 Critical View from Four Pillars

While we understand the problem that Story is trying to solve, the way it is conveyed is somewhat disappointing. Criticizing projects that are gaining a lot of interest in the market by saying, "they are not solving the real problem" is enough to make many people frown upon Story. The criticism that other chains have made only "little technical tweaks" to existing technologies might also apply to Story, as they have launched their chain by modifying the Cosmos SDK (Comet BFT).

Story just needs to fulfill the reason for its existence, just as other protocols need to fulfill theirs. Those who are not generous to others must hold themselves to the same strict standards. Just as bringing others down does not elevate oneself, we hope that future discussions will focus more on how Story specifically intends to solve its problems, rather than criticizing other protocols.