NFT Leasing and Licensing
WIP : Currently work in progress, subject to change as per core contributors
Arka Network is in the process of developing new Interchain Standards (ICS) aimed at NFT leasing and licensing. Drawing inspiration from the ERC-5635 standard, Arka's innovative approach promises to bring transparency, consistency, and clarity to the world of NFT licensing, especially in relation to derivative artworks.
NFT Leasing
NFT leasing enables AI model developers and content owners to lease their NFTs, generating a steady source of passive income. For instance, an AI developer can lease out their model, allowing the lessee to utilize it for their business or create additional revenue streams based on the AI model's capabilities.
Use cases for leasing (for lessees) include:
Building a business around the AI model, similar to applications like FaceApp. Since Arka Network manages scalability and availability, business owners can focus on expanding their ventures without the need to pay royalties or fees to the AI developer for each model usage.
Enabling business owners without development expertise to issue licenses for AI models they lease. All license fees would accrue to the lessee, while the owner receives the lease amount as compensation.
Empowering music streaming companies to lease generated music and use it to generate revenue on multiple platforms. Content owners benefit from a consistent income stream, while music companies leverage their revenue-generating expertise. This mutually beneficial arrangement benefits both parties.
Lease terms are negotiated and agreed upon by both parties, with the owner's (AI model and content) credibility linked to their track record of past leases. Owners who frequently cancel leases may see their rating decline, ensuring that lessees can select trustworthy owners for their leasing needs.
NFT Licensing:
NFT (Non-Fungible Token) licensing is a relatively new concept within the world of NFTs, and it pertains to how ownership and usage rights of digital assets represented by NFTs are managed and regulated. Here are some key aspects and information about NFT licensing:
Ownership and Rights: When someone purchases an NFT, they acquire ownership of a digital asset, whether it's an image, video, music file, or other digital content. However, owning an NFT doesn't necessarily grant the buyer full rights to use, distribute, or modify the underlying content. NFT licensing addresses the permissions and restrictions associated with NFT ownership.
License Types: NFTs can come with different types of licenses, specifying what the owner is allowed to do with the digital asset. Common types of licenses include:
Copyright License: This license allows the owner to view and enjoy the digital asset but doesn't grant them rights to reproduce, distribute, or create derivative works.
Commercial License: This license permits the owner to use the NFT for commercial purposes, such as selling or licensing the content to others.
Derivative Work License: This allows the owner to create derivative works based on the NFT, which can be crucial in the world of digital art.
Smart Contracts: NFT licensing terms are often encoded in smart contracts associated with the NFT. Smart contracts automatically enforce the agreed-upon rules, ensuring that the owner complies with the terms of the license.
Artist Control: Some NFT platforms enable artists and creators to retain control over their work even after it's sold. For example, they may have the ability to update the content associated with the NFT, or even restrict licensee to use one specific version of the AI model/content.
Legal Considerations: NFT licensing is still an emerging field, and the legal aspects can vary by jurisdiction. The terms and conditions of an NFT license should be carefully considered and legally binding to avoid disputes.
Marketplaces and Standards: NFT marketplaces may implement their own licensing standards, and artists often specify their licensing terms when minting NFTs. Additionally, industry standards and best practices for NFT licensing are continually evolving.
Use Cases: NFT licensing has applications beyond digital art. It can be relevant to music, video, virtual real estate, virtual goods in video games, and more. Each use case may have its own unique licensing considerations. In summary, NFT licensing is a crucial aspect of the NFT ecosystem that defines what rights and restrictions come with NFT ownership. It's a rapidly evolving field as creators, buyers, and platforms work to establish clear standards and practices for the licensing of digital assets on the blockchain.
Conclusion:
Pioneering the ICS standards, Arka Network's interchain licensing and leasing framework is set to redefine the creation, administration, and trade of NFT derivative pieces. By rendering a transparent and standardized protocol, Arka determines that both licensors and licensees transact their NFT dealings with utmost clarity and assurance.
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