Bessie Liu

Web3 media company Doodles is revamping its treasury, the Doodlebank, to enhance support for community projects.



Earlier in January, the Doodles community appointed an advisor to oversee the Doodlebank project. It recently created a community council that will focus on establishing council governance and developing a budget and proposal vetting process.&nbsp;



The community council will also be held accountable for communicating Doodlebank updates to its community members.&nbsp;



As of now, there are roughly $5 million in crypto in the Doodlebank waiting to be deployed.



<h2 class="wp-block-heading">Removing the $100k commercial license cap</h2>



One of the most significant updates about the Doodlebank project is its removal of the $100k commercial license cap for projects which are supported by approved Doodlebank proposals.



In an interview with Blockworks, Julian Holguin, Doodles CEO said that the initial purpose of the $100k cap is to protect Doodles&#8217; intellectual property, or IP.



“We want to ensure that we can control the IP and create the business opportunity for our company and our community,” Holguin said.&nbsp;



But with projects initiated through the Doodlebank, creators won’t just have the opportunity to use their one individual NFT, he noted, they will also have access to other parts of the Doodles brand to build out their ideas.&nbsp;



“So not only are we going to lift the cap and make a real business opportunity for you [the creators], we&#8217;re going to fund it for you too,” Holguin said.



Holguin notes that, currently, the Doodlebank is given a percentage of money from the sale of Doodle NFTs — though the goal for the Doodles business is to diversify that source of revenue eventually.



“We have a flagship retail experience launching this summer, there will be ticket and merchandise sales, and sponsorship opportunities around it,” he said. “You can think of it as a scaled-down version of Disneyland.”



Ultimately, the Doodlebank initiative is designed to bring the Doodles community closer together by giving more opportunities to the NFT holders.&nbsp;



“We’re going to be bringing our community into the world of Doodles — they’re already a part of it, but now they get to be part of this fantasy world as well, that’s the sense of identity that does not really exist with IP right now,” he said.



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Doodles CEO Imagines a ‘Scaled-down Version of Disneyland’

Ornella Hernandez

<div id="highlights-block_6319d73558517" class="highlights">
 <ul>
 <li>Metaverse trademark registrations through 8 months of 2022 have eclipsed all of 2021</li>
 <li>ENS is the top ETH collection with the most volume on OpenSea within the past seven days</li>
 </ul>
 
</div>



This week Blockworks looked at <a href="https://cms.blockworks.co/venture-capital-bullish-on-building-gamefi-in-a-bear-market/" target="_blank" rel="noreferrer noopener">the state of the nascent GameFi market</a> and how venture capital is keen on pouring money into it during a bear market.



Additionally, a new Solana NFT collection, y00ts, <a href="https://cms.blockworks.co/latest-solana-nft-collection-gives-ethereum-nfts-a-run-for-their-money/" target="_blank" rel="noreferrer noopener">has already generated</a> over $7 million worth of secondary sales since Monday despite minting delays.



Blockworks recaps other notable stories that caught the eyes of the Web3 Watch.



<h3 class="wp-block-heading">Metaverse trademarks are booming</h3>



4,150 trademarks relating to Web3 and the metaverse have been filed with the United States Patent and Trademark Office (USPTO) so far in 2022. This is slightly more than twice as many as the total metaverse trademark registrations in all of last year — 1866.



Three major brands have put in their own filings in the past week alone, including carmaker Ford, <a href="https://tmsearch.uspto.gov/bin/showfield?f=doc&amp;state=4804:24nzyj.5.1" target="_blank" rel="noreferrer noopener">with 19 trademark applications</a> for virtual cars, trucks, vans and clothing, as well as an NFT marketplace.



Sony Music filed trademarks for its Columbia Records logo to be used in association with NFT-backed media including art &amp; music NFTs, music and podcast production as well as artist management and music distribution services.&nbsp;



Luxury goods retailer Hermes also <a href="https://tmsearch.uspto.gov/bin/showfield?f=doc&amp;state=4804:24nzyj.6.7" target="_blank" rel="noreferrer noopener">filed trademarks</a> for its name to be linked to NFTs, an NFT marketplace, virtual clothing and footwear, fashion shows and cryptocurrencies. It also mentions plans to create game software featuring avatars, alongside plans for user authentication services for e-commerce transactions.



Metaverse and NFT-focused applications are growing all over the world. The European Union Intellectual Property Office (EUIPO) claims to have registered 205 applications using the term “metaverse” in 2022.



The number of NFT-specific applications was 1,277 in 2021, but as of September 2022 there have been 1,157 applications.



<h3 class="wp-block-heading">For hoops fans who fancy NFTs</h3>



The National Basketball Association (NBA) and the National Basketball Players Association (NBPA) <a href="https://www.nba.com/news/nba-nbpa-sorare-fantasy-game-release" target="_blank" rel="noreferrer noopener">teamed up</a> with French startup Sorare to launch a free-to-play fantasy basketball game this Fall.



Sorare is mostly popular in Europe for its NFT-based fantasy soccer game. After partnering with the Major League Baseball (MLB) association in July, it has now turned to basketball fans as it expands within the US.



This partnership makes Sorare the official NFT fantasy partner of the NBA and gives it the rights to use official NBA league and team logos across its products.



The fantasy game will be released in time for the 2022-23 season and plans to enable fans to buy and sell digital NFT cards representing their favorite players and teams, while putting together a line-up that can earn them points based on the real-life performance of NBA players.



The NBA is no stranger to NFTs and already counts on the Dapper Labs-run NBA Top Shot&nbsp; NFT marketplace where sports fans can buy, sell and trade video clips from basketball games.&nbsp;



<h3 class="wp-block-heading">GameStop links up with FTX</h3>



GameStop partnered with FTX, making the video game retailer FTX’s preferred retail partner in the US.



The partnership intends to “introduce more GameStop customers to the crypto exchange’s community and its marketplaces for digital assets,” a press release stated.&nbsp;



While additional details including the financial terms have not been disclosed, one known perk is that GameStop stores will begin selling FTX gift cards.



GameStop recently launched its own NFT marketplace and its own crypto wallet. When the company submitted its Q2 2022 earnings report on Wednesday, however, it noted that any recent financial success may not stem from these new products.



“Revenues earned from our digital asset wallet and NFT marketplace were not material to the condensed consolidated financial statements for the three and six months ended July 30, 2022,” its quarterly SEC filing <a href="https://gamestop.gcs-web.com/static-files/3a9d968d-b9f5-415a-877f-895d5ac83ed3">stated</a>.&nbsp;&nbsp;



Additionally, <a href="https://cms.blockworks.co/ftx-bringing-crypto-swaps-to-reddit/" target="_blank" rel="noreferrer noopener">FTX also recently partnered with Reddit and Arbitrum</a> to allow users to pay gas fees on Reddit’s “Community Points” tokens using fiat currency.



<h3 class="wp-block-heading">New blockchain game alert&nbsp;</h3>



The top Solana marketplace Magic Eden <a href="https://cms.blockworks.co/solana-marketplace-magic-eden-to-offer-ethereum-nfts/" target="_blank" rel="noreferrer noopener">recently expanded to the Ethereum blockchain</a>. One of its first ETH NFT mints on the Magic Eden Launchpad includes a collaboration with Web3 game studio Azra Games.



Azra, which recently closed a $15 million seed round led by Andreessen Horowitz (a16z), announced plans to launch a collection of profile picture (PFP) NFTs called “The Hopeful,” as part of its upcoming “Legions &amp; Legends” game.&nbsp;



This game is an ETH-powered collectible and combat role-playing game (RPG) set in a sci-fi fantasy universe. The company is led by Mark Otero, former General Manager of EA Capital Games, whose credits include Star Wars: Galaxy of Heroes.



Magic Eden recently shifted its focus to gaming by <a href="https://cms.blockworks.co/web3-watch-gamestop-opens-nft-marketplace-magic-eden-fund-focuses-on-web3-gaming/" target="_blank" rel="noreferrer noopener">launching a new venture capital fund</a>, dubbed Magic Ventures, that focuses on investments in Web3 games from third parties as well as its own. 



<h3 class="wp-block-heading">Vitalik polls crypto Twitter </h3>



Ethereum co-founder Vitalik Buterin has been <a href="https://twitter.com/VitalikButerin/status/1566763265291681793?s=20&amp;t=tUl1e0BorDII4mHyLfgsCg" target="_blank" rel="noreferrer noopener">tweeting</a> out a slew of polls lately — from personal random questions, like which crypto personality he respects the most, to what a fair price for a 5-letter .eth domain name is. 



In response to the latter, 91,130 participants chimed in and around 50% of the crypto community thinks that the fair price for a 5-letter .eth domain name for 100 years is less than $100. The same goes for .eth domain for 10 years.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">What is a fair price that someone should have to pay to register and unconditionally guarantee ownership of a 5-letter .eth domain for 100 years?&mdash; vitalik.eth (@VitalikButerin) <a href="https://twitter.com/VitalikButerin/status/1566421042872164355?ref_src=twsrc%5Etfw">September 4, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



At the same time, Buterin has called for Ethereum Name Service (ENS) domain taxation, suggesting a 3% yearly fee on ENS domain names for the highest bidder.



For example, an investor with $500,000 as the highest bid on their domain should pay a $15,000 taxation annually to maintain ownership. According to him, this would demotivate people from hoarding domains they aren’t using.



ENS has been trading at the top of the secondary sales charts on OpenSea, as the ETH collection with the most volume within the past seven days.



It <a href="https://twitter.com/ensdomains/status/1565374366791057409?s=20&amp;t=QtnSDYyIgx2haUUm3qqE1Q" target="_blank" rel="noreferrer noopener">registered</a> 301,000 new .eth domains in August and touts a total of 2.17 million names so far.



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Web3 Watch: GameStop Partners with FTX and Sorare Creates NBA Fantasy Game

<div id="highlights-block_630f9b55eda23" class="highlights">
 <ul>
 <li>Licenses provide open source codified versions of intellectual property rights</li>
 <li>Murky IP licensing has recently caused confusion regarding rights of NFT buyers</li>
 </ul>
 
</div>



Venture capital firm Andreessen Horowitz’ crypto arm, a16z, released six NFT-specific copyright licensing frameworks on Wednesday as part of a free and public set of “Can’t Be Evil” Licenses, in the style of <a href="https://creativecommons.org/">Cr</a><a href="https://creativecommons.org/" target="_blank" rel="noreferrer noopener">e</a><a href="https://creativecommons.org/">ative Commons</a>.



A blog post from Miles Jennings, general counsel at a16z, and Chris Dixon, a managing partner who founded a16z, <a href="https://a16zcrypto.com/introducing-nft-licenses/" target="_blank" rel="noreferrer noopener">stated</a> that the firm is addressing the existing ambiguity and confusion around NFT licensing.



Their aim is to clarify an NFT creator, buyer or seller’s rights regarding the artwork of digital assets in order to “democratize access to high quality licenses and encourage standardization across the web3 industry.”&nbsp;



The “Can’t Be Evil” set is meant to serve as a template for NFT projects to consider when creating and selling NFTs, <a href="https://a16zcrypto.com/wp-content/uploads/2022/08/Cant-Be-Evil-Licenses.pdf" target="_blank" rel="noreferrer noopener">according</a> to its Terms and Conditions.&nbsp;



The slate of open source licenses are based on US law and relate to copyright only, excluding other forms of intellectual property, including personality rights, stated the document. US copyright laws do not automatically grant buyers of both traditional and digital assets the right to reproduce, adapt or publicly display the artwork without a license.



The six options each outline different degrees of freedom intended to help creators protect or release their intellectual property (IP) rights, especially those enabling buyers to modify the artwork or create derivative works.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="411" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png" alt="" class="wp-image-29747" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Screenshot-2022-08-31-at-19.40.25-1024x411.png?w=50 50w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: <a href="https://a16zcrypto.com/introducing-nft-licenses/">a16zcrypto</a></figcaption></figure>



The Licenses were developed in partnership between a16z Crypto and the law firms Latham &amp; Watkins LLP and DLA Piper LLP. Available on GitHub, NFT projects are able to add a reference to a specific license directly into a smart contract.&nbsp;&nbsp;



The “Can’t Be Evil” title was inspired by Google’s “don’t be evil” slogan and puts the trust in the code, according to a16z



<blockquote class="wp-block-quote">“Instead of trusting people or corporations to not be evil, we can ensure through code that they “can’t be evil,” the company stated.&nbsp;</blockquote>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">can’t be evil &gt; don’t be evil&mdash; cdixon.eth (@cdixon) <a href="https://twitter.com/cdixon/status/1470223992757927936?ref_src=twsrc%5Etfw">December 13, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Creative Commons licenses have lately been put in the spotlight by NFT projects such as Moonbirds, whose founders recently <a href="https://cms.blockworks.co/from-moonbirds-to-cryptopunks-terms-of-service-are-changing/" target="_blank" rel="noreferrer noopener">moved to a Creative Commons Zero (CC0) license</a> and rescinded its holders’ commercial art rights without warning.&nbsp;



Yuga Labs-owned CryptoPunks and Meebits have also updated their terms and conditions to allow NFT holders to use the image of their NFT however they want, without permission from Yuga Labs, which legally still owns the rights and title of the art.



NFTs are, at their core, a piece of software code. It is quite common for the actual image or artwork to be stored off-chain on a remote server, while only the metadata is on-chain.&nbsp;



When an NFT is bought and transferred to a crypto address, the purchaser is only acquiring the metadata associated with the remote image, and not the actual content file. That’s why intellectual property rights are a murky subject.



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A16z Creates NFT Licensing Framework to Standardize Collectors’ Rights

<div id="highlights-block_6308d5541e879" class="highlights">
 <ul>
 <li>The largest bank in Japan, MUFG, has become a new Animoca Brands Japan partner</li>
 <li>Japanese regulators are considering easing taxation rates on crypto assets</li>
 </ul>
 
</div>



Animoca Brands KK (Animoca Brands Japan), a subsidiary of Web3 firm Animoca Brands raised $45 million from its parent company and from MUFG Bank, the largest bank in Japan, the company <a href="https://www.animocabrands.co.jp/whatsnew?id=7LgoXXkSD18iJnd73DsqHr" target="_blank" rel="noreferrer noopener">announced</a> on Friday. The Japanese unit intends to use the new capital to secure local licenses for popular anime and manga intellectual properties (IP) and additional investments. 



Each investor contributed $22.5 million. Prior to the raise, the company’s valuation was approximately at $500 million.



Animoca Brands Japan aims to “promote adoption of Web3… while fostering the development of a safe and secure NFT ecosystem in Japan.”



MUFG first <a href="https://www.bk.mufg.jp/global/newsroom/news2022/pdf/newse0303.pdf" target="_blank" rel="noreferrer noopener">stated</a> its intentions to collaborate with the gaming and metaverse powerhouse in March “in order to energize the NFT market in Japan.”



The bank also hopes to support the issuance and listing of NFTs and provide services for their purchase and storage.



Other Animoca Brands Japan partners include Hello Kitty creator Sanrio, NFT platforms MADWorld and Ucollex, and others.



In June, <a href="https://cms.blockworks.co/web3-watch-ghost-in-the-shell-and-bill-murray-get-new-nft-collections/" target="_blank" rel="noreferrer noopener">Blockworks spoke to Robert Tran</a>, a member of Animoca Brands Japan’s Board of Directors and the CEO of both MADWorld and Ucollex, when the partnerships were announced.



The news brought with it the IP of popular manga series published by Kodansha, “Ghost in the Shell” and “Fairy Tail,” into the Animoca Brands ecosystem.&nbsp;



“Ghost in the Shell is a seminal work for a generation of science fiction authors and movie directors,” according to Tran, “and the foundation for what we perceive and recognize as the metaverse.” Hollywood adapted this manga into a screenplay with Scarlett Johansson in 2017.



Tran added that the opportunity for Japanese IP to be developed into NFT projects is “enormous,” given that international sales of anime surpassed Japan’s for the first time in 2020 and the global anime industry is currently estimated to be worth between $24 billion to $26 billion.&nbsp;



<h3 class="wp-block-heading">Regulatory environment in Japan</h3>



Japan is not the most crypto-friendly country due to tight regulations, such as a 30% tax on profit from crypto holdings, including unrealized gains. This sparked Japanese advocacy groups, Crypto-Asset Business Association (JCBA) and the Japan Crypto-Asset Exchange Association (JVCEA), to recently ask the government to lower corporate tax rates that could be “stunting the local digital asset industry’s growth,” Bloomberg <a href="https://www.bloomberg.com/news/articles/2022-07-27/japan-s-crypto-groups-call-for-tax-cuts-to-stem-talent-outflow?sref=gni836kR#xj4y7vzkg" target="_blank" rel="noreferrer noopener">reported</a>. 



The Financial Services Agency and the Ministry of Economy, Trade and Industry (METI) in Japan decided this week to review and potentially amend the corporate taxation of crypto assets, <a href="https://www.yomiuri.co.jp/economy/20220824-OYT1T50011/" target="_blank" rel="noreferrer noopener">according</a> to local news outlet Yomiuri.



The proposed changes include removing capital gain liabilities for undisposed corporate crypto assets at the end of each taxation year, and revising the classification of virtual assets, “so as not to impede the growth of startups and prevent the outflow of crypto assets from overseas.”



Japan also recently <a href="https://cms.blockworks.co/japan-passes-legal-framework-for-stablecoins/" target="_blank" rel="noreferrer noopener">made clear the legal status of stablecoins</a>, defining them as digital money and restricting issuance to licensed financial institutions.



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<hr class="wp-block-separator">

Animoca Brands Japan Raised $45M To Foster Local Web3 Efforts

<div id="highlights-block_62ffe9ce52e48" class="highlights">
 <ul>
 <li>World of Women is the only top-25 collection attempting to confer intellectual property rights on their NFT buyers</li>
 <li>Yuga Labs is a $4 billion NFT company that owns 63% of the implied market cap of the top 100 NFTs</li>
 </ul>
 
</div>



Crypto merchant bank Galaxy Digital has studied the current NFT market and concluded that Web3’s promise of digital ownership and property rights “remains far off.”&nbsp;



Galaxy Digital reviewed licenses for top NFT (non-fungible token) collections such as Bored Ape Yacht Club (BAYC) and CryptoPunks for its latest report, “A Survey of NFT Licenses: Facts &amp; Fictions,” <a href="https://qa.fictive-galaxy.net/preview/post/4GqapWjUs9FsTrklUdsOIR" target="_blank" rel="noreferrer noopener">published</a> on Friday by the firm’s research team.&nbsp;



While more than $118 billion in NFTs has been traded in the year-over-year period on Ethereum alone, monthly trading volume has fallen by roughly 90% since January, according to Galaxy.



These declines were largely attributed to the greater cryptocurrency market downturn that has caused many NFT investors to sell at a loss.&nbsp;



In contrast, <a href="https://nftgo.io/analytics/market-overview" target="_blank" rel="noreferrer noopener">NFTGo data</a> shows the number of addresses that hold NFT investments (excluding traders) continues to rise despite the bear market, particularly leading collections.



<h3 class="wp-block-heading">Almost no top NFTs convey IP rights, Galaxy found</h3>



The report found that the vast majority of top collections convey zero intellectual property ownership of their underlying artwork or media.&nbsp;



Azuki, Doodles, Nouns and VeeFriends NFT projects were also surveyed.



Recently, some blue-chip collections including Moonbirds, CryptoPunks and <a href="https://cms.blockworks.co/from-moonbirds-to-cryptopunks-terms-of-service-are-changing/" target="_blank" rel="noreferrer noopener">Meebits have changed their terms of service</a> — placing discussions regarding NFT license agreements in the spotlight.



In the case of Moonbirds, Galaxy found its switch from commercial use licensing to Creative Commons (CC0) — without community consent —&nbsp;highlights the fact that Moonbirds holders never owned any intellectual property (IP). The parent company behind Moonbirds and Oddities was calling the shots.



“CC0 licenses are too permissive,” Galaxy said, because it moves the IP fully into the public domain, which means no one truly owns it. This makes it “unfeasible for entrepreneurs to integrate NFTs into their businesses due to the lack of legal protections.”



As for newly acquired Yuga Labs collections CryptoPunks and Meebits, the report found the new license terms (which were enacted on Monday) are “significantly more professional and explicit in the ownership and license terms.”



Yuga Labs has acknowledged it has the right to unilaterally update or alter the license terms for these projects, which is “usually buried” in terms and conditions policies or “never clearly stated” on secondary trading platforms such as OpenSea.&nbsp;



On the other hand, Galaxy labeled BAYC’s license potentially misleading. It’s unclear whether Yuga Labs intends to confer identical commercial use rights to holders of Apes and Punks.



“If Yuga Labs does intend for the licenses to be functionally identical, they should update the BAYC license to remove misleading phrases like ‘you own the underlying Bored Ape, the Art, completely,’” the report said.



When it comes to Yuga Labs’ “Otherdeed for Otherside” NFTs, the plots of metaverse land are the first tokens issued by Yuga Labs that don&#8217;t confer commercial rights, the report said.



The NFTs’ terms and conditions state that while owners have the ability to use and transfer the virtual land they purchase, Otherdeed owners have no rights to the copyright for associated media, including artwork.



However, owners of Kodas, the creatures that roam the Otherside, do have full commercial rights for the art consistent with the BAYC license.



<h3 class="wp-block-heading">World of Women or world of litigation?</h3>



Galaxy’s report lauded one collection as the only project to attempt to transfer full IP rights to NFT holders: World of Women (WoW).



“WoW attempts this through the provision of a novel copyright assignment agreement,” a governance framework which transfers the copyright of each artwork to whomever owns the WoW NFT.



Still, there’s a problem. It’s unclear whether the IP agreement continues to hold in the secondary market, Galaxy pointed out.



<blockquote class="wp-block-quote">“Unless both minter and secondary purchaser agree to these terms, there’s no guarantee that the IP assignment agreement will pass from minter to secondary purchaser,” the report said.</blockquote>



Galaxy concluded that metaverse realms Decentraland and The Sandbox do a “decent job of attempting to assign IP ownership to their users for user-generated content while properly disclaiming what users do and don’t own.”



The firm offered three suggested action items to achieve a future of digital ownership: NFT holders should fight for their IP rights; NFT issuers must fix their agreements for Web3 to have a chance; and the decentralized metaverse must enable intellectual property rights by default.



“While there is no requirement that NFT issuers specifically confer full intellectual property rights to purchasers, the lack of intellectual property rights undermines grand pronunciations by NFT and Web3 promoters that this technology will revolutionize digital ownership,” the report said.



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Web3’s Promise of NFT Intellectual Property Rights ‘Far Off,’ Says Galaxy

Casey Wagner

<div id="highlights-block_6262dc662c5e9" class="highlights">
 <ul>
 <li>Centralized NFT platforms must find a solution to intellectual property issues before regulators step in, attorneys warn</li>
 <li>There is currently no effective system for authenticating NFTs and intellectual property</li>
 </ul>
 
</div>



As Web3 and NFT spaces continue to grow, infrastructure is not expanding at the same rate, causing headaches for many attorneys in the space.



The biggest issue that centralized NFT exchange FTX faces is making sure that users are only listing content that they actually own, Ryne Miller, the exchange’s general counsel said during a panel discussion at the Cornell Blockchain Conference in New York, Friday.



“The ‘right click, save’ thing, is the issue,” he said, referring to how people can copy another NFT (non-fungible token) and mint it as their own. “Our biggest issue is making sure people don&#8217;t list NFTs for which they don&#8217;t own copyright, or whatever other intellectual property they need, and it&#8217;s a very manual process. It takes a ton of effort and energy.”



A potential solution, Miller said, might be a community-driven, incentive-based moderating system where users could keep each other in check, similar to <a href="https://opensea.io" target="_blank" rel="noreferrer noopener">OpenSea</a>’s current system of verified collections.



The concept is not that different from what currently exists in the legal system, other panelists pointed out.



“Ultimately, what intellectual property is, is society recognizing that this thing is real, and this is not real,” James Rathmell, general counsel at Haun Ventures, said. “I mean, it&#8217;s a government-granted license for that, but ultimately, it&#8217;s society agreeing on what things you own and what things you do not own.”



Consumers also have to be aware when interacting with these marketplaces, Miller said, but consumer protection laws are going to come eventually, and platforms should be prepared.&nbsp;



“Tell buyers to do their own research, that would solve this problem,” he said. “‘Do your own research’ is a good solution, but you&#8217;re going to have governments and consumer regulation folks step in before that.”



Some NFTs are designed to have utility, so while a copy may look the same, it will not be accepted by smart contracts tailored to an original. That opens up the possibility for authentication not available in other forms of digital art.



The space is moving much faster than regulation, Rathmell agreed. Web3 platforms and regulators need to have a mutual understanding of what risks they are trying to mitigate.&nbsp;



“They need to get that information out into the market so that everyone is on the same playing field,” he said.



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