Introduction
The stock asset market was estimated to be 3.3 billion USD in 2020 and projected to grow to 4.8 billion USD by 2028 [1]. Currently the stock asset industry is bogged down by the inefficiencies of centralization which is limiting the growth of the industry. Decentralized technologies like NFTs can be used to solve these inefficiencies but not in their current form.
Stock Asset Agencies
The stock asset industry is an oligopoly controlled by a small number of large companies that act as agencies between stock asset creators and buyers. These agencies markup the price of stock assets by 200%-1000%. This complex and unnecessary system of middlemen has created an inefficient market with a lack of innovation in recent years. The technology platforms of these middlemen are built on web 2.0 technologies and would be made significantly more efficient using decentralized technologies, benefiting both stock asset creators, marketplaces and buyers.
Non-Fungible Tokens (NFT)
The non-fungible token market size reached 50 billion USD in 2021 and is forecast to grow to 130 billion by 2028 [2]. In 2021 the majority of NFTs revenue were collectable NFTs developed with the ERC721 or ERC1155 NFT standard. The collectable NFT standards are not useful for licensing because royalty fees are not honored between different marketplaces and the NFTs are freely transferable. However, ERC721 and ERC1155 can be implemented with modifications to make them suitable for licensing any stock asset.
Solution
To facilitate creativity and growth of the stock industry it needs a new model and technology to license digital assets. The rest of this whitepaper will describe a decentralized stock licensing protocol based around a stock licensing NFT. The stock licensing NFT will use a blockchain to manage stock asset payments and licensing. To achieve this, decentralized technologies will be used to disintermediate the stock asset middlemen creating more efficient marketplaces for stock assets.
When a creator mints a stock licensing NFT, they are giving anyone permission to sell a license for the price specified when minting the NFT. This will create a collection of stock photos, videos, and other creative assets that can be sold by any marketplace in a decentralized way. The entire stock asset ecosystem can be rebuilt with an open-source protocol managed by a decentralized autonomous organization (DAO) based on tokenomics incentives.