🗺️IP Tokenization Guide
A guide for DAOs to tokenize their IP in partnership with a researcher and their affiliated organization.
Below is a checklist of items that will be needed to tokenize an IP-NFT. If you are unfamiliar with IP-NFTs or IP Tokens, we highly recommend you read over those sections before proceeding. This guide will go over the logistics required to tokenize an IP-NFT, and for further information on the technical protocol, please read here.
Tokenizing an IP-NFT into IP Tokens enables the IP rights to be decentralized directly to individuals (IP Token Holders). The IP Token holders hold rights over the research, as granted by the IPT Membership Agreement, and selling IP Tokens via a Crowdsale is an effective way to raise funding for the research.
DAO (Sponsor) Checklist
Data Room: Coordinate with the research lead to create a data room. Here is an example data room from VITA-FAST, the tokenization of the VitaDAO IP-NFT supporting Viktor Korolchuk's research at the University of Newcastle. Ensure all the data included in the data room is blinded or obfuscated to minimize the risk of IP leakage.
Whitepaper: The Whitepaper describes the project in detail, and includes items like the project's background, research plans, risks, budget, timelines, tokenomics, and disclaimers. It is meant to have broad coverage for the curious funder interested in understanding the project deeply. Example whitepapers can be found here and here.
Pitch Deck: The data room should contain a pitch deck to summarize the research program, showing (blinded) data generated to date, and plans for future research. This pitch deck is likely the most important piece of collateral to be created in preparation for the IP Token Crowdsale.
Presentation: We recommend a video recording to go along with the pitch deck, to educate the community about the research.
Ask-me-anything (AMA): After the Presentation has been released, a community call for funders to engage directly with the researcher may be useful as an efficient means of getting the diligence questions answered.
Lab Tour: Though not required, a lab tour is an effective way to bring the community closer to your lab and research. We suggest highlighting the work and team that will be funded, as well as the instruments that will be used to conduct experiments.
Researcher Wallet: If the researcher will be receiving IP Tokens, those tokens will need to be held in a wallet connected to the Ethereum blockchain. We suggest holding them in a non-custodial wallet such as Metamask or Rabby. You will have to share your wallet address (0x...) with the DAO so they can send the IP tokens to the correct wallet.
Fresh Multi-signature Wallet: Though optional, a DAO may choose to create a separate multi-signature wallet for the tokenized IP-NFT to keep all assets project-specific. SAFE is typically the multi-signature wallet of choice.
Snapshot Space and ENS Domain: In order to use IP Tokens for governance, you will need to create a Snapshot space (guide here). Importantly, an ENS domain will need to be registered and granted to the appropriate multi-signature wallet controlling the Snapshot space.
Research Organization Checklist
Get approval: Whether you are working with a university or a private lab, legal approval for IP tokenization is the first requirement. To help de-risk the opportunity with the research organization, the following articles may be useful collateral for convincing key decision makers.
Research Organization Wallet: If the research agreement between the DAO and the research organization states that the research organization has an ownership stake in any IP that comes from the research, then the research organization should expect to receive IP tokens. The IP tokens will need to be held in a wallet connected to the Ethereum blockchain. We suggest holding them in a multi-signature wallet such as SAFE. You will have to share your wallet address (0x...) with the DAO so they can send the IP tokens to the correct wallet.
FAQs
Q: Is ownership of the IP/results defined wholly by who controls the wallet the IP-NFT is in?
A: The scenario of multiple IP owners presents complex challenges. In order to streamline this process, there is a singular owner designated as the holder of the IP-NFT, who is responsible for the distribution of governance rights pertaining to the licensing function of the IP. This strategy ensures a more efficient and less convoluted management of IP rights and licenses.
Q: The future model involves scientists directly minting and selling IP-NFTs to raise research funds – how will this work where IP belongs to the institution and not the individual scientist?
So long as research happens at universities or private labs, that is where the IP must be licensed. Even in the case that a researcher is being funded directly, a legal entity is the likely owner and counter-party for any IP licensing agreements.
Q: What due diligence will be in place to ensure the party minting an IP-NFT has rights to transfer ownership?
This is the burden of the licensee. However, validating IP ownership and ensuring the IP is truly owned by the minter of an IP-NFT is a service that can be provided by Molecule. Until IP is enforced entirely on the blockchain, there will always have to be some degree of manual diligence required.
Q: If sending the IP-NFT to another party, does the other party need to sign some sort of agreement in addition to just holding the IP-NFT in a wallet they control to take full legal ownership?
Just holding the IP-NFT is sufficient to be assigned the rights to the IP. That said, an unlawful transfer (e.g. someone steals the IP-NFT) would still be invalid.
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