On September 16th, the "FAT Awards 2024" annual ceremony grandly opened at the Conrad Hotel in Singapore. "FAT" is a list awards ceremony and summit forum brand founded by Odaily Star Daily in 2020, aiming to commend the leaders and innovators of the Web3 and crypto industry, and focus on value paradigms and consensus moments. In 2024, as the crypto industry is changing rapidly and narratives are becoming mainstream and recognized by the world, with fresh narratives emerging and a flourishing ecosystem, Odaily Star Daily once again initiated the FAT list selection and held an offline ceremony.

At the event, Story Protocol's Head of IPFi BU FAN delivered a speech on the theme of IPFi. Bu Fan defined IPFi as supporting financial market activities in the field of IP (storing and transferring asset value) and building an open and non-rent-seeking financial ecosystem.

In practical terms, Bu Fan believes that IPFi has three stages: the first stage still retains the core goals and functions of DeFi; the second stage begins to experiment with new token forms to empower IP with new tokens and methodologies; the third stage may develop into a structured IPFi, providing concrete IPFi services for creators, with token forms becoming more derivative, or develop into experimental IPFi, providing purely new mechanisms for IP services, focusing on serving the long-term ecological needs of IP.

Below is the full text of BU FAN's on-site speech, edited and organized by Odaily Star Daily, enjoy~

Good afternoon, everyone. I am BU FAN from Story Protocol. Today, I hope to share with you the relationship between IPFi and Story Protocol.

Story Protocol is a Layer1 that is about to go online, and we are currently in the testnet stage. Story Protocol focuses on intellectual property (IP), and our goal is to make programmable IP a reality. In the Web2 era, IP often belongs to large companies, and the development rights of IP are restricted by contracts. What we hope to change is to use blockchain to allow everyone to afford and use IP.

Suppose you build a story on Story Protocol and want to turn it into a movie. You will be able to register the asset on Story Protocol and define royalty terms. If this story achieves great commercial success, you will be able to receive 5% of the revenue—specific numbers are set by the IP owner. Our expectation for Story Protocol is that a large number of IPs will be registered on the chain in the future, and they will all have open commission relationships. This is what we call IPFi, and when Story Protocol goes online, financial transactions will occur.

I would like to start the discussion from the role that finance usually plays. Finance is the driver of development in various industries, and the role of finance is to provide capital to companies to create the goods that consumers want. Crypto is a low-capital industry, and the formation of capital may not be the focus, but finance still connects investors and users. This relationship is particularly important for IP assets.

The following diagram describes the value circulation loop of the IP industry, involving three different groups. First are the creators, who are the group that creates original IP content; then there are the consumers, who watch, share content, and pay for it; and finally, there are the investors, who provide capital for content creation, just as they invest in major companies.

Between investors and creators, the former provides capital to the latter, who can use the capital for IP content creation; between creators and consumers, the former provides content and service value to the latter, who in turn pay for it; between investors and consumers, the former can receive returns from the latter's payments. The key to the financial system is the form of value transfer, and the arrows in the diagram clearly indicate how value will transfer from one place to another.

Now let's move on to IPFi. IPFi mainly consists of two elements: one is that the asset form is IP, and the other is that it has a strong financial system to ensure effective value transfer. Unlike most value transfers in the traditional IP industry that occur between entities, Story Protocol hopes to build an open system that allows users to freely create and transfer IP assets.

Let's clarify a question: in different stages of development, what specific forms will IPFi take?

In our view, the first stage of IPFi will still focus on building core DeFi functions. The main goal of this stage is to provide the necessary infrastructure for the creation and value transfer of IP assets, including IP launch platforms, IP asset trading markets, IP asset currency markets, and necessary DeFi incentive programs from a functional perspective.

Next, we will enter the early stage of IPFi. In this stage, Story Protocol will provide two different but related types of tokens around IP. One is the authorization token, whose main utility is to connect creators with consumers; the other is the royalty token, whose main utility is to realize the flow of IP revenue. For example, when you hold a royalty token for a certain IP, if that IP ultimately profits in the form of a movie, you will also receive corresponding royalty income through that token. We also hope to conduct some experiments in the early stage of IPFi, such as we believe that everyone who has invested in memecoins can build a community and content around a consensus image and transform it into a real IP project.

In the early stage of IPFi, some projects need special attention. In traditional fields, companies with good prospects for future cash flow often choose debt financing to expand their business. However, in the IP field, such debt financing structures are not perfect. Why must IP creators sell their works? In the vision of Story Protocol, a well-structured IPFi will nurture more valuable IP assets.

In the later stages, some experimental IPFi needs attention. For example, in an open IP registration system, many people will register some "junk" IPs on the network. To serve the few truly valuable IP assets, an equity proof mechanism needs to be established. Under this mechanism, people can choose to support the highest quality IP assets to achieve asset quality screening.

In summary, our vision is to create an open value transfer system for IP assets through IPFi, fully guaranteeing the legal rights of all participating groups, and allowing more users to participate in the system at a lower cost. Currently, most IP creators have not considered how to finance and monetize IP. Story Protocol will provide them with a convenient and effective solution.

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