What is IPFi

Want to learn more about IPFi? Read A Way to 10x the IP Market: Why we need IPFi

PiperX aims to be the liquidity layer and complete IPFi platform. But what is IPFi?

Below content are from Story's Head of DeFi I.P. Morgan:

What is IPFi? I’d like to start with the end, with what IPFi can unlock on Story in the long term. IP is already a multi-trillion asset class, and it is possible to make it even many times bigger by enabling higher transparency (cheaper to price), accessibility (ease of funding) and composability of IP assets (larger franchises than ever before). To increase the capacity for IP to create more financial value, many layers of financial infrastructure will be needed.

The end state of IPFi should therefore be able to support the creation, transaction and financialization of trillions of dollars of IP assets. Further down the road, IPFi must among other things.

• Be mature enough to facilitate capital formation of hundreds of millions of dollars for any individual mega-scale IP project, while providing clear attribution to each single party involved and easily track the numerous derivative IP • Facilitate deep liquidity and low-slippage trading of IP assets created by both individual small-time creators and leading global media franchises. New generation AMMs will be born on Story to bridge the liquidity fragmentation of distinct IP assets. • Enable IP as an institutional-grade asset class on par with Bitcoin, equities, debt and other financial derivatives, attracting institutional-scale capital to invest in IP.

These mechanisms must also be open and permissionless, in line with the Web3 ethos of decentralized and permissionless access, while respecting what IP creators define in their license terms on Story. This will allow not just established IP creators to participate in IPFi markets, but also up and coming IP builders. Who will be the next J. K. Rowling or George R. R. Martin?

To achieve this vision, Story IPFi will be built in steps, starting from the basic building blocks of core DeFi, which focuses on the existing trading, money markets, liquid staking and launchpad features common in DeFi. While these DeFi infrastructure may not uniquely serve IP, core DeFi infrastructure has been battle-tested and is flexible enough to meet many existing demands on IP financialization. Many existing IP projects and users will use these existing DeFi infrastructure, and existing token formats to capture value. Users will also still need to use existing DeFi infrastructure to leverage their capital for different IP financial plays. Many DeFi teams are already building these functionalities on Story and we expect this layer to be the first to go live on Story.

After core DeFi, we can build Structured IPFi infrastructure on top of it. These are the IPFi rails which will gradually tackle the trillions of IP assets yet to come onchain, or are for the first time coming onchain from web2. Structured IPFi refers to a more nuanced and purpose-specific financial infrastructure which serves more established IP projects with sophisticated needs. Some ideas here I've been thinking about are

a) can successful IP creators leverage their characters and franchises as collateral to expand their work with debt financing/CDPs, instead of having to sign their IP away to large distributors in web2?

b) can royalty-bearing, web2 IP be tokenized into RWAs onchain and provide entincing yield?

c) if individual IPs are highly risky and unpredictable, can retail investors access bundled opportunities to make IP investment safer and more predictable?

There are also some novel issues that do not have existing solutions within crypto or DeFi. For Experimental IPFi, there are exciting novel problems which can be solved by aspirational and creative builders. Some of these that come to mind are

a) how do we build an oracle to discover the price of royalty-bearing IP assets, given that their ongoing royalties mean that they're always financially valuable?

b) if Story is an open system which enables IP registrations by anyone, how do we enable financial mechanisms which promote authentic and valuable IP registrations, and deprioritize malicious or accidental bad registrations in a broad manner?

c) can we build a robust onchain arbitration/judicial system in which we can arbitrate IP disputes effectively and quickly without resorting to offchain legal settlement, incentivizing good disputes and penalizing malicious actors?

Many seasoned teams are already building solutions to tackle some of these new challenges and opportunities as we speak.

Additionally, we also need better infrastructure to support IPFi. In order to onboard and unlock trillions worth of IP assets onchain, some of these infrastructure need to be iterated on

• A better on/offramp suite of products which allows IP creators to operate onchain without needing to understand too much about blockchain technology

• Better price oracles for both web2 and web3 IP assets, such that web2 IPs can successfully assetize onchain and become composable with DeFi infrastructure

• Connections with web2-oriented distribution channels (e.g. Youtube, Netflix) for IP which meet where the existing users are

As Story opens up a vertical of permissionless IP Legos, I envision that there will be many new IP needs that can be solved via IPFi. The above questions only scratch the surface. I look forward to working with builders who are thinking about the above questions and more. Feel free to DM me if you are part of a team looking to build a protocol, or a builder looking to get started.