IP Revenues in the Web3 Digital Landscape - Part II Fractional IP
Fractional IP: Unlocking Potential
Fractional ownership divides IP assets among multiple stakeholders, mirroring models used in real estate and fine art. This approach offers several benefits: diversification, increased accessibility, improved liquidity, and reduced risk.
Diversification: Fractional ownership allows investors to gain exposure to a broader range of assets across different industries and sectors, supporting diversification.
Increased Accessibility: Fractional ownership makes it easier for smaller investors to participate in investments that may have been previously inaccessible due to high costs or barriers to entry.
Improved Liquidity: trading of fractional IP units can increase liquidity in the market, allowing investors to buy and sell their ownership stakes more readily.
Reduced Risk: Spreading ownership across multiple stakeholders can help mitigate various risks, such as infringement or obsolescence.
Regardless of asset class, fractional IP ownership is still typically facilitated through IP investment platforms or IP funds and syndicates. Tokenization however represents a more novel approach to IP ownership, dividing assets into digital tokens tradable on various exchanges. This fosters fractional ownership, liquidity, and broader accessibility. While DeFi has expanded asset tokenization, IP and other real-world assets remain relatively untapped.
Web3 Revolutionizes IP Investment: Enter Fractional Ownership
The NFT landscape exploded in 2017 with pioneers like Larva Labs' CryptoPunks and Dapper Labs' CryptoKitties. These projects, leveraging the ERC-721 standard, ignited interest in digital collectibles. Subsequent blockchains like Algorand, Tezos, and Flow addressed scalability and transaction fees, further expanding NFT use cases.
Fractional IP: A Compelling Tokenization Application
Web3 technology unlocks exciting possibilities for IP ownership through fractionalization. This, combined with tokenization, empowers investors with:
Diversification: Invest across diverse industries and sectors by owning fractions of valuable IP assets.
Accessibility: Lower investment barriers open doors for previously excluded smaller investors.
Traditional IP valuation relies on income, market, and cost methodologies. However, fractional IP utilizes Web3 tools for a more streamlined approach. While traditional methods are cumbersome, Web3 offers transparency and efficiency. Smart contracts provide clear ownership records with details like token numbers, prices, and inherent rules. Additionally, Web3 facilitates easier data access for benchmarking valuations.On top of that, original IP owners can distribute fractional shares and potentially trade them on secondary markets.
Web3 Empowers All Stakeholders
The rise of fractional IP through Web3 empowers creators, brands, and agencies to monetize IP in innovative ways. That’s done through increased investor access, since Web3 makes IP investment accessible to the average investor while also streamlining investment for all interested parties. Furthermore, Smart contracts provide clear ownership records solving many of the issues around provenance and ownership. Code is law presents a lot of clarifications around fractional ownership that are key to allowing it to truly go mainstream.
Spaceport: Your Guide to the Web3 IP Revolution
As we witness the convergence of IP and web3 technologies, we are excited about the transformative potential for creators, brands and agencies to monetize their intellectual property in new and innovative ways. At Spaceport.xyz, we bridge the gap between IP and Web3. We empower stakeholders to navigate the complexities of the digital economy with confidence.
The future of IP in the Web3 era is brimming with potential. Join us as we unlock this potential and shape the next chapter of digital innovation and prosperity. For more information on Spaceport’s solutions contact us.
Tae Mi Lee is Spaceport Head of Finance. Tae Mi Lee brings a wealth of experience in financial strategy and operations, facilitating multiple M&A transactions and funding rounds. Tae Mi was previously Head of Finance at Republic, a crypto advisory and private investing platform across all asset classes. While there she helped Republic raise their series A and B rounds, leading to a unicorn valuation. She was CFO at Nextseed, where she helped facilitate the acquisition and sale of Collaboration Capital. Previously she also served as Director at Cheniere Energy, where she helped raise over $40 billion across all equity and project financing. Her leadership will be instrumental in supporting Spaceport’s ambitious growth plans.
