Rights Management

High-value assets like real estate or rare art can be tokenized into fractional NFTs (F-NFTs). A rights management contract governs the collective ownership, defining:

• Voting mechanisms for asset-related decisions (e.g., to sell).
• Revenue distribution from rental income or eventual sale.
• Transfer restrictions to comply with securities regulations. This democratizes investment and provides liquidity for otherwise illiquid assets.

Artists use rights management to create evolving NFTs. The token's metadata or visual output can change based on on-chain conditions or owner actions. For instance, a digital painting might alter its appearance if the holder also owns a related music NFT, or if it's held for a specific duration. This embeds programmable behavior directly into the asset's rights, making ownership an active experience.

Blockchain-based DRM provides superior audit trails and automation for B2B software and media. Licenses for enterprise software, stock media, or patented designs are issued as time-bound or feature-bound tokens. Usage is recorded on-chain, enabling:

• Automatic compliance audits.
• Precise, usage-based billing (pay-per-use).
• Instant license revocation or transfer upon contract termination. This reduces piracy and administrative overhead compared to traditional centralized DRM systems.

Access control mechanisms determine who can perform specific actions on a digital asset. This is enforced through cryptographic keys and smart contract logic.

• Role-Based Access Control (RBAC): Assigns permissions to roles (e.g., owner, minter, operator).
• Ownership-Based Control: The private key holder has ultimate authority, as seen with ERC-721 NFTs.
• Granular Permissions: Smart contracts can define specific functions (e.g., transfer, burn) accessible to different addresses.

Once deployed, a smart contract's logic for rights management is immutable on the blockchain, providing predictable and tamper-proof enforcement.

• Code is Law: The programmed rules execute exactly as written, without intermediary discretion.
• Auditability: All rule logic and execution history are permanently recorded on-chain.
• Trust Minimization: Participants trust the deterministic code, not a central entity, to enforce terms like royalties or transfer restrictions.

Blockchain provides a complete, verifiable history of ownership and rights changes for an asset, which is critical for establishing legitimacy and resolving disputes.

• Chain of Custody: Every transfer, mint, and authorization event is timestamped and linked to a cryptographic signature.
• Transparent History: Anyone can audit the full lifecycle of an asset, from creation to current holder.
• Fraud Prevention: Immutable provenance helps combat counterfeit assets and false ownership claims.

The security of digital rights is fundamentally tied to the security of the private keys that authorize actions. Loss or theft of keys equates to loss of control.

• Private Key Compromise: A stolen key grants the thief all associated rights (e.g., ability to transfer assets).
• Key Loss: Losing a private key results in the permanent and irreversible loss of access to the asset and its management functions.
• Mitigations: Use of hardware wallets, multi-signature schemes, and social recovery wallets distribute this risk.

Flaws in the smart contract code governing rights can lead to unauthorized access, asset theft, or frozen assets.

• Reentrancy Attacks: Can drain assets by recursively calling a withdrawal function.
• Logic Errors: Bugs in permission checks or ownership transfer logic can be exploited.
• Upgradeability Risks: Proxy patterns used for upgrades introduce centralization risks if admin keys are compromised. Rigorous auditing and formal verification are essential.

When assets and their rights interact with other protocols (DeFi, marketplaces, bridges), new trust assumptions and attack vectors emerge.

• Infinite Approval Risks: Granting unlimited spending rights to a DApp can lead to asset drain if the DApp is malicious or compromised.
• Bridge Vulnerabilities: Moving assets across chains relies on the security of the bridge's custodial or consensus model.
• Standard Compliance: Adherence to standards like ERC-20, ERC-721, and ERC-1155 ensures predictable behavior across ecosystems.

A critical distinction in how token attributes and media are stored and referenced.

• On-Chain Metadata: Data (like traits, name, image SVG) is stored directly in the contract's storage or calldata. It is immutable and permanently accessible but expensive.
• Off-Chain Metadata: The contract stores a URI (like an IPFS hash or HTTPS link) pointing to a JSON file hosted elsewhere. This is cost-effective but introduces a dependency on the external data's availability and integrity.

A concept for non-transferable tokens that represent credentials, affiliations, or achievements bound to a specific wallet or identity. Proposed as a building block for decentralized society (DeSoc).

• Key Property: Tokens cannot be transferred or sold after minting.
• Use Cases: Educational degrees, professional licenses, voting credentials, and reputation systems.
• Standards: Often implemented as a restricted form of ERC-721 or ERC-1155 with transfer functions disabled.

The legal and technical frameworks governing how digital assets can be used, modified, and commercialized by third parties.

• Creative Commons & CC0: Many NFT projects adopt these public licenses to define commercial rights.
• Programmable Royalties: Smart contracts can enforce a fee (e.g., 5-10%) on secondary sales, paid directly to the original creator.
• Composability: Tokens and their attributes can be used as inputs in other decentralized applications (e.g., using an NFT as a character in a game).