The Frontier of Intellectual Property: Programmable IP w/ Jason Zhao (Story Protocol)

Transcript

[Music] hello and welcome back to the strange waterer podcast thank you for joining us for another episode today's conversation begins in a world that I would also Mark its dis dis inct from The Real World but one with a lot longer tradition than the blockchain world the legal world and more specifically an intellectual property law the rules and regulations that govern intellectual property or IP were written long before the digital age they come from a time when the value of IP

came from reproducing and selling copies of it and it's tough to get past the fact that they are built for a different time and therefore are incredibly difficult to enforce in an increasingly online and international World part of the problem is the laws that we live under and the legal systems that enforce them and at least in the US we don't have a lot of hope that we're going to see a lot of progress when the path lies through Washington but another much more addressable part of the problem is that we don't really have the tools or the systems to express and track IP natively

across the internet that is until we had the world computer ethereum serves as the internet native property layer of the internet and why can't we just build an intellectual property layer on top of it well today we have the perfect guest for this question as he's already raised over $50 million to build the answer Jason Zhao is a co-founder of story protocol who are building an open IP infrastructure and revolutionizing the way intellectual property works in the 21st century this episode is a real treat not

only do we walk through how story protocol works and how it will integrate with the existing IP infrastructure we spend a lot of time thinking through some of the more exciting implications of blockchain native IP and artificial intelligence one more thing before we begin please do not take Financial advice from this or any podcast ethereum will change the world one day but you can easily lose all of your money between now and then okay let's bring out Jason Jason thank you so much for joining us

on the strange waterer podcast it's a pleasure to be here awesome man well I'm so excited to like start talking about how uh basically we're going to fix the uh like internet content problem but before we get there I am a huge believer that the most important part of every conversation are the people in it so with that as a frame can you tell us a little bit about yourself how you found you know crypto and computer science and I guess like what about it uh was so compelling that you didn't run away like most everyone else absolutely yeah so tiny bit in background on myself and uh I I'm very interested in philosophy so I studied philosophy in University I also studied computer science as well which I love but my true passion is is in political philosophy and so one of the

reasons why I got super into crypto I actually started off my career as a product lead at Deep minds and so there's a lot of interesting ideas especially now in AI but at the time when I got into crypto a few years ago I actually found it uh as an interest through my interest in political philosophy so what I started noticing as I was reading these white papers vitalic uh Satoshi these early uh blockchains were all created through a very libertarian philosophy it had a very very specific perspective on how Society should function in the wake of 2008 creating an independent monetary system free from government intervention um and so that obviously animated a lot of crypto early on and still does but what I found extremely interesting was that around the time I was getting into it uh

was that there's a lot of conversation about Dows and communities right this is also very pervasive and so this is a very interesting line of thought where people are saying that people who use platforms should own a part of them right if I were an early user of uber and I help boostrap the network why shouldn't I have tokens or some form of ownership in in order to compensate me and so I found that to be very communitarian and in some cases even like socialist in the sense of creating co-ops it's a very Co-op like language and then of course you have people who are you know the quote unquote degens in crypto who are there to just trade and speculate and that's also a big part of crypto today and so it's a very capitalist pure capitalist worldview right so the fact is that I found crypto

and blockchain to be a political mirror and I think that technologies that reflect so many different worldviews and people see so many different Visions being realized in them that's a sign to me that something very powerful is going on um but one of the things that really drew me to move from Deep Mind and and start story protocol was the understanding that despite all this promise there did there wasn't a huge consumer case that had been unlocked to this day there's a lot ofy in financial Innovation with stable coins Unis swap um and I think that some interesting consumer use cases have have been unlocked with nfts but I really haven't seen the aha moment yet and I think that a big part of that is because the intellectual property infrastructure for creativity isn't really there yet on chain so I think that's that's kind of

what drew me to crypto is this political philosophy element then also seeing the big need to realize the potential for this technology yeah for sure I mean I think there's something pretty interesting about how you're describing this as um it the the maybe like political philosophies that swirl around in crypto are like mirrors of each other or like definitely counterbalance each other and I think that's definitely true uh but part of me just wonders if that like all that's really saying is that none of these political philosophies are actually correct and that like life is just much more nuanced and uh like gray than the the way we like to talk about it and so when you find these areas where it just seems like everything's

mixed up and the same guy who's having like a Libertarian argument about how um you know code is Law and if like you can do it then you should be allowed to do it are the same ones that are excited about what a dow can do um with a community like that just shows that we're hitting something that is ground truth and not just like chasing more Buzz buzzwords absolutely and even what you're saying about there being a lot of different worldviews is something that crypto really accommodates if you look at metalic and Glenn Wild they they've written about pluralism too right so it's almost like crypto invites pluralism and apologies uh you know talked about this in the network state where because we move away from one centralized Authority or several centralized authorities dictating the way that people can operate and the way

that systems and software operate you can actually have the libertarian vision and it is compatible with the Socialist Vision or the communitarian vision and that is also compatible with the capitalist vision and if you don't like it you have the right to exit so I think that even like maybe like a new meta narrative over all of these vities of political thought is that you have different modes of operating and they can exist because of the pluralism of what the blockchain can guarantee yeah I I say like the the magic of uh ethereum right which I believe will be the global settlement layer of the future right is that I still believe we're going to have like Wells Fargo bank and probably like Wells Fargo chain where most of our money actually lives but what ethereum and the L2 Paradigm and blah blah blah

everything we're building allows us is the ability to ra quit and just say like hey if this institution is screwing me like I'm out and it's like it's actually doable in a way that is just frankly not today and and you don't realize it's not until you try to do it and so maybe like the meta narrative that we're we're building here is like by having this feature of opting out like what the the counterveiling culture of ethereum is is that like whatever you want like you have the ability to opt in and like by contrast opt out yeah I 100% agree it's even if you know crypto rails isn't everyone's first option and in some cases it might not be it at least offers a powerful back stop from the worst

forms of abuse yeah cool so um like let's why don't we talk through your uh story a little bit more to figure out how we get to story protocol but tell me a little bit about like what what it was like working at Deep mine and um like why that work that you were doing um just like didn't capture you in the way that this like crazy space of where like philosophy meets like economic theory meets like computer science like what talk to me about that transition why was that right for you yeah one thing that you know a couple things so the first thing that I will say is that in AI being at De mine is a very privileged place to be and I I have only good things to say about it um but it is you know it's only accessible to so many

people right you need a ton of data to make AI work and that's why companies like Google and open Ai and Microsoft and Amazon have invested so deeply into it and they have such a such an advantage because they have these massive massive styze of data that give them proprietary advantages in training the best models and so one thing that is true of AI is that it's very centralized very closed in that way and only a few people can access but in crypto it's inherently open it's inherently permissionless the data is inherently Global like these are the sort of guarantees that the blockchain provides and I found that really exciting so one thing I noticed in relation to this is that um my job at Deep Mind as a product lead was to essentially take research coming out of the labs and find ways to

productionize it so how can we take this abstract technical idea and actually generate value for consumers and also uh revenue for the company um and that that's a very slow pipeline in AI because it's a very only few people can access that research and so only myself and the engineers I was working with could really take that idea and put it into reality but in crypto because it's open and permissionless because it's Global uh that research to production pipeline was so much faster right you you were seeing white papers come out two or three years ago and in and in months there's like millions of users there's millions of dollars being transacted yes sometimes it gets forked and but that's part of the process like people are trying to break down this protocol they're trying to build on top of it it's because it's open it almost

opens up this space of Randomness and Darwin Evolution that allows that research to evolve at a much much faster ratees and so that's what really excited me is it felt like things were happening so much faster in crypto because of the inherent guarantees of the technology that anyone good or bad malicious or not could go and engage with this technology and even the times when it fails are going to move the space forward because it's this evolutionary process that just isn't the case in AI yeah and I was never someone who like got bit by the AI bug at all so like I really can't speak to anything going on there but at least in crypto I like to think of it as like the final manifestation of Open Source because it is like open source with this added layer of like built-in systems to

reward the people that contribute to it and believe in it and support it and so like that is something that um I find like is really exciting to me like for like you know libertarian ideals and like for some like political stuff but also just like as someone who has dealt with like large Enterprise like software and just like has seen the way the world works it's just like open source usually is better and if it's not better it's because someone took the open source and added some like proprietary data into it and so um like for me like ethereum specifically but really like the broader crypto is a bet on open source in a way that like just couldn't be made before

yeah that the way that you put it is so powerful and it resonates a lot with me because this is something we say at story protocol it's open source exists right like it existed before crypto it will continue to exist um in the future but really the unique benefit is crypto combines open source guarantees with value capture and that that is exactly what we're doing for IP and creative contents at story protocol is allowing IP to not exist in these silos and in a studio somewhere in someone's head on a piece of paper right um but instead to exist in a global Ledger that anyone can access uh and then to not just allow that it to grow like an open source graph like almost like an organic darwinian tree but also to allow people to capture value for the contributions to that tree and both of those thingss

don't exist in IP today it's it's closed s and the value capture ures to very few people and so we want to open source IP in a way but also allow people able to capture value for for the things that they've done yeah and I think this is like a great Pivot Point to like talk about story protocol so we'll get there in a moment but um I just I think what uh is like very cool about crypto and in in general which matches story protocol is everything that we're talking about but I think what's like a little like more ambitious and like kind of terrifying about what you're doing is that like years is fundamentally built into like the legal system and which is not only like scary as itself but like is something that has not yet deemed to

embrace like our space so anyway we'll get to that part of the conversation that'll be fun it'll be fun to talk about that great so um why don't we just start with like what is the um like origin story and the founding moment of a story protocol yeah so story protocol uh I'm one of the co-founders and my other two co-founders are s and another Jason Jason Levy so uh they are both very very strong media entrepreneurs they've been in the Hollywood and entertainment space for a very long time and so uh my background as I mentioned was more on the technical side having developed U research to production pipelines at Deep Minds right and so as I was exploring crypto I actually left deep Minds with I just knew I wanted to work on crypto I didn't have any real

idea of what that would look like so I was just out and about meeting people hacking on different ideas kind of getting to know a lot of builders in the space and I was very lucky to have one of my uh friends from college introduce me to s um and so S at the time uh was thinking very deeply about some of the big big problems in the entertainment world and of course I don't even need to say it out loud because Hollywood has gone through strikes in the past year right strikes that lasted almost half a year I believe on both the uh actors and the uh writer guilds right and so we we were thinking I think from two different angles and converg at the same point which is clearly entertainment is broken from some perspective right it's it's and it's no one's fault like there's not

some evil Corporation that's that's bringing this uh this pain point it's just really the structure of how the economics of creativity work in Hollywood and beyond that make it extremely difficult for Studios to generate revenue and also compensate creators fairly and give them ownership so we're thinking oh well you know clearly there's there's a big problem here and we need to provide an alternative uh and it seemed like the blockchain was the perfect way to do that given all the things that we talked about allowing people to open source IP allowing people the creators themselves to almost be creative entrepreneurs and owning that IP and deciding and setting the rules for who can build on top of that and and that's really important because that turns IP from this static asset into something that's programmable and so program programmability of Ip is really what story protocol is about and

and we believe that by giving this programmability to creators that they can give other people in their communities go direct to their fans and allow them to write the rules for how their fans can contribute and also potentially earn upside and skin in the game for those contributions in exactly the same way as open source so maybe what might be helpful just to like put like kind of meat on the bones here is could you like kind of talk through uh maybe like the problem that existed before something like story protocol and then like with a for foresight of like the the solution you're building and and how that's going to transform it I'm just like Curious from The Insider perspective like it's one thing to just say like oh IP is like a mess and it's impossible to track and like whatever

but like let's look under the covers like what's really going on there and why is it broken yeah so the way that uh I like to describe story protocol is first through historical perspective and understanding how intellectual property as a concept has evolved alongside communication and information technology so um really you know intellectual property what it is at a first principal's level is injecting scarcity where there's Natural Abundance and so if you think about the notion of property especially physical property it's it's intuitive that it's scarce right like everyone wants a mansion by the beach but there's only so much space by the beach and so there's only so many mansions and of course that property ACR value naturally and and with intellectual property it's completely

different because if I have a great idea and I and you overhear me talking about it right Rex and then you you go take that idea you can spread that idea as much as you want the idea I don't really have any real protection over it it's a naturally abundant thing right you having that idea doesn't take away from me having that idea and so intellectual property is basically injecting scarcity in order to incentivize a creation of more ideas and more creativity and and it came about as a concept only when it became very possible to replicate content for free and so when the Gutenberg Press was invented uh that's actually shortly after that was when the first IP laws were enacted for the first time the statute of man in England and the reason why they had to be enacted was because now for the first time I

could take ideas and replicate them at scale very very cheaply and so it became very very abundant the nature of contents but then you needed to inject artificial scarcity through these intellectual property laws to protect creators so that people didn't just take their ideas for free right and so just zooming way to the present moment to the internet era you have a similar sort of explosion that the Gutenberg Crest introduced uh but just of a different form so obviously the internet has made content creation extremely cheap and social media and other sort of media platforms have made everyone into a Creator right like you have so much user generated content on YouTube Instagram Etc Tik Tok um that it's very clear that anyone can create contents and generative AI is only like going to supercharge that Trend where it's not

just me creating like a really crappy a fan fiction somewhere right it's I can actually take that and make it into almost like a Hollywood style short film in and so everyone's going to be able to generate high quality contents and and as this new technology comes about just like with the Gutenberg Press it Demands a new IP regime it Demands a new way of thinking about how do we inject scarcity into the system so that we can actually compensate creators so one of the things we like to point out at story protocol is you look at like the Drake in the weekend remix that was created and went to the top charts of Spotify or Harry Potter and balenci Harry Potter and the style BL Yaga things on YouTube they get tens of millions of views no one's capturing value from that the creators can't

because they're using someone else's work in IP but also if you're JK ring you're not getting any value from that because you can't monetize that um and so it's kind of a lose-lose situation and and generative AI is fundamentally it's fundamentally different from Gutenberg Press it's not just copying right it's not replication it's actually generation and so we think that the internet era needs a new new IP technology just like intellectual property laws helped Usher the Gutenberg Press we think that there's a really really big need for IP to be able to grow at the speed and the scale of the internet um but also provide real scarcity and that's where the blockchain comes in so the blockchain what it is fundamentally why are nfts important at all well fundamentally they're about digital property rights and so they're perfect fit for this explosion in

creativity this explosion of abundance um and injecting scarcity into it so we can prove who's owning the IP let them program the rights make it programmable like literally take lawren Le idea of code is Law and make it reality um and then allow them to share that IP permissionless in a way that transcends different mediums and different platforms so you can own one piece of Ip and allow it to go on YouTube allow it to go on another platform but you're really the owner and it's very similar to sort of these decentralized social platforms like lens and forecaster except instead of owning your social graph you're owning your IP graph so while we're still in this realm of just talking about maybe bigger picture and history of Ip I I think something that is just the reality of the perversion of the 21st

century is that those same ideas that um the way you described IP was like very much about supporting like Innovation and the little guy and like fostering a sense of like if you work hard like the system will find a way to reward you and I think like in a lot of ways that's true um and I think like in a lot of ways and more and more every day it's not true and I think that what we see today is that those IP structures are like weapons but use that that become more effective the more resources you have and and we're like like let's just elephant in the room here right like probably get sued for saying this but it's Disney right where like that

has become a black hole of Ip and because of that and because they're so litigious that probably has like stopped a lot of people from moving forward um with their ideas and so I guess my question for you is um what whether or not story protocol has like a role to play in like kind of unbundling in fixing this problem where do you think we went wrong from like that original Vision uh 600 years ago around Gutenberg Press Times Like H how do things got to where they are yeah this is a this is a really really interesting question and I think that you know it's interesting if we're continuing in the historical perspective to think about storytelling in general it's it's not naturally a siloed

activity like like storytelling and myth making is one of the things that makes us human like you GA I'm not an anthropologist but I imagine our ancestors gathered around the campfire to tell stories and those stories were modified and remixed by each generation to sort of accommodate the new things that were happening in that generation and ultimately like when writing was invented you could write these things down moving from the oral tradition and encode them so that's how you end up with these sort of founding texts like um Homer Homer's Odyssey like it's actually there's so many so many characters in this it's probably because it was accumulated through generations so there this organic darwinian remixing that's naturally happens um but then again Homer probably wasn't a very wealthy person he probably didn't make much by writing the Odyssey because you know there wasn't IP rights to protect

that and so I think there is a real benefit to IP rights but that benefit may have been taken too far so now we're in this new era where it's almost the antithesis of this organic darwinian storytelling that was practiced by the Ancients it's now this extremely siloed behind closed doors activity where corporations as you mentioned dominate IP and in some cases they keep it very close um to themselves right they could be close to the chest and so it's I think it's probably gone too far you you want to have value capture and that entails a little bit of scarcity as we talked about but you don't want too much scarcity and so I think what is St story protocol is doing is we we want to work I mean also with the Disneys of the world if they're ready for it we want to

help them turn their IP into a network and we're seeing that in gaming this is actually something that's starting to happen where game developers realize that you need to have user generated content like GTA Roblox Minecraft the biggest games are also platforms for creation and so I think for gaming IPS at least they've started to realize like you can't really keep things Ultra closed you have to allow creativity to happen from the bottoms up I don't think that other forms of media are as as close to that um yet but I do like we we do want to work with these companies I think that the alternative though is is to be completely honest is if you look at any sort of New Media technology it generally arises because it's it empowers a class of creators that have been neglected before so this is very

prevalent on social media like Snap like you know when when everyone's parents went on Facebook then people started using Instagram and then when Instagram became do mainstream then you then you had high schoolers using SnapChat right and so in YouTube YouTube didn't Target Hollywood film creators and video creators they targeted this new class of people that were creating videos at home and of course they were lower quality and made a lot less money but that that's what it takes to develop the Mr Beast of today and so story protocol we we certainly want to work with the the large companies of the world and open up their IP to their Community uh in a in in a measured way but we think that probably a lot of the early users will use our tools and there will be people that weren't able to get things done

before so it'll be someone you know maybe like a USC creative writing student putting their ideas all their characters and stories on chain setting licensing terms and then doing a mass marketing campaign on social media getting you know a lot of people around the world to build on that IP and create a universe together and we think that allowing these communities and network effects to accumulate through open source IP with value capture built-in it is going to create the next marel it is going to create the next um you know next big franchise so there's basically two models we can either work with the large companies now and sort of make them more open or you know we want to do both which is enable smaller creators that are currently neglected by the creative system to to come up and build their own ideas yeah and I think I think

maybe the answer to this question is like the always the same answer with all crypto things which is like before crypto and these rails and like these opportunities it like the world has gotten so complex and um just like I'll just stick with complex but that it led to a situation where like the only way to survive and to thrive was to like skate as fast as possible towards Monopoly and like it's all about consolidation of power and um like we can talk about it like literally in every industry from entertainment to like the beer industry to anything right but what crypto does is like we love to say it democratize give you know

democratizes whatever but what it does do is I think you put it in a much more realistic way which it it serves like the class of people that are locked out by like the way things are set up today and so I think maybe the reason story protocol is like a solution to how like perverted IP laws have become is because it allows like creators that don't have the resources to hire lawyers and to like look into how to weaponize the legal system the ability to like still like extract all the benefits that like were placed there by our social contract to benefit them right right exactly awesome cool all right so let's uh let's

prog progress this conversation a little bit further and like let's talk about how this actually works so can you give us just not a technical breakdown but just a brief description of like when I'm using story protocol like what what are are the different pieces how does it work absolutely so the way we think about our protocol at a high level just defining literally what it is it's a set of smart contracts that we've written that can be deployed really on any chain right now we're currently focused on evm but it's a set of smart contracts that essentially empowers two different categories of functions that are very related so uh just colloquially the first class of functions what we call nouns or data structures they're the stuff of the protocol the IP and then the second class are what we call verbs or modules and that's the sort of

abilities that get unlocked once you register your IP on story protocol and and so just to go a little bit deeper into the nouns what we've created is essentially a universal IP layer for programmable IP so we take IP offchain or onchain and allow you to bring it onto our protocol in a set of standardized uh data structures right that we Define for basically maximizing composability around different types of Ip and so you take your IP whether it's onchain or offchain bring into story protocol and it becomes programmable IP and so you can set the rights and the terms for how that IP can be used so you can tell you can say if you know I own an nft that uh someone must pay one eth UPF front and share 50% of any Revenue that they generate from using my IP and

they can use it in these regions right so it's a very simple onchain parameters that distills the complexity of a legal license into code um of course you know one thing that we can get into later is that our IPS actually do uh linked to a license off chain so we've actually created something as a company called the universal media license so we have a story protocol Universal media license and it's just very simple to read legally binding license with parameters that people can choose from so it's almost like think about it like a YC safe but for uh story protocol and so we think this will capture like 99% of the use cases that people need so they'll have a legal license that allows them to have the rights over what they've you know registered on chain and then those those rights and terms are also

enshrined on the smart contract level too so there's this link between offchain IP and onchain IP so that's the the nouns part we're creating a universal composable IP layer for programmable IP that can talk to any medium live on any chain um and and really be a sort of uh infrastructure core infrastructure for the internet we see and then and then you know why is this important well obviously if you register things on story protocol there's the Providence and the attribution that you get for free but then really the modules are what make this protocol so powerful and so once you registered your IP as a noun you have access to our verbs so you have access to these modules in particular we built a sort of remixing or licensing module that allows you uh to set the terms for engagement on on how people

can use your IP and then allow people to build essentially an IP graph or an IP network around that intellectual property so let me just give you a very concrete example if I register a pro story on story protocol it's registered on chain it's an nft it has you know all these metadatas attached to it that that are relevant for licensing it has an onchain rights and then I would use the licensing module to say who can interact with my IP what sort of economic terms are there and then if anyone else let's say someone from around the world sees this on an app and any app can Surface this right so like you know it can be on openc it can be on a new app that's kind of the power of the protocol but let's say they see see it on some client or

some friend ends and they see oh well I can I I really love the story and I want to create a comic around it as long as those rights are acceptable um like as long as I meet those conditions let's say I pay one eth to the smart contract and there's a royalty link such that if I create this comic and make five bucks then you know 5 e then 2.5 e flows back back to the original Creator these are all set automatically and then I can go or whoever is making this comic book can go and create a comic book and that itself is an IP asset so so it's IP assets all the way down right everything that's a derivative is literally you know also a progenitor possibly of a whole tree of its own and so you have this graph likee growth with money and

economic and legal terms flowing through each edge of the graph and that's really what we built is is this very extensible protocol that allows anyone to tap into IP and it's almost like IP liquidity the way that unisoft has LP liquidity forecaster talks about conversational liquidity story protocol talks about IP liquidity and that's really what we're doing is allowing IP to be super legible and and standardized and then also making it liquid in a very in a very real way yeah that so everything you said makes so much sense um I think it might be helpful to just like let's step offchain for a moment and like talk about so IP right it is just basically like you can give a much better uh summary but it's like idea behind like the project you're embarking on right

and so what we're saying is we can take this idea we can uh like basically convert it into metadata attributes and then have it like in a smart contract uh on ethereum and then like based on um like these program programmable set of rules that you call verbs uh like that can dictate how that can be used by like future creators and um like that not only dictates like how they can use it but like how the E economics like flow back and forth between like original Creator and new Creator exactly exactly so I guess like for me the the big thing is that like IP in the real world is like just totally a legal construct

right like it is it is something that we have just decided that like as a society we've created these like relatively arbitrary laws that if you break them like our system will like tell you that that's like wrong and uh like secr restitution and so I guess like what I'm wondering is as you're building out story protocol like how does that interact with like how IP works today like do how are lawyers involved like as a Creator am I relying on like story protocol or whatever you know like Labs company is behind it to enforce these like talk to me about what is the real world interaction between story protocol and the traditional IP system absolutely it's a great question uh so basically

the way to think about story protocol is not that we are creating some completely distinct island of authority that is uh you know disjoint from the legal regime that we have in the United States and other countries today right so we are actually deriving that's the reason why we even care about having a license is because we want to respect the authority of the existing legal system in so far as you know it it's important for protecting copyright right so we we creators do care about this and they they want their work to not just exist only on chain but they might want to create t-shirts or or films that are shown in in studios in different countries right so like it is very important to creators to have this tied to the traditional legal system but the way that I would conceptualize this is

that you know imagine like the legal layer that we currently have is at the very top it's where Authority deres from but it's also extremely expensive it's extremely inefficient and so many different types of creative interactions just don't happen because I don't know as a Creator what IP I can use I can't afford a legal team I have to go through a one-on-one negotiation even if I did have a legal team it's all very expensive and so 99% of like the long tale of Licensing and creative remixing just doesn't happen today right so this is the legal layer so what we do is we say okay great why don't you delegate some of the authority of the legal layer to the blockchain why don't you delegate some legal authority to Ledger Authority and so that's why we have this tie to a legal license offchain but really we

think that 99% of Licensing interactions can be enforced on chain using programmable IP so the blockchain it's almost like we're sort of delegating all of this uh to the blockchain and the code literally becomes law on the blockchain because we are enforcing rights that are enshrined in a legal contract via onchain rights that mirror that contract on story protocol and so to sum it up I I think that we're essentially making the legal system more efficient and more effective by making IP programmable by making these laws uh enforceable as code so that you know there's transparency and composability built in um and I just making analogy with defi I think that one of the early Promises of crypto is that everything's programmable and that everything's

composable I think that promise has really been realized in the world of decentralized Finance um where you can you know put your tokens into compound generate C tokens swapy tokens on Unis Swap and and the list goes on right it's very composable but I haven't seen that I don't think that composability has been realized in the world of Ip in the world of creativity so even though I I you know we have a lot of respect for Yuga and isuki and they really Pioneer this model of putting rights on chain if I wanted to take my board ape and create a comic with someone else's Suzuki you're back to the existing legal system you have to go create a license figure out how you're going to share the revenue and it's this High friction High expense low legibility interaction which prevents a lot of things from happening

and so we really think that the multiplayer storytelling multiplayer IP um in This Promise of composability hasn't been realized in the world of content yet and so that's what we see story protocol as is if defi is programmable money then we are programmable IP and so that's that's where we see crypto has you know a lot of improvement to do and we hope to be kind of the underlying infrastructure that lets programmable IP composable IP really come to life yeah got it so it sounds like the secret ingredient here is the in this um like I I think you called it the story protocol like Universal content license right which is sounds like you know just like uh any open source license or we like we're we're all familiar with with license are

but based on what you're saying it sounds like that is like an explicit legal contract that like you as a Creator are entering into that says um you know like based on let's say like the laws of like a specific State maybe or the federal government or maybe a specific country I don't know but based on these laws like if we get into a legal conflict and like if a judge is evaluating this they have to go refer to what is ever being expressed on chain and like look at that for like the resolution so for my first question is is that sound right and my second question is like we'll never really know until this is tested through fire but like do how how much of a leap is it for a judge to say like okay like I believe

in this blockchain thing and whatever this blockchain thing is reporting out to me is like what I need to go reforce sorry go enforce in like the real physical world yes yes great question so first of all absolutely our Universal media license it is a real license we've worked very hard with uh some world-class lawyers and legal Council to create it so it is 100% part of the legal system um and and there is an option on that license whether you want to choose your license to be legal Authority or Ledger Authority so legal authoritative would imply that if there is a disparity between the onchain states of zory protocol and you know the offchain states of your IP then the

offchain legal uh uh reality is authoritative and then Ledger Authority which is the default option we recommend this is that uh the state of the blockchain is reality it is legal reality you are sort of again delegating the responsibility for IP to the blockchain two story protocol and so in that case if there were a conflict between the onchain states like let's say someone somehow takes your NFC that represents your IP then that would be the reality right so there are of course um risks but I think that there are also a lot more promise there's also a lot more promise when you can enforce rights and IP interactions automatically on chain so there is difference between Leisure authoritative and legal authoritative we give people the option

it's one of the parameters in the Universal media license um but ultimately it is is a legal license that will hold up and it is also gives people the choice to say hey I'm Crypt native and I'm going to allow story protocol in the blockchain to determine the ground truth of my rights and sorry I don't mean to like drill so hard into this point but I do think that it is like the the secret sauce that you guys have created I guess so what what you're saying makes so much sense to me in cases where we're talking about creating a like asset that has some sort of uh Crea sorry crypto nativeness and then like if someone wants to like actually use the crypto nativeness um we can enforce via Smart

contracts like fees flowing through in any specific ways like that totally makes sense like that's the point of smart contracts right but what about the flip side of the problem where let's say I say that you are welcome to use my nft that I just put out there as long as you share 10% of like Revenue with me and then I go see that like hey this guy just made $2 million using my nft and like didn't give me a scent like how how how would I as a Creator like Leverage the work that I've done using story protocol to go like resolve this situation so there's there's a I would say different levels of escalation and obviously we want to to keep things as permissionless and frictionless as

possible because the legal system is difficult to say the least right um so the the way that this would work in your specific example which is a good one let's say I've you know set some conditions for who can use my IP one of those conditions is that you need to pay me 50% royalties and I knowed someone just making tons of money off of my IP you know and not sending me any eth in return um in that case you know the first line of defense is we we built a royalty module that works with our licensing and remixing module um such that it it shouldn't happen like this shouldn't happen we should automatically be able to see that Revenue uh if it's all on chain I should say that Revenue came into this user's wallet and that this user made this commitment and

therefore you know the revenue should flow automatically so we have a sort of royalty protocol right but let's say someone you know malicious creates a separate wallet or somehow um you know doesn't get permission right like so they just didn't even they didn't even accept this license term they just saw it on openc or some other NFC Marketplace and they're like oh this is great piece of art I'm going to do my own separate thing right so in that case our royalty module wouldn't be able to to see that you know any Revenue had come in because there was no connection made right so in that case what we've created is also a dispute module so it's almost thinking about like onchain court system and we can connect to existing arbitration systems like claros or any custom Smart contract really that allows people to settle disputes and so there's

people can choose how they want to settle a dispute but there's basically an onchain arbitration system that determines who's in the right and who's in the wrong and if you're the wrong then of course there are you know your IP is marked as invalid and and so that would take care of the problem on the blockchain level so you have these different levels of escalation on chain which the first is that this shouldn't happen because a royalty module helps enforce this and then the second level is if for some reason something happens you have an onchain dispute me mechanism um so those are the first two layers but then at in the final analysis if there's still no uh proper resolution then you can go and use the fact that you have a license and that this is a real legally binding IP and take it to court in

whatever jurisdiction you're in so that's sort of the ultimate escalation and our goal is to make 99.9% of things automatically enforced and then you know only 0.1% needs to go to dispute and then only 0. one of that needs to ever go to the legal system reality now is that 100% of things go the legal system and also there's like no visibility so it's even very difficult there's a whole industry to try to figure out what's going on with your IP is someone misusing it uh on chain you know you don't even have that problem it's much more legible so we think that again we're not trying to usurp the legal system in any way but we are trying to make it more efficient by bringing it on chain I hear you and I think that like so if you'll indulge me for a moment uh I ured crypto like from defi I

like I used to work at in corporate finance like cash management and like I thought like okay this curve like all this crazy stuff is just going to be like the new way that Finance works and you know that was 2021 and like there was uh like dwan was in there at some point s SPF came came and left and and I I still very much believe that crypto is going to completely transform Finance but like I don't think that it's like any of this like defi crypto native stuff like what I see that's really transformative is like I used to have to transfer like billions of dollars of Fiat like regularly for my job like we would have to do cash transfers from our

North American Business to the European business or we would have to do like huge uh tax payments or whatever and like it's a total show like I could go on and on but the reality is is that like it doesn't really work and like it's so easy to just use ethereum to send value whether that's ethereum value or usdc value or like a nft or whatever right but like it just works and that I think is going to like completely transform how Finance is done and I bring that up because like what I'm seeing here is like very similar because look like I'm definitely bullish and excited about all of these things you're talking about about like the composability and this expressibility and like all of this like truly like

defi esque stuff that is going on that that story protocol is building but what I think is just like almost more profound and really going to transform the way things are done are just like you're building a um a way for like blockchain which what what is the purpose of blockchain it's a mutable Ledger you're building a way for blockchain to ingest IP data and that all that's doing is giving us a record by which in the future we can build like dispute resolution systems we can build like Revenue attribution systems we can do like whatever we want with it but like Step One is like we need records that actually work absolutely and this is why it's so important for us and

we've even put in the name to be a protocol like we are not story IP reposit atory Services Inc right we I mean that would be a horrible name first of all but we we are story protocol right and say what you want whether you think it's a good name or not it's descriptive because we're building a layer uh that allows anyone to build on top so we are as you said we're aggregating all the world's IP in one place it's completely transparent and then we're giving people the tools to extend that IP so the two two benefits is one legibility if you go on copyright.gov you will see a Craigslist style worse than Craigslist style UI and you can search up Cinderella Darth Vader anything it's extremely hard to figure out who owns the IP whether I can license it who else has license it

what's the cost right there's no legibility so we're providing legibility at a protocol level and then as I said with the verbs in the licensing module we're providing expandability or liquidity right the ability to not just know what's going on with IP but also be able to use it and be able to extend it without having this complex conversation and expensive legal negotiation but that's it we provide those two values and whatever you want to do with them that's up to you so uh there's several layers of how people can build on our protocol one thing we're already seeing is what if you want kyc like what if you want to be more web to you can integrate a kyc hook and and you know before you register IP you can you can do a hook to a kyc provider and check that this person's kyc and then you can store that

on store protocol and then people might have more trust around that IP because it's been kyc right that's just one option it's not mandatory by any means but you can start to extend our protocol using these hooks we you know we've talked with copyright infringement companies what if there's some offchain thing what if I just took Mickey Mouse and put on story protocol that would be pretty bad right but like how do you give story protocol visibility off chain worlds you can connect an API into the protocol that talks to uh a copyright infringement provider and then they can they can say oh well actually you know we can label this on chain as something that has is a duplicate of something offchain right so now you give perspective into the offchain state um and then we've also imagined uh and our working with so many different design

Partners um I can't really announce them now but for example there's some in social media with you know lots of users where every uh publication can become a IP on story protocol so there's social media cases we're working with AI companies to register models on chain as IP and then anything they produce is also tracked as a derivative work creating a graph around models themselves we're also working with uh Hollywood producers to create brand new universes on chain um and and also with you know very very web 2 companies actually that that don't even want to think about the blockchain like Creator tools with millions of users that just want register their IP on chain and then the UI and experience is completely abstracted away from the end user so I point out all these ecosystem Partners

really to show that we uh it's almost like in some sense like ethereum where you know there's like what is the one use case of ethereum there's not one single use case we're building a very very neutral protocol that enables developers and that Builders to realize their Visions for their end customers and like you you bring up like so many like just crazy like racing thoughts um when you start talking about design partners and I guess my question for you is like as you look towards like the endgame success of story protocol how much do you think it is necessary for story protocol to become integrated with like the like main content Hub platforms right so like the YouTubes the Tik toks

the um I don't know Instagram I guess but um like these places where like content like kind of like lives in like Rose in this primordial just like I don't know Cyclone right and and first question is how important D you see that is and second question is how do you convince these like Tech Giants that um it is more beneficial for them to like begin to integrate these tools that allow like the really uh free free flow of ideas like out of their wall Gardens and like how do you fight against that like just very uh prevalent web 2 Vibe which is like the goal is to like gather

as much data and keep it internally and keep as many eyeballs and like uh creators in your platform as possible yeah it's it's a really good question so I think you know I would like to live in the world where we don't have to create a new system from the ground up and that these existing Tech Giants will adopt story protocol and adopt web three principles I mean that would be great for everyone I think um that being said I think you're absolutely right like a lot of these platforms they have every incentive to keep their IP closed uh and so that's the status quo we have talked to um I can't name any right now but we have talked to some pretty large content platforms that have been very interested in this so there are there are I think some leaders in the space in traditional

entertainment traditional content platforms that will lead the way and they will prove I hope to the you know other other platform Giants that this is more viable path so I think there's part of it is that there always will be some early movers and then they will show the way um and we hope to collaborate with those early movers and we have been talking to some of them on the other hand I do think um as with any sort of content or media Revolution we talked about before it's generally a paradigm shift right and I see story protocol and onchain IP programmable IP in general is a paradigm shift and so the first people to get it are not going to be the the incumbents they have every incentive to ignore uh this trend right and and so I think that there will be new content

platforms and there already have been uh some attempts at this um in social media on chain that will leverage this new IP regime and we will see those grow bigger and bigger and bigger um and I think that that will that competition will really push the incumbents to either adopt or or to die out right and so I think that you you know you see this at Google too where you know I think that Google has had the capabilities and the resources to create chat gbt but of course it was open AI that did it and that forced Google to create Bard and so you could see a very similar effect here where even if the on Native onchain new content platforms don't win out their contribution will be to force the hand of the existing incumbents so I I'm optimistic that we can have some

incumbents adopt this technology even in a limited way and show that it's better but I think that the the more realistic path is that as with every media Revolution it's a completely new group of neglected creators that then you know become prominent on the back of a new technology yeah I think the example that just popped into my head is um the stories right like that was a Snapchat like feature that every other company was like literally who cares about 24-hour like vid like things that disappear this is so stupid and now like literally there's not a messaging app or social network or like even LinkedIn has story telegram has stories like what and so it is just like I think it's a reflection of uh like there's so many

examples in technology where like incumbents are initially resistant to a transformative like Paradigm or technology or um it's hard to call stories like transformative but like first they fight you then they like join you absolutely yeah and I think I think we will start to see that and to be honest it's it's interesting looking at the market I do think the Asian market in general is much more ahead of uh the Western Market so to speak in in Contents uh I think a lot of a lot of Trends in gaming and and content and mobile they come from Asia for whatever reason I think there a lot of reason we don't have to get into but um but we're seeing a lot of adoption in anime uh we talked to anime studios in in Korean uh

in Korean platforms you know like I think we've talked to a lot of them and um they're all very interested and I think that it's a very different culture there than in in the US especially so again if history is any guide we'll see that the Asian uh sort of ecosystem might lead and be a good indicator of the future so I would suggest you know people check out some of the content platforms there they're already doing things very similar to story where people can kind of story protocol where people can kind of build on an IP together in a community uh they just lack the sort of global layer to make it composable with any other platform and to monetize it but I think it's already happening there and I think that it will only be a matter of time before it gets adopted in some of the the um content

platforms closer to home so with the last like few minutes here I want to uh like quue off something you said about AI like generative Ai and so um I'll let you kind of run a little bit wild here but like just to to put you in a frame of mind so like I am so so convinced that a that crypto and AI are two sides of the same technology and I don't know what that looks like or really even what that means but when I think of like what AI is it is about abundance right it is about just like creativity and um just like yeah generation and again abundance and when I look at crypto like it is exactly the opposite it is about

scarcity and it's about slowing things down and it's about identity um and like yeah and scarcity really and so like I know that the that like we're entering the AI apocalypse unless we can like start to like figure out attribution and start to like give some identity to these like programs that are getting smarter than us and um i' I've said that like Shel a few times before and people just kind of like laugh and you know go off on on their own thing but this is the first time like I'm starting to get a sense of how this is going to work out and like what you said about chat G or uh generative AI models and how you know that can start as like a IP in story protocol and then that can be used to

like spin off more IP which can be you know like ingested by other generative AIS um and like through the power of the blockchain we can figure out like at what point do like models get attribution at what point do like people putting inputs get attribution and like I'm starting to see how this all kind of works out so um that was a little bit rambly like I I guess uh my question for you is like with what you're building in story protocol in mind like how do you think about like all this exciting developments in generative Ai and like what it means for crypto sure yeah I think that you know there's some surface level observations that people have made

which I think are D directionally correct so I'll just sort of enumerate them the first is that um crypto is decentralized and AI is centralized right I think Peter Still famously said AI is communist in crypto is capitalist they're libertarian right and and I think on the surface level I think yes AI favors centralization we talked about how deep mind is you know one of the few companies that can really build a top-notch foundation model but in crypto anyone can participate so yeah there's truth to that um AI is abundance we talked about AI is content abundance earlier and but then with IP right crypto provides the scarcity that's needed um so I think that's also true tension between the two technologies um on the surface level I think the immediate effect you'll see is that there's going to be more creative content and that's going to be good for

everyone not just crypto uh everyone's going to be a Creator the cost of the diminishing marginal cost of creation on the Internet is going to be near zero right so that's that's obviously a huge effect but what I think is extremely interesting is to think about what happens if AI takes off without crypto so let's just run that thought experiment um I think you're going to see that eventually there's going to be a tragedy of the commons uh where AI because it makes data it just consumes data and produces output so cheaply uh there is no incentive to producing new data right so the the best example of this is search engines right now link to websites right so there's a real reason for websites to exist but if you have a social if you have a search engine model that doesn't link to websites it just

summarizes text and it tells you the exact right thing that's that's great like I'm not saying that's not a great end result for the user but then who's creating websites like who where is this traffic going there no one's going to be able to maintain a website because they're not getting any traffic and so these websites will die and the training data that provides the model with its Effectiveness will die and so if you have ai without proper compensation and attribution AI will eat itself right you will have this huge tragedy of the commons where yeah you'll have increasing returns until the commons can no longer support itself because AI is eaten it all right and so crypto is essential because you can't have ai with this is why I talked about the Gutenberg Press imagine what would happen to creativity if the Gutenberg Press came

out with no IP laws to come shortly after people I mean no one would create anything why would I why would spend time to create something that's just going to get copied by someone with a printing press I'm not going to do that um and so uh I think in a similar way with AI you need you need crypto because crypto is provable scarcity crypto is onchain IP and programmable IP and without crypto to provide monetization and incentives for people to continue producing data even if that data is just training data the AI can't function and the AI will eat up the commons and so I think that's why I'm so you know passionate about what we're doing at story protocol and also does relate to some of the work I was thinking about at Deep mine which is that you know we see story protocol as the home for AI on

chain it is really uh providing the ability for the commons to exist on chain for AI and so that's where I see the real intersection is that really AI cannot sustain itself without story protocol and without the crypto rails that the protocol is built on yeah I I think that's like super interesting to think about how that that kind of like nature kind of balances itself and that if AI does doesn't have like the proper structures around it like it will create situations that like directly result in its own demise and I think that's super applicable for like the search engine example I like struggle a little bit more to like how that is applicable to like let's say um AI like altering

photos to like let's change an election or start a war that kind of thing um but I still think crypto is the answer and and I think that is really the other side of what story protocol is building is in just that attribution and like if we can see that like when the first time the photo existed like when um like basically what what you're doing and what crypto allows us to do is like create a record that um is immutable but is in a context and by which like AI can actually see and um I just I see I like I'm very excited about um how yeah what you just said is very cool about how AI

is going to eat itself and I think that what story protocol and what crypto does is like provide the context for AI to like get have enough information to not eat itself absolutely yeah and and and and that's just one facet right I think you brought on very interesting points uh we're working with some Partners actually at story protocol that are working on other chunks of that problem um not just tragedy becons that I just mentioned but also as you mentioned how can we trust the out puted models how how can we trust that something actually came out of a specific model and not a malicious model or not a model at all right so verifiable compute ZK Technologies they're solving that trust problem uh and that's also very important of course the Providence and attribution for the data upon which that model is trained comes from story

protocol so I think there's a natural you know interaction and compatibility between the layer that we're building and a lot of these ZK provs for AI models that we're seeing build on top of us very cool all right man I could keep going for like a literally two more hours like want to talk about just continue down this conversation but I also want to talk about like what verbs can actually do and the type of applications that we're seeing but I think for the sake of everyone's attention span uh we I'll cut us off here and then I'll make sure bring you back eventually to uh talk more about how story protocol is developing so first of all I just want to say Jason thank you so much like this has been like so eye openening both on like what IP really is but also like how

blockchain is going to start to transform the world outside of I'll say Finance but what I really mean is just like Casino Antics so first of all thank you thank you thank you of course yeah thanks for having me Rex this is a great conversation of course and before I let you go can you just share with the audience um how they can find you how they can find story protocol and if they're interested in to start figuring out how they can deploy their IP on story protocol like what are the best ways to get started and what are the things to be thinking about yeah absolutely so our Alpha version is out so if you go to docs. stopr XYZ you can find them and there's a lot of tutorials there uh we are launching a beta version of the protocol at eth Denver it's going

to be a big launch for us and we hope at that time to really find a lot of the key Builders and teams that are going to build the core infrastructure on top of story protocol so we have a grants program that we're building we have uh opportunities for entrepreneurs and residents to work with us so definitely come to Denver or reach out to us uh on our Twitter page um and then also I'm always open to chatting with Builders who are interested in this sort of intersection of crypto and programmable IP so you can find me on Twitter at Jason JZ and that's spelled Zhao awesome man well super exciting like the I I can't even believe the beta is right in front of us and um yeah eat Denver it's uh I'll see you there and it sounds just like a really big moment for um for

people that are excited about like bringing IP on chain so good luck and um have a great rest of your day thank you Rex appreciate it n