Why IP-Based Protocols Are The Hottest New Thing In Crypto

In Brief

The tokenization of intellectual property is emerging as a major growth area in Web3, turning sports, music, and cultural assets into tradable, programmable digital investments while enhancing fan engagement and creator royalties.

Over the last ten years, a slew of real-world commodities have come on-chain, from precious metals and real estate to carbon credits and government securities. Christened real-world assets – RWAs – they are said to represent a tremendous market opportunity, with McKinsey projecting the market to balloon to $2 trillion by 2030.

As for IP protocols themselves, they transform intellectual property – music catalogs, entertainment franchises – into an investable asset, one that benefits from automated licensing and an immutable ownership record. Rather than bringing financial assets on-chain, these protocols are effectively financializing cultural assets: brand identities, fictional characters, hit songs.

A Global Repository for Sports IP

One of the prime movers in this fast-growing space is Sweet-developed SCOR, which calls itself a “peer-to-peer network for programmable fandom.” Sweet boasts licensing agreements with top sports leagues like the National Hockey League (NHL) and Major League Soccer (MLS).

Earlier this year, Sweet integrated the $SCOR token issued by the SCOR Foundation into its fan engagement ecosystem, where it powers key interactions such as exclusive fan rewards, in-game upgrades, and entry to competitive tournaments. Built on the EVM-compatible Base network, $SCOR also bridges to ecosystems like TON and is set to become the future native token of the forthcoming SCOR protocol.

Gaming is central to the Sweet vision: several viral mobile sports games have been developed, apps that combine sports IP, fandom, and rewards. From the perspective of players, the appeal is to accumulate collectibles, take part in sports-centric challenges, and compete for rewards to unlock fresh in-game experiences

As for leagues and teams themselves, it’s about driving retention and engagement by bringing the fan economy on-chain, and in so doing, rewarding fans’ skill and loyalty

Some readers may be wondering what exactly constitutes an IP asset. According to SCOR, they include athlete likenesses, tickets, and collectibles like photos, highlight clips, and art. Many of these IP assets will also be endowed with unique in-game abilities, giving them utility in multiple gaming dApps and also making them attractive commodities on the secondary market

Fans, meanwhile, will have their own soulbound digital identity in the form of a SCOR-ID, an identity platform that ensures a verifiable “footprint” of user activities within the SCOR ecosystem.

Tokenizing Tracks

Away from the world of sports, another IP-based protocol has been making waves: Story. A Layer-1 blockchain built to digitize intellectual property, Story now purports to secure hundreds of thousands of IPs, including songs and AI training data. Anyone can use the platform to register their original work, embed licensing terms, and receive automated royalties.

Last month, Aria – a Story-based IP protocol focused on music IP ownership – raised $15 million at a $50 million valuation. Its co-founder David Kostiner, a former music and entertainment lawyer, says the protocol was created to combat the fact that music royalties and IP ownership have traditionally been illiquid, hard to access, and confined to well-connected equity investors; Kostiner has also promised to expand into additional IP categories, including art and film, and TV.

Here to Stay

If the first era of Web3 was about building programmable money, the next era may come to be defined as the one where tokenized IP took flight.

Unlike some here-today, gone-tomorrow Web3 fads, the ongoing transformation of intellectual property into programmable assets promises to be a multi-year process, one that all creators (filmmakers, actors, musicians, writers, artists) will be watching with avid interest.