Most NFT issuers retain ownership rights, the study reveals
Most non-fungible tokens give those who buy them no ownership rights to the underlying media, a recent study revealed.
In fact, when reviewing licenses for the best NFT collections, in almost all cases issuers only offer a usage license to the NFT buyer, according to research by Galaxy Digital. Indeed, these publishers still retain full ownership of the original media, while the various levels of commercial rights range from fairly permissive to highly restrictive. The study identified only one NFT collection, World of Women, among the top 25 by market capitalization that attempted to provide intellectual property rights to NFT buyers.
Galaxy researchers also found that popular NFT marketplaces such as OpenSea failed to make these arrangements clear to buyers. In many cases, they found that issuers had deliberately perpetuated the concept that buying an NFT would confer ownership rights, either by encouraging the message directly or by omitting it through marketing content.
Changed usage licenses
The report highlighted a pair of high-profile issuers whose significant user license changes regarding their NFT collections in recent weeks have brought the issue to the forefront of the crypto community.
After months of claims on their website that token holders “own the IP” of their NFTs, the eighth most valuable NFT collection based on implied market capitalization, Moonbirds, changed its license to Creative Commons (CC0). By fully submitting the intellectual property to the public domain, the Creative Commons license renders NFT ownership obsolete from a legal perspective, according to the report.
Meanwhile, Yuga Labs released new license agreements for two of the most popular NFT collections CryptoPunks and Meebits. Yuga Labs is by far the largest NFT issuer and has significant market power, owning more than 63% of the market capitalization of the top 100 NFT pools.
Other NFT news
Earlier this month, Nike was revealed to be the top-grossing brand from NFT sales, with sales of $185 million, according to data from Dune Analytics. In addition to its total revenue being seven times higher than the next place on the list, Nike also topped total transactions with over 67,000.
On the other hand, cybercriminals stole over $100 million worth of NFTs between July 2021 and July 2022, according to a recent report from blockchain research firm Elliptic. The report found that at just under $24 million in May 2022, the highest confirmed value of NFTs was lost to fraud.
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