Hi, we’re drafting an EIP for managing NFT licenses. The standard provides basic functionality to create, transfer, and revoke licenses, and to determine the current licensing state of an NFT.
The EIP-721 standard defines an API to track and transfer ownership of an NFT. When an NFT is to represent some off-chain asset, however, we would need some legally effective mechanism to tether the on-chain asset (NFT) to the off-chain property. One important case of off-chain property is creative work such as an image or music file. Recently, most NFT projects involving creative works have used licenses to clarify what legal rights are granted to the NFT owner. But these licenses are almost always off-chain and the NFTs themselves do not indicate what licenses apply to them, leading to uncertainty about rights to use the work associated with the NFT. It is not a trivial task to avoid all the copyright vulnerabilities in NFTs, nor have existing EIPs addressed rights management of NFTs beyond the simple cases of direct ownership (see EIP-721) or rental (see EIP-4907).
This EIP attempts to provide a standard to facilitate rights management of NFTs in the world of Web3. In particular, ERC-5218 smart contracts allow all licenses to an NFT, including the root license issued to the NFT owner and sublicenses granted by a license holder, to be recorded and easily tracked with on-chain data. These licenses can consist of human-readable legal code, machine-readable summaries such as those written in CC REL, or both. An EIP-5218 smart contract points to a license by recording a URI, providing a reliable reference for users to learn what legal rights they are granted and for NFT creators and auditors to detect unauthorized infringing uses.
Check out EIP-5218 for more details. We’d love to hear your thoughts on this!