Most non-fungible tokens give those who purchase them no ownership rights to the underlying media, a recent study revealed.
In fact, upon reviewing licenses for the top NFT collections, in almost every case, the issuers offer only a usage license to the NFT purchaser, according to research from Galaxy Digital. These issuers actually still retain full ownership of the original media, while the varying levels of commercial rights range from rather permissive to highly restrictive. The study identified only one NFT collection, World of Women, in the top 25 by market capitalization that attempted to confer intellectual property rights to NFT buyers.
Galaxy researchers also found that popular NFT marketplaces like OpenSea neglected to make these arrangements clear to purchasers. In many cases, they found that issuers had deliberately perpetuated the concept that purchasing an NFT would bestow ownership rights, either by encouraging the message directly or by omission through their marketing content.
Altered usage licenses
The report highlighted a pair of high-profile issuers whose substantial changes in user licenses concerning their NFT collections in recent weeks have brought the issue to the fore of the crypto community.
Following months of claiming on its website that token holders “own the IP” of their NFTs, the 8th most valuable NFT collection based on implied market value, 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. By far the largest NFT issuer, Yuga Labs holds significant market power, owning more than 63% of the market value of the top 100 NFT collections.
Other NFT news
Earlier this month, Nike was revealed to be the highest-earning brand from NFT sales, with sales of $185 million, according to data from Dune Analytics. In addition to total revenue being seven times higher than the next position on the list, Nike also topped total transactions at 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 by blockchain research firm Elliptic. The report found that at just under $24 million, May 2022 saw the highest confirmed value of NFTs lost through fraud.
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