Non-fungible tokens, or NFTs, are sold with the promise of “ownership,” but a new review suggests that many creators and buyers still don’t know what that means. Galaxy Digital, a blockchain investment company, did a review of the 25 most valuable NFT projects and found that only one of them even tries to give buyers direct intellectual property rights to the underlying art. Many of the other projects offer confusing or vague licenses, even though there have been recent efforts to clean up the space.

The Galaxy report looks at the terms of some of the biggest NFT projects, like the Bored Ape Yacht Club (BAYC) from Yuga Labs, Gary Vaynerchuk’s VeeFriends and World of Women, and the “metaverse” social platforms Decentraland and Sandbox. It comes to the conclusion that “the vast majority of NFTs convey zero intellectual property ownership of their underlying content,” and that many of their operators, including Yuga Labs, “appear to have misled NFT purchasers” about the extent of their rights. Some projects have tried to avoid confusion by using the well-known Creative Commons license. However, in doing so, some have effectively untethered IP rights from the NFT, making it “impossible” for NFT holders to defend exclusive rights to the art.

This is similar to what Cornell University and the Initiative for CryptoCurrencies and Contracts found in their review, which The Verge used earlier this year. Both reviews point out that BAYC, one of the biggest and most important NFT series, doesn’t make sense. The BAYC terms say that buyers “own” the art behind their token “completely,” but they also give buyers a license that goes against this promise. (In short, you wouldn’t need a license to use the art if you actually owned it.) Galaxy has a lot of doubts about the claim that big artists like Seth Green depend on NFT terms of service. “It’s hard to believe that Seth Green and his production company didn’t make a separate deal with Yuga,” it says.

But Yuga Labs just changed the terms of service for its CryptoPunks and Meebits series in a big way, showing how a more professional version of NFT licensing might work. Galaxy also mentions the “noble effort” of World of Women (WoW), which is the only project in its survey that uses NFTs to try to legally change who owns a piece of art. But it says that WoW still doesn’t explain how selling the NFT gives the buyer the rights to any works based on that copyright that were made by someone else.

When the creators of an NFT keep the IP rights, they can change the terms in ways that some NFT buyers might not like. This just happened with the Moonbirds project. After telling buyers for months that they “owned” their Moonbirds art, the project recently announced a switch to the CC0 (or “no copyright reserved”) Creative Commons license. CC0 means that anyone, not just the NFT holder, can use the art. This is said to have ruined at least one licensing deal between a Moonbirds owner and a brand.

Galaxy’s report is mostly about how to make NFT licenses better. This could help NFT fans who want to license their purchases or turn them into fan art. But the way things are now doesn’t show that they’re a great way to manage intellectual property rights, at least not without a lot more work.

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