Physical-Digital Asset Linking Through NFT Royalty Contracts
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Solution Overview
Problem
Existing systems fail to provide seamless integration and monetization opportunities for creators and fans in digital and physical environments, particularly in the sneaker industry, where creators do not benefit from the secondary sales of their work, and fans lack ways to support and engage with their favorite creators.
Innovation Solution
A blockchain-based system that links digital and physical assets using NFTs, allowing creators to earn royalties on secondary sales and fans to own both digital and physical assets, with smart contracts managing ownership and royalties, and integrating digital assets with decentralized storage systems.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If creators sell digital assets directly to fans using NFTs, then creators can monetize their work and fans can support creators, but creators do not benefit from secondary sales of their work
Solution Approach 1:
The patent implements a royalty mechanism where a predetermined percentage (e.g., 10%) of secondary sales is automatically transferred back to the creator through smart contract enforcement. This feedback loop ensures creators continuously benefit from the appreciation and resale of their work, resolving the contradiction between initial monetization and ongoing participation in value appreciation.
Solution Approach 2:
The patent establishes royalty terms and smart contract enforcement mechanisms in advance, before secondary sales occur. This preliminary action embeds the creator's ongoing benefit into the asset's ownership structure, ensuring automatic royalty payments on future transactions without requiring subsequent negotiation or intervention.
2Adaptability or versatility
If fans purchase digital assets to support creators, then fans can signal affiliation, but fans lack ways to engage with creators in digital environments
Solution Approach 1:
The patent makes NFT assets interoperable across multiple digital environments and platforms. The same NFT that proves ownership and affiliation can be displayed, traded, and utilized across different virtual spaces, social platforms, and creator ecosystems, enabling fans to engage with creators universally across digital boundaries without requiring separate systems.
Solution Approach 2:
The patent uses the NFT itself as an intermediary token that mediates between fans and creators. The NFT serves as a portable credential that fans can present to creators across different platforms, enabling automatic verification of affiliation and facilitating direct engagement without requiring complex authentication systems or intermediary verification processes.
3Adaptability or versatility
If digital assets are used in interconnected digital environments, then a unified metaverse experience is possible, but digital assets lack provable scarcity and shared ownership truth
Solution Approach 1:
The patent combines multiple critical functions into a single NFT token: provable scarcity through blockchain uniqueness, interoperability credentials for cross-platform use, and ownership verification. This merging eliminates the need for separate systems for each function, allowing assets to maintain reliability and provable scarcity while seamlessly integrating across interconnected digital environments.
Solution Approach 2:
The patent implements self-verifying NFTs that contain embedded cryptographic proofs of authenticity, ownership, and scarcity. These assets automatically verify their own legitimacy through blockchain consensus mechanisms, eliminating the need for external verification authorities and enabling trusted operation across decentralized digital environments without centralized control.
Data Source
AI summary
A physical asset corresponding to a digital asset is provided. The physical asset includes one or more components manufactured in accordance with one or more parameters for customizing the physical asset based on information associated with the digital asset. The physical asset also includes a tag associated with the physical asset, wherein the tag includes information comprising a uniform resource locater (URL) and encrypted information, wherein the encrypted information corresponds to a cryptographic token on a distributed ledger and information about the physical asset.