NFTs for Open-Source and Commercial Software Licensing and Royalties

Abstract

Software licenses are legal agreements of sale and usage among software developers and clients. Such legal agreements are crucial to effectively manage ownership and protect the rights of involved parties. Today's software licensing mechanisms are mostly centralized and do not address the ever-increasing issues and complexities of modern software that may include multiple licenses, open-source distribution, rewarding other contributors of external software libraries, and utilizing royalty payments for monetization. As a result, developers have lost confidence in the existing software licensing models, and many software projects are failing due to lack of funding and royalty payments. This paper addresses such issues and complexities by proposing a novel decentralized software licensing system based on Non-Fungible Tokens (NFTs) and blockchain. The proposed licensing system is applicable to both commercial and open-source software. We use NFTs as digital tokens that encapsulate software code and their artifacts by minting them as unique valuable assets that allow developers to store and manage them on a blockchain ledger. With NFTs, developers can register and license their code, monetize it on NFT marketplaces, and earn royalties from other software projects that use their code. We present system architecture, relevant sequence diagrams, and develop aggregation algorithms for Ethereum smart contracts with ERC-1155 NFTs. Furthermore, we perform functional validation of our system and analyze the cost of its adoption. We also analyze the security of the solution and show how its applicability can be generalized and extended. We have made our smart contract code and related testing scripts publicly available on GitHub.

Non-Fungible Tokens (NFTs)—Survey of Current Applications, Evolution, and Future Directions

“…1) Digital Software Licensing: Madine et al [74] explores the use of NFTs to protect the intellectual property rights of software. By creating unique NFTs for each software license, developers can prove ownership and control the distribution of their licenses.…”

TrenchX An Integrated Marketplace for Secure E-Commerce and NFT Transactions

“…The paper titled, NFTs for Open-Source and Commercial Software Licensing and Royalties [1] proposes a decentralized software licensing system using NFTs and blockchain for both open-source and commercial software. It allows developers to register, license, monetize their code, and earn royalties from other projects, addressing funding and royalty payment issues in the software development industry.…”

Blockchain-Powered Gaming: Bridging Entertainment with Serious Game Objectives

“…The first, dubbed TokenManager, is given the task of generating, preserving, and transferring the game tokens. This decentralized application employs two distinct types of tokens: the in-game gold, analogous to an ERC-20 [42] compatible token due to its resemblance to conventional currency, and the in-game cards, possessing attributes similar to an ERC-721 [43], widely referred to as NFT [43]. To manage both types of tokens within a single contract, the ERC-1155 [43] token standard was selected.…”

“…This decentralized application employs two distinct types of tokens: the in-game gold, analogous to an ERC-20 [42] compatible token due to its resemblance to conventional currency, and the in-game cards, possessing attributes similar to an ERC-721 [43], widely referred to as NFT [43]. To manage both types of tokens within a single contract, the ERC-1155 [43] token standard was selected. This standard has become a contemporary choice across numerous other blockchain sectors due to its enhanced performance, reduced gas-related expenses, and the capability to transact multiple distinct token types in a single transaction [43].…”

“…To manage both types of tokens within a single contract, the ERC-1155 [43] token standard was selected. This standard has become a contemporary choice across numerous other blockchain sectors due to its enhanced performance, reduced gas-related expenses, and the capability to transact multiple distinct token types in a single transaction [43].…”