Autonomous IP valuation & tokenistion for use in DeFi
The majority of game-fi projects have deeply explored the assetisation of in-game items and cosmetics for socioeconomic purposes within Web3 game economies. In-game items and cosmetics are typically the only assets from the gaming value chain that are tokenised and thus benefit from the value add of the underlying technology. Players benefit through a public and game-theoretically guaranteed source of truth (the underlying L1, such as Ethereum) and by gaining cost-explicit value ownership and transfer rights.
Yet, these benefits are challenging to incorporate at the very least (for most games creators wanting to enter Web3) and at best require deep rethinking and novel game design on the part of creators to maximally enhance their game economies and value proposition for players.
While markets related to rights associated with commercial use, cash flow, rent-seeking, control and other financial interests remain largely unexplored.
The Acxyn ecosystem introduces a groundbreaking concept of Intellectual Property (IP) and Intellectual Property Rights (IPRs) tokenization, which brings a new level of innovation, composability, interoperability, and value creation to the gaming industry. IP & IPR tokenization refers to the process of converting intangible assets, such as game characters, digital art, stories, or in-game items, into digital tokens on the blockchain.
To be able to value an IP asset, the asset should meet the following conditions:
- 1.It must be separately identifiable (subject to specific identification and with a recognizable description)
- 2.There should be tangible evidence of the existence of the asset (e.g. a contract, a license, a registration document, record in financial statements, etc.)
- 3.It should have been created at an identifiable point in time.
- 4.It should be capable of being legally enforced and transferred.
- 5.Its income stream should be separately identifiable and isolated from those of other business assets.
- 6.It should be able to be sold independently of other business assets.
Once these requirements are met, Acxyn leverages its oracle network to capture all on-chain and off-chain data provided to Acxyn by game creators to identify the separate royalty and revenue streams to IP and individually and collectively value the game IP. This method is known as the income method.
The income method is based on the concept that the value of IP is equal to the present value of the future cash flows it is expected to generate. This method is often used when the IP is generating or expected to generate income, such as through licensing or direct use in products or services. The process for the income method involves the following steps:
a. Identify the IP: Determine the specific intellectual property to be valued, such as a patent or trademark. In the Acxyn ecosystem, IP is identified as the underlying on-chain representation (aka NFT).
b. Project cash flows: Estimate future cash flows generated by the IP, considering factors like market size, growth rates, and the IP's competitive advantages. Game developers share revenue data with Acxyn to provide a base from which to carefully extrapolate future income.
c. Determine the discount rate: Identify an appropriate discount rate - the discount rate is influenced by the GGV score, which reflects the risk associated with the IP's future cash flows. This rate is used to discount future cash flows back to their present value.
d. Calculate the present value: Discount the future cash flows to their present value using the chosen discount rate. The sum of these present values represents the estimated value of the IP. Game creators and investors are provided with the NPV of the IP.
In order to fully value an IP, Acxyn extrapolates the potential future revenue from its known dataset and comparison with similar IPs within the Acxyn ecosystem. Acxyn leverages SiRE, a simulation-informed-revenue-extrapolation algorithm with Confidence Estimate, which is a cutting-edge forecasting method specifically designed for companies operating within the Acxyn ecosystem. Leveraging scarce time-series data, SiRE aims to accurately predict future revenues by incorporating advanced simulation techniques and statistical models.
Overall, the SiRE algorithm offers a robust and flexible forecasting solution for game economies in the Acxyn ecosystem, enabling them to make better-informed strategic decisions and optimize their growth trajectories.
Acxyn serves as a gateway for game creators to protect and monetize their intellectual property, allowing them to license, sell, or borrow against it for their benefit. The Acxyn token represents the digital store of value for participating teams.
Developing intellectual property assets is essential for innovation, competitiveness, and sustained growth. They can be leveraged as additional revenue sources, bolstering profits and diversifying risk. Intangible assets, like trademarks, contribute to a company's primary economic benefit, while ancillary assets may also generate revenue.
Effective management and integration of intangible assets into revenue streams require a tailored, overarching strategy specific to each sector. By embracing this approach, businesses can unlock multiple streams of revenue from their intellectual property.