Digital Rights and Royalty Enforcement on Fuel as Native Asset Wrapper
Overview
This proposal introduces a novel framework for digital rights enforcement on Fuel. Outlining an approach that leverages the unique properties of UTXO models to overcome fundamental limitations in current account-based systems, particularly in the context of digital asset rights management. The proposed framework enables granular transaction-level rights enforcement without requiring intermediary mediation, representing a significant advancement over existing NFT paradigms as well a foundational building block from which to construct wider systems of networked ownership, licensing and IP.
Would love to get wider feedback from the ecosystem and thoughts on how we could move it all forward 
Background and Motivation
Current account-based blockchain systems face inherent limitations in enforcing digital rights at the transaction level. The main limitation around rights enforcement with EVM (+ any account based system) is the inability to distinguish calls to the transferFrom() function which are valid direct ownership transfers from sales transactions. As such, any entrenched creator rights are deprived of enforcement capability and rendered merely suggestive.
Technical Innovation
On Fuel the nature of the UTXO model means there is greater ability to inspect the inputs from a transaction which would enable the effective distinction between an end user account and smart contract akin to the tx.origin / msg. sender comparison on EVM.
However, where the distinction is rendered unworkable with the introduction of SC based account abstraction, Fuel’s use of predicates means such a distinction remains valid even through contexts such as multi-sig accounts.
Whilst an additional vector then opens up to use predicates through which to set sales which would bypass the wrappers royalty structure. Such transactions would have to contain a coin spend (as bypassing payment) within the atomic txn which included the ownership update request, as such an additional check can be included to verify no coin spend is detected within a direct transfer request.
As such you can design a system which allows for the working establishment of rights and royalties around native assets which can be enforced at the transaction / contract level without need for intermediary white/black lists or third party enforcement.
The Digital Rights Wrapper
The core wrapper would function as a contract framework which could be deployed by any user with the transfer of native assets to the contract. In order to function the framework would cover:
Rights Configuration
Sets the conditions in which the asset can be unwrapped, as well as the conditions which would govern any sale or ownership (such as royalties, time bound payments, fee splits etc.)
Ownership Registry & Asset Custody
The contract holds the wrapped asset, tracking ownership instead through its own internal register and enforcing on the conditions in which it could be unwrapped.
Direct Transfers
Checks against msgsender() and coin spends to validate direct transfer requests and update the corresponding ownership registry.
Sales Management
Sets sales conditions for ownership to update and enforces on the relevant royalties and rights set by the wrapper as well as ensuring the correct distribution of subsequent funds.
Wider Applications
Licensing & I.P
Further modularity can be built into the framework enabling for optional configuration around a whole suite of broader onchain IP licensing and use cases, such as:
- Original/derivative relationships (remixes or new creative assets tied to an original)
- Dataset licensing and distribution (Authorising use within certain other platforms, datasets or applications)
- Asset provenance, contribution mapping and compliance.
Networked Ownership
Further configurations can be added to the way ownership is handled within the wrapper, enabling new forms of networked ownership and governance systems. Developing novel mechanisms to address a pervasive market failure within digital markets whereby the common property framework of single owner transfer fails to allow for the networked context and embedded value creation of the underlying asset (i.e things like data where the single bit or dataset acquires greater value through interrelation with other data). This would have applications across:
- Alternative asset frameworks such as PCO
- New kinds of shared/fractionalised ownership systems
- Defi integrations & networks of assets / IP / Licences held via a common token or asset system.