Intellectual Property (IP) is a critical driver of economic growth, contributing $6.6 trillion annually to the U.S. economy alone and accounting for nearly 40% of GDP in developed markets. From patents and trademarks to copyrights and trade secrets, IP assets fuel innovation, support brand value, and create competitive advantages across industries.

However, despite their immense economic value, IP assets remain illiquid, difficult to value, and challenging to commercialize. Traditional IP transactions often involve complex legal frameworks, lengthy negotiations, and a reliance on intermediaries, making it difficult for businesses to efficiently monetize their IP portfolios or raise capital against them.

This is where tokenization of IP assets offers a transformative solution, not by disrupting existing IP structures, but by improving accessibility, enabling fractional ownership, and streamlining transactions in ways that were previously impossible.

What is Intellectual Property?

Intellectual Property (IP) refers to intangible assets that are legally protected through patents, trademarks, copyrights, or trade secrets. These assets represent creations of the mind, including technological innovations, creative works, and proprietary business strategies.

For businesses, IP can be a core revenue driver, whether through licensing, royalties, or direct commercialization. Yet, the traditional IP market remains opaque, with valuation discrepancies and limited secondary trading options.

How Can Intellectual Property Be Tokenized?

Tokenizing intellectual property (IP) involves creating digital tokens that represent specific rights to an underlying IP asset. These rights can include ownership, economic benefits, utility access, or other forms of entitlements to the underlying asset.

IP-backed tokens can be:

• Equity tokens: Representing ownership in the IP asset itself.
• Royalty tokens: Offering rights to a portion of future revenue from the IP.
• Utility tokens: Enabling access to the IP, such as software licenses or creative works.

For issuers, tokenization does not replace legal IP protection but instead enhances its commercial utility, broadens investor participation, and offers a structured, compliant, and liquid format for transacting IP assets.

How Does the Tokenization of IP Assets Work?

The tokenization of intellectual property (IP) assets involves multiple steps, ensuring compliance, security, and accessibility for investors. Below is a structured breakdown of the IP tokenization process, from asset evaluation to ongoing management. 

1. Asset Evaluation & Structuring

Before tokenization, the IP asset must be identified, evaluated, and structured appropriately for token issuance. This involves:

• Asset Identification: Determining whether the IP asset is a patent, trademark, copyright, or trade secret and assessing its commercial potential.
• What will be tokenized: Structuring how the asset will be tokenized, typically as:
  
  • Equity Tokens: Representing fractional ownership of the IP.
  • Royalty Tokens: Allowing investors to earn a share of future revenue.‍
  • Utility Tokens: Providing rights to use or access the IP, such as a software license.

2. Legal & Regulatory Compliance 

Ensuring that tokenization adheres to intellectual property laws, securities regulations, and jurisdictional requirements. Platforms like InvestaX provide a regulated tokenization framework to address compliance risks.

3. Token Creation & Smart Contracts 

At this phase, the IP asset is converted into IP-backed tokens, also known as security tokens, on a blockchain such as Ethereum, Polygon and Base. 

Rights, revenue-sharing mechanisms, ownership terms, and/or another form of entitlement to the underlying IP asset are embedded into the tokens via smart contracts.

4. Primary Offering (Investor Participation)

The initial sale of tokenized IP assets takes place through a regulated tokenization platform, such as InvestaX and IX Swap, where investors can purchase tokens representing rights to the asset.

Investors will need to go through Know Your Customer (KYC) and Anti-Money Laundering (AML) checks to ensure that investors are verified and eligible to participate in the tokenized offering.

The process of raising funds for IP assets via tokens is called a Security Token Offering (STO).

5. Secondary Trading

Unlike traditional IP assets, which are often illiquid, tokenization allows for secondary market trading, enabling investors to buy and sell tokenized IP on a regulated marketplace such as InvestaX’s IX Exchange.

6. Ongoing Management & Compliance

The ongoing management and compliance process for tokenized IP assets shares similarities with traditional IP asset management but also introduces key differences due to blockchain technology, smart contracts, and decentralized ownership structures.

Processes such as royalty distribution, revenue tracking, and IP enforcement benefit from automation, real-time transparency, and immutable blockchain records, reducing administrative burdens and improving accuracy. Fractional ownership and secondary trading enhance liquidity, making IP assets more accessible and tradable.

By integrating automation, transparency, and liquidity, tokenization streamlines IP asset management while maintaining regulatory compliance.

Real-World Use Cases of Tokenized IP

Tokenization is already transforming IP commercialization across multiple industries:

• Patents & R&D Commercialization: Pharmaceutical and biotech firms can tokenize drug patents, allowing investors to participate in drug development financing.
• Creative Rights & Royalties: Musicians, artists, and film studios can tokenize copyrights or revenue streams, enabling direct revenue sharing with investors.
• Technology Licensing: Software developers can tokenize software licenses, allowing companies to purchase and resell access on-chain.‍
• Brand Monetization: Companies can tokenize trademarks, allowing investors to participate in brand expansion and licensing revenues.

Examples of Tokenized IP Assets

1. Socialerus tokenized fractional ownership of Youtube channels.

The issuer: Socialerus, a trading and investment platform for famous South Korean YouTube channels.

What was tokenized:

• Socialerus has partnered with IX Swap to tokenize fractional ownership in a portfolio of high-income-generating YouTube channels and launched the SCR-1 token on IX Swap’s regulated tokenization platform. 
• This IP-backed token represents fractional ownership in a portfolio of high-income-generating YouTube channels, featuring content from prominent South Korean creators across industries such as beauty, kids’ entertainment, music, education, martial arts, influencers, and travel.

Why tokenize?

• By launching the SCR-1 token on IX Swap RWA launchpad, Socialerus gained exposure to a global investor audience across 177 countries and territories on IX Swap.

Learn more about Socialerus’ SCR-1 token here.

2. First Indo-Taiwanese tokenized film by Demon Hunters

The issuer: Demon Hunters, a South Korean action-horror film

What was tokenized

• Demon Hunters tokenizes a portion of the film’s intellectual property (IP) rights through IX Swap’s regulated tokenization platform. By tokenizing the film’s potential earnings, the movie’s producers have turned profits into digital tokens, called $DHUNT, that fans and supporters can own.
• The Demon Hunters token, $DHUNT, represents a fractionalized stake in the film’s financial rights, allowing investors to gain exposure to potential revenue streams from box office sales, streaming deals, licensing, and merchandising.

Why tokenize?

• Traditionally, investing in movies was reserved for big studios or high-net-worth individuals. Now, anyone with a smartphone can get involved. 
• By adopting tokenization, the Demon Hunters team leveraged blockchain technology to create a structured, transparent, and more inclusive investment framework, addressing key inefficiencies in traditional film financing.

Learn more about Demon Hunters’ tokenized movie IP here.

Benefits of Tokenization of IP Assets

• Liquidity for IP Owners – Transforming illiquid patents, copyrights, and trademarks into tradable digital assets.
• Global Investment Access – Fractional ownership allows a broader pool of investors to participate in IP-backed securities.
• Automated Royalty Payments – Smart contracts ensure real-time, transparent revenue distribution to token holders.
• Increased Valuation Transparency – Blockchain-based audit trails improve valuation accuracy and reduce disputes.‍
• New Financing Models – Tokenized IP can be used as collateral for financing, unlocking new capital streams for innovation.

The Future of IP Tokenization

As businesses seek new ways to monetize intangible assets, tokenization is emerging as a practical, scalable, and regulated solution for the IP economy. The ability to fractionalize ownership, automate royalty payments, and create transparent valuation mechanisms positions tokenization as a game-changer for intellectual property financing.

For IP holders, investors, and innovators, now is the time to explore structured, compliant tokenization strategies to maximize the value of intellectual property assets.

Connect with InvestaX to tokenize your first IP asset.