Version: 1.0, last update: Nov 1, 2022
The Utility Token: LICA (LICA)
LICA (Symbol: LICA) is an ERC-20 token and the utility token on Licens. LICA is an inflationary token and has no hard circulation cap. The primary function of LICA is to incentivize positive and contributing behaviors while penalizing negative and disruptive behaviors in Pond’s ecosystem, but not to gain value on the secondary market.
The minting and distribution of LICA mainly rely on Licens’ License-to-Earn (L2E) model. When a licensing transaction happens through Licens’ protocol, new LICAs will be programmatically minted based on a mathematical model, which takes multiple factors (e.g. gross merchant value, staked token value on the listing, licensing history, and token circulation volume) into the calculation to determine the issuance and distribution of new tokens between the licensor and the licensee.
Copyright infringement is a critical issue for any content marketplace, particularly in Web2, where incentives for copyright integrity are misaligned. Licens implements an innovative counter-infringement mechanism called Proof-of-Right (POR), which mobilizes and incentivizes the entire Licens community to protect copyright integrity.
Traditional marketplaces rely heavily on humans to review and approve new listings, which dramatically slows the listing process, especially for new contributors. Within this system, unauthorized listings can sometimes still get approved. Anyone is allowed to flag any content to dispute the copyright ownership, but the review and settlement process is also very manual and slow. At times, the best outcome the legit copyright owner can attain is to have the unauthorized content delisted, after which the platform seizes any unpaid earnings. The consequences of infringement are not significant enough to stop content theft from happening in the first place.
Licens tackles this problem with a dynamic token economy design and an automated mechanism based on Zero Knowledge Proof and Proof-of-Stake concepts, made possible through blockchain technology. Instead of a centralized organization carrying the burden of examining every new listing, Licens creates token-based incentives for community members to endorse credible creators, report content infringement, and even examine infringement disputes. Significant fines in the form of staked tokens are charged to discourage copyright infringement or any abuse of the infringement reporting system.
Other Token Use Cases
Staking is the primary utility of LICA. Token holders stake their LICAs for token rewards from L2E and PoR as well as for voting rights to participate in Licens governance.
LICA may be redeemed for add-on services on Licens. For example, creators may use LICAs to customize their online shop, buy blockchain storage space, promote their listings on Licens, or launch their affiliate program. Licensees may use LICAs to acquire new content or retrieve the original files of their licensed content from blockchain storage. Developers and partners may use LICAs for API usage and to launch their services on Licens.