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3.5 KiB
Markdown
40 lines
3.5 KiB
Markdown
---
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title: Data NFTs and Datatokens
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description: >-
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In Ocean Protocol, ERC721 data NFTs represent holding the copyright/base IP of
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a data asset, and ERC20 datatokens represent licenses to access the assets.
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---
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# Data NFTs and Datatokens
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In summary: A [**data NFT**](data-nfts.md) serves as a **representation of the copyright** or exclusive license for a data asset on the blockchain, known as the "[**base IP**](../../discover/glossary.md#base-ip)". **Datatokens**, on the other hand, function as a crucial mechanism for **decentralized access** to data assets.
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For a specific data NFT, multiple ERC20 datatoken contracts can exist. Here's the main concept: Owning 1.0 datatokens grants you the ability to **consume** the corresponding dataset. Essentially, it acts as a **sub-license** from the [base IP](../../discover/glossary.md#base-ip), allowing you to utilize the dataset according to the specified license terms (when provided by the publisher). License terms can be established with a "good default" or by the Data NFT owner.
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The choice to employ the ERC20 fungible token standard for datatokens is logical, as licenses themselves are fungible. This standard ensures compatibility and interoperability of datatokens with ERC20-based wallets, decentralized exchanges (DEXes), decentralized autonomous organizations (DAOs), and other relevant platforms. Datatokens can be transferred, acquired through marketplaces or exchanges, distributed via airdrops, and more.
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Here is a visual representation:
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<figure><img src="../../.gitbook/assets/DataNFT and Datatoken Flow.jpg" alt=""><figcaption><p>Data NFTs and Datatokens </p></figcaption></figure>
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You can [publish](../../discover/glossary.md#to-publish) a data NFT initially with no ERC20 datatoken contracts. This means you simply aren’t ready to grant access to your data asset yet (sub-license it). Then, you can publish one or more ERC20 datatoken contracts against the data NFT. One datatoken contract might grant consume rights for **1 day**, another for **1 week**, etc. Each different datatoken contract is for **different** license terms.
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For a more comprehensive exploration of intellectual property and its practical connections with ERC721 and ERC20, you can read the blog post written by [Trent McConaghy](http://www.trent.st/), co-founder of Ocean Protocol. It delves into the subject matter in detail and provides valuable insights.
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{% embed url="https://blog.oceanprotocol.com/nfts-ip-1-practical-connections-of-erc721-with-intellectual-property-dc216aaf005d" %}
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**DataNFTs and Datatokens example:**
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* In step 1, Alice **publishes** her dataset with Ocean: this means deploying an ERC721 data NFT contract (claiming copyright/base IP), then an ERC20 datatoken contract (license against base IP).
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* In step 2, she **mints** some ERC20 datatokens and **transfers** 1.0 of them to Bob's wallet; now he has a license to be able to download that dataset.
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### Other References
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* [Data & NFTs 1: Practical Connections of ERC721 with Intellectual Property](https://blog.oceanprotocol.com/nfts-ip-1-practical-connections-of-erc721-with-intellectual-property-dc216aaf005d)
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* [Data & NFTs 2: Leveraging ERC20 Fungibility](https://blog.oceanprotocol.com/nfts-ip-2-leveraging-erc20-fungibility-bcee162290e3)
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* [Data & NFTs 3: Combining ERC721 & ERC20](https://blog.oceanprotocol.com/nfts-ip-3-combining-erc721-erc20-b69ea659115e)
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* [Fungibility sightings in NFTs](https://blog.oceanprotocol.com/on-difficult-to-explain-fungibility-sightings-in-nfts-26bc18620f70)
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