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*Special thanks to Jason Zhao for his valuable feedback on this article.
Key Takeaways
Aria Protocol is bringing major music IPs like BTS’s The Truth Untold on-chain via Story to enable fractionalized, tradable royalty rights.
If executed successfully, this could mark the emergence of a new investable asset class, where IP is not only tokenized but programmable, liquid, and widely accessible on-chain.
To bootstrap liquidity, Aria has leveraged StakeStone LiquidityPad, raising $10.95M from the community within its early phase.
The biggest challenge lies in bridging off-chain revenue flows to on-chain assets, requiring precise royalty tracking, seamless fiat-to-stablecoin conversion, and verifiable yield distribution.
Programmable IP, a concept pioneered by Story, has often been viewed by critics as more theoretical than practical. However, with Aria Protocol onboarding major music IPs, including BTS, BLACKPINK, Aespa and other global artists into Story, this initiative marks one of the first tangible case studies for fractionalized, tradable, and yield-generating IP rights at scale.
Source: X (@Aria_Protocol)
The key challenge lies not in the tokenization of music royalties itself but in the seamless integration of off-chain royalty flows into an on-chain framework. This process presents a set of key considerations, including:
Ensuring accurate tracking and collection of off-chain revenues from streaming, licensing, and performance royalties.
Establishing a robust mechanism to convert fiat-based royalties into on-chain assets in a transparent and verifiable manner.
Sustaining yield distributions for tokenholders.
Given the complexity of music royalty structures, a well-defined framework with clear disclosure, rigorous revenue tracking, and a transparent distribution mechanism is essential for credibility. This report examines the transaction flow of IP distribution and potential challenges that may arise.
Step 1. Acquiring Music Rights
Before music royalties can be tokenized, securing the underlying rights is a crucial first step. The ownership structure of music IP is highly fragmented, with rights typically divided into two primary categories:
Master Rights: Representing the recorded performance of a song, typically owned by record labels such as Universal Music Group, Sony Music, or HYBE.
Publishing Rights: Governing the underlying composition, including melodies, lyrics, and arrangements, usually held by songwriters and their affiliated publishing companies.
Each category generates distinct revenue streams collected by different intermediaries, adding complexity to the tokenization process. Understanding whether Aria Protocol has acquired master rights, publishing rights, or both is critical, as it directly impacts the revenue sources available for tokenization. However, clarity on the specific rights Aria Protocol has secured remains an open question, making it difficult to assess the full scope of its revenue potential.
Aria Protocol may have obtained these rights through direct licensing agreements, secondary market acquisitions (via firms like Hipgnosis or Royalty Exchange), or partnerships with rights aggregators (such as JKBX or SongVest). However, given the industry’s complexity, ensuring transparent disclosure of ownership remains a key challenge.
That said, acquiring rights is only the first step. In order to generate value from these rights, Aria Protocol must successfully track and collect royalties across a highly fragmented payment system. Without a clear revenue collection framework, tokenized music IP would fail to deliver sustainable cash flows.
Step 2. Collecting & Aggregating Royalty Revenue
Once rights are secured, accurately collecting and aggregating royalty revenues becomes the next challenge. The music industry’s payment system is highly fragmented, with different entities handling various revenue streams:
Streaming Royalties: Paid by platforms like Spotify, Apple Music, and YouTube to labels and publishers.
Mechanical Royalties: Generated from digital downloads and physical sales, collected by The MLC (U.S.), MCPS (U.K.).
Performance Royalties: Earned from radio, TV, and live performances, distributed by PROs like ASCAP, BMI, and PRS.
Synchronization Fees: Payments for music placements in films, commercials, and video games, negotiated directly.
Ensuring accurate collection requires a clear framework. If Aria Protocol holds master or publishing rights, it must register as a rights holder with key collection agencies, establish direct royalty payment agreements, and leverage third-party royalty tracking services like Audiam, Stem, or Songtrust to verify inflows.
Transparency in revenue reporting will be a key factor in validating how much is actually collected and transferred on-chain. Implementing independent verification processes could further enhance confidence in reported revenue figures.
Step 3. Converting Off-Chain Royalties into On-Chain Value
Once royalties are collected, the next step involves converting these earnings into tradable on-chain assets. This begins with converting fiat-based revenues into stablecoins like USDC or USDT using crypto payment processors such as Circle or Fireblocks. These stablecoins are then deposited into Story’s smart contracts, minting $RWIP tokens that represent fractional ownership of royalty streams.
Ensuring a seamless and transparent transition is key. A well-defined audit mechanism will be essential to confirm that stablecoin deposits accurately reflect total royalties collected off-chain. Additionally, establishing a predictable and verifiable revenue flow can help mitigate potential concerns around liquidity disruptions or yield stability.
Step 4. Bootstrapping Liquidity with StakeStone LiquidityPad
Ensuring liquidity for $RWIP is crucial for its tradability and adoption. To address this, Aria Protocol has integrated StakeStone LiquidityPad, an omnichain liquidity issuance platform designed to bridge Ethereum’s liquidity into $RWIP. A total of $10.95M has been rasied via the Aria Premiere Launch vault.
Source: Stakestone
Users deposit USDC or USDT into Aria Premiere Launch on StakeStone, where funds are locked for approximately three months before being converted into $RWIP tokens. Once issued, $RWIP tokens can be traded on decentralized exchanges, staked for additional rewards, or used as collateral in lending markets.
For long-term sustainability, $RWIP must demonstrate clear value accrual from real-world royalties, ensuring that liquidity is driven by organic demand rather than short-term incentives. A strong foundation in transparent revenue flow and stable trading activity will be key factors in $RWIP’s adoption.
Step 5. Sustaining Yield & On-Chain Distribution
Following the issuance of $RWIP, Aria Protocol aims to provide ongoing distributions from future royalty payments, with an estimated annualized yield of 6–7%. These payouts depend on continuous revenue inflows from streaming, licensing, and performance royalties.
Source: X (@Aria_Protocol)
To maintain a sustainable model, Aria Protocol must ensure that off-chain earnings are consistently converted into stablecoins, deposited into Story smart contracts, and distributed to $RWIP holders. Transparent reporting mechanisms and regular audits could further reinforce confidence in the system and mitigate potential concerns about revenue misallocation.
Establishing a predictable and verifiable payout schedule will be crucial for long-term credibility. The ability to demonstrate consistent revenue inflows and clear distribution mechanics will help solidify $RWIP’s position as a viable yield-generating asset.
Looking Forward
Securing rights to major music IP like BTS’s The Truth Untold and Aespa’s Black Mamba is no joke - it reinforces industry credibility and signals access to high-profile IP. With additional songs from BLACKPINK, Justin Bieber, Miley Cyrus, Dua Lipa, Katy Perry, and BIGBANG joining the framework, Story is shaping up to be one of the most ambitious and forward-thinking Web3 experiments to date.
Ultimately, the broader opportunity lies in establishing IP as a programmable, on-chain asset class. Compared to traditional RWAs like U.S. Treasuries, tokenized IP offers distinct advantages: it democratizes access to an asset class historically unavailable to retail investors and extends beyond passive yield to programmable rights that unlock new monetization models.
For context, U.S. Treasuries, often seen as the gold standard of RWAs, represent a $27 trillion market. In contrast, the global IP industry is valued at $61 trillion, highlighting a significantly larger addressable market. Unlike T-bills, which are accessible off-chain but offer limited programmability, Aria’s approach introduces new dimensions of ownership, governance, and revenue generation that go beyond traditional financial assets. Given its positioning at the intersection of RWAs and IP, Aria’s trajectory naturally invites comparisons to players in the space like Ondo or Mantra, where market valuations are increasingly shaped by the ability to tokenize and financialize real-world assets at scale.
That said, while music RWAs present immense potential, their success ultimately hinges on transparency, verifiable revenue flows, and a robust on-chain distribution mechanism. The next phase will be crucial in proving whether this model can achieve sustainable, real-world traction at scale. If executed successfully, this could mark the emergence of a new investable asset class, where IP is not only tokenized but programmable, liquid, and widely accessible on-chain.
