🦊 Token troubles

Fall is finally here in the northern hemisphere, which in “war-ravaged” Portland means farmers’ markets, delicious espresso, hikes in the forest and a sea of trees changing color. 

The only battle happening around here is the one my cats start every morning to get their breakfast.

— Kate Irwin

Whose token is it, anyway?

A Pinkfong token using the Story IP protocol has stirred up some confusion online after a licensing dispute led the memecoin to dramatically plunge in price in just a few days.

During the Story Origin Summit last week (which Blockworks co-hosted), Pinkfong co-founder and EVP Ryan Seungkyu Lee said onstage that The Pinkfong Company was working with Story and IPWorld to make a meme.

Story co-founder SY Lee also announced onstage that Pinkfong was launching its “first-ever Pinkfong token” on IPWorld.

Pinkfong is the namesake pink fox character who exists in the same kids’ YouTube universe as the viral “Baby Shark” character. 

IPWorld is a memecoin launchpad that uses the IP protocol but is separate from the Story Foundation and team. 

Since its launch, the PINKFONG token on the IP protocol has been IPWorld’s top-trending token. It had a market cap of over $500 million on Sept 23. But within a day, the token’s market cap had fallen 80% to around $100 million, climbed back up to around $234 million, and then fell again.

It’s held a market cap of less than $10 million since Thursday last week. The token has less than 1,000 holders. 

So what caused the price plunge? Confusion around the token’s owner and legitimacy appears to have triggered a lack of confidence in the new memecoin. 

Story’s IP protocol provides “a decentralized registry where IP ownership is verifiable, programmable and enforceable.” 

BBF Limited Foundation, “a licensed partner of the Pinkfong Company,” reportedly claimed the rights to launch the token on IPWorld. But another party, BSUniverse, “a limited licensee of Babyshark,” questioned that agreement. 

IP World said: “Our verification process requires that full and valid IP rights are confirmed before an IP can be verified onchain and its token allocation and fees unlocked for the rightful owner. During this final stage, BSU raised an objection to BBF’s license, which immediately halted verification and prompted us to get in touch with the Pinkfong Company to resolve the matter.”

“There was simply no way for us, or any outside party, to know that BBF did not in fact have clear rights to license the property. Also because of this, our final IP verification did not go through, nor any creator fees paid out. This safeguard exists precisely to prevent IP misalignment in cases where post-launch disputes arise.”

I’ve reached out to Pinkfong’s co-founder for additional comment. Pip Labs (the main developer of Story Protocol) declined to comment. 

The @Pinkfong X account published a statement on Thursday asserting that its only official tokens are a Baby Shark memecoin on Solana and a Baby Shark Universe token on BSC. The statement also appears when accessing the Pinkfong website.

“False representation of our company, unauthorized use of our IP, and disseminating false information constitutes a clear violation of law that will be met with grave legal consequence[s],” the statement further alleged.

A BSUniverse account also argued that the PINKFONG token is not official. 

“This situation has provided an excellent case study on the dangers of championing ‘on-chain verification’ while neglecting the most basic due diligence: a valid ‘off-chain legal relationship’ with the IP holder,” the BSUniverse account wrote. “We hope this incident establishes that verifying both is the absolute standard moving forward for any project building on Story Protocol.”

IPWorld’s co-founder, known as Red, told me via email: “The Pinkfong token was launched in good faith under an agreement with BBF, an official licensee, which operates games and other initiatives with Pinkfong’s intellectual property. We also got explicit approval from a Pinkfong co-founder in addition to his appearance in public discussing this initiative. The issues that followed were the direct result of disorganization and misconduct among Pinkfong and its licensing partners.”

“At the time of launch, there was no basis upon which the validity of the license could reasonably be challenged. Only after the public launch did the internal conflicts within Pinkfong’s licensing structure come to light.”

Red continued: “IP World operated with full integrity and transparency throughout. We strongly denounce the unethical behavior that undermined this launch, and we are implementing stronger verification standards to ensure our community is never subjected to such actions again.”

Copyright and licensing issues can absolutely be messy — and memecoins make that messier when anyone can launch one. 

Hopefully, platforms like IPWorld can figure out a better process to verify ownership — or at least make it more obvious to buyers what level of verification has (and hasn’t) occurred.

For what it’s worth, IPWorld’s Pinkfong page still says it’s in the process of “identifying [the] IP owner.”

Whoever is designated the IP owner will get over $13 million in rewards, according to the platform. 

Now, a slew of other (unofficial) memecoins are trending on the platform, including one called “Jail IP WORLD” and another dubbed “Babyshutthefuckup.”

Crypto is changing TradFi derivatives and rate markets as we know them. 

DAS: London will feature all the builders driving this change. 

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📅 October 13-15 | London