‘NFT License 2.0’ – 2 years on

It is almost two years to the day since DapperLabs launched the Non-Fungible Token (NFT) License 2.0. The significance of this development should not be lost on the crypto community. This license was an upgrade to the original NFT License — a gift to the blockchain metaverse — an offer to help artists take control of their art.

Two years is a long time in the crypto space, where life moves at an exponential pace and demand for NFTs has skyrocketed. So much so, it appears, that the opportunity to take up DapperLabs’ generous offer may have passed us by.

So what is the NFT License 2.0, and more importantly what does it mean to creators and owners? These are questions that should be coming from both ends of the crypto community. The license is a public legal framework which sets out what owners of NFTs can and cannot do with the art associated with their tokens.

In simple terms, when someone spends hard-earned ETH on an NFT, they should know what rights they are actually acquiring. On the other hand, the creator who invested time, money, and care into the work should also be able to define what uses are acceptable.

DapperLabs’ decision to make the NFT License 2.0 publicly available was a strong idea in principle. Why then have relatively few artists adopted it in practice? One likely answer is a combination of limited awareness and the rigid take-it-or-leave-it structure of the license itself.

The NFT License 2.0 can be used free of charge. A creator can attach it to their website and make the sale of an NFT subject to its terms. But creators cannot modify those terms. DapperLabs makes it clear that the license is available on a fixed basis, which means both creators and owners need to understand it before relying on it.

Under the license, owners can make personal use of the art without issue. They can also monetize the art up to a fixed annual gross revenue threshold, trade the NFT, and use it on third-party platforms and apps. But there are also meaningful limits: the art cannot be altered, trademarking is restricted, and the work cannot be used in connection with certain inappropriate behavior or external products.

That raises an obvious question: what happens when a creator wants a different balance of rights? Some may want holders to be able to remix the art freely. Others may want broader commercial rights. The one-size-fits-all nature of NFT License 2.0 will inevitably work for some creators and fail for others.

This is exactly why custom approaches emerged. Avastars, for example, developed its own Digital Asset Ownership License, offering holders more freedom than the standard NFT License 2.0.

Even so, some licensing framework is still far better than none. Without a clear license, both creators and holders are left exposed to disputes about what digital art tied to a token can or should be used for. That uncertainty becomes more dangerous as NFT adoption expands.

A broader spectrum of licenses — almost like a Creative Commons suite for NFTs — could make things dramatically better. Creators could choose how much control to give holders, and trading platforms could make those terms easier to surface and understand.

For the sake of both creators and owners, the underlying rights attached to NFT art need to be clear, accessible, and adaptable. The challenge is not just to have a license, but to create a framework flexible enough for the real diversity of digital art and ownership models.

Now is the time to get our house in order — before NFT adoption multiplies further into the mainstream. As a community, we can work toward broader license options, more usable frameworks, and a better shared understanding of what it means to hold digital art on-chain.