Definition ∞ IP-backed securities are financial instruments whose value is derived from intellectual property assets. These securities represent claims on future revenue streams generated by patents, copyrights, trademarks, or other forms of intellectual property. They allow creators or owners of intellectual property to monetize their intangible assets by securitizing them and offering them to investors. The valuation and risk assessment of such securities depend heavily on the strength and projected earnings of the underlying intellectual property.
Context ∞ The concept of IP-backed securities is gaining renewed attention with the rise of tokenization, where intellectual property rights can be represented as digital tokens on a blockchain. This approach offers new avenues for creators to access capital and for investors to gain exposure to unique asset classes. Regulatory frameworks are slowly adapting to accommodate these novel forms of securitization and ensure investor protection.
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