Below is the abstract for “The Property Law of Tokens,” forthcoming in the Florida Law Review and available for download on SSRN.

Non-fungible tokens—or NFTs, as they are better known—have taken the world by storm. The idea behind an NFT is that by owning a certain thing (specifically, a digital token that is tracked on a blockchain), one can hold property rights in something else (either a real or intangible asset). In the early part of 2021, NFTs for items ranging from a gif of a pop-tart cat with a rainbow tail, to Twitter CEO Jack Dorsey’s first tweet, to a New York Times column (about NFTs!) have sold for millions of dollars over the internet. Promoters assert that NFTs are the “future of digital property,” and that they herald a day when “government will lose its unique power to mint currency and protect property.” And these promoters reach beyond the typical crypto crowd. Giants of finance and industry are promising to extend the use of NFTs to securities, industrial assets, and real estate in the coming years. Moreover, this crypto token craze comes at a time when the American Law Institute and the Uniform Law Commission are in the midst of recommending revisions to U.S. commercial law to accommodate the digital age.

In this Article, we take a more sober look at the tokenization phenomenon and, in doing so, describe what exactly it means when it comes to property rights. What can a purchaser of a token expect? How is a token actually connected to the underlying asset, if at all? What does the law—not the hype—have to say about it? We show that tokenization under the law actually has a long history, backed by practical economic considerations and animated by strong theoretical underpinnings. We also show that NFTs have neither of these attributes. Additionally, our Article surveys a dataset of terms of service from the most prominent NFT platforms in order to exploit both their disconnect from real legal effects and their puzzlingly contradictory promises about the relationships between buyers, seller, and the platform. Our project aims not only to inform current commercial law reform efforts, but it also offers a policy prescription for policing the NFT market.

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Juliet M. Moringiello

Juliet M. Moringiello is Associate Dean for Research and Faculty Development at Widener University Commonwealth Law School. Through her work with the Pennsylvania Bar Association Business Law Section she played a key role in the enactment in Pennsylvania of Revised Articles 1, 7 and 9 of the Uniform Commercial Code and the Uniform Voidable Transactions Act. In 2019 she was appointed to the joint ALI/ULC Study Committee on the Uniform Commercial Code and Emerging Technologies.

Christopher K. Odinet

University of Iowa College of Law

Christopher K. Odinet is the Michael & Brenda Sandler Fellow in Corporate Law and Professor at University of Iowa College of Law. His research specializes in commercial/consumer finance and real estate, with an emphasis on mortgage lending and financial regulation. His courses include Property Law; Secured Transactions; Real Estate Law and Finance; Bankruptcy; Payments Systems; and Consumer Finance Law.

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