NFTs in Commercial Transactions

THE CAMBRIDGE HANDBOOK OF EMERGING ISSUES AT THE INTERSECTION OF COMMERCIAL LAW AND TECHNOLOGY, Nancy S. Kim and Stacy-Ann Elvy, eds., Cambridge University Press, 2024, Forthcoming

U Iowa Legal Studies Research Paper No. 2022-42

Texas A&M University School of Law Legal Studies Research Paper No. 24-30

34 Pages Posted: 7 Dec 2022 Last revised: 13 Feb 2023

See all articles by Juliet M. Moringiello

Juliet M. Moringiello

Widener University - Commonwealth Law School

Christopher K. Odinet

Texas A&M University School of Law

Date Written: December 6, 2022

Abstract

In October 2021, the digital image of an ape with a wearied and uninterested expression—known as Bored Ape #8817—sold for an astounding $3.4 million in an online auction by Sotheby’s. Actually, it wasn’t really the digital ape that was sold. Rather, the auction was for a token representing the graphic. Although noteworthy for its price, this bored ape non-fungible token (NFT) was just the latest in the tokenization craze—the idea of creating a unique digital representation (a token) of a particular asset—that proponents assert will upend government and property law as we know it.

This Chapter, drawn in part from our earlier work, gets to the heart of the real question: What does it really mean to tokenize something under the law? In other words, what property rights does the owner of the bored ape token receive? Ownership? Some other kind of property entitlement? If the right is a property right, is it a property right in just a token, or is it some right in the Bored Ape image? Perhaps the owner receives a contract right. Maybe the owner gets only bragging rights. The answers to these questions have tremendous implications for just how revolutionary tokenization can really be.

Keywords: NFT, crypto, token, property, tethering, UCC, Article 12, controllable electronic record, commercial law, Bored Ape, platforms, blockchain

Suggested Citation

Moringiello, Juliet M. and Odinet, Christopher K., NFTs in Commercial Transactions (December 6, 2022). THE CAMBRIDGE HANDBOOK OF EMERGING ISSUES AT THE INTERSECTION OF COMMERCIAL LAW AND TECHNOLOGY, Nancy S. Kim and Stacy-Ann Elvy, eds., Cambridge University Press, 2024, Forthcoming, U Iowa Legal Studies Research Paper No. 2022-42, Texas A&M University School of Law Legal Studies Research Paper No. 24-30, Available at SSRN: https://ssrn.com/abstract=4295041

Juliet M. Moringiello

Widener University - Commonwealth Law School ( email )

3800 Vartan Way
Harrisburg, PA 17110-9380
United States
717-541-3917 (Phone)

Christopher K. Odinet (Contact Author)

Texas A&M University School of Law ( email )

1515 Commerce St.
Fort Worth, TX Tarrant County 76102
United States

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