I am convinced that, although it is becoming fashionable to refuse royalties, they still remain an integral part of the Solana ecosystem. And a complete rejection of royalty will not only lead to a reduction in the number of new collections , but will also lead to a decline in trading volumes in general.
Solving the problem
To begin with , we will look at two different approaches to royalty .
@cardinal_labs-Cardinal Token Manager- is a conditional ownership protocol that combines NFTs to manage their ownership using SPL token program features such as delegation and freezing.Simply put, it provides a form of selective transfer that gives creators control over where/how their tokens are traded, such as ensuring that NFTs are traded only through royalty payment contracts.
Verdict
This method leads to centralization and in the future may lead to disapproval on the part of NFT owners and creators . Given the arbitrary programmability, the only “solution” is to provide the creator with permanent administrator access to the blacklist of addresses, burning tokens or revoking transfers. For crypto-ideological collectors, this is an unacceptable compromise with obvious risks. DCinvestor said it best:
https://twitter.com/iamDCinvestor/status/1563371646614130688
When people suggest “removing transfers from wallet to wallet”, “adding a centralized blacklist” or “allowing the creator to burn tokens”, they destroy the value of the token itself. There is no way to secure royalties while maintaining censorship resistance.
**The second approach to solving the royalty problem is @FudBoisNFT **— they propose a new model that simultaneously rewards those who agree to royalties and does not punish those who do not. FUD-o-Meter will determine which users have chosen the creation fee on the buyer’s side, and in turn will give them priority in every aspect of the FUDbois ecosystem.
Those who pay this royalties, receive great rewards from placing bets, will receive priority on airdrops, exclusive merchandise and much more The priority level will be based on the % of the royalty paid — the higher the%, the higher the “FUD level” you will be at.
Owners who choose not to pay royalties will still be an integral part of our community — just think of their access/benefits level as “FUDbois Lite”.
Verdict
We agree with their statement “The future of royalties is not to impose centralization and punish those who do not pay them
The future rewards those who fully support the project by providing exclusive benefits and access.”
But their proposal cannot be called a solution to our problem .Since most users of marketplaces, if they are faced with a choice not to pay royalties and use this to increase their profits, or pay royalties and get some consolation prize.Most will choose not to pay royalties.
Our Idea
As we wrote earlier , we are against punishing or restricting users , either . We offer a protocol in which two solutions will be used: double royalties and wallet karma.
Double royalty.
What is royalties — these are payments that compensate the original creators of the NFT for the use of their irremovable tokens (NFT). We propose to divide the royalties into two parts, the first part will go to the creator of the NFT, the second part to the previous seller of the NFT (who paid the royalty). But at the same time, the percentage of royalties going to the creator of the NFT cannot exceed 60%.Moreover, the creator of the NFT can completely abandon the royalty in his favor in favor of the sellers (who paid the royalty) .
The protocol will not restrict the user if he does not want to pay royalties.
Additional functions 1)When the collection is pulled by Rug, the royalties is disabled for the creator of the collection, everything goes to the previous NFT seller 2) the inclusion of additional royalties that will go to charity in charities approved by the protocol.
Wallet karma
We propose to change not only the work of royalties, but also to add a new way to get WL . To do this, the karma of the wallet will be monitored in the protocol, the level of which will depend on whether a person will pay royalties or not.Also, the use of charitable royalty will give additional points to karma.Any wallet will start with zero karma, and at the same time karma cannot fall below zero. A platform will be created to track karma. Information about karma will not be public, the creators of NFT will be able to see it only with the permission of the wallet owner. To do this, there will be functions in the platform: a raffle, and a form for WL.
1)Raffle — raffle on the platform will almost not differ from the standard Premint or Magiceden, but an additional condition will be the level of karma of the wallet. 2)The form on WL- will also not differ from the standard Forms on WL, but the condition is in the form of the wallet’s karma level.
As a result, the karma of the wallet helps not only in solving the problem of royalties, but also complicates the process for obtaining WL by creating multiple wallets.
Another additional incentive for the use of royalty will be the retro drop of protocol tokens for active activity.
Result
We refused to follow the path of restrictions and centralization . And we followed the path of encouraging creators and users.
P.S. I wrote the article almost immediately after MagicEden canceled the royalty.At the moment MagicEden followed a very similar path that I described in the article .The article was written a long time ago, so some of the information is outdated.The article will be updated in the future.If you like it, support the project. You need to click on the NFT collection in the upper right corner and replace the NFT for 10U or so to support the project.
https://twitter.com/AresLabs_xyz