Michael Blau
@michaelblau
NFT royalties were never enforced onchain, even though everyone expected them to be. Onchain royalties on secondary sales have always been an important value proposition of NFTs, but they’ve been misunderstood for a while now. In a way, NFT royalties reached product-market fit before there ever was a “product.” Creators now have a few different solutions to choose from, but each come with tradeoffs that can be difficult to navigate. So how do NFT royalties work, and why have they been so challenging to implement? Here are some thoughts from @skominers, @darenmatsuoka, and myself on current designs, along with a few new ideas. Full post 👉 https://a16zcrypto.com/posts/article/how-nft-royalties-work/
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Michael Blau
@michaelblau
It’s difficult to distinguish between the NFT transfers that are sales that should pay a royalty and other types of transfers, like transferring between your own wallets or gifting an NFT, etc. The two most popular designs for enforcing NFT royalties, blocklists and allowlists, take different approaches to restricting NFT transfers, but they come with a tradeoff: The more strictly a creator prevents transfers, the less composable the NFT.
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Michael Blau
@michaelblau
The blocklist model is openly composable by default, but it’s easier for people to get around royalties. On the other hand, it's easier to enforce royalties with an allowlist, but you risk limiting which applications an NFT can interact with. The tradeoff looks like this…
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Sonic chemist at QuantaLab
@sochemist
Wallet transfers and gifts don't involve monetary value. So there isn't a % of any amount to collect? Isn't this a way to distinguish this type of tx with a sale requiring a royalty payment?
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