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/
9 replies
7 recasts
113 reactions
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.
1 reply
0 recast
5 reactions
Cryptoversal 📚🎩
@cryptoversal
Good stuff. I made an early version of “right of reclaim” a while back through the terms of a collection license agreement that required royalty payment to use the IP, but with no onchain enforcement mechanism.
1 reply
0 recast
2 reactions
itai (building dynamic.xyz)
@itai
Great read!
0 reply
0 recast
3 reactions
killjoy.eth
@killjoy
Thanks for sharing this! Great read. 205 $DEGEN
0 reply
0 recast
1 reaction
Mark Hilgenberg
@hilgi
It has been such a disappointment how royalties have gone ignored. From what I remember Wax is able to enforce them.
0 reply
0 recast
1 reaction
Future
@future
563 $degen
0 reply
0 recast
0 reaction
Sumaa
@sumaa
Something I’ve thought about - creators and marketplaces share similar incentives to enforce royalties, therefore you can create an off-chain blocklist maintained by the creator, and being on the blocklist forgoes all holder benefits (airdrops, events, etc.) Then for every non royalty paying action (I.e anything but trading) there is a 12hr delay until you can move that NFT again. This comes from the assumption that a NFT trader (party who wants to avoid royalties) needs fast + liquid NFTs and holders don’t. If a trader acts malicious (doesn’t follow the rules), the NFT goes on the blocklist and it’s value will trade significantly lower than non-tainted NFTs. If the rule was broken accidentally a user could sign a randomly generated message by the creator with both the wallets that underwent the transfer. Assuming if it was a non trading transfer, they likely have access to the other wallet or access to the person that owns the other wallet
0 reply
0 recast
0 reaction
acai 🚽🐇
@acai
has to be said 1000$farther
0 reply
0 recast
0 reaction
Montez
@montez
Did the team explore how ERC 6551 may impact this? I figured a benefit token bound accounts was having more programmability within the NFT itself through modules for licensing, royalties, etc. @storyprotocol biz is a bet on just that
0 reply
0 recast
0 reaction
