I’ll gently push back on this a bit or at least ask for clarification. It seems completely reasonable that some people should get royalties in perpetuity. Ideally that is the creator. In reality, and depending on the use case, things have to be financed, service has to be provided, art has to be produced, ongoing services need to be funded, tech needs to be built. Our ecosystem will be better if those that enable creation are perpetually funded for doing so. That is the attractiveness of the “tokenomics” that will bring funds and talent.
Now, deciding what those royalties are should be a free choice of the party issuing the asset. They should define it, publish it and not be able to rug it. We built this into the ogy_nft in a way that once royalties were set, they could only be changed via governance. I believe this was actually done once pre-sns with the goldDAO NFTs where the royalty was lowered from a percentage to a small fixed fee.
So, there are two issues here:
- If the royalty is declared before hand and you buy the NFT, that’s a free choice you make. The artist/minter/service provides sets that at 20% at mint I’d imagine they will have a hard time finding a market with traders. This would actually be a method to reduce liquidity in initiatives that value long-holding and community interaction. If they are using as a tool than good for them and it is the responsibility of the buyer to be well informed(obviously open source code , transparent data and clear governance help here)
- Was the minting conglomerate that sets this royalty required to include some party as a non-free choice. We call this excessive rent or rent extraction. If there is only one marketplace and only one way to mint the minting platform has a lot of power to charge excessive rent.
I suspect that what makes people hot under the collar here is that 1. The marketplace royalty may not have been published(the code certainly wasn’t at the time if I remember correctly…just stop this people..do not use a service that hasn’t open sourced its canisters..just don’t do it…until that is culturally ingrained this will happen over and over) and 2. Toniq used their position in the marketplace to charge this and exclude future marketplaces.
Now, depending on your economic philosophy you may feel a few different ways right now. The reality is that raw capitalism is based on extracting excessive rent. Being aghast that a company would try to corner the market and force collection of funds based on the strength of their market position is ignoring the primary market mechanism of the modern world.
The only real antidote to this is funding public goods and establishing sane governance that works toward the common good. When the platform is open, transparent, and well governed it allows participants to make free choices and compete on their merits. You don’t have to stop paying “rent” to valuable service providers, but you should be free to not have to pay excessive rent. (This ignores the fact that wealth in general enables extraction…if you can’t pay to manifest your idea you are at the mercy of financiers)
My interest in the IC has always been rooted in the hope that through tokenizing we can short circuit some of this by enabling the platform to collect the value and that the platform distributes the rights to that future value to contributors and users of the platform.(If we don’t do this we’re just making a case to move the rights of extraction from one place to another.)
We were well in our way to this at Origyn with most of the necessary tools in the can, almost production ready with a decent bead in how to do governance until a mixture of market dynamics and “someone” deciding that questioning the neuron/community fund structure was a sign of being in a global anti-IC cabal(and yet here we are) drastically kneecapped my personal ability to push it forward. Since, progress has been slow and deliberate to mange the market conditions and prep for future opportunities. Trying to pull this off even with huge amounts of resources is difficult enough, fewer resources makes it harder, and no resources results in just banging your head against the wall for years. At this point I don’t have a clear view what exactly is still on the table and slated for release by the OGY Dao, but I hope a bunch of that stuff makes it to market because it was purposely designed to solve many of these issues(and particularly the disclosures, protection, and transparency of royalties)
As to the point of the original quote, marketplace royalties seems like a an easy enough solution: let the creating entity define it and split it between the listing marketplace(who recruited the asset into the market) and the selling marketplace(where the buyer found the asset. Real estate has been operating like this for years(not without other issues, but maximizing sales surface by offering upside to losing and selling brokers seem like a solved pattern.). If the creator sets a marketplace royalty too high, and it is disclosed, don’t buy it.
One of the hardest problems to solve in NFTs that want to reward artists, communities, etc is wrapping. Even if we reward existing assets, as soon as someone gets a dominant market position, they can just re-wrap your wrap.It is a really hard problem to solve. I thought we had a good solution, but only experimentation will bear that out.
I hope I didn’t take your quote too out of context…I thought it was a good jumping off point for some of this discussion.
