Anatoly Yakovenko proposed the concept of a flexible "win-win" strategy that could change the narrative in NFT development, trading, marketing and promotion.
Immutability instead of ambiguity
Yakovenko has taken to Twitter with a thread on dangerous discrepancies NFT developers and entrepreneurs should address. He is sure that the segment badly needs an unambiguous royalty mechanism as an "additional revenue" tool for creators.
I think what is obvious to me on NFT royalties
1. they are a really cool mechanism for creators to earn additional revenue
2. if it's not enforced directly in the tech the market will move around them
3. they must be unambiguous to users🧵— toly 🇺🇸 (@aeyakovenko) October 14, 2022Morning Crypto Report: Mt. Gox Halloween Deadline Haunts Bitcoin at $111,000, XRP in Focus as Ripple Joins US Summit, $500 Million Binance Outflow Adds FearCoinbase CEO Says It’s 'Never Too Late' to Enter CryptoCrypto Market Prediction: Bitcoin (BTC) Shows No Chances for $100,000? XRP Crash Stops, Shiba Inu (SHIB) Wants $0.00001 Back$3 Million Worth of Stolen XRP Tracked Down
It is necessary to change the very concept of ownership in the NFT segment to make royalties fair and transparent. While NFTs cannot be solely owned by either the creator or the trader, the former should retain "certain" rights to effectively enforce royalties.
Technically, this can be achieved through "an additional persistent mint" added to this or that token. Through this mint, the creator should be able to define the rights management scheme for his artworks.
On the other hand, there is no "one-size-fits-all" mechanism here: the creators themselves should be able to choose the design of the royalty scheme: it can be the "Harberger Taxation" principle or any other.
Searching for better royalty designs for NFTs
Yakovenko stressed that the design of the rights applied to this or that token should be clear to all sides involved before the purchase takes place.
In the comments to his tweet, crypto engineers and NFT fans proposed various tax models for digital tokens: super-high royalties for the first sale, 2-3% tax on every next sale and so on.
There is a heated debate around the perfect royalty scheme for the crypto segment. As covered by U.Today previously, NFT marketplace X2Y2 made headines in August 2022 by reducing all royalties to zero.
Its representatives highlighted that this approach would make NFT creators switch toward VC funding, which is a dominant one in the rest of the Web3 segments. This, in turn, would make the NFT segment more balanced, democratic and resilient to manipulation and hype.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team