New TZIP Draft: NFT Royalties

TZIP
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Request for comments on a new tzip draft for on chain NFT royalties

This draft was developed with input and comments from NFT marketplaces.

Thank you.

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Looks great :blush::pray:

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Really no input/comment from others on this?
I also noticed by reading the draft on gitlab that there are 39 issues in the TZIP repo and most are unanswered for months?? Sad…

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Hello, I saw this is now included as a current draft. But it seems still depending on FA2, is there any plan for updating this to FA2.1 (TZIP-026)?

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This is an absolute necessity. Too many problems in the blockchain ecosystem in general, not specifically Tezos, have occurred due to the lack of a standard.

This proposal states:

It is impossible to know which NFT transfers are the result of sales, and which are
not. Therefore, we cannot force every transfer function to involve a royalty payment
as not every transfer is a sale that would require such payment.

This raises the question: is it technically feasible to incorporate into this standard a smart contract that would enforce the payment of royalties?

  • transfer() would not trigger any payment for the reasons you said.
  • But buy(amount) would: the smart-contract would be paid directly and facilitate the payment and transfer.
  • this would require owners to authorize the contract to perform transfers on their behalf, perhaps by calling a function like set_buyable(ceil) or something similar (which would essentially be a listing operation).

We are absolutely not sure that this is feasible; we are simply asking the question. Similarly, even though it seems to solve some of the problems encountered with off-chain royalties, it may create other problems that we have not foreseen.

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Regarding the impossibility of knowing whether a transfer is a sale or just a self-transfer between wallets, what do you think of Henry George style “property taxes” for NFTs?
FYI it’s an idea Arthur has previously described.

The basic idea is the NFT value is set via a market mechanism, and the creator gets an income stream from a continuous (but tiny) tax on that value.

The market mechanism is simple: The NFT is always for sale, at a price set by the owner.
So, if the price is too low because the owner wants to save on tax, someone else can buy the NFT at a discount.
It’s a little scary that someone can just randomly buy your NFT, but there are variations of the idea that address this by providing grace periods, allowing counter-bids, etc.

The real issue is that NFT owners would need to pay a continuous upkeep, and thus might not feel like they “own” the NFT.
OTOH, the whole idea of royalties is to give creators a continuous income stream, and so someone has to pay for it, and you can’t get more continuous than this kind of tax.

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