The founders of Bored Apes propose a new model for royalties for NFT creators

by · November 8, 2022

The founders of Bored Apes propose a new model for royalties for NFT creators

The founder of the Bored Ape Yacht Club (BAYC) has weighed in on the ongoing debate over non-fungible token (NFT) creator quotas and shared a potential path forward that they believe best deals with the issue.

A Nov. 8 blog post from BAYC co-founder Wylie Aronow — co-signed by co-founders Greg Solano and Kerem Atalay — shared that they see creator royalties as “the most important factor that brought them [creators and artists] into the ecosystem.”

The post was in response to OpenSea’s announcement on Nov. 6 that it would follow other NFT marketplaces in enforcing royalties, which Aronow said shows its intention “to move with the rest of the pack and remove royalties for creators for older collections from their platform, ” and meant. this move was “not good,” adding:

“For as much as NFTs have been about users truly owning their digital assets, they have also been about empowering creators.”

In response, the BAYC founders proposed a model for NFT royalties that uses “permission lists” coded into an NFT collection’s smart contract that allows NFT trading between common wallets, but only allows NFT trading for “marketplaces that respect royalties.”

A basic version of how this would work was explained, with the first step checking whether the wallet is a regular wallet or a smart contract making the transfer request.

Regular wallets would have transfer requests allowed, while transfers initiated by smart contracts are checked against “an oracle of contracts known to respect royalties”, with the requests approved if a match is found.

This model will allow free wallet-to-wallet transfers, which the BAYC founders stress is a must to ensure that one of the core benefits of NFTs – assets – is recognized with owners able to move assets between wallets without fees.

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The BAYC founders acknowledge that this model still has trade-offs, citing the maintenance of approval lists and an increased barrier to entry for new marketplaces, but said that for now this approval list is relatively small, noting:

“To begin with, there are only a handful of well-known good actors today. Starting the approval list is easy – just add the couple of marketplaces that pay creator fees. Finished.”

Permit list maintenance is what they see as the more challenging issue, particularly the composition of the governing body, adding:

“The real work is just figuring out what that governing body looks like. But I think it’s a solvable problem for the NFT ecosystem to take on.”

In a Nov. 8 tweet, popular NFT artist Mike Winkelmann, known as Beeple, applauded the post as a great way to protect royalties for creators as many NFT marketplaces are moving away from them.