Core Concepts
The authors introduce ERC-7526 as an incentive-compatible mechanism for enforcing NFT royalties, addressing the challenges faced by creators in receiving fair compensation for their work in the secondary market.
Abstract
The content discusses the challenges faced by creators in receiving royalties for NFTs, the limitations of existing standards like ERC-721, and introduces ERC-7526 as a solution. It explores the need for decentralized enforcement, mechanisms to incentivize truthful disclosure, and potential implications on user experience and adoption.
The proposed mechanism involves rules for token transfers, auto-sales, and take-backs to ensure fair compensation and prevent royalty avoidance. The discussion includes insights on collusion limits, fee functions, marketplace support, and potential future research directions.
Overall, ERC-7526 aims to provide a transparent and efficient way for creators to receive royalties from NFT sales while maintaining compatibility with existing standards.
Stats
The secondary market for Ethereum non-fungible tokens (NFTs) has resulted in over $1.8bn being paid to creators.
As of October 2022, $1.8bn in NFT royalties had been paid.
ERC-2981 is an extension to ERC-721 that allows NFT contracts to signal expected royalty payments.
Quotes
"A purely programmatic solution to royalty enforcement is hampered by the prevailing NFT standard." - David Huber & Arran Schlosberg
"ERC-7526 introduces an incentive-compatible mechanism for decentralized enforcement of NFT sales taxes." - David Huber & Arran Schlosberg