Thread by @StachedPunk

Royalties for Art for HODL’ng vs Royalties (or lack thereof) for more tradeable PFPs via aligned incentives.

Maybe it's not either:or?

Hear me out on why all this can still be a net positive as the space matures. An attempt at a 🧵🧵 on the subject...

Royalties for Art: I personally believe artists deserve to sell their art, and a perk of NFTs from the moment I joined the space was the tech’s ability to monetize ongoing income thanks to appreciation and/or their art changing hands. (2/13)

(R4A Cont'd) With lower supply collections and especially 1/1 art @SuperRare has shown its continued prowess. Can something similar remain? Via any/all marketplaces where its set up as such? I feel many agree as to where a collection or #NFT asset belongs categorically (3/13)

(R4A Cont'd) Similar to IRL the artist is paid for their artistic ability at the onset & similar to IRL if it never changes hands that’s OK. But if it does (that royalty is fair to both seller & artist, and unlike flipping PFPs the entire original intent was to collect) (4/13)

Royalties for PFPs: The race to the bottom has been inevitable. It also unlike in art, incentivizes volume post mint. Hypothetically, one who minted & diamond handed their ape since day1 has generated 0 #eth for @yugalabs. (5/13)

(R4PFP cont'd) Yet this ape would be among their most loyal, devout community member.

What if one minted a @proof_xyz pass, minted 2 @moonbirds & has nested since day one? From a revenue/royalty standpoint they're worth so little to that ecosystem! But talk about loyalty (6/13)

(R4PFP cont'd) But it's the buying/selling/trading = royalties. In very few asset classes does this make sense. In NFTs a holding or vesting schedule at mint is pseudo market manipulation (and has been tried by some garbage collections). (7/13)

(R4PFP cont'd) The minter isn't an insider, they can/should transact as they please.

BUT what if the new norm is the collection keeps say 5% of supply??? In plenty of existing assets this is the norm (and far greater than 5%!); especially for the insiders/founders/owners. (8/13)

(R4PFP cont'd) As an example, a/o 2/18/23 #BAYC had done 836,656eth of total volume. At 2.5% creator earnings that's ~21,000eth or the equivalent of ~280 apes at current floor prices. So what if they kept & owned 500 apes (out of 10,000?). (9/13)

(R4PFP cont'd) Over time, they surely would've sold some at lower prices and some even at higher prices, and it can & should follow a set pre-determined schedule ala insider stock transactions (i.e. 1/week) so they aren't taking advantage of the current market price. (10/13)

(R4PFP cont'd) This makes volume far less relevant to their success, but aligns the incentives to long term collection price appreciation for everyone’s sake. It also provides constant liquidity (how much eth is selling 10 apes/qtr vs a qtrs worth of royalties? @punk9059) (11/13)

I am simply outlining a method for us to advance the realities of the space while still incentivizing new projects/mints to come to the table. Traders trade (for less), collections prosper, diamond hands prosper.

I hope you’ve enjoyed my attempt at thinking out loud.
I am very curious what everyone thinks conceptually. Dont roast me, its purely brainstorming and meant to be an open dialogue as we all move forward. We are early. #yugalabs #NFT #blur #opensea #royalties #nfttrading #nftart