The Web3 world ignited in discussion over Sudoswap’s decision to lower royalties for creators to zero without the consent or permission of said creators. This sparked quite the debate.
Token Gamer and NFT Insider have decided to combine forces to launch a weekly podcast, Mint One (formerly WAX Lyrical). John Nichols of NFT Insider and I will discuss a new topic every week, as well as feature special guests. If there’s a topic you’d like us to cover, make sure you let us know through the Token Gamer Discord or Twitter, or the NFT Insider Discord or Twitter.
In last week’s episode, John and I had a fantastic conversation with the metaverse lead at Polygon, Brian Trunzo. This week we turn our attention to the discussion that has been alight on Twitter: royalties.
Episode 35: Sudoswap, CC0s, and the Royalty Debate
Earlier this week, we published an article by Murtagh on the nature of royalties in Web3 games; this was a reactionary piece given the conversation happening all across Web3. Major crypto news outlets reported on Sudoswap’s decision to lower creator royalties to 0% with their Automatic Market Maker (AMM). While this was intended to lower fees on the trading of NFTs, it will likely do more harm than good. However, many too a more indifferent stance on the topic, stating that royalties can never be reliable.
i think the creator royalty argument is actually a lot simpler than people make it out to be.
There is ZERO way to FORCE royalties technologically so creators will have to build a collector base that WANT to honor these royalties…. It’s really that simple. 🤷
— beeple (@beeple) August 13, 2022
The Block’s Eden Au called royalties within NFTs a “social concept” and that these royalties and fees may disincentivize trading. Although I appreciate the difficulties of solving this problem, and I cannot say Beeple or Au are incorrect, I don’t believe their views are necessarily correct either. I have worked with royalties for a decade and I see smart contracts as a way we can improve.
There is, of course, no infallible way to stop people from circumnavigating royalties, but no system is perfect and that doesn’t mean we cannot iterate upon what we have and improve it. The common argument — and Beeple makes this — is to instead concentrate on building a loyal collector base. This is not a case of one or the other and we ought to be doing both. That is, cultivating your following and collector base, but also improving the systems that secure royalties.
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