Understanding NFT royalties | Michael Blau | Summary and Q&A

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July 17, 2023
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a16z crypto
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Understanding NFT royalties | Michael Blau

TL;DR

NFT smart contracts do not enforce royalties on chain, but there are solutions such as the manifold royalty registry and operator filters to help manage royalties in the NFT ecosystem.

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Questions & Answers

Q: Why do NFT smart contracts not enforce royalties on chain?

Enforcing royalties on chain presents challenges such as users wrapping the NFT or transferring it between their own wallets, limiting composability and causing technical limitations.

Q: What is the purpose of the manifold royalty registry?

The manifold royalty registry provides a decentralized registry where creators can register their royalty information, allowing marketplaces to easily access and honor royalties.

Q: How can creators prevent certain applications from interacting with their NFTs?

Creators can implement operator filters in their NFT contracts, blocking specific addresses or code hashes associated with unwanted marketplaces or applications.

Q: Are there any standards or initiatives to enforce NFT royalties on chain?

The eip2981 standard and the manifold royalty registry are examples of initiatives that aim to improve the management and accessibility of NFT royalties, but enforcement is still reliant on the integrity of marketplaces.

Summary & Key Takeaways

  • NFT smart contracts do not automatically enforce royalties on chain, despite the initial belief that they did.

  • The manifold royalty registry allows creators to register their royalty information on chain, making it easier for marketplaces to access and honor their royalties.

  • Operator filters can be implemented in NFT contracts to block certain marketplaces or applications from interacting with the NFT, providing some control for creators.

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