TIP-12 Creator Royalties on the Treasure Marketplace

Gaarp

Summary

This TIP proposes to lift the 2.5% creator royalty cap for projects listing NFTs on the Treasure Marketplace. The max cap for creator royalties will be set at 20%. Royalties proposed above 10% are to be discussed with the Council to ensure the respective communities are aware of the rates and the rationale. All fees will be clearly labelled on the marketplace.

Discussions with the community and builders have indicated that each project should have the flexibility over their own royalty rate based on the needs of their individual business model (within reason). This is particularly important for projects using a free mint distribution model; 2.5% creator royalties on a free mint is unlikely to be sustainable, particularly in a depressed market. The DAO’s fee will remain at 2.5% as will creator royalties for Treasure projects (eg. Bridgeworld, Smolverse, Life). Any proposed changes to the latter will be done through consultation with the community.

Context
Currently NFTs sold on the Treasure Marketplace have a maximum 5% royalty, comprising 2.5% for the DAO and 2.5% for the creator. This cap was established back in November 2021 as part of TIP-02 as a temporary measure when the Marketplace was launched, and only Treasure created projects were listed.

Since then, the market and TreasureDAO have rapidly evolved. There are five external projects listed on the Treasure Marketplace with many more slated as part of deeper integrations into the Treasure Ecosystem. Many of these projects are using a free mint or partial paid/free mint model.

After discussions with the community and builders, it is the Council’s view that a restricted 2.5% creator royalty cap is unlikely to be sustainable under prolonged depressed market conditions. It also restricts much needed flexibility over the creator’s business model. This key business lever should be controlled by each project team, with the specific rate managed directly between the project team and their communities.

Rationale

Allow for a wider breadth of business model design and flexibility.
Give creators more control over key revenue drivers.
Foster healthier, more sustainable project runway / operations.
Reduce reliance on the DAO for grants.

Proposal

Lift the 2.5% creator royalty cap on NFTs sold on the Treasure Marketplace to a 20% max cap and a 10% trigger for disclosure discussions with the Council.

The royalty rates for each project must be clearly displayed on the marketplace and changes communicated clearly to respective communities. The DAO’s share will remain unchanged at 2.5%.

Polling Period

The polling process begins now and will end at 13:00 UTC on 20 April. If quorum is reached, a Snapshot vote will be put up shortly thereafter.

spacedoctr

I'll support anything that puts more control in the hands of creators. Higher max cap on royalties = more creators will want to be listed = more demand/exposure/utility for MAGIC.

rigatoni_ether

I voted yes because 2.5% is low but I personally wouldnt touch a project if it was over 10%

Aikon

rigatoni_ether

Realizing you paid 0 for a free mint (except for $1-3USD), I believe 10% is still low as most project owners have spent months in developing a viable product and are getting peanuts for it due to the amount of undercutting flippers.

If the initial mint was a paid mint, however, I do agree that anything over 5% would be too much.

In the end, if the project is solid, I don’t see why even 17.5%+2.5% would be an issue. If your objective is to flip, then sell the item for 20% + whatever % of profit margin you’re looking for.

Gendalf

the more royalties - the more projects can come

support

SmolHydra

Could start off with relatively high royalties to capture capital from dumpers and also discourage dumping. Then lower over time. (e.g. 10% > 7.5% > 5% > 2.5%)
Think it would work well with the free mint model

Aikon

SmolHydra
Agreed.

The initial mint dumpers at 20+2.5%, with a degressive percentage over time and over passing of ownership would be best to discourage dumpers who are looking for a quick buck.

maddmoxx

I'm ok with a Royalty bump, but not 20%. Good intentions do not Guarantee desirable outcomes. If passed this applies to everyone, I'm just saying they need to investigate secondary effects of this proposal.

maddmoxx

Aikon

Currently the cap is at 5% and they want to bump up to 20%? Why such a huge increase? A royalty is a transaction cost for each trade in the marketplace. Transaction costs are a barrier to trade. Though the Treasure council (of how many people?) may have a good heart and try to keep royalties low, it is still an income stream and can easily be cranked up by the few who benefit from such a decision the impacts the many.

Take Treasure with all its delays compounded by depressed markets, they have huge expenses and rely on a healthy marketplace that promotes trade. When a portion of the game is paused and elements of it lack utility, and there are delays to developing and etc… These are not caused by depressed markets condition, but poor decisions that create self-inflicted depression. With the ability to simply raise the royalty to a whopping 20%, it gives them no incentive to improve conditions in a timely manner.

I support a raise in royalties, but not 20%. They need to reconsider and look at the economics of their proposal and its impact to the marketplace.

sjr

No issue with this proposal. 10% maximum is the standard in the NFT space with higher royalties allowed on a case-by-case basis. This proposal is in line with industry standards.