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Royalty structure for TON-based NFTs

Usually, creators of nonfungible tokens (NFT) receive a percentage from the sales of their work on secondary markets via trading platforms (marketplaces)

This happens on all blockchains primarily thanks to a simple principle: When a creator mints an NFT, they indicate a royalty percentage and their crypto wallet address. NFT marketplaces require creators to submit this information when minting their NFTs, and when they list their NFTs, crypto tokens are automatically transferred to creators’ crypto wallets. This is how popular Ethereum NFT marketplace OpenSea operates. If other marketplaces choose to omit this royalty program, creators will receive no royalties.

While drafting the TON NFT standard, the developers carefully considered how to implement the function that guarantees the automatic transfer of royalties from secondary markets — regardless of where it occurs. As it turns out, there’s only one way for it to be done like this.

Royalty structure for TON-based NFTs

Free NFT trading will be forbidden

The only way to transfer the ownership of an NFT is through the process of an open auction. Additionally, it’s imperative to bar other methods of transferring NFTs to ensure every piece of a collection, for example, goes through an NFT marketplace.

If you want to transfer an NFT from one of your wallets to another, you’ll have to put it up for auction and buy the NFT yourself. In this instance, the creator is guaranteed a royalty percentage from the secondary sale, but clearly, there are better methods to manage such transactions in an open network.

A variation to this approach

The goal here is to make every NFT transfer a paid transaction, the royalty of which will be sent to its creator. Understandably, this creates friction when you need to update your crypto wallet or want to gift an NFT to someone or send an NFT to another smart contract.

If we were to allow the free flow and transfer of NFTs, there would be no guarantees that their creators would be able to receive their rightful royalties from every sale or transaction. The simplest counterargument to this is that a user can send an NFT to another person, and the two could come to an agreement on a payment that would happen off-chain — e.g., exchanging cash.

How this is going to work on TON

While drafting the TON NFT standard, the developers chose to make it possible to send NFTs freely. “Shady” marketplaces also have such capabilities, but at the very least, an NFT’s history will always follow it, even if it’s bought and sold on some less trustworthy platforms. Many services and marketplaces can deny service to an NFT that has been bought on the “black market.” Therefore, profitability will not always outweigh these glaring disadvantages.

TON Community
Inherited from Telegram, the TON blockchain was designed to onboard billions of users. It boasts ultra-fast transactions, low fees, and easy-to-use native apps, some of which can be used directly in Telegram such as @wallet or @cryptobot.
https://t.me/toncoin

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