Final: EIP-6105: No Intermediary NFT Trading Protocol With Mandatory and More Diverse Royalty Schemes

[5cent-AI]

@Alex-Klasma

It seems that as long as you implement a ERC721.transfer function it will be impossible to enforce royalties. Yes it’s true that you can block other marketplaces smart contracts, but eventually marketplaces will spring up that automatically generate new smart contracts (perhaps per-trade) to get around these blocks.

We must consider compatibility issues. Removing the transfer function will bring more inconvenience. Even if we do so, traders can still complete deals privately and transfer NFTs online at extremely low prices.
However, I don’t think we should assume that everyone is unethical. I believe that most people are willing to pay royalties while themselves benefiting from NFT.
Therefore, designing standards from the perspective of increasing the “cost of illegal activities” is more appropriate.

@Alex-Klasma

Then what, you block autogenerated smart contracts by comparing ext_code_hash(address) with a “blacklist” of bad code hashes that don’t respect royalties? Then the autogenerated smart contracts start adding randomization in order to get around these sort of hash blocking schemes. Etc.

Doing so would significantly increase the gas cost for traders and also increase their exposure to risk. You can think of it as increasing the “cost of illegal activities.”
For an intermediary trading market, if it does not follow the royalty scheme, it may lose its users instead of gaining more users as a result. If we achieve this goal, the number of “violators” in the market will be greatly reduced.

@Alex-Klasma

The only way to truly enforce royalties is to remove the ERC721.transfer function. Make a new transfer function that requires ETH to be sent in the other direction of the transfer, and then tax that. In order to prevent 0ETH or dust amts being sent in the other direction, you could pull the “floor price” from this NFT collection (from Chainlink or other) and enforce that the ETH amount is at least some fraction of this floor price.

In addition to NFT trading, there are also financial scenarios such as NFT lending, NFT renting, etc. NFTs have a lot of utility. The method mentioned above would limit the value of NFTs only to NFT trading, which may not be appropriate.

@Alex-Klasma

we should look beyond royalties

I completely agree with that view. As you said, there is no perfect royalty solution. NFTs should have greater value and more room for imagination. Even with a royalty scheme, we can make some changes to adapt to the development of NFTs. Here are some studies on the new royalty scheme.We have already reserved scalability for this in the interface.

Better and More Diverse Royalty Schemes

Better and More Diverse Royalty Schemes Abstract By using modern tax theory, various royalty schemes are proposed to better fit the diversity of NFTs and industry development. Through research, most of the royalty schemes can be implemented without any improvements to EIP2981. Royalty Scheme We replace the _salePrice in EIP2981 with the taxablePrice. That is, the expression of function royaltyInfo( uint256 _tokenId, uint256 _salePrice ) external view returns ( address receiver, uint256 roy…

But regardless, we must consider protecting the interests of creators and holders. Without them, innovation will no longer occur in the NFT space.

Although we are discussing the royalty issue, I would like to add some thoughts on EIP-6105. The benefits of implementing it are not limited to enforcing royalty payments (it doesn’t even provide a standard method for setting blocklists, haha). It provides a more secure, decentralized, censorship-resistant, and zero-service-fee way of trading NFTs.