We can finally kill royalties as an NFT business model.

At Mintplex, we are always at the forefront of the conversations in the space. We were there for the free mint meta, the “first x free” meta and will always be serving creators in this space with our no-code tools.

Recently, its become increasingly evident that royalty revenue for NFT projects to survive is not only unsustainable — it actively kills projects.

Traders and Flippers kill projects.

When you are a founder of an NFT project the one word touted often is “Community”. How can a founder or team expect to provide value and get active participation from their holders when that very same crowd is constantly churning with new people who weren’t there from day 1?

I really feel as if I am taking crazy pills in this space sometimes. Traders and flippers have their own game and incentives (hint: it’s money) which are in direct opposition to the founding team’s ideals of building a brand.

Me explaining that you can't have a community with a transient population

So if you are running a 10K collection, but require royalties to survive then you better hope and pray that people find your NFTs worth selling for more than they bought them for — otherwise 💀.

This is not the way this space should operate. Holders should be participants who are engaged, know the story and the lore behind your project, and also want to actively be a part of your community.

If they want to sell, sure they should be able to, but what if they want to double down? Guess you have to launch a new collection — increasing the complexity of your community. This isn't even mentioning that marketing a new mint is 99% of the hard work and they have nominally much lower success rates compared to their genesis.

Introducing “Recyclable” NFTs

Now, before you roll your eyes and go on a rant about how “Web2 things should stay out of Web3” you should first take a pause — and think about incentives.

For NFT projects to succeed there are only two fates:

1. They run a huge mint during the right market conditions — have massive marketing budgets and make enough runway upfront for A16z to buy their influence.
2. They slowly mint or mint out and without enough upfront capital — die slowly due to lack of funds and incentive to continue.

The first scenario is really not going to happen for 99% of projects out there. So, what if there was a way to increase the chance of success for the second scenario — to have a sustainable path forward?

Now creators can run a regular mint — the same time that has gotten the space to where it is now, but now each NFT when minted you are purchasing time instead of quantity. You could buy more than one, but I digress.

This is actually the same principle that the Ethereum Name Service works on — except with this you have a limited collection size and we are dealing with communities around a brand as opposed to a utility name service.

How it all works.

Since each NFT now has a time limit you are the owner from now until whenever and can extend your ownership at the contract-defined price anytime. Bullish? then pre-buy for the next 3 years for the long haul.

Bearish? Sell your position with its expiry carrying to the new owner — or let it expire and someone can re-mint.

If you are a creator or the admin team, you also have skin in the game and can incentivize existing holders by awarding free time extensions for only gas. You can also control all the settings — keeping the terms and pricing attractive for new and existing holders.

When an NFT ownership expires there are two options:

1. Let it stay expired and someone can come along and “re-mint” the token. This essentially revives the token from the dead and assigns it new ownership
2. The admin/team (or really anyone) pays to revive the token and the previous owner is reclaimed — you’re back in the game!

What’s the catch?

You may be thinking to yourself: “What’s the catch?” There really is no catch. For this to work you will need to mint with the new contract and the people considering your project should be aware of these new rules to play by.

Real projects with real holders who care will know that this is a good thing and will want to be part of a thriving new community where equity exists for both the holder and owners.

Lastly, Mintplex will provide out-of-the-box all of the tools you need — no code required. Here are a few:

• Dashboard to manage your contract, see who is expired or about to
• Easily extend new tokens — push notification to the current owner about an upcoming expiration
• A branded marketplace that shows the expiry time in real time!

What about existing tools??

At Mintplex, we want to make things that are simple to use and easy to understand. We also want to make things that are actually useful for creators and in order to do that we also have to work with what people are already using.

Our contract works automagically with OpenSea, LooksRare, X2Y2, and all other marketplaces. Token-gating solutions you already know and love like Unlock protocol, Collab.land, and others all work perfectly.

Check out the ownership — also DALL-E generated this NFT collection.

From the above, you can see the owner of the NFT reverts back to 0x...000 once it expires. This will also result in the NFT disappearing from OpenSea and marketplaces until it is either revived or re-minted.

Previous offers, listings, and everything else will automatically be illegible for accepting or executing — no gas required!

So what can I do?

We are looking for creators for who we will pay for their deployment and get them all set up with the tools they need — at no cost. You can signup here.

Some ideas:

• Subscription crate NFT, where the holder is able to claim a subscription box each month
• Subscribable private communities and chats on Discord and other token-gated communities
• Subscribable discounts using Mintplex Shopify Plugin.

Closing thoughts.

This solution is geared specifically towards the generative types of collections — not really 1:1’s since the nature of this collection is one of an active community, not art collectors.

This model allows the project to continuously run its minting phase forever and earn from primary mints, reclaimed mints, owners extending their ownership window, and royalties. Four total revenue opportunities as opposed to the traditional two (primary mint & unenforceable royalties)!

This isn’t the silver bullet to the royalty issue, in fact with this model you can still earn royalties, but is an alternative to the current world where projects live and die on their trade volume and floor price — both of which are meaningless metrics to a project’s real value to holders.

How do I get to test drive this for a new collection?

Easy. https://recycle.mintplex.xyz

Early Access: https://tally.so/r/w8N11Y

You can also reach out to us directly by DM’ing us on Twitter @mintplexnft.

We can’t wait to see the next iteration of NFT communities built on top of this awesome new extension of what we already love.

• Tim