Cute Owl 2.0 — introducing a revolutionary paradigm for NFT minters

Published in

eGem Labs

6 min readMar 13, 2022

Hello eGem community, I am excited to announce that Cute Owl is undergoing a smart contract migration, in order to make it possible to fulfill our earlier promises(such as airdrops) to minters.

Some of the things introduced in this upgrade are quite groundbreaking, hence I would recommend reading the entirety of this post to understand how to make the most out of them.

Why an upgrade?

Firstly, our initial contract is not upgradeable, meaning if we should introduce changes in the future, holders will have to undergo a personal and manual migration of each token they hold to the new contract.

Secondly, the previous contract did not accurately track the minters of a token. It only tracked if a user had minted, not exactly how many they had minted. This meant we could not do a 1-to-1 airdrop where we would reward users based on the number of tokens they had minted.

What is in this new upgrade?

1. Upgradeability

Our tokens are now upgradeable, based on Openzepplin’s upgradeable systems.

2. Tokenized author royalty rights

we needed a new contract that tracked exactly how many tokens were minted, so we can reward them proportionally. so if you minted 10 tokens, we can airdrop you with 10 tokens, not just airdrop you with 1 token — as is possible with the legacy contract.

To be able to implement a tracking system for how many tokens a user has minted, we could go the conventional way:

mapping(address => uint) public mints;...function mint(uint8 _mintAmount) {  ...
  mints[msg.sender] = mints[msg.sender] + _mintAmount;
  ...}

and that would work just fine. However, there are a few limitations to this approach.

Firstly, given that we are going to be rewarding users for minting, how is a user going to change their mint account to receive their rewards with another account? That could be done, sure. But is this a ledger?

Secondly, this is crypto, the realm of tokenization. Why lock the minter’s rights in a value-key system? Is that not just ridiculous in the context of tokens? There isn’t much we can do with such a system.

The light bulb moment

Why not tokenize the minter’s rights as an NFT? Yes, just like how there are Andre Cronje’ solidly.exchange DEX tokenizes LP positions.

By tokenizing these positions, we will be able to truly unlock their potential. make them liquid, transferable, and tradeable!

The new implementation:

function mint(...) ... {
  ...
  INFT authorRightsToken = INFT(authorRightsTokenAddress);
  ...  ...
  authorRightsToken.mint(msg.sender, _tokenId);
  safeMint(msg.sender, _tokenId);
  ...}

Now, when you mint or upgrade your Cute Owl tokens, you will receive 2 new tokens:

the new Cute Owl tokens
their accompanying author rights NFTs

How cool is that?

These tokens are being called “Author Rights” tokens. Their symbol has a suffix of ‘-AR’, as in ‘OWL-AR’, similar to how Uniswap’s LP tokens also have an ‘-LP’ suffix.

We plan to use this system of dual tokens for all upcoming NFTs by egem.studio.

But what can we do with these tokens? Are they necessary? Let’s find out next.

3. Giving author royalty rights to minters

This is a big part of this upgrade. Minters of Cute Owl will be the beneficiary of EIP-2981 author royalty payments on secondary sales!

Due to the new tokenized author rights design, we can do some cool things such as giving minters the token author royalty rights!

This means that minters of Cute Owl could receive royalties on the secondary sales of their tokens — whenever it happens, as per EIP-2981.

Also, they are not locked in. They can liquidate their right to receive royalties by selling the author right NFT — after all, they are NFT tokens too! Whoever holds these tokens will now be the royalty beneficiary.

How will these tokens work?

Consider the EIP-2981 interface:

interface IERC2981 is IERC165 {
    function royaltyInfo(uint256 _tokenId, uint256 _salePrice)
     external
     view
     returns (address receiver, uint256 royaltyAmount);
}

Using our NFT based author rights model, our implementation looks like this:


function royaltyInfo(uint256 _tokenId, uint256 _salePrice)
  public
  view
  returns (address receiver, uint256 royaltyAmount)
{  ...
  INFT authorRightsToken = INFT(authorRightsTokenAddress);
  ...  ...
  receiver = authorRightsToken.ownerOf(_tokenId);
  ...}

This means royalties are paid to whoever holds these Author Rights tokens. If you transfer them to another account, that account will automatically become the new receiver of royalties from secondary sales of the token. Given that these tokens are NFTs themselves, that opens the possibility of trading them — you don’t have to be locked to holding them forever. The buyer will now become the reciever of royalties from secondary sales of the associated NFT.

This is a revolutionary model for the NFT space. The model we use in Cute Owls 2.0, with a little conditional alteration.

Terms of Author Tokens Rights

Are we just giving away the author’s royalty rights to minters?

Yes and no. While the minter/holder could receive, they only work on marketplaces that support both author and collection royalties. They are not an entitlement nor do they offer any guarantees. They are conditionally honored.

In all situations, the collection will be the uncompromising receiver of royalties from secondary sales of Cute Owl tokens. This is because we need secure ongoing revenue for hosting and serving metadata indefinitely as well as supporting the collection’s author.

For this reason, holders of Cute Owl Author Rights will only receive royalties from secondary sales on marketplaces that support both collection and author royalties. For marketplaces that support only author royalties, the collection will be deemed the author and receive the royalties — not the author right holder.

Author rights are a royalty-sharing mechanism, which is intended to share royalties from secondary sales with the minter/holder. However, they do not guarantee the holder’s right to receive royalties on secondary sales of tokens they represent. The collection does hold priority over them. They are only honored in situations where both the collection and author can split the revenue. If not, then all of the revenue will go to the collection, not the holder of the token’s author right.

Do these NFT-based royalty tokens themselves support royalties on their re-sale?

Yes. They do support EIP-2981 and the collection will receive a royalty on their secondary sales.

Does the royalty system work on all sales?

The NFT royalty standard — EIP-2981, is a voluntary standard. It only works on marketplaces that choose to implement it. And even then it is at their discretion on how to honor it.

Also, the EIP-2981 standard does not support collection royalties, hence holders of author rights will not receive royalties for secondary sales on marketplaces support only EIP-2981 with no form of support for collection royalties.

How much could author right holders receive?

The amount has not been decided yet, but may start at 1%(may be higher or lower) and be adjusted up or down later.

Cute Owl benefits for minters

Cute Owls are not just Cute! There is more to them.

Author royalty split

Author rights will allow minters to receive royalties for secondary sales which could exceed the mint amount, ensuring ROI while still paying dividends.

Minters can also sell their author rights, for higher than the mint price, recouping their mint fees. Author right tokens may have a value exceeding the mint fee due to the fact that they allow the holder to receive perpetual royalty rewards from secondary sales.

Exclusive airdrops for minters

Minters will benefit from airdrops of new collections.

More exclusive peaks coming soon

eGem Studios just launched. There is a lot coming with the eGem Labs ecosystem for eGem Studio NFTs.

Migrate your tokens now!

Visit eGem.studio now to migrate! You will also find links to our communities there so you can join us to ask any questions.

Don’t have a Cute Owl?

You can mint one now for just ~ $1 for 2 Owls, at current market prices.

Minting gives you the minter author right tokens which allows them to receive lifetime royalties from secondary sales on select marketplaces. They could sell the right to these royalties separately!

Also, these author rights give the holder the right to benefit from future airdrops! A really cool collection is going to be airdropped this month for Cute Owl minters, with free 1-to-1 mappings. If you minted 1 Cute Owl, you get 1 free NFT, if you minted 10 Cute Owls, you get 10 free NFTs. These will be decided based on your author rights holdings.

Why should I migrate?

Aside from the fact that the benefits only apply to the tokens from the new contract, the old contract will be retired once enough new tokens have moved to the new contract.

When that happens, the old tokens will no longer point to the Cute Owl metadata, meaning they will not have any content backing them.

Discover Cute Owls now!

Visit eGem.Studio.