How we are Developing a Smart Contract to Manage Royalties for Artists of our NFT.

Our Unity NFT project is quite unique. We have 13 artists, and each of them are doing 5 different artworks that represent a different rarity tier for accessing our ecosystem. For handling royalties, we agreed in our legal contract that the NFT will implement the EIP-2981 royalty standard, and send royalties to another smart contract which will split the royalties between Valorize and the artist.

We decided on an architecture for this where we will set up a RoyaltyDistributor contract per each artist, as the royalty standard does not specify how to create a distribution. Each artist will have a contract which they can go to and claim their royalties from. Now these contracts are quite simple, but powerful, as they allow both Valorize AND the artist to have COMPLETE control over the way they want the future royalties distributed. We also built it in a way that is extensible for any amount of royalty recipients, and in the ethos of everything we do, it is open source for anyone in the world to use and implement a royalty splitting system like ours.

How it works — The Non Technical Version

It is quite simple, and that is on purpose. The contract allows the artists to give us an address which will be the royaltyRecipient for their share of the royalties.

There will also be another address (which can, but doesn’t have to be the same) which will be able to administer the royalty recipient address. If the artists ever want to, they can change wallets, sell their royalties, or even set up another RoyaltyDistributor contract to forward the royalties and split them even more.

Each administrator can do very few, but very important actions. These actions are simply: granting admin access to other addresses (there is no limit to the number of admins), revoking admin access from other addresses, and of course changing which address will receive the royalties. This is completely permissionless, meaning that Valorize can’t ever modify anything in regards to the artists’ payments. It is there, forever, and without the need to trust that we will hold our word. Once it is set up, it will live in perpetuity, just as the legal contract states, without needing to go into arbitration around that.

This is where smart contracts really shine through. Creating NFT royalties in perpetuity, completely managed by individuals in a permissionless manner is revolutionary for how we as humans are able to compensate creative work. We hope the community will find this useful, and hope that more projects that are thinking about splitting royalties, use our contracts to do so in the best way possible, giving more control to artists.

Here is a link to the working code that will go live when we launch the project!

Stay tuned to more information about the NFT project in our website:
https://nft.valorize.app