| Introduction |
This proposal would implement a royalty fee on all secondary market Loot transactions, where there currently is none. A snapshot vote would be held solely to determine whether a royalty should be implemented, and if so, how much. Secondarily, this proposal suggests concepts for use of the royalty to fund development, generally, while supporting $AGLD and serving as a rational basis to confer benefits upon OG Loot holders.
This follows a spirited chat with Dom Hofman (@dhof) (https://twitter.com/dhof) @NittyB @felixrosenstein @MrBigTimeCEO @tybow @Woonie // Vehicle Daddy and others in the #loot-owners discord, all of whom are credited for contributing to the conversation.
| Facts |
1. Significant Untapped Funding For The Lootverse Lies in Royalties.
Loot is currently trading at the top of OpenSea’s volume chart:
As of the time of this writing (post-mLoot), approximately 51K ETH has been traded in original Loot. A 7.5% royalty fee on the traded volume would yield approximately 3,825 ETH in royalties, or roughly $15,000,000 since the Loot launch 8 days ago. This is a significant amount of untapped funding that could be reinvested into creating the best Lootverse possible through incentivizing developers and content creators.
Despite this, Loot trades with no royalty fee. Sellers are subject only to the 2.5% fee charged by OpenSea.
2. Other Successful Projects Are Using Royalties to Reinvest in Development and Community.
Other successful projects have royalty fees which are supported by their communities. Some are used to reinvest while others are used to pay the content creators. Some accomplish both by parsing out the royalties.
Parallel is a sci-fi collectable card game. “Parallel Masterpieces are 1 of 1 NFTs showcasing the beautiful art of each card in the game.”
@dhof popped into the Saturday night Discord discussion to note that the concept of using royalties as an investment in the community seemed similar to Parallel Masterpiece’s concept, here: Parallel Masterpieces. What is a Parallel Masterpiece? | by Parallel | Parallel Life | Medium
Parallel’s key points, for reference from their site:
- “10% of the resale value will be sent to Parallel”;
- “Half of this reward will be dedicated to funding the project…”;
- “the other half will go towards a prize pool for in-game leaderboards and competitions”;
- “Masterpiece holders receive 1% of the (10%) fee on all secondary sales of the matching playable card.”
At the time of writing, @artblocks_io (https://opensea.io/collection/art-blocks) charges a 7.5% royalty paid to the creator of its NFT’s for secondary market sales and has traded 168,200 ETH volume.
3. OG Loot Holders Desire Perks and Benefits.
Following the release of mLoot, OG loot holders find themselves desiring differentiation and perks. There is a sense among Loot holders that money (sometimes substantial amounts of money) were paid on the secondary market for the opportunity to participate in Loot. This thought continues to some notion of entitlement to benefits.
| Proposal |
1. Implement a 7.5% Royalty Fee on Secondary Sales.
Loot would benefit from immediately implementing a 7.5% royalty fee, where such royalty fees are sent to a community fund or treasury contract, to be distributed based on rules agreed by the community through a vote. $AGLD would serve as the governance token and $AGLD holders would be able to vote.
Maintenance of the royalty fee and distribution thereof would not require centralization. Royalty fees could be maintained on a smart contract. Distribution of funds would be handled through a community vote using $AGLD as the governance token and using the $AGLD multisig (I am not a programmer; these concepts require fleshing out).
- Fund metaverse development (artists, writers, developers, seek partnerships)
- Provide loot rewards in tournaments/battles
- Buy floor loot for long term investment thesis
- Give grants to developers who have demonstrated worthy concepts or prior successful work
- Fund core infrastructure that otherwise would not be profitable as its own project
- Buy $AGLD off exchanges, $AGLD then used to further reward developers/game participants
- Stake $AGLD to maintain liquidity
Funds should be transferred in $AGLD to preserve liquidity and keep them within the Lootverse to the extent possible.
Per Will Papper, $AGLD creator (@WillPapper), the Loot community can use a DAO with multisig to send $AGLD to developers and projects:
2. Add AGLD as an Arbitrary Token on OpenSea for a Loot Storefront.
I can’t find publicly available information on it, but big brains have mentioned that OpenSea supports allowing additional arbitrary tokens for a storefront although it has to be added by the contract owner.
If possible to add $AGLD, this concept would give $AGLD an additional use case and solidify it in the Loot ecosystem.
3. Use Loot to Yield AGLD.
This concept is to have Loot yield $AGLD, which can then vote on community $AGLD spends (i.e. from royalties). Simple and summarized by @dhof here:
/ Possible Collaborators /
Treasure (For Loot)
https://twitter.com/treasureforloot ($AGLD staking/yield farming)
Aq’s proposal for Loot-Items is here: Loot Items - Use your loot bag/mloot bag as an item factory
Aq’s twitter is here: https://twitter.com/aqxu/status/1434290533099134976.
His concept is to spawn individual items as standalone NFTs from your OG Loot on a weekly basis, sell them for $AGLD or do what you please. It would be possible to include staking here too (i.e., if your spawned item is in use in the lootverse, the $AGLD is staked until the item is destroyed or lost.) This would continue to drive $AGLD liquidity.
4. Reward OG Loot Holders For Generating Royalties Through Secondary Sales.
Some of the following comments were noted in Discord when I posed the question: “Why should OG Loot buyers get any benefit over those who came just few days later for free?”:
- “People paid lots of money for their OG Loot”
- "My guess is that very few people that minted their OG Loot for free are still around”
- “You got to get your money worth”
- “OG Loot holders have been around and actually invested real money. When you invest real money in Rune Scape”
The word “invest” really struck me because, in fact, Loot buyers didn’t “invest” in anything. At least not consciously. Our ETH didn’t go to developers or builders, it likely went to a flipper. To actually “invest”, the community needs to obtain a benefit by and through the secondary market sales. “Invest” might be a four-letter word here, so we can come up with something better.
The large volume of secondary sales propped up by OG Loot provides the opportunity to collect significant royalties, discussed above, and meaningfully contribute to development. By being an OG Loot bag buyer, OG’s are contributing toward royalties and to development by having community governance over use of royalties. This fact provides a rational basis to confer benefits which differentiate Loot from mLoot.
Loot holders could also receive small royalty draws (i.e., 1% total predistribution) to secondary sales which involve items that also appear in a holder’s bag. Common items would receive frequent but low royalties, while Mythic items would receive infrequent larger royalties. This concept dovetails with the Loot-Items proposal of weekly item spawning.
| Conclusion |
Implementing a royalty fee could quickly result in a fund that would support development and infrastructure for the Lootverse, while finding new use cases for $AGLD. It would also provide an opportunity and rational basis to incentivize OG Loot holders who prop up the secondary market and would directly contribute toward royalty fee generation.
That’s all for now.
Vote: The community seems to agree that the first step is voting to implement a royalty, at all. Uses and concepts for how to involve $AGLD will be dealt with in separate votes by the community.
The snapshot will be live for 48 hours ending 10AM PST on 9/7/21. Vote your Loot: Snapshot
The poll below is to gauge general interest and does not require Loot to poll:
- Yes, with 7.5% royalty.
- Yes, with 5.0% royalty.
- Yes, with 2.5% royalty.