An Alternative Solution to the Royalties Problem
Royalties are a hot topic in the NFT space right now. In their present form, royalties are not enforceable on chain, and are therefore, said to be optional. Some marketplaces are doing away with them entirely while some others are giving the buyer the option to pay them or not.
The goal of NFT royalties is to provide artists with value when the value of their creation increases post-primary sale. There are other ways to achieve this goal. We believe that a mechanism of the Sliced.art protocol can provide this value to artists. It is not only both fair and to the benefit of all involved, but it is also enforceable on chain and cannot be circumvented.
NFT Editions vs Slices
Sliced.art has opened up a new world to 1 of 1 NFT collecting. As an artist, you want to ensure you are getting your rightfully due royalties. As a collector, you want to ensure royalties are not too high and that you are collecting a NFT with limited amount of editions. With fractional NFTs, all of these issues are solved.
Let’s say an artist wants to mint an NFT and create 100 editions. The artist sets the price, the royalty, and then sends the 100 editions out into the world hoping to sell out. After a sellout, there is the hope of resales so the artist can collect royalties.
Or an artist can mint an NFT as a 1 of 1, set a higher price, and in most cases wait awhile before a primary sale happens. Resales of 1 of 1’s happen even less frequently for most.
What if an artist could have it both ways, getting value for their work today while also earning and benefiting from ongoing value over time? What if this can also benefit collectors?
With Sliced.art, an artist can mint a 1 of 1 NFT (on their platform of choice), set a certain number of slices, and set a curator fee that annually inflates. For now, this fee is set to a max of 10% annually. This means that the supply will automatically inflate by up to 10% on an annual basis, and the increase in slices will be directly sent to the artist’s wallet.
With these earned slices, the artist is free to resell them, or hold them for the eventual buyout of the underlying NFT, or both. This fee, if set, is enforced by the Sliced.art protocol, ensuring ongoing value for the artist.
Why is this beneficial for collectors and artists?
Let’s elaborate on what that means for editions and underlying NFTs on Sliced.art. There is no longer a reason to create more than 1 edition of an NFT. Instead of minting multiple editions, slice the 1 of 1 NFT into fractions. Why? Collectors can now purchase slices of an NFT to ensure everyone can own a share of that NFT, but the actual NFT represented is still a 1 of 1 NFT and is always available to purchase outright through a public reserve auction.
If an auction is started and the underlying 1 of 1 NFT sells, collectors and artists who hold slices can trade in those slices for a relevant portion of the XTZ from the sale.
In this space we often hear the phrase “A rising tide lifts all boats,” and in the case of Sliced.art, it is true.
Artists, who is ready to start slicing some 1 of 1’s and changing the paradigm?
Disclaimer: The Sliced.art team and community representatives are not registered financial advisors. All opinions shared on Twitter, Discord, or through other public channels are those of the respective individuals alone. Sliced tokens are solely intended to increase participant access to collectable, provable ownership of digital art and their respective communities. Sliced.art does not condone the creation, buying, or selling slices as a means of investment. The Sliced.art team is not responsible for how curators choose to market their NFTs. Similarly, the Sliced.art team does not create, handle, or manage the intermediary platforms, or networks through which slices can be transferred, sold, or purchased. Publications from Sliced.art are solely for information and entertainment purposes only. Please consult and work directly with tax, legal, financial, and investment professionals before making any sliced creation, transferring, and purchasing decisions.
