Systematizing Good Will: How Do We Solve the Royalties Problem?

Ever since OpenSea gave up on artist royalties, there's been a lot of talk about what to do about this problem (platforms undercutting each other) on a macro level. It seems that - at least from a technical perspective - on-chain royalty enforcement is very difficult since there will always be ways for bad actors to bypass them. As it stands now, royalties are running purely on the good will of voluntary participants out there.

This problem is cultural as much as it is technical - if the majority of the players on a chain decide that royalty enforcement is a priority, it will probably happen (e.g. Tezos). Royalties exist under the assumption that if creators are fairly compensated, it will attract talent to their platform and result in higher quality works. If that's not a priority and the culture becomes fearful that paying creators will drive prices up too much, it probably just won't happen. (e.g. Ethereum)

For now, royalties on the Tezos ecosystem is safe as long as the players in the space (fxhash, objkt, TEIA, versum, etc.) all respect royalty rights, but the threat of an external player emerging in order to undercut the others still looms. If Tezos wants to maintain its status as the premiere destination for the creative class, it will probably be in its own interest to put artists' minds at ease - when the NFTs first started, 99%+ of the artistic talent in Web3 was squarely in Ethereum - but that landscape changed very quickly over the course of 22-23'. Unlike the friction artists face when they migrate to new cities when an existing one becomes untenable, in Web3, if the arts community decides that they don't want to be there anymore, it will happen instantaneously.

But if a technical solution is not viable or effective, what can be done about the whole thing? The solution, I believe, is to simply have a mechanism to capture and empower the good will we currently have now. Many platforms have "pledged" that they will respect royalties - but it is finally time to get it in writing, and etch it into stone. (Or the blockchain, in this case.) This will create a permanent record of the pledge (along with each organizations' official wallet address and proof that they are enforcing royalties) and create a degree of public accountability that didn't exist before. If platforms really want to turn their backs on their promises (e.g. OpenSea) nobody will be able to stop them - but at the very least, everyone will know.

The reality is that both artists and consumers don't really have the time nor patience to wade through mountains of historical records to determine if a platform is "legit" or not, especially if they're new or obscure. But a semi-self-regulating royalties "whitelist" would be very helpful in helping both creators and audiences make smarter decisions about where to spend their time and money. In any given space, the emergence of bad actors is an inevitability, but systems can be designed in a way to minimize the damage and influence they're able to do.

As we wait for TEIA's DAO to become a "formal" non-profit entity in the near future, this will probably be one of the first proposals I will be pushing for as one of the founding members out there. If you'd like to get involved, DM me on Twitter or join us on Discord to get the ball rolling!