Royalties System

Complete guide to creator royalties and secondary sales revenue on Lyraverse.

Understanding Royalties

What are Royalties?

Royalties are automatic payments made to NFT creators every time their NFTs are sold on the secondary market. They ensure creators continue to benefit from their work's long-term success.

How Royalties Work

Original Sale: Creator receives 100% (minus platform fees)
Secondary Sale: Creator receives royalty percentage
Example: 5% royalty on 10 HYPE sale = 0.5 HYPE to creator

Royalty Implementation

Smart Contract Level

Royalties are enforced at the smart contract level, ensuring:

• Automatic Payment: No manual intervention required

• Guaranteed Execution: Built into every sale transaction

• Immutable Enforcement: Cannot be bypassed or modified

Royalty Standards

Lyraverse follows EIP-2981 royalty standard:

interface IERC2981 {
    function royaltyInfo(uint256 tokenId, uint256 salePrice)
        external view returns (address receiver, uint256 royaltyAmount);
}

Setting Royalties

During Collection Creation

{
  "royaltyPercentage": 5,        // 5% of secondary sales
  "royaltyRecipient": "0x1234...abcd",  // Creator's address
  "maximumRoyalties": 25        // Platform limit for user protection
}

Royalty Range

• Minimum: 0% (no royalties)

• Maximum: 25% (platform enforced limit)

• Recommended: 5-10% (industry standard)

• Why 25% max?: Protects buyers from "royalty rug pulls"

Recipient Configuration

• Single Address: All royalties go to one wallet

• Split Recipients: Distribute across multiple addresses

• Smart Contract: Send to DAO treasury or splitter contract

Royalty Distribution

Fee Breakdown Example

Sale Price: 10 HYPE
Platform Fee: 2.5% = 0.25 HYPE
Creator Royalty: 5% = 0.5 HYPE
Seller Receives: 9.25 HYPE
Creator Receives: 0.5 HYPE (royalty) + 10 HYPE (initial sale) = 10.5 HYPE total

Multiple Sales Impact

Initial Sale: Creator gets 10 HYPE
Sale #1: Creator gets 0.5 HYPE (5% of 10 HYPE)
Sale #2: Creator gets 0.5 HYPE (5% of 10 HYPE)
Sale #3: Creator gets 0.5 HYPE (5% of 10 HYPE)
Total Creator Earnings: 10 + 0.5 + 0.5 + 0.5 = 11.5 HYPE

Royalty Management

Viewing Royalty Earnings

1. Collection Dashboard: Access creator analytics

2. Royalty History: Track all royalty payments

3. Total Earnings: Combined primary + secondary revenue

4. Payment Status: Confirmed on-chain transactions

Updating Royalties

• Creation Only: Royalties set at collection deployment

• Immutable: Cannot be changed after creation

• Planning Required: Choose percentage carefully

• Legal Compliance: Consider jurisdiction requirements

Platform Fee Structure

Marketplace Fees

• Primary Sales: 0% (royalties only)

• Secondary Sales: 2.5% platform fee

• Why Fees?: Platform maintenance and development

Fee Distribution

Platform Fee Breakdown:
- 40%: Development & Operations
- 30%: Marketing & User Acquisition
- 20%: Community & Ecosystem
- 10%: Reserve & Future Growth

Royalty Best Practices

Setting the Right Percentage

For New Creators

• Start Low: 2-3% for early adoption

• Build Community: Focus on utility over royalties

• Gradual Increase: Raise as collection proves value

For Established Creators

• Industry Standard: 5-7% for proven collections

• Value-Based: Higher for unique/artistic works

• Market Competition: Match similar successful collections

Maximizing Royalty Revenue

Collection Value

• Utility: NFTs with ongoing utility earn more

• Community: Strong holder engagement drives sales

• Scarcity: Limited supply increases demand

Market Timing

• Initial Hype: High volume immediately after launch

• Sustained Value: Long-term holder retention

• Market Conditions: Benefit from NFT market growth

Legal Considerations

Copyright and Ownership

• Creator Rights: Royalties don't affect copyright

• License Grants: Commercial usage rights

• Derivative Works: Creator maintains original rights

Tax Implications

• Report Royalties: Treat as business income

• Jurisdiction: Follow local tax laws

• Professional Advice: Consult tax professionals

• Record Keeping: Maintain detailed transaction records

Troubleshooting Royalties

Royalties Not Received

Issue: "Didn't receive royalties from sale" Solutions:

• Check royalty percentage setting

• Verify recipient address

• Confirm sale was on Lyraverse marketplace

• Wait for indexer sync (2-3 minutes)

Incorrect Royalty Amount

Issue: "Received less than expected" Solutions:

• Verify royalty percentage in collection settings

• Check for platform fee deductions

• Confirm sale price calculation

• Contact support with transaction details

Royalty Address Issues

Issue: "Royalties going to wrong address" Solutions:

• Verify recipient address during creation

• Update via collection management (if available)

• Use multi-sig for shared royalties

• Contact support for address changes

Advanced Royalty Features

Split Royalties

{
  "royaltySplits": [
    {"address": "0x1234...creator", "percentage": 70},
    {"address": "0x5678...artist", "percentage": 20},
    {"address": "0x9abc...community", "percentage": 10}
  ]
}

DAO Treasury Royalties

• Community Control: Royalties go to DAO treasury

• Proposal-Based Spending: Community decides fund allocation

• Transparent Governance: Public treasury management

Dynamic Royalties

• Time-Based: Decrease over time

• Volume-Based: Adjust based on sales volume

• Holder-Based: Different rates for different holders

Royalty Analytics

Creator Dashboard Metrics

• Total Royalties Earned: Cumulative royalty income

• Average Royalty Rate: Effective rate across sales

• Top Performing NFTs: Highest royalty-generating pieces

• Geographic Distribution: Sales by region/country

Performance Insights

• Royalty Velocity: How quickly royalties are earned

• Holder Retention: Impact on long-term holding

• Market Performance: Royalty correlation with floor price

Industry Comparison

Royalty Standards by Platform

OpenSea: 0-10% (no maximum enforced)
Rarible: 0-50% (flexible)
Foundation: 10% (fixed)
Lyraverse: 0-25% (buyer protection)

Creator Earnings Examples

Collection A (5% royalty):
- 1000 sales at 1 HYPE = 50 HYPE royalties

Collection B (10% royalty):
- 500 sales at 2 HYPE = 100 HYPE royalties

Collection C (1% royalty):
- 10000 sales at 0.5 HYPE = 50 HYPE royalties

Future Royalty Developments

Planned Features

• Royalty Tokens: Trade royalty streams as assets

• Royalty Staking: Stake royalties for governance

• Cross-Platform Royalties: Universal royalty enforcement

• Royalty Analytics: Advanced earning insights

Community Governance

• Royalty Adjustments: Community can modify rates

• Treasury Allocation: Vote on royalty fund usage

• Creator Incentives: Reward successful creators

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Royalties ensure creators are rewarded for their success long after the initial sale! 💰🎨