💍Tutorial 64: Equal Royalties for Unequal NFTs
In decentralized applications involving NFTs, royalties play a critical role in ensuring that creators and other stakeholders receive a share of revenue when their assets are traded. Royalty payments are generally distributed as a percentage of the sale price of an NFT, ensuring that creators are compensated for each subsequent sale.
However, many systems do not account for varying values of NFTs in a sale and distribute royalties equally across all NFTs, regardless of their individual value. This can result in unfair royalty distribution, where owners of high-value NFTs receive disproportionately low royalties, while owners of low-value NFTs benefit unfairly. This creates a misalignment in royalty allocation, leading to potential losses for owners of more expensive assets.
In this tutorial, we will explore how unfairly calculated royalties can arise, provide a step-by-step explanation of the issue, and suggest methods to address this vulnerability.
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