SACR\'E BLEU: Self-Assessed Creator Royalties \'Enforced by Balancing Liquidity Estimation & Utility (A formal definition and analysis of Ethereum Request for Comment ERC-7526)
<|reference_start|>SACR\'E BLEU: Self-Assessed Creator Royalties \'Enforced by Balancing Liquidity Estimation & Utility (A formal definition and analysis of Ethereum Request for Comment ERC-7526): The secondary market for Ethereum non-fungible tokens (NFTs) has resulted in over $1.8bn being paid to creators in the form of a sales tax commonly called creator royalties. This was despite royalty payments being enforced by no more than social contract alone. Predictably, such an incentive structure led to zero-royalty alternatives becoming abundant and payments dwindled. A purely programmatic solution to royalty enforcement is hampered by the prevailing NFT standard, ERC-721, which is ignorant of sale values and royalty enforcement therefore relies on (potentially dishonest) third parties. We thus introduce an incentive-compatible mechanism for which there is a single rationalisable solution, in which royalties are paid in full, while maintaining full ERC-721 compatibility. The mechanism constitutes the core of ERC-7526.<|reference_end|>
@article{huber2024sacr\'e,
    title={SACR\'E BLEU: Self-Assessed Creator Royalties \'Enforced by Balancing
  Liquidity Estimation & Utility (A formal definition and analysis of Ethereum
  Request for Comment ERC-7526)},
    author={David Huber and Arran Schlosberg},
    journal={arXiv preprint arXiv:2403.07896},
    year={2024},
    archivePrefix={arXiv},
    eprint={2403.07896},
    primaryClass={cs.GT econ.TH}
}