There's a difference between making royalties for distribution of copies of an item and making royalties for transferring a single item from one person to another. One makes sense, the other is a weird misleading way to rent to people.
Royalties apply on re-sale, not every transfer. Royalties on sales going back to the original creator is pretty normal practice in the arts and creative industries (music, writing, art, photography).
The good thing, compared to traditional markets, is that this is something that can be (loosely) enforced with smart contracts, the % rate is flexible, and the current NFT royalties are typically far better for the artists (eg: 10% NFT platform fee instead of 50% gallery fee).
What on earth are you talking about? If I buy a copyrighted work in the second-hand market I don't have to pay any royalties to the original creator. That would be extortion.
You are free to do the same (trade w/o fees) with crypto currencies, nothing stops you from sending the tokens directly from one wallet to another or doing a private sale.
But with galleries in the real world (where artists are “represented” - and the model that NFT marketplaces are emulating), the artist will receive royalties on sales.[1]
> It's simply like a real estate broker commission, gallery commission, or whatever.
Except that its not at all like that. You pay a commission to someone who helped you sell something - they did work to help you sell it and you compensate them. Paying an automatic comission fee to the artist upon sale makes no sense. What are they doing to earn that commission? You already paid for their art. It makes no sense to pay again. What this is cannot be called a "comission".
I can see a situation where the artist is paid in total a very small fraction of the total price the art was sold for. Eg in the situation someone brought up where an artist sells a painting for $10,000 and then a few years later its sold for $1 million, I can see the artist maybe getting 10% of the margin between those sales (eg 0.1*(1 million - 10,000)). But even that is dubious to me, since a sale already took place. It just seems really weird to me and I think it has to be justified further than just "this is good for artists" or "artists need more money". Certainly calling it a commission is not at all accurate.
That still doesn't make it weird or misleading or "renting". It's straightforward and clear and ownership.
You're correct in that it's not exactly the same as previous models. It's a somewhat new innovation. And isn't it great to try new things?
Perhaps you'd prefer to think of it as more like a transaction tax, which exists in many localities when you sell real estate. E.g. NYC has a 1% transaction tax on sales over $1MM. But here the tax goes to the creator rather than the government.
Sure. Its an interesting new idea. I can see that it might have reasonable use cases, but its not clear to me whether its actually an improvement over other kinds of contracts. It would also have technical problems in the case of key change - if the owner has their keys compromised and needs to transfer the record to a new address, do they pay a fee to the original creator for that? And this happens in perpetuity?
Transaction fees for the Topps MLB cards on WAX, for example, are only taken during the sale when the sale occurs on a secondary Atomic Asset marketplace. There are no royalties to trade or transfer between accounts.
