Royalty Pool Explained
Colle's royalty system employs a "royalty pool" that provides a distributed percentage of each sale among relevant parties.
Key Components
Royalty Pool: The royalty pool represents a certain percentage of each sale, distributed among relevant parties. This percentage is determined by the royalty contract that resolves from the sellers' account's tier in KYCRegistry.
Parties in the Pool: There are two types of parties that may receive royalties: the original publisher of an NFT and any recent sellers of the NFT.
Pool Size: The pool can consist of up to 5 parties at any given time. This includes the original publisher and the four most recent sellers.
Addition to the Pool: The original publisher is added to the pool upon minting the NFT. Subsequent sellers are added to the pool in order of their sale, with the oldest reseller being rotated out once the pool is full.
Weight Distribution: Each party in the pool has a weight determining their share of the royalties. All recent sellers in the pool have an equal weight, but the share assigned to the original publisher can be adjusted by Colle.
Publisher as Seller: If the seller of the NFT is also the original publisher, and there are no other parties in the pool, they are not added as a seller.
Example Royalty Distribution Scenario
For the purpose of illustrating how the royalty system works, let's assume the following conditions:
The royalty pool consists of 2% of each sale.
Each sale is worth $10,000.
The original publisher has the same weight as the recent sellers, meaning each party gets an equal share.
Assuming these conditions, the calculation of royalties after each sale can be determined as follows:
Mike mints
Mike ⇒ Bob
$200
$200
Bob ⇒ John
$200
$200
John ⇒ Doe
$200
$100
$100
Doe ⇒ Jane
$200
$66.67
$66.66
$66.66
Jane ⇒ Kate
$200
$50
$50
$50
$50
Kate ⇒ Alex
$200
$40
$40
$40
$40
$40
Alex ⇒ Curtis
$200
$40
$40
$40
$40
$40
Curtis ⇒ Akos
$200
$40
$40
$40
$40
$40
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