Fees & Royalties
Who pays what and when
Last updated
Who pays what and when
Last updated
When a transaction happens on FOTON, from the total paid by the buyer, there are a couple of small amounts reserved for the Creator, the Marketplace and the Radix Network as follows:
Royalty - Set by the Creator (or owner if the Release fee is paid), either as percentage or as a fixed amount. See below Royalties.
Marketplace fee - Set by FOTON and it is set as percentage, usually around the 2.5% mark.
Radix Network fees - it depends by the type of transaction but usually are very small
Minting fees are calculated differently, depending on the type of NFT minted, but they have a fixed amount of XRD set for every NFT minted (Ex: 2 XRD /NFT). All these fees should usually be visible in the FOTON UI and in the Radix Wallet before confirming the transaction.
As mentioned earlier in the Documentation, Royalties can be implemented for any NFT, either it being within a Collection or a project. Foton has two Types of NFTs (or/and NFT standards) that are differentiated by the way the Creator Royalties are Enforced and Collected: 1. Royal NFT - royalties are always collected, even for transactions outside Foton. 2. Rebel NFT - royalties are optional and can be collected only if 3rd party dApps do it.
Once the type of NFT Royalty is selected you will have to choose what is the format of the Royalty:
As Percentage - a percentage is collected from the total of the secondary sale. Ex. 2%
As Amount - a fixed amount in XRD is collected for every secondary sale. Ex. 25 XRD tokens.
Next you'll have to set if your Royalty can be adjusted after the NFT has been minted. Some use cases require a flexible fee some might need to have a fixed one set forever.
Therefore there are 2 options here:
Flexible - The Creator can update after mint the Royalty. Ex: From 2% to 10%.
Fixed - The Creator can't change it anymore after mint. Ex: Remains forever 5%.
Following this little wizard above the Creator is prompted further to complete the fields for the actual amounts of the Royalties. Again, depending of the chosen Royalty types, these will be required.
Here is the explanation for each:
Active Royalty - the actual royalty collected when the secondary sale happens
Max Royalty - is the maximum percentage that the creator can set the Royalty to be in the future updates. It can't be set higher than this limit. This is useful to protect Collectors and give some peace of mind that rugs will not happen that easily.
Hard Limit - is the same as the Max Limit, only it is set in a fixed amount of XRD tokens. When both Max and Hard limits are set, it takes priority the first limit reached.
Release Royalty Fee - it's a new concept introduced by FOTON, where the Owners of NFTs, can release all Royalties attached to an NFT if they pay a Fixed amount of XRD. More about it below.
This feature is a first for the NFT industry and it's a piece of innovation introduced by the FOTON team by elevating the power of the Radix DLT stack. When an NFT is minted, the creator sets a Release fee, let's say 1000 XRD, which if paid by the future owners of this NFT, it will allow them to remove the Creator Royalty and set it to zero by default. Therefore the Creator can't collect any fees anymore inside or outside of the Marketplace.
The same applies for the FOTON marketplace fee if the Release fee is paid, but collecting the fee resumes to zero only outside the FOTON Marketplace, in this case. Therefore this way their NFT becomes a Rebel NFT where they can do anything with it. And when we say anything, we mean even setting their own Royalty if they wish so. You heard that right. :) Once the owner has paid the Release fee, he can find a new button on the details card of the NFT page on FOTON, set a 5% new Royalty, and start earning Royalties for himself from now on.
The use cases for this feature can be endless, but you can compare it with the way a real painting would work, where the owner of a "Monalisa" can monetise his painting from now on since the Original Creator got fully paid for all his previous work in one go and renounced all his Royalties. (This doesn't mean he will be erased as the Creator of the NFT, just the Royalty is affected).
