Weekly update on development process (Oct 10, 2022)
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- ⚒ Updated the Fairpool website: https://fairpool.io/.
- 🤝 Signed up 1 more influencer for initial launch.
- 🤝 Advised another project.
Royalties: how high?
There’s an ongoing discussion among the NFT traders: how high should the royalties be?
On one hand, high royalties incentivize the founders to develop their projects. The higher the trading volume, the more money they make, which they can (should) spend on marketing. This works well for huge brands like Yuga Labs, and for unexpected successes like Goblintown. For example, the Goblintown NFT has generated ~49000 ETH in volume at 7.5% royalty, which translates into ~3675 ETH for the creator. Nodd badd!
On the other hand, if the royalties are too high, the traders simply won’t buy the NFTs, because the breakeven price increases too much. For example, if the royalties are set at 50%, the trader needs to list his item at 1.67x just to break even. Also, the traders would simply be pissed off that too much money goes to the creator.
We feel that it’s better for royalties to be high rather than low, and the market will stabilize in the 7.5% — 10% range. The most successful projects will have high royalties & they will utilize their marketing budget to the max. And the new projects will imitate the most successful ones.
We also think it’s OK to add 25% tax in the case of Fairpool, because this tax will go directly into the pockets of the current token holders. The trader who’s thinking about buying the token will see the 25% tax as a positive thing — a reason to buy & hold for the long term.
Next week’s focus
- ⚒ Develop Fairpool.
- 🤝 Advise current projects.
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