The issue of creator royalties has sparked heated debates within the NFT community. This is not surprising for those immersed in the world of Web3. However, what is surprising is the lack of significant progress in resolving the debate since its inception.

While some of the prominent NFT marketplaces have taken positions on the matter, efforts like Manifold’s Royalty Registry have not fully addressed the problem of ensuring creators receive their rightful share. Nevertheless, there are builders actively working to rectify this situation, and the recently introduced ERC721-C standard serves as a testament to these endeavors.

So, what exactly is ERC721-C?
ERC721-C is a novel token standard designed to enable enforceable on-chain royalties. Unlike the commonly used ERC-721 and ERC1155 NFT standards, this new standard introduces programmable royalties. It empowers creators to prevent zero-fee exchanges from trading their works without paying royalties.

Conceived by Limit Break, a blockchain gaming company, ERC721-C (and ERC1155-C) allows creators to establish new rules for their royalties on the blockchain. In simpler terms, this standard enables artists and developers to create permissioned smart contracts that dictate how and where royalties are transferred.

Essentially, this customizable royalties contract permits creators to choose the platforms where their NFTs can be sold, giving them the ability to filter interactions exclusively through the contracts and applications they approve. Traders will no longer be able to bypass royalties by utilizing zero-fee marketplaces, as any collection created with ERC721-C can opt out of trading on such platforms.

Potential Applications of ERC721-C
The potential applications of Limit Break’s innovation extend beyond simple royalty transactions. As Hunter Solaire, a strategist and writer, highlights in his tweets, users of this new standard can easily customize their royalties in dynamic ways to benefit themselves and their supporters.

For instance, ERC721-C could be employed in community-building initiatives where royalties from sales are automatically split among members of a DAO or contest winners. However, instead of perpetual kickbacks, creators can allocate percentages and determine the timing and frequency of distributions.

Moreover, ERC721-C is fully backward compatible, ensuring seamless compatibility with existing blockchain chains and marketplace standards. Gabriel Leydon, the CEO of Limit Break, expressed his excitement about this functionality during a Twitter Space, stating, “You will actually be able to block exchanges for real now, and there’s nothing they can do about it.”

Leydon further added, “The standard that everybody’s using right now cannot defend royalties. This is the real deal. This is a real on-chain solution for royalties. This will work, it’s going to work, and in my opinion, it’s going to change the internet.”

Implementation Timeline for ERC721-C
It is important to note that the adoption of ERC721-C and other new standards like ERC1155-C, ERC-6551, or BRC-20 will not happen overnight. While interest in these standards is growing within the NFT space, they are still relatively new and complex. Additionally, if more features are added, the complexity may further increase.

The customization features offered by ERC721-C may require marketplaces to update their platforms accordingly. However, even this step might not be taken until the Web3 community witnesses a successful collection implementing the new standard and demonstrates its viability.