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Fees structure

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Rarible Protocol Exchange contract has flexible fee structure and allows to set up these types of fees and royalties:

  • Protocol Fee: A mandatory fee charged by the Rarible Protocol on every transaction, paid by both the buyer and the seller. This fee supports the ongoing development and maintenance of the platform
  • Origin Fees: Optional fees set by users for each transaction. These can be applied to either the buyer's or seller's order, acting as a commission for facilitating the sale
  • Royalties: Payments made to the original creator of a digital asset each time it is sold. This ensures that creators continue to earn from their work over time

Thus Rarible Protocol Exchange contract allows every party to earn profit:

  • applications can earn money by specifying origin fees
  • creators can earn money by specifying royalties
  • protocol contract developers and DAO can earn money by specifying protocol fees

Here is a diagram which shows structure of fees and royalties paid:

Example to illustrate the fee structure. For instance

  1. Imagine an artist, Alice, who created an NFT, she specified royalty of 10%.
  2. Bob, the collector, bought this NFT quite a while ago and recently he decided to sell it for 100 ETH.
  3. A protocol fee of 1% is applied, so 2 ETH is deducted for the platform's maintenance (1% from buyer and 1% from seller)
  4. When sale happens Alice gets 10 ETH (10% from 100 ETH)
  5. The seller's agent, Carol, who facilitated the sale set an origin fee of 2%, amounting to 2 ETH.
  6. Additionally, buyer's agent Ted set an origin fee of 1%, amounting to 1 ETH.
  7. Buyer in this case will pay 102 ETH (100% + 1% protocol fee + 1% buyer side origin fee)
  8. In such case payouts will be:
    1. 10 ETH to Alice (royalties)
    2. 2 ETH to Carol (seller's origin fee)
    3. 87 ETH to Bob (he's seller)
    4. 2 ETH to Protocol
    5. 1 ETH to Ted (buyer's origin fee)

Conclusion

The Rarible Protocol Exchange contract's fee structure is designed to benefit all parties involved in a transaction. The protocol fee supports the platform's sustainability, origin fees provide earnings for facilitators, and royalties ensure that creators are rewarded for their work over time.

Updated 10 months ago