NFT
Wylie Aronow, along with the other co-founders at Yuga Labs, suggested a way to limit Bored Ape Yacht Club’s (BAYC), NFT sales to only royalty-enforcing markets.
The allowlist would be used to verify the wallet address in order to conduct a BAYC transactions. This is described in Substack. If it’s a normal wallet, or externally owned accounts, the transaction would automatically go through since it’s impossible to tell whether someone’s harmlessly swapping an NFT between their wallets or attempting a trade that bypasses royalties such as through wrapping.
If the allowlist sees that a transaction request is made from a smart contract on an NFT market that does not pay royalties, then the transaction will be denied.
Bored Ape Yacht Club has received a total of $147.6 million through NFT royalties so far — the most of any collection, according to a Galaxy Digital report. Implementing an allowlist helps Yuga Labs keep this recurring revenue while forgoing a deny list, or blocking certain wallet addresses, of NFT marketplaces that don’t uphold royalties that other NFT projects have done.
One example of this was with QQL Mint Pass, an NFT project co-founded by Fidenza’s Tyler Hobbs, where coding in the QQL smart contract blocked the wallet address of X2Y2, an NFT marketplace that makes paying royalties optional.
The Yuga Labs co-founders considered curating a deny list, but thought “using a deny list would inevitably result in a game of whack-a-mole, where new marketplaces would get deployed continuously to avoid paying creator fees,” Aronow wrote.
Bored Ape Yacht Club maintains a floor price of around 60 ETH (almost $93,000), according to The Block’s Data Dashboard. Yuga Labs can expect to make a minimum of $23,344 per transaction, if Yuga Labs continues to earn the 2.5% royalties on every sale.