ALGOxNFT Q1 2024 Proposal

Hello Algorand!

We wanted to share our NFT Rewards Program proposal:

Let us know what you think!

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Is there any reason why it is only primary that is counted? Is this to mitigate the seller set royalties for secondary potentially being under 5%?

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That’s a great question!

Here’s the reasons for counting only primary:

  • We want to encourage as many creators as possible to bring their work/attention to Algorand, so by limiting it to primary sales, we hope that there will be less discouragement than if secondary is counted, which might make it feel “hopeless” to enter the competition.
  • For most new collections launching today, the majority of the volume is in primary sales anyways. There’s exceptions to this from collections that launched a while ago like MNGO or Al Goanna, but this is not the case today.
  • Wash trading is much harder if we only count primary sales, so this is also helpful in that regard.

I’ll go into detail on that last point, let’s say someone is trying to cheat and wash trade:

Scenario 1: Only primary sales count
If the bad actor wants to win, they have to mint new assets to “wash trade”. Assume the current winner is at 30,000 ALGO for the week, and taking the typical mint price (say 20A):

30,000 / 20 = 1,500 units * 0.1 ASA creation cost = 150A

Not a huge amount, but definitely not 0 either.

Scenario 2: Secondary sales count too

Bad actor can now mint a lot less units, and just sell them back and forth to themselves:

100 units * 0.1 ASA creation cost = 10A

So by allowing secondary sales, it is now 93% cheaper to attempt to wash trade and cheat. There’s other factors that make only considering primary sales safer against cheating, but this is just one example.

Just to challenge that justification a bit…

The wash trade example you give where the difference is $28 or 150A of mint fees, and the reward is ~ $6400 or 32,000A. Does that really makes much difference?

The real expense of the wash in either scenario would be marketplace fees = 600A to generate 30,000A ‘volume’ on your own collection - this would be the same for primary or secondary sales.

You also could get into a domino effect problem. Successfully wash trade reward week #1… that person now has 32,000A extra capital to wash trade a new collection week 2… then 64,000 week 3 etc etc

I think a better scenario is either splitting the weekly rewards between multiple collections - so there’s less and less incentive to game it and it becomes a ‘nice’ bonus rather than something that could attract bad actors. Of course the goal should be ZERO wash trading.

Or rethink the reward structure to reward top collector volume as well as creators (primary or secondary your choice). I think the NFT space thrives best when it feels like there’s mutual wins for both creator/collector - and I think you’re more likely to get people to participate each week

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I like the suggestion for what it is - convincing projects to do their PRIMARY sales/shuffles on algoxnft. We need more even market share inNFT marketplace scene, this is imo a good step towards that and as creator i can support it.

I would however suggest reducing the rewards per week a bit and move some of these algos to reward buyers too, because it’s hard to imagine every week there will be a “organic” shuffle happening, if not you are inviting forced sales, which need some incentives for buyers too, to be attractive imo. (perhaps take a look in how algogems does rebate system for primary sales, or do some simple leaderboard for buyers regarldess if its primary or secondary)

congrats on making the cut this quarter :slight_smile:

Great feedback, keep it coming!

Love the idea about leaderboards and comments on how often shuffles might happen, and appreciate the kind comment, Simon :smile:

Seconding the importance of taking secondary sales into account. When looking at chains for NFTs, people want to see a healthy market for flipping and actively trading. This is just a matter of reality. They are less concerned about primary sales.

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Any updates on changes being made to this proposal?

I have seen a few posts from creators announcing their upcoming drops on AxN based on the draft proposal. I think the NFT ecosystem would benefit from seeing the updated document with changes you’ve made based on the communities feedback.

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Yup, thanks for all the thoughts. We’ve updated the proposal with clarifications, logistics, etc.

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7 good shuffles on algorand in 7 weeks? wont happen sorry. sounds too easy to game

also you ignored feedback since you just argued why you think that you are right which is not how feedback works

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So for the proposal one winner each week will receive 32K Algo and that’s the plan?

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Paying people to flood the market with tons of new NFT collections will absolutely have consequences for our already struggling ecosystem.

If the aim was to attract new creators from other popular chains with a track record of success and an audience they could bring with them, that would be one thing.

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Yeah I agree, Im glad AlgoXNFT got on the rewards program but the proposal needs a solution that will help us grow. The current one is not very good and or thought out. Maybe take a look at multiple proposals to see what has already been said or written down for more reference. @pillar

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This plan seems like it wasn’t really well thought out. 32,000 ALGO to one person per week? How does that help the majority of the ecosystem? A few people get new tv’s or laptops while everyone else spends money on new mints? The top creators get even more? :-1:

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I agree with Stitch’s point.

Secondary sales should be included as part of this rewards program. Wash trading rules can still be set in place and there are ways to monitor/catch wash trades and rule them out of the competition.

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Lots of shuffles struggle to sell out already. There’s 30+ on AxN right now. With no incentive for buyers to buy, and encouraging even more drops in a 7 week period - how does this proposal resolve that?

All that I can see happening is the hyped drops that were going to sellout anyway, will sellout anyway… and the ones that weren’t will probably suffer even more.

I’m not even sure there’s time for a new proposal at this stage as 10 days between drafts nothing changed and reward period starts soon?

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100%.

We do not have a supply issue, 99.9% of people in the community agree… Just talk to them.

Would love some insight in next steps for this process if there are still very large concerns by the community @Joana ?

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Very interesting proposal in comparison to the rest. Surely, you must care about your collectors?

I don’t know how I feel that one creator can win all 7 weeks and only creators win. The low volume on Algorand can make that very easy to game. Someone can drip out their collection and make sure to sell slightly enough to win every week.

@D4O (Community Manager for R&) are you speaking on behalf of your employer R& right now? Or are you speaking on behalf of Agash who is on the NFT council?

The CEO of R&, Agash Navaranjan has the power to vote against this proposal.
Agash is part of the NFT Council that has the sole power to approve or deny proposals.
Surely, you can do this to help the community?

Creators AND collectors need money. Not only creators.

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Someone can correct me but council doesn’t have any power over proposals I don’t think, its under full discretion of the marketplaces - joana doesn’t have power to approve/deny anything outside of the guidelines here: https://arc.algorand.foundation/ARCs/arc-0049

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@algopepe

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