When NFTs are sold separately, calculating the royalties to be paid out to the creator is a straightforward process. However, when NFTs are nested together and sold, calculating the royalties for each NFT becomes tricky due to the variable value problem.
The Variable Value Problem
Let’s assume a nested bundle containing 4 NFTs is listed for $2,000. The parent NFT (NFT P) has a 10% creator royalty, while the children NFTs (NFT C1, NFT C2, and NFT C3) have 3%, 5%, and 7% creator royalties, respectively.
How do we calculate the royalty for each NFT? Are we to assume that all NFTs in this bundle are equal in value? Of course not. Usually, in any nested bundle, there will be a single NFT that represents over 50–80% of the bundle’s value. Thus, since all NFTs in a nested bundle do not have equal value, we cannot calculate royalties for each NFT based on a single price (the total bundle price).
RMRK’s Nested Royalty Solution
To ensure that each creator’s royalty is honored relative to the price set by the seller, RMRK’s Nested Royalty Solution requires all nested NFTs listed for sale to specify a price for each NFT in the bundle.
But don’t worry — we’ve made it easy for you. Our intuitive user interface uses sliders to vary the percentage and automatically calculates the amount. All you have to do is specify the total price and distribute it among the various NFTs. Here is how it works:
Nested Royalties UI — by RMRK
The user lists a nested NFT bundle for sale and sets a total price.
The user specifies the price of each NFT in the bundle, starting with the parent and ending with the children. The user only needs to distribute the total price among the various NFTs.
The user lists the nested bundle, and royalties are automatically calculated and distributed to the respective creators based on their percentage share.
Key things to note
Sellers must set a percentage for all NFTs with creator royalties.
You only need to worry about setting the total price of the nested bundle and the percentage share for each NFT in the bundle.
All percentages (of parent and child NFTs) must sum up to 100%. This is enforced automatically so there is nothing you need do.