diff --git a/ERCS/erc-5173.md b/ERCS/erc-5173.md index 0eb2fcfe42..263f4ecb2d 100644 --- a/ERCS/erc-5173.md +++ b/ERCS/erc-5173.md @@ -13,21 +13,41 @@ requires: 165, 721 ## Abstract -This ERC introduces the NFT Future Rewards (nFR) extension for [ERC-721](./eip-721.md) tokens (NFTs). nFR allows owners to benefit from future price appreciation even after selling their tokens, without the need for market prediction. This establishes a Provenance Value Amplification (PVA) framework where creators, buyers, and sellers collaborate to collectively increase value. This innovative approach disrupts the current zero-sum trading paradigm by creating a fairer and more rewarding system for all participants. - -[ERC-5173](./eip-5173.md) fosters a sustainable and collaborative trading environment by aligning the interests of service providers and users. Compliant token owners enjoy price increases during holding and continue receiving nFRs after selling. By eliminating competition and promoting shared prosperity, nFR fosters strong bonds within the NFT and crypto token ecosystems. The framework ensures equitable profit distribution across all historical owners, including the original minter. +This proposal introduces the Non-Fungible Future Rewards (nFR) framework, extending [ERC-721](./eip-721.md) tokens (NFTs) features to let token holders benefit from value appreciation after transferring ownership. By integrating cooperative game theory, it aligns stakeholder incentives, addressing inefficiencies in asset transactions. The framework fosters collaboration, transparency, and equitable profit sharing. It improves equity and efficiency, recognizes all ownership stages, and establishes a cooperative asset transaction model. ## Motivation -The current trading landscape is often marred by unfair practices like spoofing, insider trading, and wash trading. These activities disadvantage average traders caught in cycles of fear and greed. However, the rise of NFTs and their inherent transaction tracking capability presents an opportunity to disrupt this unequal value distribution. +Traditional financial markets are often characterized by inefficiencies, opaque practices, and systemic imbalances, resulting in significant disadvantages for the majority of participants. Although blockchain technology offers transaction transparency, current implementations do not adequately facilitate equitable value sharing or participant alignment. This proposal addresses these gaps by introducing structured collaboration and a fair compensation system, ensuring equitable rewards for contributions to asset value. + +### Framework Components + +#### The Flow mechanism + +Each [ERC-5173](./eip-5173.md) token maintains an immutable record of ownership and price transitions, creating a dedicated network of historical token owners. This unique community collaborates to generate additional value and maintains vested interest in the project or token even after selling, ensuring contributors benefit from the asset's appreciation. This mechanism promotes collaborative value creation, equitable profit sharing, and a connected financial ecosystem, distinct from traditional financial market systems. + +#### Cooperative Value (Future Rewards) Distribution + +The nFR framework transforms the zero-sum financial equation: -ERC-5173 introduces a standardized profit-sharing model across the entire ownership history of an NFT, benefiting all market participants. It creates a "Flow of Provenance" where buyers and owners are rewarded for their contributions to price discovery. This model fosters aligned interests and establishes a mutually beneficial economic structure for both buyers and sellers. +``` +P(A) + P(B) + F ≤ 0 +``` +Where: + +- P(A): Profit of trader A +- P(B): Profit of trader B +- F: Transaction fees, friction costs, and operational expenses -NFTs can accurately reflect the contributions of their owners to their value. By recording every price change of each ERC-5173 token, we can establish a Future Rewards program that fairly compensates owners. This program aims to level the playing field and provide average traders with a better chance at success, without the need for complex market predictions. +into a collaborative model: + +``` +P(A) + P(B) + F + FR > 0 +``` +Where: -In addition to promoting this novel "gift economy" model, the nFR framework discourages illicit activities that circumvent artist and marketplace rules. This fosters a transparent and trustworthy trading ecosystem. +- FR: Shared value creation through cooperative mechanisms -Applied to the exchange of wrapped [ERC-20](./eip-20.md) tokens, this value-amplification construct has the potential to transform the asset transaction sector by integrating identities within the time and sales (T&S) data. This inclusive attribute affords a holistic perspective of each trade, infusing an additional layer of depth into the trading experience. +This model incentivizes fairness and rewards contributions throughout the asset lifecycle. ## Specification