On Secondary: A Suppressed Royalty-free ArtBlocks Decentralization

On September 17th, Infernaltoast.eth quietly announced a new project, On Secondary - an open-source secondary marketplace for listing ArtBlocks projects at no-fee.

Negative reaction was swift from certain CT users who accused the project of stealing artist and AB's due royalties. Infernaltoast.eth responded by deleting the post and temporarily taking down the website, but leaving the code up and a Discord where discussion shortly flourished on the complications behind secondary royalties. His point was clear: anyone could be the one to take the code and launch the site, but he didn't want to take the consequences himself.

A crypto developer essentially bullied into suppression for open-source code by the platform it superseded should be shocking for anyone coming from the background of FOSS, cypherpunk and decentralization attitudes underpinning the entire space. While the project was quickly snuffed out, it prompted a discussion which was quite informative to me about attitudes in the space, worth a summary and response as it relates traditional mores entering the decentralized space, and can hopefully help elucidate what the 'decentralized mindset' really means.

Decentralization is inevitable

Make no mistake, all centralized platforms will eventually be decentralized, whether you like it or not - and this will always be a net good. It should always be understood a developer open sourcing a platform isn't bad just because secondary royalties currently rely on centralized infrastructure, it's good for the market in driving fees competitively & good for artists by compelling a decentralized royalty solution (whether or not it's technically possible is debatable) or driving them to alternative, genuinely decentralized monetization solutions (e.g. the artist reserve).

Sacrificing any of this because they currently rely on non-lindy infrastructure as a monetization model is the same as record companies trying to stop the web to maintain traditional monetization. Royalties on AB don't persist on any of the secondary markets except by manual, permission-based intervention (eg OpenSea), which they want to funnel you onto by suppressing liberating projects like OnSecondary. Not only do they advance the consumer rights of the space, it sparked a much needed fuse in the conversation around secondary royalties: an inefficient, anti-market monetization model.

In the discussion that took place, some argued for a half fee royalty to the artists as a compromise, but this still misunderstands how decentralization works: it could and will easily be forked to remove the fee to maximize consumer benefit.  If you don't build it, someone else will; and if you set high fees, someone else will lower them. This is the nature of open source code, and it's healthy market competition. You can't stop the free flow of technology, only build new solutions around it. The only reason the existing platforms have survived until now is because they hide their codebase, forcing developers to rebuild them from scratch.

There is no obligation to honor artist's wishes

I also saw AB's team argue that despite the complications and ethical ambiguity over secondary royalties, we have a moral obligation to respect the artist's wishes.

There is a myth of the artist as a holy, naive outsider, with zero interest in money; that's obviously facetious with a moment's thought - and especially egregious in a space where financialization plays a primary role in the conceptual basis of the artwork. Artists are not superhuman, and do often succumb to greed; especially when it's only at the point of sale and not something that negatively influences their own art production.

In this sense, they do have the freedom to explore any grift they want, but the market likewise has the freedom to get around them: either by price action, lowering demand for artists that choose to apply royalty, or decentralization, and simply working around their exploitations. There's no inherent ethical condition that says we have an obligation to the originator of a work we've purchased to follow their commands on how we interact financially with our own property.

When they say we should provide them the royalty tax out of pure good will or ethics, what they mean is we owe them a donation from moral grounds, because they have no decentralized ability to enforce it.

Compromise: Self-elected Donations

My recommended compromise for a decentralized secondary is allow the seller decide how much donation "royalty" they want to give back from their profits at the point of sale. If the seller feels he's obligated to honor the artist's wish by principle, he could set the royalty high and take a hit on his value as a donation back to the artist.

If you really feel obliged to pay lip service to the artist's intentions, have the default set to whatever % they announced. This is fully transparent and realistic considering the ability for anyone to fork and relaunch the market.

This 'donate what you want' model is fully fair while still providing the agency for the owner of the work to honor the artist's royalty wishes if they feel necessary, while providing an ethical tipping platform that's otherwise not conveniently available to help support artists with patronage.

Final note on Web3 Ideology

I firmly believe the only ethical questions in Web3 pertain to free information, decentralization & self-ownership. Code is law, because code is the transparent and immutable agent of power. Any attitudes or mores that cannot exist in and be enforced by trustless decentralized systems are hangovers of the old world and will not survive. All decentralizations are good, and all platforms will tend towards decentralization over time.

The agents in the market are free to settle on a variant consensus and centralized actors can try their best to suppress the liberation progress, but information wants to be free and platforms want to decentralize: the flow of code will eventually return is collectively back to these truths, just as it brought us into the blockchain in the first place.

Permalink: https://blog.remilia.org/on-secondary/