Royalty Tokens (ROY)
Royalty Tokens (ROYs) are ERC20-compliant tokens. The functionality allows NIM (or the parties NIM appoints) to create an arbitrary number of new ROYs, as long as the ROYs are deleted in the same number before the end of the same transaction.
Think of ROYs as “credit tokens
Or maybe “running up a tab” in the pub and deleting the ROYs at the end of the transaction is “paying off your tab”. If you don’t pay off your tab by the end of the transaction, then the transaction is reverted, and it is as if you never ran up a bill to begin with.
It is a great concept, but only if ROYs have (intrinsic) value as asset-backed tokens
What are asset-backed tokens?
Asset-backed tokens are 1-to-1 backed and redeemable for some other asset. This is the core functionality of Royalty Tokens (ROY). When the Digital Service Provider (DSP) buys ROY (or pays and invoice), it will be with the exact amount in fiat as in ROY (in our example, we will be using USD1:1 parity, but could easily be Euro or any other fiat currency). The funds are put in escrow in a bank account, and the ROYs are created (minted) as asset-backed tokens.
Every time there is a stream on the DSP, the respective royalty amount in ROY is sent to the wallet of the keeper (owner/administrator/investor) of Copyrights. The owner of Copyrights can convert ROYs at any time into fiat currency. Then have the respective amount transferred to their conventional bank account, and the ROYs are deleted (burned). This mechanism ensures liquidity in ROYs and guarantees that the keeper of copyright will get the royalties earned.
Asset-backed tokens have the same market value as their underlying asset.
The owner of Copyrights can also convert ROYs into CREATIVES. The fiat in escrow (USD) will ALWAYS follow the exchange of ROYs!
Fiat (USD) that was balancing the ROYs are now balancing CREATIVES, contributing greatly to liquidity and stability for CREATIVES