RoyaltyPolicyLRP
The RoyaltyPolicyLRP (Liquid Relative Percentage) contract defines the logic for splitting royalties for a given IP asset using a liquid relative percentage mechanism. It manages the royalty relationships between IP assets and their ancestors, allowing for the transfer of revenue tokens to the appropriate royalty vaults.
State Variables
RoyaltyPolicyLRPStorage
Storage structure for the RoyaltyPolicyLRP containing:
royaltyStackLRP
: Sum of the royalty percentages to be paid to all ancestors for LRP royalty policyancestorPercentLRP
: The royalty percentage between an IP asset and a given ancestor for LRP royalty policytransferredTokenLRP
: Total lifetime revenue tokens transferred to a vault from a descendant IP via LRP
IP_GRAPH
The address of the IP Graph precompile contract that tracks relationships between IPs.
ROYALTY_MODULE
The address of the Royalty Module contract.
ROYALTY_POLICY_LAP
The address of the RoyaltyPolicyLAP contract.
IP_GRAPH_ACL
The address of the IP Graph Access Control List contract.
Functions
constructor
Constructor for the RoyaltyPolicyLRP contract.
Parameters:
royaltyModule
: The RoyaltyModule addressroyaltyPolicyLAP
: The RoyaltyPolicyLAP addressipGraphAcl
: The IPGraphACL address
initialize
Initializer for this implementation contract.
Parameters:
accessManager
: The address of the protocol admin roles contract.
onLicenseMinting
Executes royalty related logic on minting a license.
Parameters:
ipId
: The ipId whose license is being minted (licensor)licensePercent
: The license percentage of the license being minted
onLinkToParents
Executes royalty related logic on linking to parents.
Parameters:
ipId
: The children ipId that is being linked to parentsparentIpIds
: The parent ipIds that the children ipId is being linked tolicenseRoyaltyPolicies
: The royalty policies of the licenseslicensesPercent
: The license percentage of the licenses being minted
Returns:
newRoyaltyStackLRP
: The royalty stack of the child ipId for LRP royalty policy
transferToVault
Transfers to vault an amount of revenue tokens claimable via LRP royalty policy.
Parameters:
ipId
: The ipId of the IP assetancestorIpId
: The ancestor ipId of the IP assettoken
: The token address to transfer
Returns:
- The amount of revenue tokens transferred
getPolicyRtsRequiredToLink
Returns the amount of royalty tokens required to link a child to a given IP asset.
Parameters:
ipId
: The ipId of the IP assetlicensePercent
: The percentage of the license
Returns:
- The amount of royalty tokens required to link a child to a given IP asset (always 0 for LRP)
getPolicyRoyaltyStack
Returns the LRP royalty stack for a given IP asset.
Parameters:
ipId
: The ipId to get the royalty stack for
Returns:
- Sum of the royalty percentages to be paid to all ancestors for LRP royalty policy
getPolicyRoyalty
Returns the royalty percentage between an IP asset and its ancestors via LRP.
Parameters:
ipId
: The ipId to get the royalty forancestorIpId
: The ancestor ipId to get the royalty for
Returns:
- The royalty percentage between an IP asset and its ancestors via LRP
getTransferredTokens
Returns the total lifetime revenue tokens transferred to a vault from a descendant IP via LRP.
Parameters:
ipId
: The ipId of the IP assetancestorIpId
: The ancestor ipId of the IP assettoken
: The token address to transfer
Returns:
- The total lifetime revenue tokens transferred to a vault from a descendant IP via LRP
isSupportGroup
Returns whether the royalty policy supports working with groups.
Returns:
- True (LRP royalty policy supports working with groups)
Internal Functions
_getRoyaltyStackLRP
Returns the royalty stack for a given IP asset for LRP royalty policy.
Parameters:
ipId
: The ipId to get the royalty stack for
Returns:
- The royalty stack for a given IP asset for LRP royalty policy
_setRoyaltyLRP
Sets the LRP royalty for a given link between an IP asset and its ancestor.
Parameters:
ipId
: The ipId to set the royalty forparentIpId
: The parent ipId to set the royalty forroyalty
: The LRP license royalty percentage
_getRoyaltyLRP
Returns the royalty percentage between an IP asset and its ancestor via royalty policy LRP.
Parameters:
ipId
: The ipId to get the royalty forancestorIpId
: The ancestor ipId to get the royalty for
Returns:
- The royalty percentage between an IP asset and its ancestor via royalty policy LRP
_getRoyaltyPolicyLRPStorage
Returns the storage struct of RoyaltyPolicyLRP.
Returns:
- The storage structure for the RoyaltyPolicyLRP
_authorizeUpgrade
Hook to authorize the upgrade according to UUPSUpgradeable.
Parameters:
newImplementation
: The address of the new implementation
Events
RevenueTransferredToVault
Emitted when revenue tokens are transferred to a vault.
Parameters:
ipId
: The ipId of the IP assetancestorIpId
: The ancestor ipId of the IP assettoken
: The token address transferredamount
: The amount of tokens transferred
Security Considerations
The RoyaltyPolicyLRP contract implements several security measures:
-
Access Control: Functions like
onLicenseMinting
andonLinkToParents
can only be called by the Royalty Module through theonlyRoyaltyModule
modifier. -
Reentrancy Protection: The
nonReentrant
modifier is used on functions that handle token transfers to prevent reentrancy attacks. -
Pausability: The contract can be paused in emergency situations using the
whenNotPaused
modifier. -
Safe Token Transfers: The contract uses OpenZeppelin’s SafeERC20 library to ensure safe token transfers.
-
Upgradability: The contract is upgradable using the UUPS pattern, with upgrade authorization restricted to the protocol admin.
-
Input Validation: The contract validates inputs and checks for edge cases, such as preventing transfers between the same IP.
Royalty Dilution Considerations
The LRP (Liquid Relative Percentage) royalty policy allows each remixed IP to receive a percentage of the revenue generated by its direct derivatives. However, it’s important to understand the potential dilution of royalties as more derivatives are created between two IPs.
This dilution can reduce the earnings of the original IP creator as more layers of derivatives are added. For example:
- Creator 1 - Registers IP1, mints an LRP license of 10%, and sells the license to Creator 2.
- Creator 2 - Registers IP2 as a derivative of IP1 and mints an LRP license of 20% for himself/herself.
- Creator 2 - Registers IP3 as a derivative of IP2 and promotes IP3 commercially in the market.
The earnings for Creator 1 are diluted because they will only receive 10% of the 20% royalties from IP3, resulting in an effective royalty of 2%. If Creator 2 had chosen to promote IP2 instead, Creator 1 would have earned 10% directly, avoiding this dilution.
In contrast, the LAP (Liquid Absolute Percentage) royalty policy enforces a fixed percentage on every descendant IP, protecting the original creator from dilution.