[Market Proposal 1] Turning on fees for the marketplace

  1. Summary

There will be a need to turn on fees for the marketplace to fuel further development and to help make Zesty Market sustainable. This proposal outlines the details regarding the introduction of fees and rationale.

  1. Motivation

The current market contract takes 0 fees, while this helps to incentivize adoption in the first few months of the marketplace. It would not be sustainable in the long run. While the contract is immutable, there are surrounding tooling and business development work required to make the market contract useful.

Tooling like bots, beacons, and building out better user interfaces require money and manpower. While the frontend can be run without using the app.zesty.market, the hosted service makes it convenient for people to access. Additional income to run these peripheral services would be helpful.

In addition, there’s significant business development effort expended at the moment to incentivize usage of the marketplace. This involves reaching out to potential advertisers and giving out initial credits to get started with using the marketplace risk free.

Taking in funds will help improve the service that the market can provide and increase marketplace volume which becomes a net win for participants.

  1. Specification

The proposed fee rate will be a range between 0%-20% of the revenue generated from sales. The contract has a limit for fees no more than 20% will be taken. The majority of revenue generated will always go to creators. This fee is sent to the Zesty Treasury on Polygon which is a Gnosis Safe multisig managed by the core team at Zesty.

More information about the cut parameters can be found in the contract

    function setZestyCut(uint256 zestyCut) external onlyOwner {
         require(
            zestyCut <= 2000, 
            "ZestyMarket_ERC20_V1::setZestyCut: Zesty Cut cannot exceed 20%"
        );
        _zestyCut = zestyCut;
    }

  1. Benefits

Introducing fees will improve the function of the Zesty Market making it sustainable for contributors to maintain the project in the long run and introduce more features that could help improve liquidity and usage of the market. This can lead to more increased and increased revenues over time.

This fee will still be considerably lower than other advertising marketplaces (for example, youtube/google takes a 45% cut)

  1. Drawbacks

The fee parameter is a tax on creators who are currently using the platform

  1. Vote

Vote for the fees on the marketplace. Note that only whitelisted addresses will be able to vote. The whitelist strategy on the snapshot page is found here

*Link to Snapshot For Voting
https://snapshot.org/#/zestymarket.eth/proposal/0x774bb7f315aafe1617ccfe86d4b46abc0d71062605be40a7eb9643ea0cc1c41b

Note to add, that the Zesty treasury is only for the time being managed by the core team. With time as we enter a more community-owned model, with the introduction of Governance token, holders would also receive a portion of the protocol’s fees that are collected every time a bid on an ad slot is won.

Thanks @jseam for drafting up this proposal. Very much looking forward to when we’ll be able to vote on turning on fees for the Zesty banner space marketplace!