Background

In light of the move towards 0 royalties among marketplaces in the Solana ecosystem, we decided to focus our attention on adapting our existing conditional ownership technology to create a protocol-level royalty enforcement solution for creators. We call this solution the Cardinal Creator Standard (CCS).

SPL-Tokens do not have natively built-in guarantees for royalty payouts when they’re traded. Trading royalties have a very important role in the development of the Solana NFT ecosystem and the survival of its creators, and the goal of CCS is to provide a new standard of Solana NFT (built atop Metaplex) with a built-in mechanism for automatic royalty payouts on all trades that involve a simultaneous exchange of value.

Cardinal’s flagship audited protocol, the Token Manager”(repo), achieves conditional ownership of SPL tokens via a token wrapper that, among other things, enables permissioned token transfers. In order to enforce royalties, the token manager protocol is used in conjunction with Cardinal’s Transfer Authority program (repo), to create tokens that can only be traded via the approved transfer authority.

Because the concept is novel and everyone has many questions about technical implementation, vulnerability, edge cases, holder UX, creator UX, and much more, we’ve structured the remainder of this document as follows. First, we’ll share concise details about the technical implementation with links to our open source repos for those that want to dive deeper, and we’ll conclude with a set of FAQs that we feel will answer any and all questions/concerns you might have.

Technical Implementation

• Transfer Authority Program
  • Authority that facilitates transfer of token ownership
  • Supports functionality to
    • Create a marketplace with the ability to
      • Enforce a marketplace fee
      • Enforce specific payment mints for listings
    • Create token listing
      • For a given price
      • For a given payment mint (native SOL included)
      • For a given marketplace (note: listing cannot be listed in >1 marketplaces at once)
    • Accept listing
      • For a given listing on a marketplace
• Tokens have to be wrapped with CCS (ie. Token Manager of kind Permissioned)
  • CCS takes freeze and mint authority for tokens, which implies Metaplex Master Edition minted tokens cannot be wrapped in this specific way.
• Once wrapped tokens are perpetually frozen
  • A token can only can be traded with the approval of its transfer authority
    • create_listing/accept_listing ixs for trading
  • A token can be ****transferred wallet-to-wallet with the token manager’s send instruction
    • “Send” ix unfreezes the token, SPL Token transfers it to the target, and freezes it again for the target
    • “Send” ix validates that no instruction is preceding or succeeding it. It basically enforces that there are no other instructions included in the same transaction
      • Reasoning: to prevent malicious contracts from bypassing royalties utilizing wallet-to-wallet transfers
      • Composability: There can be a transfer authority for staking, for rentals etc. that will allow to compose multiple instructions together

For a technical deep-dive on the code

• Transfer Authority
• Token Manager

FAQs

CCS Holder Guide

What is the Cardinal Creator Standard?

The Cardinal Creator Standard encompasses a set of smart contract tooling designed to enforce royalties for NFT trading at the protocol level. NFTs wrapped with the CCS can only be traded in accordance with its rules, which dictate that royalties must be paid on all transfers of tokens that involve a coincident, adjacent exchange of value.

Where can I trade these tokens?

Hyperspace (https://hyperspace.xyz/) is currently the only secondary marketplace supporting trading of CCS tokens, but we are currently working with others to integrate them.