💸Royalty Split Logic
Every trade within a SquareStrategy-linked collection triggers a precisely defined on-chain redistribution of royalties. The ERC-1001 Controller contract intercepts the royalty fee and splits it programmatically into two flows:
8 % → Accumulation Pool — liquidity reserve used for floor buys and relists.
2 % → Burn Flow — deflationary reserve dedicated to buy-and-burn events.
This 8 / 2 split is immutable in the base standard but can be parameterized by governance in future extensions.
⚙️ 1 Process Overview
Figure 3.2 — Royalty Split Logic The Controller automatically redistributes royalties from every trade into two distinct paths, ensuring that all fees remain productive within the ecosystem.
🧮 2 Mathematical Representation
Let R = royalty rate (10 %), T = trade value.
Then:
Fee=T×R\text{Fee} = T \times RFee=T×R Pool_Allocation=Fee×0.8\text{Pool\_Allocation} = Fee \times 0.8Pool_Allocation=Fee×0.8 Burn_Allocation=Fee×0.2\text{Burn\_Allocation} = Fee \times 0.2Burn_Allocation=Fee×0.2
No manual wallet routing, no off-chain computation — all operations occur atomically in a single transaction through the Controller.
🔁 3 Why the 8 / 2 Ratio
Accumulation Pool
8 %
Maintains constant market liquidity and supports floor price buys.
Burn Flow
2 %
Ensures ongoing deflation and visible scarcity.
This ratio balances growth (liquidity) and scarcity (deflation): too much burn reduces market fuel; too little burn erodes value over time.
🧠 4 Contract Mechanics
Marketplace Transfer → Royalty fee detected via ERC-2981 or custom hook.
ERC-1001 Controller → Validates sender + amount; splits funds.
Pool Module → Receives 8 %, records balance, triggers buy when threshold met.
Burn Module → Receives 2 %, queues funds for buy-and-burn transaction.
Event Emission →
RoyaltySplit()logs both allocations with timestamps.
All funds are stored in non-custodial smart contracts — no manual handling, no developer wallets, no centralized control.
🪙 5 Transparency & Verification
Every split generates on-chain logs viewable in block explorers:
event RoyaltySplit(
address indexed collection,
uint256 poolAmount,
uint256 burnAmount,
uint256 timestamp
);Investors and auditors can track the entire fee path from trade → pool → burn with full traceability.
🧩 6 Key Benefits
Automatic Allocation: No human intervention or multi-sig required.
Predictable Economics: Constant 10 % split maintains loop stability.
Auditable Flows: Each allocation is emitted as a public event.
Immutable Logic: Protects holders from treasury mismanagement.
The Royalty Split Logic converts passive royalties into active market fuel. By embedding the split directly into ERC-1001’s core, SquareStrategy ensures that every trade strengthens the loop — automatically, permanently, and transparently.
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