---
arc: 49
title: NFT Rewards
description: NFT Rewards, Terms and Conditions
author: Stéphane BARROSO (@SudoWeezy)
discussions-to: https://github.com/algorandfoundation/ARCs/issues/228
status: Deprecated
type: Informational
created: 2023-07-19
---

## Abstract
The NFT Rewards is a temporary incentive program that distributes ALGO to be deployed in targeted activities to attract new NFT users from within and outside the ecosystem.

## Specification
The key words "**MUST**", "**MUST NOT**", "**REQUIRED**", "**SHALL**", "**SHALL NOT**", "**SHOULD**", "**SHOULD NOT**", "**RECOMMENDED**", "**MAY**", and "**OPTIONAL**" in this document are to be interpreted as described in <a href="https://www.ietf.org/rfc/rfc2119.txt">RFC-2119</a>.

### Pilot program qualification for NFT marketplaces

To be eligible to apply to this program, projects must abide by the <a href="https://www.algorand.foundation/disclaimers">Disclaimers</a> (in particular the “Excluded Jurisdictions” section) and be willing to enter into a binding contract in the form of the template provided by the Algorand Foundation.

NFT marketplaces applying for this program:
- Must be an NFT marketplace on Algorand that coordinates the selling of NFTs. An NFT marketplace is defined as an online platform that facilitates third-party non-fungible token listings and transactions in ALGO on the Algorand blockchain.
- Must have transaction volume (over the previous 6 months leading up to the application for the program) that is equivalent to at least 10% of total rewards being distributed. For example, if the total rewards amount is 500K ALGO, then the minimum volume must be 50K ALGO.P

#### Important Note

*NFT Rewards Program for US entities:*

>For 2024 | Q2 we will be allowing US-based entities that fit the Program Criteria to apply for the NFT Rewards program.
Their allocated ALGO will be converted to USDCa post prior to the payment transfer. This change will be reviewed on a periodic basis.

### Allocation of rewards
- Rewards will be allocated proportionally based on volume for each qualified NFT marketplace.
- For qualifying marketplaces with more than 50% of total NFT marketplace volume, rewards will be capped at 35%.

### Requirements for initiatives
1. The rewards (ALGO) must ultimately go to NFT collectors/end users and creators.
2. NFT marketplaces must share their campaign plans publicly in advance in order to qualify for the rewards.
3. The rewards (ALGO) should be held in a separate wallet from operating funds to track on-chain transactions of how funds are being spent.
4. The NFT marketplace must make public data that shows its trading volume in the last quarter.
5. Proposals that incentivize wash trading* will not be approved to participate in the Program.
6. NFT marketplaces must reward creators whose NFTs are purchased with a 5% minimum royalty.

>* By definition, the term “wash trading” means a form of market manipulation where the same user simultaneously buys and sells the same asset with the intention of giving false or misleading signals about its demand or price


### Process for launching initiative

- To apply, a qualifying NFT marketplace must provide detailed information on the specifics of initiatives they are planning in that period, as well as any documentation proving the location of its headquarters.
- If approved by the Algorand Foundation team, rewards will be distributed proportionally based on the allocation defined above.
- The qualifying NFT marketplaces must provide a detailed 1-page report following the initiative to Algorand Foundation and on the Forum:
1. Summary of the initiatives implemented;
1. Amount of rewards paid out (including any unspent rewards, which must be returned), and wallet addresses;
1. Total volume of transactions directly as a result of the campaign;
1. New wallets interacting with the marketplace;
1. Total volume of transactions compared to the previous quarter;
1. Any other relevant information.

### Evaluation
From GP10 (Q1/2024) proposals will be added to the governance portal and approved or rejected directly by the community. A proposal passes when it reaches a majority of "Yes" votes. The proposals and results are available at <a href="https://governance.algorand.foundation">governance.algorand.foundation</a>.

NFT marketplaces that do not fulfill their campaign plan cannot apply for further incentives.

NFT team will review overall results and discuss whether this program is having the desired impact and, together with the community, will help evaluate whether it should be extended and expanded to the next period.

### Important to note
- Marketplaces that fit the above criteria will be required to sign a legal contract with the Algorand Foundation.
- Rewards are only paid out in ALGO or USDCa for US-based entities..
- Legal entities based in other jurisdictions where receiving ALGO is not allowed are not able to partake in this program.
- Participants and the Algorand Foundation will all agree on the source of data and metrics to be used for calculating the allocation and measuring the results.

## Rationale
This document was versioned using google doc, it made more sense to move it on github.

## Security Considerations
Disclaimer: This document may be revised until the day before the voting session opens, as we are still collecting community feedback.

## Copyright
Copyright and related rights waived via <a href="https://creativecommons.org/publicdomain/zero/1.0/">CCO</a>.
