Smart contracts are only able to enforce rules within their borders, but not of actions outside of them. Thus, there’s nothing preventing an anonymous user who's hidden behind a crypto public key from continuing to pass along the NFT without the physical collectible. Simply put, it’s impossible for Collect9 to enforce any user holding a physical collectible be honest. This means the NFT should only be trusted to be redeemable while the physical collectible is held by a trusted custodian.

Through the end of 2024 there will be no fees to NFT holders. Beyond that and in the worst case, it should cost no more than ~1.5% of the insured value, per year, to keep the collectible securely stored and insured. In the meantime, Collect9 is striving to build an income model that covers these fees indefinitely for NFT holders.

NFT royalties are a small percentage of the exchange price (i.e. ~3.5%) collected on popular marketplaces like OpenSea and Rarible. These royalties are used to continuously fund secure storage and insurance, and other maintenance costs.

One time up-front upon transfer to a new NFT owner. Royalties are collected automatically by popular NFT marketplaces like OpenSea and Rarible, and are typically paid by the buyer. They are not expected to be paid when transferring between your own crypto wallet addresses, or even if exchanging like or similarly valued Collect9 NFTs amongst eachother.

The NFT will be flagged as INVALID. While the NFT is flagged as such (visible on the NFT’s SVG image), the NFT cannot be redeemed. A royalty grace period (i.e., ~90 days) will begin for that NFT. If royalties remain unpaid after the grace period, the NFT will be forever locked and marked as DEAD, storage and insurance for the redeemable physical collectible will be dropped and the collectible will be sold on the physicals market at wholesale price. The owner of the NFT will still be able to retrieve Collect9’s wholesale proceeds, minus wholesale process fees.

Insured values are determined by a combination of the Collect9 acquisition price, recent and comparable physical marketplace sales, and popular unofficial price guides. Eventually, we envision that a liquid and observable NFT market will be able to provide real-time price data for this purpose.

Until it is proven whether royalties and other income streams can sustain the long-term maintenance expenses of Collect9, the NFTs will carry a price premium. As time passes and if the business model is successful, then the NFT price premiums should decrease.

Price manipulation is always possible in an regulated market. However, the existing physicals markets should provide a hard counter to price manipulation of Collect9 NFTs. This is because downside manipulation will be entirely countered by the ability to redeem and resell physically. While upside manipulation will be countered by the ability to obtain and tokenize ownership and possession rights of more comparable physical collectibles.

To lock in ownership ahead of time: the NFTs are minted, the registration and redemption smart contracts are finished, and Collect9 just needs to build the front-end top guide the user through the redemption process. Additionally, Collect9 is a registered entity within the state of California and thus are obligated to see redemption through. We expect our redemption process to be completed in the latter half of 2023.

Traditional web 1.0/2.0 stores have KYC built into them via PayPal, Visa, etc., while exchange funds on web 3.0 operates anonymously. And since the user must supply personal information (shipping address) at the time of redemption, Collect9 will do a one-time per-address basic KYC check to ensure it is not violating any rules and regulations set by the jurisdiction it resides in (California, USA). Once a user and associated crypto address has passed the KYC check, it will not need to be done again for future redemptions.

Please register your crypto address as a safeguard against this!!

It is not possible for Collect9 to store and insure a collectible linked to a permanently lost NFT. It is also not possible for Collect9 to verify the owner of a NFT without prior registration. In such as scenario, this presents complete and permanent loss for the NFT owner. That is why it is imperative anyone interest in Collect9 NFTs register. While Collect9 will still make wholesale proceeds (minus process fees) available to the NFT owner via smart contract, that will still require the NFT owner be able to recover access to their wallet.

Such a scenario will be treated the same as any other conventional marketplace mishap – the shipping carrier will be held liable. Packages will be insured and recorded for evidence of condition prior to shipping to the NFT redeemer.

This is currently not available but may be beyond Phase II development (redemption) - stay tuned by following us on social media!

Because what else could seem like even more a natural progression of NFTs of cartoon animals, than of the physical toy animals that were the true original “NFT craze of the 90s”? Artwork was a low barrier to demonstrate that NFTs certify ownership extremely well. But there’s a lot more we could with NFTs. And like the progression of any technology – pun intended, baby steps!