Creators and IP holders need tools which allow them to reflect their business models on chain. Sui Kiosk (a primitive on Sui) addresses that need and offers dynamic options for creators to set terms that will be respected in any trading scenario.
Let's look into why we use it for your SuiFrens collectibles, and how creators and marketplace operators can use it to trade digital assets on Sui.
What is Sui Kiosk?
You’re probably familiar with some sort of kiosk, whether a newsstand in Paris that sells a wide range of newspapers and magazines or a small stall in a tourist shopping area that sells t-shirts and other local souvenirs. The common trait with these kiosks is that they sell something and display their wares openly for passersby to browse and engage with. A Sui Kiosk is the digital version of these types of kiosks, but in this case, it’s digital assets and collectibles (i.e. NFTs) offered instead.
Sui Kiosk solves the problem of serving a business model in a decentralized environment – by creating and placing assets inside a Sui Kiosk, a creator can define transfer policies and rules that will control how the asset is shared, sold, and managed by future owners and/or marketplaces.
Creators are in control of the policies and rules – not marketplaces – which mitigates issues that have been observed on other chains and marketplaces (for example, a well-known marketplace recently removed strong royalty enforcement for NFTs). Additionally, as Kiosks use the shared object model on Sui, they exist as a source of truth where everyone can see assets listed for sale and, if they want to, implement their own front-end experiences to display and interact with them.
At its base, Sui Kiosk is purposely generalized, offering simple functions in order to set a common framework which helps with adoption and interoperability. The base is constructed in the following way:
Kiosk + KioskOwnerCap – these are the basic components of the Kiosk. The owner of a Kiosk can place an asset inside it, they can list it (without conditions) and then anyone can purchase the listed asset.
TransferPolicy + TransferPolicyCap – these define the conditions in which an asset can be traded or sold. They can define whether an asset can be sold or not, what price it can be purchased for, and under which circumstances it can be purchased (e.g. peer-to-peer only or via defined marketplaces).
Rules – these are the specific terms within a TransferPolicy that define how an object can be traded. For example, rules can define the existence of fees or taxes – and as in the case of SuiFrens, they define Royalties due to the creator.
As with kiosks in the real world, creators will need varying policies and business models. Therefore, Sui Kiosk allows for extensions, enabling more complex scenarios to be modeled, such as auctions and lotteries.
Read the Sui documentation to learn more about the specific functions to use when building with Sui Kiosk. Start building using the Kiosk code from Mysten Labs on Github.
Using Kiosk for SuiFrens Bullsharks & Capys
As part of the Active Contributors & Early Supporters (ACES) initiative, Mysten Labs awarded 380k SuiFrens Bullsharks to recognized addresses in June. These Bullsharks were all delivered inside a Kiosk which controls how SuiFrens are sold (currently via marketplaces with Kiosk support only), mandates a royalty and prevents the transfer of the collectibles unless the two prior conditions are met.
Our goal for placing the SuiFrens collectibles in a Kiosk was to demonstrate strong royalty enforcement, something many creators and builders need, but is rarely available as a common feature on many blockchains.
The SuiFrens Bullshark Kiosks have two key rules implemented within the TransferPolicy:
- A Royalty Rule specifying an amount to be paid to the creator (in this case it's 0.1% or 0.1 SUI, whichever is higher) when resold AND
- A Lock Rule which prevents the asset from being listed or traded outside the Kiosk, thereby bypassing the Royalty Rule
The combination of the above rules represent a simple version of strong royalty enforcement.
In order to work with the Sui Kiosk primitive, creators need to work with common packages which are supported by the various applications and marketplaces on Sui. Fragmentation can be a real risk with these types of capabilities and so it is recommended that builders work with known and established code.
Additionally, others can build their own package that uses Sui Kiosk.
We developed and open-sourced the Kiosk to allow creators, builders, and marketplaces to easily use it. And Kiosk is already supported by most marketplaces on Sui.
Orange Comet, a company creating next-generation games and entertainment, share why they use Kiosk:
If you currently own a SuiFrens Bullshark or Capy, the following may apply to you:
- In your wallet, your SuiFren will be shown with a padlock – this indicates that it is locked inside the Kiosk and you will not be able to send the SuiFren to another address
- If you’d like to sell your SuiFren, you must use one of the marketplaces that support Kiosk, currently these are Hyperspace, Blue Move, Keepsake, and TradePort
- When you purchase a SuiFren via one of these marketplaces, they will continue to be locked inside a Kiosk, so any future trades will also need to occur via a marketplace.
- Once purchased via these marketplaces, the first generation of Capys (released in May) will also be placed inside a Kiosk.
A simplified guide on how to use Kiosk
To enable trades for an asset, creators can create a TransferPolicy for this asset using the Publisher object. You can specify different requirements for each asset type, but all assets of type <T> use the same transfer policy and associated conditions.
For SuiFrens Bullsharks, Kiosk defined two rules in the TransferPolicy for the [Type].
The first is the Royalty Rule which specifies the royalty amount due when the asset is sold on the secondary market. This ensures Mysten Labs, as the creator of SuiFrens Bullsharks, receives a specified percentage (0.01%) of the sale price, or 0.1 SUI, whichever is greater. Creators can also choose to specify a fixed fee. The Royalty Rule continues to apply to future sales of the asset, and Mysten Labs will continue to receive the specified royalty for each sale.
To ensure sellers and buyers are unable to bypass the Royalty Rule, a second rule, the Lock Rule ensures strong royalty enforcement. It specifies that the asset cannot be transferred from one Kiosk to another for free. For a successful transfer to occur, the asset must be listed for purchase and bought. Currently, this means Bullsharks are primarily available via a Kiosk-supporting marketplace.
For a sale to successfully complete, both of the above criteria set in the TransferPolicy rules must be met.
We’re also currently working on two additional rules for Kiosk:
- Soulbound Kiosk – this will make an asset exclusive to a single owner. If the object is for sale, a buyer would only be able to take ownership directly from a creator (or their authorized seller) if they have made their Kiosk soulbound. This would be useful for loyalty programs where unique ownership is needed.
- Floor Price – this will allow creators to set a minimum list price for their asset. An owner would then be restricted from listing the asset for less than the amount originally specified by the creator.
These rules combined will act as very critical tools for creators selling IP on Sui, with clear conditions protecting the creator, seller, and buyer.
You can find the Kiosk code from Mysten Labs on GitHub and join the Mysten Discord community if you have any questions about how to work with it.
The future for Kiosks is more empowered creators
The SuiFrens example represents a simple use-case of royalties, but there are many more varied and sometimes complex business models that need to be defined and enforced on Sui. We’re continuing to work with creators to assess opportunities for providing custom trading scenarios (e.g. using extensions to support auctions or lotteries) and business model variants (such as licensing).
Hyperspace, an NFT marketplace on Sui, supports Sui Kiosk in order to provide greater flexibility and control for creators:
The foundation for all of these will be the Sui Kiosk primitive which fundamentally allows for trading and commerce to exist in a fully decentralized environment, without compromising on fairness, creator control and transparency.