PCO Settings
A PCOArt Stewardship License at its core is defined by two variables:
- Stewardship Cycle Duration
- Honorarium Rate
The values that you set can change the relationship between your art, Stewards, and Creator Circle.
A Stewardship Cycle is the period in which a Steward is granted the right to possess, exhibit, and/or benefit from other rights relating to the artwork and its context(s). From a technical perspective, the Stewardship Cycle Duration determines the length of time between Stewardship Inaugurations for your art.
You can set any duration consistent with the nature of the art, your goals, and practical considerations (e.g. installation/transport requirements). The longer the Stewardship Cycle, the more similar the market dynamics will be to traditional private ownership (Private ownership is effectively an indefinite Stewardship Cycle!).
The Honorarium Rate is the required percentage of a winning Stewardship Inauguration bid that the Steward makes to the Creator Circle at the beginning of each Stewardship Cycle.
Winning Bid * Honorarium Rate = Periodic Honorarium$
Lower Honorarium Rates will tend to lead to higher nominal bids: the capital commitment required of the Steward each cycle is lower given a valuation. A 0% Honorarium Rate effectively would mimic the dynamics of private ownership (with a periodic auction in which the Steward could set an arbitrarily high reserve price). The theoretically optimal rate to maximize the total Periodic Honorarium collected is equal to the probability that a new Steward emerges who values the work more than the current Steward (e.g. 1 new Steward in every 10 periods implies a 10% optimal rate). Revenue maximization isn't always the priority (and the theoretical turnover probability is likely difficult to determine), so don't get hung up on getting it "perfect." Set a rate that feels right for your art, community, and the dynamic you're attempting to create.
The current implementation supports static rates (with optional permissions to update them), but in the future, rates could be set dynamically or via an oracle that factors in market data like turnover rates.
Note: The Honorarium Rate is applied on a per-cycle basis and not as an annualized rate.
A 3% Honorarium Rate paired with a 6-month Stewardship Cycle would produce the equivalent Honorarium to 6% with a 1-year cycle, all else equal.
These cycle durations may produce different Stewardship dynamics, however!