# Curator Residuals

## What Are Curator Residuals?

Curator Residuals are a small, ongoing reward paid to the original submitter (curator) of a coin each time that coin resells on the Numex marketplace while it remains in vault custody. This creates a lasting connection between the curator and the coin's future trading life.

## Why Numex Created Curator Residuals

* Selling a prized coin should not feel like the end of a relationship.
* Collectors who submit coins to Numex deserve ongoing recognition for contributing provenance and quality inventory.
* Inspired by Courtyard's proven curation reward model in the physical-asset tokenization space.
* Encourages serious collectors to submit coins to the Numex vault rather than selling through traditional channels.

## How a Submitted Coin Becomes Eligible

1. Collector submits a PCGS or NGC graded coin through the Numex intake process.
2. Numex verifies certification data and accepts the coin into vault custody.
3. The coin is vaulted, tokenized as an NFT on Base (Ethereum L2), and linked to the collector's portfolio.
4. The submitting collector is recorded as the original curator.
5. When the curator sells the coin on the Numex marketplace, this is recorded as the primary sale.
6. Any subsequent resale of that coin on the Numex marketplace (while still vaulted) triggers a curator residual.

```mermaid
flowchart TD
  A["Collector submits graded coin"] --> B["Numex verifies and vaults coin"]
  B --> C["Coin tokenized as NFT on Base"]
  C --> D["Collector recorded as original curator"]
  D --> E["Curator sells coin (primary sale)"]
  E --> F["Subsequent resales trigger 1% residual"]
  F --> G["Residual credited to curator ledger"]
```

## How the 1% Residual Is Calculated

* The residual rate is 1% (100 basis points) of the eligible resale transaction price.
* The residual is calculated on the gross sale price before any platform fees.
* Amounts are rounded down to the nearest cent.

| Resale Price | Residual (1%) | Curator Receives |
| ------------ | ------------- | ---------------- |
| $500         | $5.00         | $5.00            |
| $2,000       | $20.00        | $20.00           |
| $10,000      | $100.00       | $100.00          |

## Who Pays the Residual?

The curator residual is deducted from the **seller's proceeds**, not added to the buyer's price. The buyer pays the listed sale price with no additional charges.

**Example breakdown for a $1,000 resale:**

| Line Item                           | Amount    |
| ----------------------------------- | --------- |
| Buyer pays                          | $1,000.00 |
| Curator residual (1%)               | $10.00    |
| Seller receives (before other fees) | $990.00   |

## When Residuals Accrue

Residuals accrue on each eligible secondary sale (after the first sale) when all of the following conditions are met:

* The coin is still vaulted and tokenized on Numex at the time of sale.
* The sale occurs on the Numex marketplace.
* The seller is not the same person as the original curator (no self-pay).

For Numex-sourced seed inventory, Numex is the implicit original curator and retains residuals on future resales.

## When Residuals Stop

Residuals stop **permanently** when any of the following occur:

* The physical coin is redeemed (withdrawn from the vault).
* The coin is burned or removed from custody.
* The curator residual program is modified or terminated by Numex (with notice).

Once a coin is redeemed, no further residuals are generated -- even if the physical coin is later re-submitted.

## How Payouts Work

* Residuals accrue in a platform ledger and are tracked per-curator.
* Payouts require completing Stripe Connect onboarding (identity verification / KYC).
* A minimum payout threshold of **$25.00** must be reached before disbursement.
* Payouts are processed via Stripe Connect to the curator's linked bank account.
* Payout timing follows Stripe Connect disbursement schedules.
* Curators can view accrued, pending, and paid residuals in their portfolio dashboard.

```mermaid
flowchart LR
  A["Resale occurs"] --> B["1% residual accrued in ledger"]
  B --> C{"Balance >= $25?"}
  C -- No --> D["Remains accrued"]
  C -- Yes --> E["Payout via Stripe Connect"]
  E --> F["Deposited to curator bank account"]
```

## How This Relates to NFTs and Smart Contracts

* Each vaulted coin is represented as an ERC-721 NFT on the Base blockchain.
* The smart contract records the original curator's address at mint time.
* The contract implements EIP-2981 (royalty info standard) for metadata compatibility with external marketplaces.
* **Important:** EIP-2981 is an informational standard only. External marketplaces are not required to honor it.
* The Numex marketplace settlement ledger (backend) is the enforcement source of truth for curator residual payouts.
* This architecture mirrors Courtyard's approach: provenance data lives onchain, economic enforcement lives in the marketplace backend.

## Why the Marketplace Ledger Enforces Payouts (Not NFT Royalties)

* EIP-2981 is a royalty signaling standard, not a universal enforcement mechanism.
* Major NFT marketplaces have historically ignored or circumvented onchain royalty standards.
* By enforcing residuals in the Numex marketplace settlement layer, payouts are 100% reliable for transactions on the platform.
* The smart contract's EIP-2981 implementation serves as public metadata for transparency and external marketplace compatibility.
* This is the same architecture used by Courtyard and other leading physical-asset tokenization platforms.

## FAQ

**Q: Is the curator residual guaranteed?** A: No. Residuals depend on the coin being resold on the Numex marketplace while vaulted. If the coin is never resold, or is redeemed, no residual is generated. Numex reserves the right to modify or terminate the program.

**Q: Can I earn residuals on coins I bought (not submitted)?** A: Only the original submitter/curator earns residuals. Buying a coin on the marketplace does not make you the curator.

**Q: What happens if I redeem my coin?** A: Residual eligibility ends permanently when a coin is redeemed from the vault.

**Q: Is this passive income or an investment return?** A: No. Curator residuals are an incidental reward for contributing provenance to the marketplace. They are not guaranteed, not fixed-rate, and should not be considered investment income or yield.

**Q: What if the seller is also the original curator?** A: No residual is generated for self-curated sales to avoid meaningless self-payment.

**Q: Do residuals apply to pack purchases?** A: No. Residuals apply to secondary marketplace resales only, not primary pack reveals or initial sales.

**Q: What about refunds or chargebacks?** A: If a sale is refunded or charged back, any associated residual ledger entry is voided.

**Q: What is the minimum payout?** A: $25.00. Residuals below this threshold remain accrued until the minimum is reached.

## Legal and Compliance

* Curator residuals are subject to Numex's Terms of Service.
* Residual income may be taxable; curators are responsible for their own tax reporting.
* Numex may issue tax forms (e.g., 1099) as required by applicable law.
* Numex reserves the right to modify residual rates, thresholds, or terminate the program at any time with reasonable notice.
* This feature does not constitute investment advice, a guarantee of income, or a securities offering.

***

*Last updated: June 2026*


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