Recoup Nft Valuation

Recoup — NFT Valuation

Value an artist whose income came substantially from selling NFTs. A streaming-only valuation reads their catalog as small because it measures the wrong revenue: for an OG onchain artist, primary sales can dwarf a decade of streaming royalties.

This skill produces two numbers side by side — a streaming catalog estimate and a measured onchain earnings figure — and deliberately refuses to merge them into one. Merging them is the central mistake this skill exists to prevent.

Origin: written after an artist told us our valuation of her catalog was wrong because it counted only Spotify and ignored the NFT sales that were the bulk of her career income. She was right. Worked example: references/worked-example.md.

The hard gate — addresses come from the artist, never from a guess

Do not derive a single published number from an address the artist has not confirmed. ENS names, handles that match, and addresses in press articles are candidates. A wallet that looks like theirs is exactly the fabricated-number failure a real-numbers brand cannot survive.

Ask the artist for:

1. Every wallet they minted or received sale proceeds on (there are usually several — a 2021 hot wallet, a later one, a hardware wallet).
2. Any 0xSplits or multisig contract they routed drops through. Proceeds land there, not in their wallet, and an address-only scan misses all of it.
3. Which platforms they sold on — Zora, Foundation, Catalog, Sound, Manifold, Async — each is a different contract set to index.
4. Which chains — Ethereum mainnet, Base, Zora Network, Optimism.

Confirm by checking that a claimed address actually appears as creator/recipient on a work they publicly claim. If the artist is unreachable, stop and report the blocker. An unverified measurement is worth less than no measurement.

Step 1 — Enumerate the revenue surfaces

NFT income is not one number. Four surfaces, each measured differently and each carrying a different valuation weight. Contract addresses, event shapes and the era map are in references/zora-contracts.md.

Surface 4 is not revenue and must never be added to a dollar total. It is often the most predictive output of the whole exercise — see Step 4.

Step 2 — Index it

Prefer a public Dune query over a private script. Roughly equal work, and the number becomes independently re-runnable by the artist, a skeptic, or a buyer. For a brand that claims real numbers, a number anyone can re-run outranks a number we assert.

Index inbound value to the confirmed addresses and split contracts, filtered by counterparty contract, across every platform and chain the artist named.

Three traps that will silently corrupt the total:

• Native ETH is invisible to a log-only scan. ⚠️ The one that has actually bitten us — it understated a real artist by 2.8×. ERC-20 transfers emit a Transfer event; plain ETH transfers emit no log at all. An indexer built on eth_getLogs sees every DAI and WETH leg of a sale and silently drops every native-ETH leg. It does not error, it does not warn — it just returns a smaller number.

  This is not an edge case on Zora V1. A sale is split into a creator share and an owner share, and on a first sale of their own work the artist is both, so they receive both legs. Auction settlements route the owner share through the Auction House, which unwraps WETH to native ETH before forwarding it — so the larger leg, typically 70–80% of the sale, is exactly the one a log scan cannot see. Mechanism and worked arithmetic: references/zora-contracts.md → The two-leg payment.

• ERC-20 settlement. Early NFT sales often settled in DAI, WETH or USDC, not ETH. An ETH-only indexer returns a confidently wrong number and misses the artist's earliest (often largest) sales. Note this is the mirror of the trap above: token-only and ETH-only scans each miss half of a V1 auction. You need both.

• Rewards double-counting. Protocol rewards are deposited to an escrow contract and later withdrawn. Deposits are the earnings; withdrawals are cash movement. Counting both doubles the figure.

The reconciliation gate — a sale total is not final until it closes twice

Never publish a per-sale figure assembled from token-transfer logs alone. Close every sale by a second, independent method that cannot share the first one's blind spot:

1. Balance delta. eth_getBalance on the artist's address at block-1 and block. Add back gas (gasUsed × effectiveGasPrice) when the artist sent the transaction themselves. This catches native legs by construction.
2. The settlement event. Read the marketplace's own end-of-sale event — for a reserve auction, AuctionEnded carries the final amount plus tokenOwner, curator and curatorFee, which also tells you whether the proceeds were actually all theirs.
3. Sum of legs vs. bid in. The value entering the marketplace contract must equal the legs leaving it. If your legs do not sum to the winning bid, you are missing a leg — that residual is the fastest tell that something settled natively.

A row that fails to reconcile is a blocker, not a footnote. Chase it before it enters a total.

Verify the split, do not assume it. Creator share is set per token at mint and varies in practice (20%, 25% and 30% all appear in a single artist's catalog). Read it per sale.

Also reconcile against any public claim the artist has made about their own sales. A measured number that lands near their stated figure is a strong story; one that lands far from it is a finding to investigate before publishing, not to quietly ship.

Step 3 — Price every settlement at its own block timestamp

A 2021 sale converted at today's token price is a fabricated number, in whichever direction it flatters. For each settlement: block timestamp → token/USD at that timestamp → USD-at-settlement.

Report native amounts (ETH/DAI/USDC) and USD-at-settlement. If a "what it would be worth today" figure is wanted, it is a separate, explicitly labelled conversion — never the headline.

Step 4 — Fold it into the valuation without inflating it

The streaming model prices recurring royalties: per-stream rate → net → multiple. NFT income does not have that shape. Applying the streaming multiple to it invents a valuation.

• Primary sales are realized, non-recurring, cycle-dependent cash. Applying a 10–16× multiple to them would invent a valuation. They belong on a separate line: realized onchain earnings, historical.
• Secondary royalties are annuity-like and can carry a multiple — but a much lower one, given decay and the collapse of royalty enforcement across marketplaces.
• The real signal is the collector base. An artist with a demonstrated set of people who paid four figures for their work has a different risk profile than one with the same stream count and no buyers. That is arguably more predictive of future earnings than play count.

Full treatment, including how to band the secondary-royalty multiple and how to express collector base as a risk adjustment rather than a dollar figure: references/valuation-treatment.md.

Step 5 — Report

Output shape:

STREAMING CATALOG (estimated)     $X – $Y, central $Z    ← measured streams, estimated $
REALIZED ONCHAIN EARNINGS         $N USD-at-settlement   ← measured, historical, non-recurring
  primary sales                   $A across M works
  protocol rewards                $B
  secondary royalties             $C  (annuity-like — the only line carrying a multiple)
COLLECTOR BASE                    K distinct collectors, top holder P works   ← risk signal

Always disclose, in the artifact itself:

• which figures are measured vs estimated;
• the as-of date and the contracts indexed, so it is auditable;
• what is excluded — offchain payouts, chains not indexed, platforms not covered, gas and marketplace fees, and whether figures are gross or net.

Guardrails

• Unconfirmed address = no publication. No exceptions, including for a candidate that looks obviously right.
• A total built only from token-transfer logs is unverified. Native ETH emits no log. Reconcile every sale by balance delta or settlement event before it enters a figure.
• Legs must sum to the bid. An unexplained residual between what entered the marketplace and what you attributed is a missing leg, not a rounding error.
• An artist disputing a number is evidence, not an objection. They know what landed in their wallet. When their recollection and our measurement disagree, re-audit from chain before defending the figure — in the case this skill was corrected from, the artist was right and we were reading 30% of the sale.
• Never merge onchain earnings into the streaming valuation as one number.
• Never apply a streaming multiple to primary sales.
• Price at settlement, never at today's token price.
• The artist's own estimate is not a measurement — cite it as their claim, and label our number as the measured one.
• Their story is theirs. When the work is about a specific artist, the numbers are ours to verify and theirs to narrate. Coordinate before publishing.

References

• references/zora-contracts.md — contract addresses, era map, event shapes, verification status
• references/valuation-treatment.md — the model: what carries a multiple and what does not
• references/worked-example.md — the case this skill was written from