Ethereum is one of the largest and most adopted cryptocurrencies in the world right now but what makes it special is its ability to execute code on the blockchain! This allows for some interesting contracts to be run on the network and because of the nature of the blockchain, digital asset ownership and share purchasing is quickly becoming the new way to trade collectables. In LimeEyes, you can purchase shares in your favourite artworks and the contract will permanently record how many shares you have as well as being able to calculate how much is paid to all the shareholders in dividends upon each purchase.
How can I start?
In order to purchase shares you must first have an Ethereum account with a bit of ETH in it. The best choices for a wallet if you don't already have one is MetaMask for your desktop (you will need to use Chrome too) or any web3 enabled mobile browser such as Trust or Toshi for your phone. You can also purchase some Ethereum from Coinbase or other similar exchanges and once it's transferred to your own wallet address, you're good to go!
From this point, head to the main art gallery and choose an artwork that you wish get shares for and click the purchase button underneath it, your browser will then present you with a transaction confirmation window and calculate the gas limit and gas price automatically for you. Due to the way the blockchain works, the more shareholders there are, the higher the gas limit needs to be in order to split and send the payment correctly between the shareholders, MetaMask will calculate this for you but changing it manually may cause your transaction to revert. The gas price is dependant on how busy the Ethereum network is and you can set this to whatever you wish, check out ethgasstation.info for an accurate gas price and confirmation time estimate!
How does it work?
Once you've purchased shares it's just a waiting game from there! Every time the artwork has another buyer purchase shares, the contract will split the price amongst all shareholders and automatically pay them their relative dividends. This will go into your Ethereum wallet straight away and you can see this in your 'Internal Transactions' tab when viewing the account on etherscan.
You can only buy a set number of shares each time but this number globally increases by 1 upon each successful sale and dividends payout. The cost of buying those shares will increase proportionally to the total volume of shares as to prevent the constant declining of dividends.
Buying in earlier will help pay off your original investment faster (within around 5-15 share purchases) but buying in later will mean your dividend payout will be larger each time new shares are purchased and it will take around 15 more purchases to get your original investment back which means profit from that point onwards!
The price of buying new shares also increases but not in a linear way, instead it will increase according to how many shares exist for that artwork as to prevent deflation. Some art gallery contracts increase the price by a set percentage each time it's purchased but within 6-10 sales, it becomes too expensive for the average Ethereum user to afford so after that point the art just tends to sit there for a long time. LimeEyes solves this by using the triangular number series to calculate the current price of the shares and as an effect, it takes 42 share purchases in order to multiply the initial price by 10 whereas for these other contracts it may take only 3 sales and the current price is already 10x greater than the initial price. This is done to encourage constant interaction with the contract as well as making it so that anyone with a small bit of Ethereum can always find a piece of art to buy shares in!
How do I earn Ethereum?
As mentioned above, once you own shares in an artwork, you will constantly be earning Ethereum every time anyone else purchases more shares in that art. This will continue indefinitely into the future and will trend towards a steady state over a long period of time.
Can my own art be hosted on LimeEyes?
This contract is written in a context where anyone can be the owner of an artwork although only the developer of the contract can actually add your art into the system. This will make sure that only quality art is available on the website and that it won't get too saturated over time.