Applications / Payments Infrastructure

Creator royalties on digital collectibles often depend on the marketplace conducting the resale.

If the marketplace chooses not to collect the royalty—or the asset moves somewhere else—the payment rule may no longer follow the asset.

PaiyBit is taking a different approach with a mechanism it calls TokenCovenant, which places creator-payment conditions into the locking rules of the token itself.

According to PaiyBit, the mechanism is already live in its collectible-card system. PaiyCards are held in users’ own wallets, and when a card is sold through its enforced sale path, the transaction must pay both the seller and the original creator according to the conditions established when the token was created.

The important distinction is that the creator payment is intended to be a transaction-validity condition, rather than a rule enforced only by PaiyBit’s marketplace software.

The Royalty Travels With the Token

When a TokenCovenant collectible is created, PaiyBit says the token establishes information including the creator, royalty percentage and edition.

The owner then holds the token using their own wallet and private key.

If that owner lists the item for sale, a buyer can purchase it while the seller is offline. The transaction transfers the token to its new owner while paying the seller and the creator as part of the same process.

PaiyBit describes the resulting token as being locked again under the same rules after the transfer.

That persistence is central to the design.

The marketplace is not simply remembering that a particular creator should receive a percentage. The token’s spending conditions are intended to require the creator payment whenever the asset moves through its defined sale mechanism.

A transaction that does not satisfy those conditions should therefore fail rather than complete while silently omitting the royalty.

Self-Custody Remains Part of the Model

PaiyBit’s public card market describes PaiyCards as non-custodial bearer tokens.

The token remains in the owner’s wallet, with transaction authorization occurring in the browser. On a sale, the buyer’s payment and the token transfer are intended to occur as one atomic on-chain exchange rather than through marketplace custody.

That separates two functions that conventional digital-asset marketplaces often combine.

PaiyBit provides the application interface through which people discover, list and purchase cards, while the user retains the key controlling the token.

TokenCovenant then attempts to preserve the creator-payment condition in the token’s own spending rules rather than leaving that condition solely in the marketplace database.

What “Every Resale” Does and Does Not Mean

PaiyBit’s own explanation identifies an important limitation.

A TokenCovenant collectible can still be given away.

If an owner simply transfers the token to another person as a gift, the transaction does not represent an enforced sale and therefore does not require the same creator royalty.

That also creates an unavoidable boundary around private arrangements.

Two people could agree separately on a price, settle that payment outside the token transaction, and then transfer the collectible on-chain as though it were a gift. TokenCovenant cannot determine that an external economic transaction took place.

The enforceable claim is therefore narrower than saying that a creator receives a royalty from every possible economic resale.

What the design is intended to guarantee is that a sale conducted through the token’s enforced sale mechanism cannot omit the required creator payment.

That distinction makes the mechanism easier to evaluate precisely.

It does not attempt to detect every agreement people might make outside the blockchain. It constrains the transaction type that declares itself as the token sale.

The Rule Is Intended to Survive the Marketplace

PaiyBit makes a second notable claim: the resale condition is intended to continue even if PaiyBit itself disappears.

That follows from the same architectural choice.

If the creator-payment rule exists only inside PaiyBit’s marketplace software, another marketplace could ignore it.

If the rule is instead reproduced in the locking conditions controlling the token as ownership changes, an independent application could theoretically construct a compliant resale without needing PaiyBit to authorize the transaction.

The marketplace becomes one interface for interacting with the asset rather than the sole authority capable of preserving its terms.

This is an important technical claim, although the public article alone does not establish full independent interoperability. Demonstrating the same PaiyCard being recognized and resold through a separate wallet or application would provide stronger evidence that the covenant rules operate independently of PaiyBit’s own interface.

For now, PaiyBit’s live card market establishes that the project is using the mechanism in its own operating application.

Not the Same as Preventing Copying

The covenant also does not attempt to make the underlying media impossible to copy.

An image can still be saved or reproduced.

The token represents the collectible edition and its ownership record rather than exclusive technical control over every copy of the associated image.

This distinction is similar to other physical and digital collectibles: the provenance and ownership of the recognized item can be recorded even though the visual material itself can be reproduced.

TokenCovenant is focused on the rules governing transfer of that recognized token, particularly how value is divided when its enforced sale mechanism is used.

A Payment Rule Embedded in the Asset

The broader infrastructure idea is more interesting than royalties alone.

A marketplace normally performs several roles at once. It identifies the asset, controls how it may be sold, calculates who should be paid, moves funds between participants and records the resulting ownership.

TokenCovenant attempts to move at least part of that logic into the spendability conditions of the token itself.

The seller still chooses whether to sell.

The buyer still chooses whether to purchase.

The marketplace can still help the two discover one another.

But once they use the defined sale path, the transaction itself is intended to enforce how the proceeds must be distributed.

This creates a different boundary between application rules and blockchain rules.

A marketplace policy can be changed by the marketplace. A locking condition has to be satisfied by the transaction that spends the output.

For creator royalties, that means payment becomes part of what constitutes a valid on-chain sale rather than an optional accounting action performed afterward.

Live Implementation, With a Clear Boundary

PaiyBit states that TokenCovenant is already live across the collectible cards available through its platform.

Its current card market describes every card as an on-chain bearer token held in the owner’s own wallet, with creator royalties automatically included in sales.

That makes TokenCovenant more than a design proposal.

At the same time, the current evidence should not be stretched beyond what has been demonstrated.

PaiyBit’s own application shows the mechanism operating within its card-market environment. Independent wallet-level testing would still be useful for verifying the stronger portability claim that the same covenant can be taken outside PaiyBit and continue enforcing its sale rules without relying on PaiyBit infrastructure.

The private-sale exception should also remain explicit: no locking script can know that an undisclosed external payment occurred before somebody submitted what appears on-chain to be a gift transfer.

Within those boundaries, however, the implementation illustrates a concrete use of BSV Blockchain Script for application-level economic rules.

Instead of asking every marketplace to remember that a creator should be paid, TokenCovenant attempts to make the creator payment part of the transaction conditions governing the collectible itself.

Developer Context

PaiyBit is developing TokenCovenant as part of its wider BSV Blockchain application environment.

Related PaiyBit work includes:

• PaiyCards — non-custodial collectible tokens and the current live use of TokenCovenant.
• PaiyBit wallet — the browser-based wallet environment used across PaiyBit services.
• Paiyges — pay-as-you-use content formats covering articles, video, audio, live sessions and other media.
• PaiyBit Arcade — a browser-game environment in which creators can publish and price games.

The October 23 TokenCovenant article does not publicly attribute the mechanism to a specific individual developer, so the implementation is best attributed to PaiyBit unless more specific authorship is established.

Source Links

PaiyBit — Paid on Every Resale: Royalties No Marketplace Can Switch Off

PaiyBit — PaiyCard Market

BSV TIMES – Under the Surface

Under the Surface looks at projects, standards, experiments, and community activity that may not rise to the level of a headline but are still worth noticing. Some are new, some are continuing work, and some are quieter developments that help show what is taking shape across the BSV community.

Update — October 24, 2026