Canton Royalty Engine

The Canton Royalty Engine is a decentralized application for transparent, automated, and real-time royalty calculation and distribution for digital content. Built on the Canton Network using Daml smart contracts, it provides an immutable, auditable, and privacy-preserving system for creators, rights holders, and content licensees.

This platform replaces opaque, slow, and error-prone manual royalty accounting with a shared, trusted ledger that programmatically enforces royalty agreements.

Key Features

• On-Chain Royalty Splits: Creators define and register royalty distribution shares for each piece of content directly on the ledger.
• Automated Distribution: When licensees report revenue, the engine automatically calculates and distributes payments to all rights holders in proportion to their registered shares.
• Atomic Settlement: Royalty payments are settled atomically using Canton-native tokens (e.g., stablecoins), ensuring that fund transfers and obligation fulfillment happen in a single, indivisible step.
• Full Audit Trail: Every action, from agreement creation to usage reporting and payment, is immutably recorded, providing a complete and verifiable history for all stakeholders.
• Privacy by Design: Canton's privacy model ensures that contract details are only visible to the involved parties, protecting sensitive financial and contractual information.

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How It Works: The Royalty Lifecycle

The process is divided into three main phases: Setup, Usage Reporting, and Distribution.

1. Onboarding & Content Registration (Creators)

1. Onboarding: A Royalty Service Provider (the operator of the platform) onboards creators and other rights holders (e.g., publishers, producers) onto the network, assigning them a unique party identifier.
2. Content Registration: The primary creator registers a new piece of content (e.g., a song, an e-book, a digital art piece).
3. Define Splits: The creator defines the royalty split agreement, specifying the percentage share for each rights holder. This is captured in a RoyaltyAgreement smart contract. All specified rights holders must agree to the terms, creating a multi-party, signed agreement on the ledger.

2. Usage Reporting (Licensees)

1. License Grant: The Royalty Service Provider grants a usage license to a content platform (e.g., a streaming service, an online marketplace).
2. Report Usage: The licensee periodically reports usage metrics and the gross revenue generated from the content. This is submitted as a UsageReport contract proposal to the Royalty Service Provider.
3. Verification & Acceptance: The provider verifies the report. Upon acceptance, the report becomes a mutually agreed-upon fact on the ledger, creating an obligation for the licensee to pay the calculated royalties.

3. Calculation & Distribution (Automated)

1. Royalty Calculation: The acceptance of the UsageReport triggers an automated process. The system references the RoyaltyAgreement to calculate the total royalty amount due and the specific payment owed to each rights holder.
2. Payment Instruction: The system creates RoyaltyEntitlement contracts, one for each rights holder, detailing the exact amount they are owed.
3. Atomic Settlement: The licensee settles their obligation by funding the distribution. This is typically done via an atomic Delivery-vs-Payment (DVP) transaction, where the licensee's payment is automatically and proportionally distributed to each rights holder's digital wallet in a single, trustless transaction.

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User Guides

For Creators & Rights Holders

As a creator or rights holder, the platform enables you to manage your intellectual property and receive payments transparently.

Your Workflow:

1. Contact the Service Provider: Get onboarded to receive your secure digital identity on the Canton Network.
2. Register Your Content: Use the platform's dashboard to register your work. You will be the initial owner.
3. Define Your Collaborators: Invite your co-creators, publisher, or other rights holders to the royalty agreement. Enter their party identifier and the percentage share they are entitled to.
4. Finalize Agreement: Once all parties have digitally signed the RoyaltyAgreement, it becomes active on the ledger.
5. Monitor Earnings: The dashboard provides a real-time view of usage reports and your accrued earnings. You will receive payments directly to your connected wallet as soon as licensees settle their reports.

For Licensees

As a licensee, the platform simplifies your royalty accounting and payment obligations.

Your Workflow:

1. Get a License: Contact the Service Provider to get onboarded and receive a license for the content you wish to use.
2. Submit Usage Reports: On a periodic basis (e.g., monthly), use the dashboard to submit a UsageReport. You will need to provide:
   • The content identifier.
   • The reporting period.
   • The gross revenue generated.
3. Await Verification: The Service Provider will review and approve your report.
4. Settle Payments: Once the report is approved, the system will show you the total royalty amount due. You can initiate a payment from your connected wallet to settle the obligation. The platform ensures your single payment is correctly distributed to all underlying rights holders automatically.

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Technical Stack

• Smart Contracts: Daml
• Ledger: Canton Network
• Daml SDK Version: 3.4.0 (using DPM)
• Frontend: TypeScript, React, Vite
• UI Components: Material UI
• Ledger Integration: @c7/ledger, @c7/react

Development Setup

Prerequisites

• DPM (Daml Package Manager): Installation Guide
• Node.js: v18 or later
• Java: JDK 11

Running the Application

1. Clone the repository:

   git clone https://github.com/digital-asset/canton-royalty-engine.git
   cd canton-royalty-engine

2. Build the Daml models: This compiles your Daml code into a DAR (Daml Archive).

   dpm build

3. Start the Canton Sandbox Ledger: This command starts a local, single-node Canton ledger and exposes the JSON API on port 7575.

   dpm sandbox

4. Install frontend dependencies: Navigate to the frontend directory and install the required npm packages.

   cd frontend
   npm install

5. Run the frontend application: This will start the React development server, typically on http://localhost:3000.

   npm start

The application should now be running and connected to your local Canton sandbox. You can interact with the UI to onboard parties and test the royalty management workflows.