Let’s be honest – most of us didn’t grow up dreaming about blockchain, smart contracts, or digital apes selling for six figures. But, here we are! The NFT space exploded, and whether you think it’s revolutionary or just another bubble, there’s one part of the ecosystem that’s quietly changing the game for artists: royalties.
Yep. We’re talking about getting paid again and again every time your work changes hands. Sounds dreamy, right? But, how does it actually work?
What Are NFT Royalties?
In simple terms, NFT royalties are automatic payments that go to the original creator whenever their NFT is resold. Not just once. Every time.
Imagine this: You’re a digital artist. You mint an NFT and sell it for 0.5 ETH (say, $1,500). Cool. But then, a few months later, some collector flips it for 5 ETH ($15,000). In the old art world? You’d get nothing from that resale. In the NFT world? If you’ve baked in, say, a 10% royalty, you’d get 0.5 ETH from that second sale, straight into your wallet.
No awkward emails. No lawyers. No chasing people down. It’s all built into the blockchain via smart contracts.
How Does That Magic Happen?
Here’s the thing: it depends on the platform.
When you mint an NFT (that’s crypto-speak for creating it), you usually choose your royalty percentage right there on the marketplace – OpenSea, Rarible, Zora, wherever.
The smart contract – kind of like an automated robot accountant – remembers that setting. Every time the NFT is resold on that same platform, the royalty gets triggered. So, if you set a 10% royalty, you get 10% of that secondary sale, sent straight to your wallet.
Simple enough. But, here’s where it gets messy…
The elephant in the room: Royalties aren’t always enforced
Buckle up—this part’s annoying.
While royalties can be coded into smart contracts, not all marketplaces honor them. Some marketplaces, especially the newer or more “decentralized” ones, have started bypassing royalties altogether.
Why? Mostly to attract traders who want lower fees. If you’re flipping NFTs for quick profits, you don’t want to lose 10% to an artist each time, right? So, some platforms made royalties optional.
Suddenly, artists who were counting on that sweet passive income? They’re left out in the cold.
The Resistance from Artists
Here’s something kind of badass – when platforms started skipping out on royalties, a lot of artists said, “Nope.”
Some started blocking their NFTs from being listed on royalty-free marketplaces. Others built contracts that only work with royalty-respecting platforms. A few even created communities, DAOs (Decentralized Autonomous Organizations), and NFTs for Musicians to push for better royalty standards.
It’s messy. There’s no single rulebook here. But, it’s a tug-of-war between what’s good for creators… and what’s profitable for traders.
Let’s Talk Numbers for a Second
Most platforms let you set royalties anywhere from 2.5% to 10%. That might not sound like a lot. But over time? It adds up.
Let’s say you’re an up-and-coming digital artist. You sell 100 NFTs for $200 each. That’s $20,000. Not bad.
Now imagine 30 of those NFTs get resold over the next year, averaging $1,000 per resale. That’s $30,000 in volume. With a 10% royalty, that’s $3,000 extra in your pocket, without lifting a finger.
And if your art goes viral? Those resale numbers skyrocket and so do your royalties.
The Psychological Shift: Artists Aren’t “One-and-Done” Anymore
Before NFTs, digital artists mostly got paid once. You create the work, sell it, and that’s it. Doesn’t matter if the buyer turns around and sells it for 100x. You don’t see a dime.
NFTs flipped that script. Suddenly, there’s an incentive to build a long-term brand. You’re not just selling one piece – you’re building a collector base. Every time they trade your work, you win too.
It creates this weird-but-wonderful feedback loop: The more your art is traded, the more you earn. And that makes you care a little more about community, storytelling, scarcity, all that good stuff.
It’s not just about art anymore – it’s about legacy.
Quick Reality Check: It’s Not Passive Income for Everyone
Let’s not get too dreamy here.
Yes, royalties can be a powerful tool, but they’re not guaranteed. You’ve got to market your work. Build a following. Choose platforms that actually respect royalties. And even then? There’s always the risk someone lists your NFT somewhere that ignores your royalty settings.
It’s like putting out a tip jar. Most people will pay you fairly. But not everyone will drop in a dollar.
So yeah, it’s not truly passive income. But, it’s a step closer than what we had before.
Artists Making It Work
Take someone like XCOPY – one of the OGs of crypto art. Their works have sold and resold for crazy numbers over the years. And those royalties? They’ve probably earned more from resales than initial mints.
Or FEWOCiOUS, the young phenom who’s made millions selling art on-chain. Royalties have been a key part of sustaining that income.
It’s proof that this model can work. When collectors know that artists benefit from long-term success, it builds a better ecosystem. Less flipping. More curation. More respect.
Is the Royalty Model Here to Stay?
That’s the million-dollar question.
Right now, it’s kind of a Wild West situation. Some platforms honor royalties. Others don’t. Some artists care deeply. Others just want quick mints.
But, here’s the hopeful bit: The conversation is happening. Creators are speaking up. Platforms are starting to realize that screwing over artists doesn’t build long-term trust. And trust is everything in this space.
Eventually, we might see standardized royalty enforcement across the board. Or maybe even new blockchain standards (like EIP-2981) that make royalties a universal thing – irrespective of the marketplace.
Summarizing
NFT royalties aren’t perfect. They’re not guaranteed. And they sure aren’t a golden ticket.
But they are a step forward. A shift in power. A small rebellion against the old-school model where artists got left behind once the gallery took over.
Now, creators have a chance to earn what they’re worth – not just once, but over time. And honestly? That’s something worth fighting for.