NFTs introduced a new way for creators to earn from their work not just once, but continuously. This is made possible through NFT royalties. Royalties allow creators to receive a percentage of every resale of their NFT, something that was difficult to achieve in traditional digital marketplaces.
In this blog, we’ll explain what NFT royalties are, how they work, and why they are important for creators and the NFT ecosystem.
What Are NFT Royalties?
NFT royalties are automatic payments that go to the original creator every time an NFT is resold.
When an NFT changes hands:
The buyer pays the sale price
A small percentage goes to the creator
The rest goes to the seller
This process happens automatically through smart contracts.
Why NFT Royalties Exist
In traditional systems:
Artists sell their work once
They earn nothing from future resales
With NFTs:
Creators continue to earn as their work gains value
Long-term support is built into the system
NFT royalties help align incentives between creators and collectors.
How NFT Royalties Work (Simple Flow)
A creator mints an NFT
The creator sets a royalty percentage (for example, 5% or 10%)
The royalty rule is stored in a smart contract
When the NFT is resold, the contract executes
The royalty is automatically sent to the creator’s wallet
No manual payments.
No trust required.
Where Are Royalties Paid From?
Royalties are paid from:
Secondary sales (resales)
Marketplace transactions
They are not paid during the first mint unless specified separately.
Common Royalty Percentages
Most creators set royalties between:
- 2.5% and 10%
Higher royalties:
Benefit creators
May reduce trading activity
Lower royalties:
Encourage more resales
Reduce long-term creator earnings
Choosing the right balance matters.
Do All Marketplaces Support NFT Royalties?
Not always.
Some marketplaces:
Fully enforce royalties
Partially support them
Allow royalty-free trading
This is an ongoing debate in the NFT ecosystem.
Creators should always check:
Marketplace policies
Smart contract standards
Royalty enforcement rules
Why NFT Royalties Matter for Creators
NFT royalties enable:
Sustainable income
Long-term creator support
Fair compensation for success
Independent monetization
They allow creators to benefit from the future growth of their work.
Why NFT Royalties Matter for the Ecosystem
Royalties help:
Support artists and developers
Encourage quality projects
Build healthier NFT markets
Align creators and collectors
They create a more balanced digital economy.
Limitations of NFT Royalties
NFT royalties are powerful, but not perfect.
Challenges include:
Marketplace enforcement differences
Off-chain trading
Royalty bypassing
The ecosystem is still evolving toward better standards.
The Future of NFT Royalties
In the future, NFT royalties may:
Become protocol-level standards
Be enforced at the blockchain layer
Expand to music, gaming, and RWAs
Integrate with DAO governance
Royalties are a key part of creator-owned economies.
Final Thoughts
NFT royalties changed how creators earn in the digital world. By embedding royalty logic into smart contracts, NFTs allow creators to receive ongoing value from their work automatically and transparently. Understanding NFT royalties is essential for anyone creating, buying, or building in the NFT ecosystem.
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