What Does the Term ‘NFT Royalties’ Refer to?

Let’s play a game. There are two buttons in front of you. The blue one gives you an instant $10k, and the red one gives you a cent for every hour of your life from the moment you push it. You have 5 seconds to push a button.

If you can do the math quickly, you’d push the red button if you are not in desperate need of some instant cash. Because a cent an hour simply pays more in the long run. Intellectual property rights work the same way. You create an art piece, something original, something that is uniquely your work, and every time it sells, you get paid.

No matter if the amount is small, you receive payment consistently without lifting a finger, and that’s passive income! Sounds good, right? It gets better. You don’t need any intermediaries to sell your unique work in blockchain-based marketplaces and platforms.

What Are NFT Royalties?


This brings us to our main topic. NFT royalties are a mechanism that ensures creators receive a percentage of sales whenever their digital asset is resold on the secondary market. Artists, musicians, writers, and other creators can continually benefit from their work’s ongoing popularity and value appreciation, a game-changer for digital artists!

It does not always have to be artwork, too. Some NFT-focused projects reward their users with royalties.

Chainers, a free-to-start NFT MMO game built on Polygon, is a landscape for ideas and imagination, inviting players to handcraft their unique gaming experience within an immersive universe.

Within the Chainers universe, you will find user-driven narratives, exhilarating gameplay, and a sustainable economy that rewards your ingenuity. It is a place to create and get rewarded for your creativity. The thriving community of Chainers is known for appreciating unique pieces.

How Does NFT Royalties Work?

Here is how NFT royalties and their mechanism work:
When a creator mints an NFT, they can program smart contracts on the blockchain to allocate a certain percentage of any future sale as a royalty. This programmed condition stays embedded with the NFT, ensuring that a slice of every subsequent transaction goes back to the original creator. No third parties!

For instance, if an artist sets a 10% royalty on their artwork, they would receive 10% of the sales every time the NFT is resold. This mechanism establishes a perpetual income stream for creators.

The impact of NFT royalties on creators’ earnings brings about amazing opportunities, and the NFT significance for creators is worth exploring. With a continuous revenue stream, creators can invest more time and resources into their craft, pushing the boundaries of innovation and contributing to the richness of digital culture.
Additionally, royalties ensure that the value generated by digital assets is more equitably distributed, recognizing the creator’s contribution to the asset’s worth.

NFT Royalties as a Solution

In 2013, it was reported by The United States Copyright Office that compared to other creators, visual artists find themselves uniquely disadvantaged in terms of earning revenue.

Several factors contribute to the disadvantages faced by visual artists:

Copyright Challenges: Copyright laws, which protect creators’ rights, can be complex for visual artists. Understanding and enforcing copyright for artistic works can be more challenging than for other types of content.

Lack of Regulation: Visual artists often operate in a less regulated environment, making it difficult for them to secure fair compensation for their work. This lack of regulation can result in lower earnings for artists.

Side-hustles: Many visual artists are forced to take on additional employment to supplement their income since their artwork alone may not generate sufficient revenue. This is in contrast to some other creators who can sustain themselves solely through their creative work.

This is attributed to the fact that the worth of their art comes from its uniqueness, thus limiting the earnings from reproductions. The unique nature of visual art prevents it from being part of the royalty agreements that exist between musicians, record labels, and streaming platforms.

While the music sector faces its own set of issues regarding equitable remuneration, streaming platforms have resulted in artists losing a significant portion of royalties. However, initiatives like Blocktones have discovered innovative methods to incorporate royalties into their music-based NFTs.

The convenience of acquiring royalties from NFT resales has persuaded many artists to explore the NFT market. You don’t need to be an artist to benefit from NFT royalties or appreciate the benefits it brings to creators.

Final Thoughts

What NFT royalties achieve is a transformative solution for creators across various fields, addressing long-standing issues of inequitable compensation, especially for visual artists. By embedding smart contracts within the blockchain, artists, musicians, and writers ensure a perpetual income stream, deriving value every time their work is resold.

This model contrasts with traditional revenue generation, highlighting the disparities and challenges faced by visual artists in copyright enforcement and regulation. Platforms and projects such as Chainers exemplify the potential of NFTs, creating ecosystems where uniqueness and creativity are valued and rewarded.

NFT royalties not only empower creators with financial autonomy but also foster a richer, more diverse digital culture by enabling artists to reinvest in their craft. Whether you are a creator or you believe that creators should be fairly compensated, the impact and the benefits of NFT royalties are clear.

It is the best version of copyright management we have and also is a force to be reckoned with.

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