What Are NFT Royalties and Why Do They Matter for Creators?

Understanding How Royalties Empower Artists and Change Digital Ownership

NFTs have revolutionized the way digital creators monetize their work — and royalties are at the heart of that shift.

For artists, musicians, and content creators, NFT royalties offer a way to earn recurring income each time their work is resold on the blockchain.

In this post, we’ll break down what NFT royalties are, how they work, and why they matter in the evolving creator economy.

Royalties are benefical for the creator

1. What Are NFT Royalties?

NFT royalties are automatic, recurring payments made to the original creator of a digital asset whenever that asset is sold on a secondary market.

These royalties are typically defined in the smart contract of the NFT.

For example, if an artist sets a 10% royalty, they’ll receive 10% of the sale price every time the NFT is resold — forever.

2. How Do NFT Royalties Work?

Royalties are made possible through smart contracts on the blockchain:

• When the NFT is minted, the creator sets the royalty percentage.

  
  

• Every time the NFT is resold, the smart contract automatically sends the royalty fee to the creator’s wallet.

  
  

• No intermediaries are needed, and payments are transparent and trustless.

  
  

However, support for royalty enforcement can vary depending on the NFT marketplace.

3. Why Royalties Matter for Creators

Traditional artists and musicians often receive payment only once — at the point of sale. NFT royalties flip that model by enabling:

• Ongoing income from future sales

  
  

• Recognition of creative value over time

  
  

• Financial sustainability for independent artists

  
  

In short, royalties align incentives between creators and collectors, especially when the asset’s value appreciates.

4. Challenges and Debates Around Royalties

The NFT space has faced debate over optional royalties, where some platforms allow buyers to bypass creator fees. This raises key issues:

• Loss of creator revenue

  
  

• Inconsistency across marketplaces

  
  

• Community pushback on “zero-royalty” platforms

  
  

In response, new protocols and marketplaces are working to enforce royalties on-chain, protecting creator rights.

Learn how NFT Royalties work

5. The Future of NFT Royalties

In 2025 and beyond, expect to see:

• Better royalty standards across ecosystems

  
  

• Royalty splitting, where multiple creators or collaborators share earnings

  
  

• Programmable royalties, adjusting based on usage or licensing terms

  
  

As NFTs continue to gain utility and adoption, royalties will remain a crucial mechanism for fair compensation in digital economies.

Final Thoughts

NFT royalties are more than a financial perk — they’re a powerful tool for building sustainable careers in Web3.

By ensuring that creators are rewarded for the ongoing value of their work, royalties represent one of the most transformative innovations in the digital asset space.

Whether you’re an artist, collector, or platform builder, understanding how NFT royalties work is key to navigating the next era of the creator economy.