Should We Worry About NFT Royalties Collapse?

By Cje95 | Chronic Illness and Crypto | 7 Jul 2023

Recently I have seen several articles from various sources discussing how NFT creator royalties have fallen to the lowest level in two years. Initially, I brushed it off since after all, we are in a bearish market still. Hence, it isn't surprising that royalties are down, but the more I saw the same thing being talked about the more I started to wonder if this was something we should be concerned about. 


Looking back at when NFTs really started to gain traction the royalties were something that digital creators highlighted as a huge win for them. Throughout history famous painters, even though their art became coveted during their lifetimes, often struggled to make ends meet and created the whole ethos of artists dying broke and penniless while their art would later sell for tens of millions of dollars. Being on the blockchain, and with the features of smart contracts, artists would be able to receive a cut of their product when they sold second hand. This was a breakthrough that is hard to put into words as it brought about revolutionary change. 


As the NFT markets though slumped and continued to struggle the marketplaces began to look to cut costs and increase their market share. The new kid on the block Blur really kicked the whole royalty's being paid to the original artists to another level. Blur for instance only enforces a 0.5% royalty fee with the marketplace supposedly making up the difference while the longtime ruler of NFT trading OpenSea requires artists who want their royalty fee need to include an on-chain enforcement method otherwise the creators will just receive a 0.5% royalty. 


Alone neither of these two approaches are necessarily bad but it does take a turn that I think the crypto/NFT community needs to keep an eye on. Not all of these creators are selling NFTs that are worth hundreds or thousands of dollars and for reference, if an NFT sells for $100 with the 0.5% royalty fee the creator only receives $0.50 which when compared to the promise of what NFTs and blockchain could bring to the artist community is a pretty significant fall from grace. For quite a while I remember that the lowest royalty fees I would see were 5% so that $100 NFT would result in the creator receiving $5 not a ton of money but again significantly more than what they are receiving now. 


If the markets heat up and many expect that should help increase the value of these payouts to creators as they are often done in ETH but that is not guaranteed to happen. Failing these creators only hurts the communities as it can easily suck away the creative one-man shop NFT shops and lead to bigger less original collectives taking over the space. Like I said for now though this is just something for everyone to be aware of and really to keep an eye out for. 




Please know I am not a financial advisor and make sure you do your own research! If you enjoyed this article and would like to support me further below are a few referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_


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Graduated from Texas A&M in May of 2020 had dabbled in crypto since 2017 but dove in at the end of 2019. December of 2020 packed up and moved to D.C.! Huge sports fan, space nerd, and international newsreader! Follow me on Twitter @Cje95_

Chronic Illness and Crypto
Chronic Illness and Crypto

Cryptocurrency and Blockchain are going to be a huge part of the future and no matter who tries it isn't going to be stopped! Here I try to give my best insight and thoughts into the latest crypto news, features, developments. Further, I look to discover any link to news from the United States ranging from social-political issues to stock market and economic data.

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