The NFT Market is becoming an increasingly important part of the Cryptocurrency Universe. To date, the total market capitalization of NFTs is about $31.4 billion, making up 1.53% of the current $2.05 trillion total market cap for cryptocurrency.
Now Rapids Network is about to enter the NFT market, but far from everything you may know, Rapids is going to create a real upheaval in this business. Today, as our developers are currently introducing the Royalty System within RPDx, we are going to explore royalties and how they work with NFTs.
Firstly what is an NFT?!
An NFT, otherwise known as a Non-Fungible Token, is a financial asset defined by its own characteristics and which is not interchangeable. An NFT can take various forms:
- Collector Card
- Video game item …
The fact that it is ‘Non-Fungible’ means that it is unique, and therefore cannot be replaced by another, nor can it be fragmented into several parts.
- A 1$ Note is Fungible because it can be replaced by 100 coins of 1 cts
- A Ton of Wheat is Fungible, because it can be sold in retail, and in different weights.
- A Work of Art, is Non-Fungible because it is unique, and can never be replaced with an identical one
- A Ticket is Non-Fungible, because it contains unique information (ticket number and identifier, your name, your seat, your reservation reference…)
As soon as a creator sells their NFT, they get the exchanged asset from the sale, which is normal you will say, they also transfer the right of ownership to the buyer, and has nothing more to say about the future or the price of the NFT but what if they could still earn from their creation forever… Now they can, by introducing Royalties the creator carries on earning from each sale after the initial sale of their creation.
How do NFT Royalties work?
Traditionally after the first sale, the creator does not have anyway to track the subsequent transactions of their work. Once they had sold that’s all their earning would be. Regardless of how their fame has increased over the years, they do not stand to gain anything from the work once they had sold.
NFTs have brought in the opportunities to change this completely. Creators can have their fair share of the sales from their creations for perpetuity.
NFT royalties are automatic payouts to the creator made on secondary sales. These are coded into the smart contract on the blockchain. The Rapids blockchain and its smart contracts work together to ensure that the creator is identified and the royalty payments are made immediately after the sale transaction is over. This removes any chance of the creator being cheated out of their royalties.
How Royalties will look on the Rapids Blockchain; From the creation - minting - initial sale and secondary sales including any royalties that are set in the smart contract being paid to creator.
More about Smart Contracts?
A smart contract is a computer protocol whose operating rules and predefined instructions are written on the Blockchain. The entire process and transactions are automated, transparent and available for anyone to view on the Rapids Explorer.
Here are some interesting facts:
- Bitcoin entered on the market in January 2009
- The first NFT to be sold was ‘Quantum’ by Kevin McCoy in 2014
- The term NFT appeared in 2017
Some of the most expensive NFT sold (to date):
- Everydays: The First 5000 Days - Beeple → $69.3m
- Clock - Pak & Julian Assange → $52.7m
- Human One - Beeple → $28.99m
- CryptoPunk #5822 → $23m
- CryptoPunk #7523 → $11.75m
Do you have a creation and want to leave your mark, your name in history? Join Rapids and be among the first to take advantage of this new opportunity. Rapids is doing everything possible to help you take advantage of the best that Blockchain has to offer. NFTs can be anything from digital art to tickets and sports highlights videos, and they can be sold for thousands or millions of dollars. The Rapids blockchain will allow NFTs to integrate royalties, whereby payments are made direct to the creator, every time their work is being bought.