NFT royalties are a mechanism that allows creators to earn a percentage of sales every time their NFT is sold or re-sold in the marketplace. This is a significant shift from traditional art sales, where artists only profit from the initial sale of their work. With NFT royalties, artists can continue to earn from their work long after it has been sold, providing a sustainable income source.
How Do NFT Royalties Work?
When an NFT is minted, the creator can specify a royalty percentage that they will receive from future sales. This percentage is coded into the smart contract of the NFT, ensuring that the creator will automatically receive their royalty whenever the NFT is sold. This process is facilitated by the blockchain's transparency and immutability, guaranteeing that creators receive their due royalties.
The Impact of NFT Royalties
NFT royalties are a game-changer for creators, providing a new avenue for income and recognition. They also encourage the ongoing creation of innovative and unique digital content. For collectors, NFT royalties add another layer of value to their purchases, knowing that a portion of their investment goes directly to supporting the creator.
NFT Royalties in Practice
A prime example of NFT royalties in action is the digital artist Beeple, who sold an NFT artwork for $69 million at Christie's auction house. Thanks to the royalty mechanism, Beeple will receive a percentage of any future resales of his artwork.