What are NFT Royalties?
NFT royalties are a mechanism that allows creators to earn a percentage of sales every time their non-fungible tokens (NFTs) are sold or transferred to new owners. This feature is embedded in the smart contracts that govern the NFTs on the blockchain.
When an NFT is initially sold, the creator can set a specific royalty percentage. For instance, if an artist sells an NFT for $500 and sets a 10% royalty, they would receive $50 each time the NFT is subsequently sold on a secondary market. This system not only provides ongoing revenue for creators but also incentivizes them to continue producing high-quality content.
NFT royalties vary depending on the platform used to sell or auction the tokens. Some platforms offer more flexible royalty setups, while others implement fixed rates. This innovation is significant in the digital economy, changing how creators benefit from their work in the digital art, music, and entertainment sectors.
Overall, NFT royalties represent a fundamental shift in how value is shared within digital ecosystems, allowing artists and creators to retain a financial interest in their creations long after the original sale.