When you buy an NFT, you’re not just buying a digital image. You’re entering a contract - one that’s supposed to pay the original creator every time it changes hands. But here’s the problem: NFT royalties aren’t guaranteed. They’re optional. And that’s turning the whole system into a mess.
How NFT Royalties Actually Work
Think of NFT royalties like a 5% tip that automatically goes to the artist every time their artwork is resold. It sounds simple. But unlike physical art, where the artist gets nothing after the first sale, NFTs were built to fix that. The tech behind it? ERC-2981. It’s a smart contract standard that tells any marketplace: "Here’s who gets paid and how much."
ERC-2981 doesn’t force anyone to pay. It just gives the info. If a marketplace wants to honor it, they read the contract. If they don’t, they ignore it. That’s why two people can buy the same NFT on two different platforms - and one pays the creator, while the other doesn’t.
Here’s how it works under the hood:
- When an NFT is minted, the creator sets a royalty percentage - say, 5% (or 500 basis points).
- The smart contract stores two things: the address that should receive the payment, and the percentage.
- When the NFT sells, any marketplace that follows ERC-2981 calls the
royaltyInfo()function to get those details. - The marketplace then sends the calculated amount (e.g., 0.05 ETH on a 1 ETH sale) to the creator’s wallet.
It’s clean. It’s transparent. And it’s completely optional.
Why Some Marketplaces Ignore Royalties
In 2023, Blur changed everything. They let buyers skip royalty payments entirely. Why? Because collectors hate fees. And Blur saw an opportunity: more volume, more users, more trading.
The result? Within months, nearly 40% of all NFT trading moved to royalty-free platforms. Creators lost millions. OpenSea and Rarible, which still honor royalties, saw drops in volume. But here’s the twist: high-value sales - the ones that matter most to serious artists - kept flowing to platforms that paid. In Q1 2025, 68% of transactions over 1 ETH happened on royalty-compliant marketplaces.
Why? Because collectors who buy expensive NFTs aren’t just flipping. They’re investing. And they know: if the artist doesn’t get paid, the project dies. No royalties = no incentive to create. No creation = no future value.
The Regulatory Wild West
Who’s supposed to fix this? Governments are trying.
In the EU, MiCA (Markets in Crypto-Assets) went live in June 2024. It forces crypto platforms to be transparent about fees - but it doesn’t say anything about royalties. It’s a loophole. Meanwhile, the UK’s Financial Conduct Authority (FCA) is digging deeper. Their October 2024 paper called NFT royalties a "priority area" for regulation. They’re asking: Should creators have the same rights as musicians or painters? If so, should platforms be legally required to pay?
At the same time, WIPO - the UN’s intellectual property agency - is pushing for mandatory authenticity checks. Their idea? If you can’t prove you’re the real artist, you can’t mint. That would cut down on scams and make royalty payments more reliable.
Who’s Getting It Right?
Not all marketplaces are the same. Here’s who’s still honoring creators:
- Foundation: Requires 10% royalties on all sales. No exceptions.
- Manifold: Lets creators set custom rates, from 0% to 25%. All enforced.
- Royal: Focuses on music NFTs. Pays royalties like streaming - every time the track is resold.
- Gucci: Even luxury brands are using it. Their digital sneakers include 5% perpetual royalties. In 2024, that brought in $18.7 million from resales.
These platforms aren’t just being nice. They’re building trust. And trust = long-term value.
The Tech That’s Trying to Fix It
Some teams are building tools to force compliance - not through laws, but through tech.
One project, the NFT Royalty Protocol, lets creators register their royalty rules on a public, decentralized ledger. Any marketplace that wants to list the NFT has to check that ledger first. If they ignore it, they’re flagged. Buyers see a warning: "This marketplace doesn’t pay royalties. Proceed at your own risk."
Another idea? Royalty-aware order books. Imagine bidding on an NFT - but before your bid is accepted, you have to agree to pay the creator’s royalty. No agreement? No sale. It’s like a contract you can’t skip.
And then there’s Layer 2. Platforms using Optimism and Arbitrum are cutting royalty processing costs by 60%. That means even tiny sales - $10 NFTs - can now pay out $0.50 to creators. Before, it wasn’t worth the gas fee. Now, it is.
What This Means for Creators
If you’re an artist, here’s your reality:
- Use ERC-2981. Always. Even if a marketplace ignores it now, the data is on-chain. Future platforms might honor it.
- Set your royalty early. Don’t wait. Once your NFT is out, you can’t change it on most platforms.
- Only list on platforms that visibly honor royalties. Check their FAQ. Look for the "creator fee" label on listings.
- Use multisig wallets for payouts. A single wallet? One hack, and your royalties vanish. Two or more signatures? Much safer.
And if you’re a collector? Pay royalties. Not because you have to - but because you want to. The next great artist? They’re minting today. If you don’t pay them now, they’ll quit. And the whole ecosystem collapses.
What’s Next?
Gartner predicts that by 2026, 75% of enterprise NFTs - think luxury goods, music, and digital fashion - will have standardized royalties. That’s up from 42% in 2024. Why? Because brands realized: royalties aren’t a cost. They’re revenue.
Meanwhile, the Ethereum Foundation is quietly exploring protocol-level changes. Could we see mandatory royalties built into Ethereum itself? It’s controversial. But if collectors keep fleeing to royalty-free zones, the pressure will grow.
The truth? NFT royalties were never about technology. They were about fairness. And fairness doesn’t die just because one platform decides to ignore it.
Do all NFT marketplaces pay royalties?
No. Some platforms like OpenSea and Foundation honor creator-set royalties using ERC-2981, but others like Blur and LooksRare allow buyers to skip payments entirely. Whether you pay depends on which marketplace you use - not the NFT itself.
Can creators change their royalty rate after minting?
Usually not. Most NFTs lock in royalty rates at mint time. Some advanced collections use upgradeable contracts that let creators change the percentage later - but this requires complex smart contract design and is rare. Always assume your royalty rate is permanent.
Is there a legal way to force marketplaces to pay royalties?
Not yet. Current laws like the EU’s MiCA require transparency but don’t mandate royalty payments. The UK’s FCA is exploring whether existing intellectual property laws could apply to NFTs, but no binding rules exist. Right now, enforcement is up to marketplaces - not courts.
Why do some collectors hate paying royalties?
Because they see royalties as a tax on flipping. If you bought an NFT to resell quickly, a 5-10% cut feels like a penalty. But collectors who hold long-term realize: without royalties, artists can’t survive. No new art = no future value. It’s a short-term vs long-term trade-off.
Can I use NFT royalties for music or other media?
Yes. Platforms like Royal and AnotherBlock are built specifically for music NFTs. Each time the NFT is resold, the artist gets a percentage - just like streaming royalties. In Q2 2025, music NFTs made up 12% of all marketplace volume, proving this model works beyond art.