NFT Royalties and Creators
๐ 8 min read
Quick Answer
For artists, the most genuinely revolutionary promise of NFTs was not the speculation, it was royalties: the idea that a creator could earn a percentage of every future resale of their work, automatically, forever. A painter who sells a canvas never sees a cent when it later resells for millions; an NFT artist, in theory, would. It was a real fix to an old injustice. Then the market discovered the promise had a flaw, and a "royalty war" broke out that reshaped the whole space. The story is essential for any creator thinking about NFTs.
๐ผ๏ธ A resale cut, if everyone honors it
NFT royalties are like a clause saying the original artist gets 10 percent every time the artwork changes hands. The catch: the clause only works if whoever runs the sale agrees to enforce it. When the auction houses (marketplaces) decided enforcing it was optional, and rivals offered "no royalty" sales to attract traders, the clause became a suggestion. The promise was real; the enforcement was not built into the foundation as firmly as everyone assumed.
The revolutionary promise
When an NFT is minted, the creator can set a royalty, say 5 to 10 percent, meant to be paid to them on every subsequent resale. For digital artists, musicians and creators historically cut out of the resale value of their work, this was transformative: a potential ongoing income stream tied to their creation's success, not just the first sale. Many creators built their NFT strategy around it, pricing initial mints low expecting royalty income over time. For a while it worked and paid real money, and it remains one of the most genuinely useful ideas NFTs introduced.
The flaw: royalties were never truly enforced on-chain
Here is the technical heart of it. Royalties were not actually enforced by the blockchain itself; they were honored voluntarily by marketplaces in their sale code. The NFT standard recorded a royalty preference, but nothing at the protocol level forced a buyer or platform to pay it. As long as every marketplace chose to honor it, it worked. But that "as long as everyone agrees" was the weakness, and in a competitive, profit-driven market, someone was always going to defect.
The royalty wars
When the bear market hit and trading volume mattered, marketplaces competed by cutting fees, and royalties became the battleground. New "zero-royalty" or "optional-royalty" marketplaces appeared, letting traders skip paying creators to get better prices, and they won volume. Established platforms were forced to make royalties optional too or lose traders. Creators watched their promised income collapse as the market raced to the bottom. Various technical countermeasures emerged (blocklists of non-royalty marketplaces, new enforceable-royalty standards), but the genie was out: royalties shifted from a guarantee to something closer to a tip.
Where royalties stand now
The honest 2026 picture is mixed. Royalties still exist and many sales still pay them, but they are no longer the reliable, automatic forever-income the early promise implied, enforcement depends on the marketplace and the chain. Some newer blockchains and token standards have built stronger royalty enforcement directly into the protocol, attempting to fix the original flaw at the foundation. And some creators use other models (charging more upfront, building utility/membership rather than relying on resale income). The lesson the wars taught: a promise is only as strong as its enforcement, and "the code guarantees it" was, for royalties, not actually true at the protocol level.
What this means for creators
Practical guidance for any creator considering NFTs: do not build your income model on the assumption of guaranteed perpetual royalties, treat resale royalties as a possible bonus, not a foundation. If royalties matter to you, choose chains and platforms with genuine on-chain royalty enforcement, and understand each marketplace's current policy before minting. Consider models less dependent on resale: meaningful upfront pricing, utility and membership that give ongoing value (and reasons to pay) beyond a resale cut. The creator-empowerment idea behind NFT royalties is genuinely good and partly alive, but the early "set it and earn forever" version did not survive contact with a competitive market.
๐ Key takeaway
NFT royalties promised creators a cut of every resale forever, a real fix to an old injustice, but the flaw was that royalties were honored voluntarily by marketplaces, not enforced by the blockchain itself. In the "royalty wars," zero/optional-royalty marketplaces competed on volume and forced royalties from a guarantee to closer to a tip. Today royalties still exist and often pay, but are unreliable and marketplace-dependent; some newer chains build stronger on-chain enforcement. Creators should treat resale royalties as a bonus, not a foundation, choose enforcing chains/platforms if royalties matter, and favor upfront pricing and utility/membership models.
Why this matters for you
Asia has a huge base of digital creators, artists, musicians, designers, for whom the NFT royalty promise was especially appealing as a new income model, and many were affected when it eroded. Understanding what royalties really are (and are not) helps the region's creators approach NFTs and Web3 monetization with realistic expectations rather than the broken "earn forever" pitch.
Frequently asked questions
How do NFT royalties work?โผ
When minting an NFT, the creator can set a royalty (commonly 5-10%) intended to be paid to them on every resale. The key catch: royalties were historically honored voluntarily by marketplaces in their sale code, not enforced by the blockchain itself, so they only worked while every platform chose to pay them. The NFT recorded a royalty preference, but nothing at the protocol level forced a buyer or marketplace to honor it.
Why did NFT creators stop receiving royalties?โผ
Because royalties were never truly enforced on-chain, only voluntarily by marketplaces. When trading volume became competitive, new zero-royalty or optional-royalty marketplaces appeared to attract traders with better prices, and won volume, forcing established platforms to make royalties optional too. This "royalty war" collapsed creators' promised income from a guarantee to closer to a tip.
Do NFT royalties still exist in 2026?โผ
Yes, but unreliably. Many sales still pay royalties, but enforcement depends on the marketplace and chain rather than being automatic and guaranteed. Some newer blockchains and token standards have built stronger on-chain royalty enforcement to fix the original flaw. Creators should treat resale royalties as a possible bonus, not a foundation, choose enforcing platforms if royalties matter, and consider utility or upfront-pricing models instead.
Keep reading
Related topics across the hub
๐ Sources & further reading
Authoritative references and primary sources used in this guide.