NFT Creator Royalties – A Guide to Marketplaces

The rise of digital media and online platforms in recent years has made it easier for artists to earn a living from their work. Royalties paid to creators have traditionally been a significant source of income for artists and other creators. This is because they receive ongoing compensation for their work long after it has been produced. NFT creator royalties are the tools artists and projects use to earn passive income from their digital content.

Read our in-depth guide to NFT Creator Royalties >> Here

Recently, there has been a divide in the Web3 community as to whether collectors should pay royalties. This article compares various platforms that pay royalties to creators with those that don’t.

Platforms that Fully Support NFT Creator Royalties

NFTs have greatly aided artists and creators by allowing them to monetize digital content and earn commission from their work long after the initial mint. There are several platforms where they can earn royalties. Let’s take a look at some of them!

Nifty Gateway

Premier NFT marketplace, Nifty Gateway, is best for investors interested in digital art, such as artists and top brands. The company believes that secondary market fees are part of what makes NFTs special. It offers enforceable royalties at a platform level while also honoring on-chain royalties set by creators.

Foundation

Foundation was launched in 2022 and is one of the largest NFT marketplaces operating today. It is unique because creators need to be invited to join the community to be able to sell their work. It also takes a 5% marketplace interest on all transactions, including primary and secondary sales, which is much higher than other marketplaces. Regardless, this platform still supports creators because they receive 10% royalties from all secondary sales.

X2Y2

X2Y2 was launched in January 2022 and was initially one of the first marketplaces to stop honoring creator royalties. Although it was one of the loudest voices in the debate against royalties, it started honoring them on all collections a few months later.

Rarible

Rarible is an NFT marketplace that was founded in way back in 2019, and is regarded as one of the top in its field. It is particularly known for its Ethereum-based collectibles, and houses a variety of different types of NFTs. Rarible honors royalties on-chain and allows users to set their own limits.

Marketplaces Treading the Middle Ground on NFT Creator Royalties

As the NFT royalties debate deepened, some marketplaces opted to operate in a middle ground where they would offer an alternative to the standard payment mechanism. This involves offering optional royalties with a token minimum fee on existing collections or compensating creators via other means. In addition, some also provide the means to secure enforceable fees on-chain. These are:

OpenSea

This is the first, largest, and most popular NFT marketplace. Devin Finzer and Alex Atallah founded it on December 20th, 2017. The platform has grown so wide over the years that it now includes a variety of digital art, music, and so on.

In February 2023, it temporarily reduced its transaction fee from 2.5% to 0% in response to the decline in its trade volume. Likewise, the platform also changed its stance on optional royalties. To that end, it mentioned that collectors of NFT projects lacking on-chain enforcement measures would only be mandated to pay a royalty fee of 0.5% on both old and new purchases. However, collectors can pay more if they believe the NFT is worth more.

OpenSea also offers an enforceable royalties model for new collections that will prevent the NFTs from being listed on marketplaces that do not honor its terms.

Blur

Launched on October 19, 2022, Blur is seen as one of the fastest growing Ethereum-based NFT marketplaces. It distinguishes itself from other marketplaces through its fast nature, zero trading fees for NFT sales, a sorting function on the basis of price, and a built-in interface. Blur honors optional creator royalties with a 0.5% minimum fee on immutable collections that cannot use the filter registry.

LooksRare

LooksRare was established on January 10, 2022 and was previously considered the most direct competitor to OpenSea. Nine months later, the marketplace opted to remove standard creator royalties. Buyers can now decide to either pay royalties at checkout or not, however the platform has also pledged 25% of protocol fees to creators.

Platforms that don’t Support NFT Creator Royalties

In 2022, many NFT marketplaces stopped supporting creator-set royalties. This change is due to several reasons, such as the differing opinions within the NFT ecosystem. The major reason is that although creator royalties are highly beneficial for creators, who can receive earnings from collectors every time their work is resold, the same cannot be said for collectors. Here are some platforms that do not support the creator’s royalties:

Magic Eden 

Magic Eden was initially created on the Solana blockchain and was later extended to other blockchains, like Ethereum. It was founded in 2021 as a marketplace competitor and a solution to problems that other existing NFT marketplaces face. At the beginning of the debate against creators’ royalties, Magic Eden completely supported creators’ royalties and even brought out a controversial royalty protection tool for creators. However, they backed out of this some weeks later and made royalties optional. Recently, creator royalties were not prioritized on the platform, their new model involves buyers, rather than sellers, deciding the percentage they wish to pay.

Sudoswap

Sudoswap is a decentralized NFT marketplace that was launched in May 2022. It is a platform where users can create and trade through liquidity pools (smart contract containers consisting of NFT and ETH). This is what brings about its uniqueness. Sudoswap gained popularity because it provides an alternative to traditional NFT marketplaces, however, it does not support creator royalties.

Solanart

Just like Magic Eden, this NFT marketplace was developed on Solana. Launched in June 2021, its purpose was to provide creators with a platform to share their work, enabling people to buy and sell their creations. It quickly became a popular choice within the Solana NFT ecosystem. However, Solanart takes a different stance on creator royalties. Initially, the platform implemented a 3% sales fee, allowing creators to customize their royalties. However, as the debate surrounding this issue gained momentum, Solanart made a significant change by eliminating all fees altogether. Consequently, the platform currently does not support creator royalties.

Yawww

Yawww was initially launched as a peer-to-peer NFT lending platform. By July 2022, it had made headlines and gradually became a community-owned NFT marketplace. Yawww was called the “first democratized NFT marketplace” because it placed the power to decide the royalty percentages in the hands of the buyer rather than the seller. This means that the marketplace does not support creator royalties.

What does the Future Hold for NFT Creator Royalties?

There has been a growing debate in the NFT community concerning eliminating creator royalties from major NFT marketplaces and collections. Platforms such as Magic Eden and many others no longer make royalties compulsory and have moved to optional royalty payments.

Creator royalties were largely regarded as one of the true innovations of the NFT space. It allowed artists to earn more money as long as their work was being sold. However, everything changed when Sudoswap, an NFT platform, launched its automated market maker. It removed royalties on secondary sales, which in turn, opened up the debate, thus challenging the concept of creator royalties.

Something to note is that while many NFT marketplaces were already making their decisions, OpenSea remained mute on the debate. When it finally addressed the issue, it expressed that it wanted to take a thoughtful and principled approach to the matter to come up with solutions.

However, NFT royalties are an aspect of the market that cannot be eliminated. Doing so means creators may be forced to work more and will not make passive income from royalties. Therefore, as long as platforms favor creators’ interest over that of the collectors, royalties will continue to be a part of NFT sales.

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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.

A blockchain maximalist who believes that technology is necessary for the future we are heading to. An ardent researcher and writer who uses his writings to inform about the prospects in the blockchain space.