What is Royalties?

NFT royalties are programmable payments that automatically send a percentage of every secondary sale to the original creator. Encoded in the smart contract, they require no manual action and are enforced trustlessly by code.

How does Royalties work?

The creator sets a royalty percentage and recipient address in the contract using the EIP-2981 standard.
When an NFT is resold, the marketplace contract splits the payment automatically.
The royalty share goes directly to the creator's wallet; the remainder goes to the seller.

Why does Royalties matter?

Royalties let creators earn ongoing income tied to the long-term success of their work, incentivizing them to keep building and supporting their communities after the initial sale.

Key features of Royalties

Automated and trustless via EIP-2981
Percentage-based on every secondary sale price
Splittable among multiple collaborators or a treasury
Currently optional on some marketplaces, sparking ongoing creator rights debate

Examples of Royalties

An artist selling a painting for 1 ETH earns 0.1 ETH every time it resells for 10 ETH. Bored Ape Yacht Club has earned tens of millions in royalties from secondary volume alone.