Automated payments to original creators each time their NFT is resold on secondary markets.
What are NFT Royalties?
NFT royalties are automated payments made to the original creator of an NFT each time it is resold on a secondary marketplace. Royalty rates are typically set between 2.5% and 10% of the sale price and are encoded in the smart contract.
How NFT Royalties Work
Creators set a royalty percentage when minting the NFT. Each secondary sale triggers an automatic royalty payment. The smart contract distributes funds to the creator's wallet. Royalties apply to every resale in perpetuity. Enforcement varies by marketplace.
Why NFT Royalties Matter
They create a sustainable income model for digital creators, aligning incentives between creators and collectors. Royalties allow artists to benefit from their work's increasing value over time.
Summary
NFT royalties automatically compensate creators on every secondary sale, establishing a sustainable revenue model for digital artists and builders.
