NFT Marketplace Royalty Policies: How Creators Get Paid After the Sale

NFT Marketplace Royalty Policies: How Creators Get Paid After the Sale
Date: 27 Oct 2025 Cryptocurrency & Blockchain

NFT Royalty Calculator

How NFT Royalties Work

NFT royalties are percentages of future sales that go back to the original creator. This calculator shows how different royalty rates affect both creators and sellers. (Based on ERC-2981 standard)

Results

Creator's Royalty: $0.00
Seller's Proceeds: $0.00
Total Transaction: $0.00
Note: Royalty payments require gas fees. Platforms like Polygon reduce costs significantly.

When you buy an NFT, you’re not just buying a digital image or audio file. You’re buying into a system where the original creator should keep earning every time it changes hands. That’s the promise of NFT royalties. But here’s the problem: not every marketplace pays them. And that’s causing real tension between creators, collectors, and platforms.

How NFT Royalties Actually Work

NFT royalties are percentages of future sales that go back to the artist or creator. If you mint a digital artwork and set a 10% royalty, every time someone resells it, you get 10% of that sale price. It’s like a record label paying an artist every time their song is played - except this happens on-chain, automatically.

The technical backbone of this system is ERC-2981 a standard interface for NFT royalty payments, introduced in 2020, that allows any marketplace to query the correct royalty recipient and amount for any NFT. Unlike older methods that relied on custom code, ERC-2981 gives every NFT a consistent way to say: “Here’s who should get paid, and how much.”

It works like this: when an NFT is sold, the marketplace calls the royaltyInfo(tokenId, salePrice) function on the NFT’s smart contract. The contract replies with two things: the wallet address that should receive the royalty, and the exact amount - usually in basis points. For example, 500 basis points = 5%. The system supports fractions down to 0.01%, so creators can set precise rates like 2.75%.

The beauty of ERC-2981 is its flexibility. The royalty receiver doesn’t have to be a single wallet. It can be a multisig wallet requiring three signatures, a split contract that divides payments among a band’s members, or even a smart contract that auto-distributes funds to a DAO. Creators can even update their payout address later, if they move wallets or change their business structure.

Why Some Marketplaces Ignore Royalties

Even though ERC-2981 is widely supported on Ethereum, Polygon, and Optimism, nothing forces a marketplace to honor it. That’s where things get messy.

In 2023, Blur Marketplace made headlines by letting buyers opt out of paying royalties. The move was framed as “user freedom,” but the effect was clear: collectors flocked to Blur to avoid fees. Within months, nearly 40% of NFT trading volume shifted to platforms that didn’t enforce royalties, according to DappRadar. Sales on OpenSea and Rarible - which still honor creator royalties - dropped sharply for collections that were popular on Blur.

This created a two-tier system:

  • Creator-friendly platforms: Foundation, Manifold, and SuperRare still enforce royalties as set by the artist. They attract professional creators who rely on ongoing income.
  • Collector-friendly platforms: Blur, LooksRare, and some smaller exchanges let buyers skip royalties. They win volume, but lose trust from artists.
The result? Many top artists now refuse to list their work on royalty-free platforms. Some even add blacklists to their websites, warning fans not to buy their NFTs on certain exchanges. Others have started using Royalty Registry a decentralized system that lets creators update their royalty settings across multiple marketplaces at once to keep their terms consistent.

Regulators Are Starting to Pay Attention

Governments aren’t ignoring this either. In June 2024, the European Union’s MiCA the Markets in Crypto-Assets regulation, which sets rules for crypto markets including transparency and consumer protection came into force. While it doesn’t mandate royalties, it does require clear disclosure of all fees and costs. That means if a marketplace hides royalty policies or lets buyers bypass them, they could be violating disclosure rules.

In the UK, the Financial Conduct Authority (FCA) the UK’s financial regulator, which has begun exploring how intellectual property laws apply to NFTs launched a consultation in October 2024 specifically on NFT royalties. They’re asking: Should creators have legal rights to secondary sales? Can royalty non-payment be treated like copyright infringement? These aren’t theoretical questions anymore - they’re being debated in policy rooms.

Meanwhile, the World Intellectual Property Organization (WIPO) the UN agency responsible for protecting intellectual property globally recommended in early 2025 that marketplaces verify the authenticity of NFTs before listing them. Why? Because if someone mints a fake version of a famous artwork, who gets the royalty? The real artist? Or the scammer? WIPO’s stance is clear: no verification, no royalties.

A glowing royalty registry tree connecting trusted marketplaces while rejecting one that ignores creator payments.

What’s Being Done to Fix This

The industry isn’t just waiting for regulators. Several projects are trying to solve the problem technically.

One promising idea is the NFT Royalty Protocol a decentralized registry where creators can register their preferred royalty terms, making them visible to any compliant marketplace. Think of it like a global phonebook for royalties. Once you register your 7.5% royalty on this system, any marketplace that supports it can automatically pay you - even if it’s not OpenSea or Foundation.

Another approach is royalty-aware order books. Instead of letting buyers place bids without knowing the royalty cost, these systems show the total price - including the creator’s cut - before the bid is submitted. If the buyer doesn’t agree, they don’t bid. No sneaky opt-outs. No hidden fees. Just clear terms.

Even enterprise brands are stepping in. Gucci now sells digital twins of physical handbags as NFTs, with a 5% royalty on every resale. In 2024, that generated $18.7 million in extra revenue - money that goes back to the brand, not to collectors. Gartner predicts that by 2026, 75% of enterprise NFT projects will include royalties, up from just 42% in 2024.

What This Means for Creators

If you’re an artist or musician minting NFTs, here’s what you need to do right now:

  1. Use ERC-2981 in your smart contract. Don’t rely on custom code. Use OpenZeppelin’s verified implementation - it’s secure and battle-tested.
  2. Set your royalty rate between 5% and 10%. Rates above 10% are rare and often discouraged by collectors.
  3. Use a multisig wallet for your royalty payout. This prevents hackers from draining your earnings if your wallet gets compromised.
  4. Only list on platforms that publicly state they honor royalties. Check their terms of service - if it doesn’t mention royalties, assume they don’t pay them.
  5. Register your royalty settings on Royalty Registry or similar tools. This gives you control across multiple platforms.
Also, don’t assume your royalties are safe just because you’re on a big platform. In August 2024, a single vulnerability in a royalty contract led to $2.3 million being stolen from multiple collections. Security matters as much as the percentage.

Courtroom scene with NFT gavel weighing collector rights against creator royalties under EU and UK regulators.

What This Means for Collectors

If you’re buying NFTs, you might be tempted to go where the fees are lowest. But ask yourself: do you want to support a system that lets collectors steal from artists?

Platforms that ignore royalties aren’t just breaking a social contract - they’re killing the incentive for creators to make new work. In Q1 2025, 68% of all high-value NFT sales (over 1 ETH) happened on platforms that honored royalties. That’s not a coincidence. Serious collectors know that sustainable value comes from supporting creators.

The music industry is leading the way here. Platforms like Royal and AnotherBlock treat NFTs like streaming royalties - paying artists every time their track is resold. In Q2 2025, music NFTs made up 12% of total marketplace volume. That’s not a fad. That’s the future.

What’s Next

The Ethereum Foundation is quietly exploring ways to make royalties mandatory at the protocol level. That’s controversial - some developers argue it goes against decentralization. But if creators keep leaving the ecosystem because they’re not getting paid, the whole thing collapses.

The International Association of Crypto Traders (IACT) announced in April 2025 that 14 major marketplaces - representing 85% of trading volume - are forming a working group to standardize royalty enforcement. If they succeed, we could see universal compliance by late 2026.

For now, the choice is yours. Do you want NFTs to be a tool for artists to earn a living? Or just another speculative asset where the only winners are the early buyers?

That’s not just a technical question. It’s a moral one.

Are NFT royalties mandatory by law?

No, NFT royalties are not legally required anywhere yet. They’re enforced by marketplace policies, not government rules. But regulators in the EU and UK are actively exploring whether they should be, especially under intellectual property and consumer protection laws.

Can I change my NFT royalty rate after minting?

It depends on how your smart contract is built. If you used a standard ERC-2981 implementation with a non-upgradeable contract, no - the rate is locked forever. But if your contract includes a governance system or owner-controlled upgrade function, you can change it. Many creators now use multisig wallets to control royalty updates, so changes require multiple approvals.

Which NFT marketplaces honor royalties the most reliably?

Foundation, Manifold, and SuperRare are known for consistently honoring creator-set royalties. OpenSea and Rarible also honor them, though they’ve faced criticism for occasional bugs or delays. Blur and LooksRare do not enforce royalties by default, allowing buyers to opt out.

Do I need to pay gas fees every time a royalty is paid?

Yes. Every royalty payment is a blockchain transaction, so it requires gas. That’s why many creators use Layer 2 networks like Polygon or Optimism - they cut gas costs by 60-80% compared to Ethereum mainnet. Some marketplaces now bundle royalty payments into batch transactions to reduce costs.

What happens if someone mints a fake version of my artwork as an NFT?

If someone mints a copy of your work, they can set their own royalty rate - and collectors might pay it. That’s why authenticity matters. Platforms like WIPO and the FCA are pushing for mandatory verification before minting. Until then, creators should watermark their work, publish mint dates publicly, and use blockchain-based provenance tools to prove ownership.

by Brennan Lockridge
NFT Marketplace Royalty Policies: How Creators Get Paid After the Sale