From the beginning of the NFT boom, one of the most celebrated features was creator royalties — a percentage of every secondary sale that automatically flowed back to the original artist. Typical royalty rates were 5-10%, enforced by marketplace smart contracts. An artist who sold a piece for 1 ETH could earn additional income every time that piece was resold, forever. It was a revolutionary concept that solved a centuries-old problem in art: creators benefiting from the appreciation of their work.
Then marketplaces started competing on fees, and royalties became casualties. In late 2022, SudoSwap launched as an AMM for NFTs with zero royalties. Magic Eden made royalties optional. X2Y2 followed. The professional trading community, led by flippers who cared about margins, loudly demanded lower costs. Blur, which captured most of the volume in 2023, effectively made royalties optional through its fee structure.
The creator community was devastated. Artists who had built their financial models around royalty income saw revenue streams vanish overnight. Projects that had promised ongoing funding from royalties couldn’t deliver. The community split between “royalties are a social contract” advocates and “the market will decide” pragmatists. Yuga Labs and other major projects tried to enforce royalties through smart contract mechanisms (like OpenSea’s Operator Filter), but these were easily circumvented.
By 2025, the royalties debate had largely settled into an uncomfortable equilibrium: royalties are respected on some platforms, ignored on others, and enforced only when creators have enough leverage to demand them. The dream of automatic, universal creator royalties — one of NFTs’ most compelling promises — was essentially dead at the protocol level. Whether future standards can solve the enforcement problem remains an open technical and social challenge.
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