NFT royalties are a way for artists and creators to earn ongoing income from their NFTs (non-fungible tokens) after they have been sold. Here’s how royalties work for NFTs:
- The artist mints their NFT using specialized software, and sets a percentage of the sale price to be paid as royalties to the artist.
- The artist lists the NFT for sale on a marketplace or platform that supports royalties.
- A buyer purchases the NFT and the transaction is recorded on the blockchain. The artist receives their initial payment for the NFT.
- If the buyer resells the NFT, the artist will receive a percentage of the sale price as royalties, according to the percentage set by the artist.
- The royalties are paid to the artist in the form of cryptocurrency, such as Ethereum, and can be withdrawn from the artist’s digital wallet or exchanged for fiat currency.
It’s worth noting that not all NFT marketplaces and platforms support royalties, so it’s important to check if a platform supports royalties before listing an NFT for sale. Additionally, the percentage of royalties can vary widely, and some platforms have different ways of calculating royalties, so it’s important to understand the terms and conditions of a platform before listing an NFT.