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The Power of NFTs: Earning Royalties on Every Resale

Power of NFTs

Welcome to the future of content creation and ownership—a landscape where artists, musicians, and creators from all walks of life have unprecedented opportunities to monetize their work. How, you may ask? Through the power of NFTs, or Non-Fungible Tokens, an innovation that not only establishes unquestionable digital ownership but also opens up lifelong avenues for earning through royalties. In this article, we’re diving deep into how NFTs are revolutionizing the age-old concept of royalties, empowering creators to earn every time their art is resold. If you’re a creator eager to step up your revenue game, or simply curious about the burgeoning digital economy, this article is your comprehensive guide.

What Are NFTs?

Non-Fungible Tokens, commonly referred to as NFTs, are cryptographic tokens that represent ownership or proof of authenticity of a unique item or piece of content, usually stored on a blockchain. Unlike cryptocurrencies like Bitcoin or Ethereum, which are interchangeable and identical, each NFT has unique information that distinguishes it from other tokens. This feature of NFTs is what makes them particularly valuable for representing ownership of unique digital assets like art, collectibles, and even pieces of music or tweets. In simpler terms, owning an NFT means you own a “one-of-a-kind” digital item, which could be anything from a digital painting to a tweet, and it’s all verified via blockchain technology.

The Traditional Royalties Model

Traditionally, royalties have been a way for creators—be it authors, musicians, or artists—to earn income from their work long after it was initially sold or published. For example, an author earns a royalty every time their book is sold or a musician every time their song is streamed or played publicly. However, this system has its limitations. Not only are creators often at the mercy of third-party distributors, publishing houses, and recording labels, but the model also rarely extends to secondary sales. In other words, if you buy a painting and later resell it for a higher price, the original artist doesn’t see a penny from that resale. The traditional royalties model is largely a one-time transaction without the perk of ongoing revenue from future resales.

By reading on, you’ll discover how NFTs are shattering these limitations, creating a new paradigm where creators are financially rewarded every time their work changes hands. Buckle up; you’re in for an enlightening journey.

How NFTs Revolutionize Royalties

Smart Contracts and Automatic Royalties

The paradigm shift in royalties brought about by NFTs largely hinges on the concept of smart contracts. These are self-executing contracts with the terms of the agreement directly written into code. What this means is, once an NFT is minted with a smart contract specifying the royalty percentage, the creator will automatically receive that portion every time the NFT is resold. No intermediaries. No complications. This automation not only simplifies the entire process but also ensures that creators are fairly compensated for each transaction involving their work.

How NFTs Provide a Revenue Stream Through Resales

In a traditional royalties system, creators would typically miss out on the potential revenue from resales of their work. However, with the introduction of NFTs, the game has changed dramatically. Now, the smart contract ensures that creators get a cut from each and every resale transaction of their digital asset. Imagine selling a digital artwork and earning a royalty not just once, but every time the piece changes hands in the future. This creates a sustainable and potentially lifelong revenue stream for creators, something that was unfathomable in the traditional model.

Setting Up NFT Royalties

Step-By-Step Guide to Setting Up NFT Royalties

Creating an NFT with royalties might seem daunting, but it’s actually a straightforward process. Here’s a step-by-step guide:

  • Choose a Platform: Start by selecting a platform that supports NFTs with royalty features.
  • Sign Up and Connect Wallet: Create an account and connect your digital wallet.
  • Navigate to Create/Mint Section: Once you’re in, look for the option to create or mint a new NFT.
  • Upload Your Work: Add the digital file you wish to turn into an NFT.
  • Set Royalty Percentage: During the creation process, you’ll see an option to set up royalties—input the percentage you want to receive from future resales.
  • Review and Mint: Double-check all the details and then mint your NFT.

Mention Necessary Platforms and Tools

You’ll need a digital wallet to store your NFTs and receive royalties. Platforms like OpenSea, Rarible, and Foundation are popular choices for minting NFTs with royalties. Ensure you read the platform’s guide on royalties before you begin.

Top 5 Platforms for NFT Royalties

Navigating the landscape of NFT platforms can be overwhelming. Here’s a list of the top 5 platforms that offer excellent royalty features:


Features: User-friendly, vast marketplace, supports various blockchains

Pros: Easy to set up royalties, large audience

Cons: High gas fees during network congestion


Features: Community-driven, governance token (RARI)

Pros: Earn RARI tokens as you interact with the platform

Cons: Less intuitive user interface


Features: Curated artists, sleek design

Pros: Great for high-profile releases

Cons: Limited to Ethereum blockchain


Features: Dynamic pricing model

Pros: Prices can increase based on demand

Cons: Complexity can deter some users


Features: Focuses on one-of-a-kind digital artworks

Pros: High-quality art pieces, substantial audience

Cons: Fees can be on the higher side for creators

By understanding the nuts and bolts of NFT royalties and how to leverage them, creators can redefine the concept of digital ownership and income, tapping into revenue streams that were unimaginable just a few years ago.

Ethical Considerations of NFT Royalties

Discussion on the Ethical Aspects of Earning Royalties from NFTs

The concept of NFT royalties has garnered much applause for its ability to provide creators with a sustainable income stream. However, it’s crucial to examine the ethical dimensions that this innovation presents. One significant concern is the potential for art plagiarism and the violation of intellectual property rights. Because minting NFTs is often a straightforward process, it opens up avenues for people to tokenize artworks that aren’t their own. Therefore, platforms and communities must implement robust verification mechanisms to ensure that only the true creators are reaping the benefits of NFT royalties.

Environmental Concerns Related to Blockchain Technology

Blockchain, the underlying technology behind NFTs, has come under scrutiny for its environmental impact, particularly those that use Proof of Work (PoW) consensus mechanisms like Ethereum. The energy consumption associated with PoW is considerable and contributes to the ongoing climate crisis. As a creator, one must weigh the potential financial gains against the ethical implications of contributing to environmental degradation. Opting for more eco-friendly blockchain alternatives can be a step in the right direction.

Some FAQs Answered About NFT Royalties Answered

How Do I Set Up NFT Royalties?

Setting up NFT royalties involves choosing a supportive platform, connecting your digital wallet, and specifying your desired royalty percentage during the minting process.

How Do I Earn from NFT Royalties?

You’ll automatically earn your specified percentage whenever your NFT is resold. The funds will be transferred to your connected wallet.

What Are the Legal Implications?

Legalities surrounding NFT royalties are still somewhat nebulous, but generally, the smart contract serves as a binding agreement between parties. However, copyright infringement remains a concern.

In Conclusion, NFTs have ushered in a revolution, particularly in the realm of creator royalties. With the capability of smart contracts to automate the royalty process, creators can benefit from a continuous and sustainable revenue stream. However, it’s essential to navigate this landscape with an understanding of its ethical and environmental implications. So, are you ready to take the plunge and explore the untapped potential of NFT royalties for continuous earning?