According to data compiled by Galaxy Digital, Ethereum based NFT creators have earned more than $1.8 billion in royalties to date.
Galaxy Digital: Major Projects Accounted for 80 Percent of NFT Royalty Payments
The percentage royalties that creators collected on secondary sales were mostly concentrated on a certain number of NFT projects, with 428 collections accounting for 80% of royalties earned.
The top-earning organization, according to Galaxy, was Yuga Labs, the blockchain company behind the Bored Ape Yacht Club and Otherside NFT collections, among others. Yuga Labs collections earned a total of more than $147.6 million in royalties.
“Until recently, NFT royalties have been a dark aspect of NFT trading,” Galaxy researchers wrote in a report released Friday.
NFT creators collect royalties from the seller, not the buyer, similar to real estate transactions in traditional markets.
Copyrights are not currently programmed into smart contracts, making it difficult to track payments.
As a decentralized royalty payment system was not yet functional, NFT markets took on the role of facilitating royalty payments.
OpenSea began showing copyright amounts in October 2021. The popular NFT marketplace has doubled its average royalties last year, from an average of 3% paid to artists to 6%.
Other marketplaces, such as Sudoswap, pay no royalties to artists in order to appeal to vendors and attract investors.
Galaxy Digital researchers point out that royalties have been touted as a reason to invest in digital art since NFTs became available. Removing this model would significantly change one of the defining features of the industry.
*Not investment advice.
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