✅ Master NFT Royalty Mechanics

Understand EIP-2981, enforcement challenges, and creator earnings

Understand how creators earn from secondary sales

🎓 Key Takeaways: NFT Royalties

What you've learned about NFT royalties:

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How Royalties Work

Creators earn percentage of every resale. Royalties compound over time—a successful NFT can generate 10x the original sale price in royalties alone.

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EIP-2981 Standard

One simple function—royaltyInfo()—that returns payment address and amount. Adopted by all major marketplaces as the universal standard.

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Enforcement Challenges

EIP-2981 cannot enforce payments—it only communicates terms. Marketplace competition led to optional royalties becoming the norm in 2023.

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Creator Solutions

On-chain enforcement via operator filters, or alternative models like staking rewards and membership benefits that don't rely on resales.

🎯 Core Principles

1.

Technical standards ≠ business enforcement: EIP-2981 works perfectly but cannot force marketplaces to pay.

2.

Volume vs. Revenue tradeoff: Enforced royalties reduce trading volume by 30-50%. Lower optional rates often generate more total revenue.

3.

Market dynamics evolve: What worked in 2021 (10% enforced) doesn't work in 2023 (2.5% optional). Stay flexible.

4.

Community matters: Premium art communities pay 60-80% of optional royalties. Mass-market PFPs see 20-40%. Choose your audience.

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Test Your Knowledge

Ready to test your understanding? Take the scenario-based quiz to see how well you grasp NFT royalty dynamics in real-world situations.