What are NFT royalties?
NFT royalties are payments made to a creator, rights holder, issuer, or another designated recipient when an NFT is sold on the secondary market.
They are usually calculated as a percentage of the sale price.
For example, if an NFT has a 5% royalty and later sells for 10 ETH, the royalty amount would be 0.5 ETH. The remaining sale proceeds would go to the seller, subject to any marketplace or transaction fees.
The important point is that a royalty setting does not necessarily guarantee payment.
On Ethereum, ERC-2981 provides a standardized way for an NFT contract to tell a marketplace how much royalty is due and which address should receive it. The standard does not itself transfer the funds or force every marketplace to pay them. The marketplace still has to support the standard and execute the payment.
There is also no universal royalty percentage that applies across NFT collections. The amount depends on the collection, creator, contract, and marketplace rules.
How do NFT royalties work?
A royalty usually comes into play after the NFT has already been sold once.
Suppose a creator uses a 5% royalty. The NFT is initially sold to Buyer A. Later, Buyer A lists it for 10 ETH and Buyer B purchases it.
- Sale price: 10 ETH
- Royalty rate: 5%
- Royalty payment: 0.5 ETH
- Remaining sale proceeds: 9.5 ETH before other applicable fees
The royalty percentage and recipient may be stored or exposed through the NFT contract. For contracts using ERC-2981, a marketplace can call royaltyInfo() with the sale price and receive the royalty recipient and amount.
The marketplace then handles the actual payment as part of its transaction flow.
This distinction matters because the NFT contract can signal that 5% should be paid without being able to guarantee that every future marketplace will honor that request.
Are NFT royalties automatically enforced?
Not always. There are three separate parts to understand.
1. Royalty information
A standard such as ERC-2981 can tell a marketplace who should receive the royalty and how much should be paid for a given sale price.
ERC-2981 was designed as a common interface for royalty information. Its specification treats royalty payment as voluntary and leaves the actual transfer of funds to marketplaces or other transaction participants.
Royalty information does not equal royalty enforcement.
2. Marketplace policy
The marketplace decides how royalty information is handled during a sale. Some marketplaces build royalties into their transaction model. Others allow sellers or buyers to decide whether creator earnings are paid. Some support both approaches depending on the NFT contract.
OpenSea, for example, currently classifies creator earnings as either optional or enforced. For optional earnings, the seller ultimately decides whether to include the creator payment. Compatible contracts can use OpenSea’s enforcement mechanism instead.
3. Contract-level enforcement
Some contract designs add rules that make royalty enforcement possible at the token transfer level or through compatible marketplace protocols.
OpenSea currently supports enforced creator earnings for compatible ERC721-C and ERC1155-C contracts. Its implementation uses Seaport functionality to check that required conditions, such as creator earnings, are satisfied before an NFT can be transferred through supported sales.
There is a trade-off. Enforcement can improve the likelihood that creator earnings are paid, but it may also limit where the NFT can trade. Marketplace compatibility therefore needs to be considered before choosing an enforcement model.
Who receives NFT royalties?
The royalty recipient does not have to be an individual artist. Depending on the NFT and business model, royalties may be paid to:
- Artists, musicians, or digital creators
- Game developers or publishers
- Brands or rights holders
- Collaborators through a revenue-splitting contract
- A DAO or treasury
ERC-2981 returns one royalty recipient address. Distribution between several recipients can be handled by the receiving contract or through separate on-chain logic.
A buyer reselling an NFT is different. The amount the seller receives from a resale is sale proceeds, not a royalty. Marketplace fees are also separate from creator royalties.
Benefits and limitations of NFT royalties
NFT royalties can create a revenue stream tied to secondary-market activity, but they also introduce trade-offs for creators, collectors, and marketplaces.
Benefits
Recurring creator revenue: creators can receive additional revenue when eligible NFTs are resold rather than earning only from the initial sale.
Alignment with secondary-market activity: if a collection becomes more actively traded, its creator or other designated recipients can participate in some of that economic activity.
Programmatic royalty calculation: smart contracts and marketplace protocols can calculate royalty amounts from the sale price and route them according to the configured transaction logic.
Flexible revenue distribution: revenue can be routed through contracts or other systems that divide proceeds among collaborators, teams, rights holders, or treasuries.
Limitations
Royalties are not automatically paid on every resale: a royalty may be optional depending on the marketplace and contract configuration.
Enforcement is not universal across marketplaces: a contract that enforces creator earnings through one marketplace architecture may not be compatible with every other trading venue.
Higher royalties affect transaction economics: royalties increase the total cost of trading or reduce the seller’s proceeds, depending on how the marketplace structures the payment.
Royalties depend on secondary demand: a collection that is never resold does not generate secondary-sale royalty revenue simply because a royalty percentage exists.
Do NFT royalties affect copyright ownership?
NFT ownership and copyright ownership are separate concepts. Buying an NFT does not automatically mean that the buyer receives the copyright to the artwork, music, image, or other content associated with the token.
The rights transferred depend on the license, contract terms, and applicable intellectual property law. The U.S. Copyright Office and USPTO highlighted this distinction in their joint NFT study and noted confusion about which intellectual property rights are involved when NFTs are created, marketed, or transferred.
A creator can therefore sell an NFT while retaining copyright, license certain rights to the holder, or structure a separate transfer of IP rights. The exact arrangement should be stated in the collection’s terms rather than assumed from token ownership.
How major NFT marketplaces handle royalties
Royalty policies vary across NFT marketplaces and may also depend on the collection’s contract and enforcement method. The table below compares how several major marketplaces approach creator royalties.
| Marketplace | Royalty model | How it works |
|---|---|---|
| OpenSea | Optional or enforced | Depends on contract configuration. Compatible ERC721-C and ERC1155-C contracts can enforce creator earnings. |
| SuperRare | Platform-defined | Original artist receives 10% on secondary sales on SuperRare. |
| Nifty Gateway | Platform-enforced | Enforces a 10% royalty on all secondary sales for NFTs minted on the platform. |
| Magic Eden | Optional or enforced depending on setup | ERC721-C collections have royalties enforced. Other collections use optional royalties where sellers decide whether to pay. |
Note: Marketplace fees and royalty policies can change. Check the current marketplace documentation before configuring a collection or designing royalty-dependent economics.
OpenSea
OpenSea currently supports both optional and enforced creator earnings. Creators can set an earnings percentage and recipient address. If the contract is compatible with ERC721-C or ERC1155-C, the creator can choose enforcement. Other contracts may still use optional creator earnings, where payment depends on the seller.
SuperRare
SuperRare uses a more standardized royalty model within its own marketplace. On a primary sale, the artist currently receives 85% of the sale amount and the SuperRare DAO Community Treasury receives 15%.
On secondary sales, the seller receives 90% of the sale amount and the original artist receives a 10% royalty. SuperRare also charges the buyer a 3% marketplace fee on top of the sale price.
Nifty Gateway
Nifty Gateway enforces a 10% royalty on all secondary sales for NFTs minted on its platform. Unlike marketplaces that leave royalty payment to seller discretion, Nifty Gateway applies creator royalties at the platform level regardless of individual transaction settings.
Magic Eden
Magic Eden‘s current EVM marketplace supports both optional and enforced royalties. For ERC721-C collections, Magic Eden enforces royalties on 100% of native listings using Limit Break’s Payment Processor. For other collections, royalties are optional and sellers can choose to pay zero, half, or the full royalty amount. On its Solana marketplace, collections using the Open Creator Protocol have royalties enforced, while other collections remain optional.
What NFT marketplace builders should consider about royalties
If you are building an NFT marketplace, royalties should be defined as part of the transaction model rather than added after the marketplace is already developed. Getting this right early also affects how much your marketplace will cost to build.
Choose the royalty model
Decide whether the marketplace will support:
- Creator-defined royalties
- Platform-defined royalties
- Optional creator earnings
- Enforced creator earnings
- No secondary royalties
- A combination depending on collection or contract type
The choice affects both the business model and the smart contract architecture. If you are still mapping out the broader feature set, our guide to choosing the right NFT marketplace features covers what each marketplace type needs before these decisions come into play.”
Decide how royalties will be represented
For EVM-based NFTs, ERC-2981 can provide a standard interface for retrieving royalty recipient and payment information. It does not provide enforcement by itself.
If enforcement is required, the contract and marketplace protocol need additional mechanisms.
Define the recipient and revenue split
A simple collection may send the royalty to one creator wallet. A commercial marketplace may need to support a wider allocation.
If several parties receive revenue, decide whether the split happens through a dedicated smart contract, a payment splitter, marketplace settlement logic, or an off-chain accounting process.
Consider cross-marketplace compatibility
Enforcing royalties can restrict the marketplaces through which an NFT can trade. Before choosing contract-level enforcement, determine whether the target users care more about broader marketplace liquidity or stronger royalty enforcement.
Separate royalties from marketplace fees
The marketplace should clearly distinguish sale price, creator royalty, marketplace fee, network fee, and seller proceeds. Users should see these amounts before confirming the transaction.
Define behavior for each sale type
Do not assume one royalty rule covers every transaction. The marketplace may need rules for:
- Primary minting
- Fixed-price secondary sales
- Offers
- Auctions
- Collection offers
- Bundle sales
- Cross-marketplace orders
- Private or OTC transactions
Plan reporting and administration
Creators may need to see:
- Royalty percentage
- Royalty recipient
- Eligible secondary sales
- Amount earned
- Payout history
- Marketplace where the sale occurred, when available
Marketplace administrators may also need tools to update allowed settings, investigate failed payouts, and resolve transaction discrepancies.
The future of NFT royalties
The main challenge for NFT royalties is no longer calculating a percentage of a secondary sale. It is deciding when that payment should be optional, when it should be enforced, and how enforcement works across different marketplaces.
ERC-2981 provides a common way to communicate royalty information, but deliberately does not force payment. Newer marketplace models have added contract-level enforcement mechanisms on top of that foundation.
At the same time, marketplace policies remain different and subject to change. SuperRare uses a fixed secondary royalty within its marketplace. OpenSea supports both optional and enforced creator earnings depending on the contract. Foundation, once one of the more prominent curated art marketplaces, ceased operations in April 2026 after a failed acquisition, a reminder that royalty models are only as durable as the platforms enforcing them.
For marketplace builders, this makes royalty architecture a product decision as much as a smart contract decision. The goal is not simply to add a percentage field. The marketplace needs to decide how creator earnings affect seller economics, marketplace compatibility, transaction UX, and the broader business model.
Final thoughts
NFT royalties can give creators and other rights holders a way to participate in eligible secondary-market activity, but the payment is not guaranteed simply because a royalty percentage exists.
The NFT contract can define or expose royalty information. The marketplace determines how that information is handled, while additional contract-level mechanisms may be needed when enforcement is required.
For marketplace builders, define the royalty model alongside the transaction flow, smart contract architecture, marketplace fees, and cross-marketplace strategy. Doing this early avoids treating royalties as a simple percentage setting when they can affect much more of the marketplace design.
Frequently asked questions (FAQs)
An NFT royalty is a payment made to a creator or another designated recipient from an eligible secondary NFT sale. It is normally calculated as a percentage of the sale price.
Not always. A contract may provide royalty information, but payment depends on the marketplace and enforcement model used for the sale.
It depends on the contract and marketplace configuration. Some systems allow royalty settings to be updated, while others make them fixed or apply platform-defined rules.
No. Royalty treatment varies by marketplace and sometimes by contract within the same marketplace.
Not automatically. NFT ownership and ownership of the underlying copyright are separate unless the applicable license or legal agreement transfers those rights.
