The rise of digital media and online platforms has created new ways for artists to earn a living. In the past, royalties have been a major source of income for creators, providing them with ongoing compensation for their work. NFT creator royalties are a new tool that allows artists to earn passive income from their digital content.

There is a growing debate in the Web3 community about whether collectors should pay royalties to creators. This guide compares NFT marketplaces that pay royalties to creators with those that don't.

NFT Marketplaces that Fully Support NFT Creator Royalties

By allowing creators to set royalties on their NFTs, these platforms ensure that creators continue to earn money even after their work has been sold. Some of the most popular platforms that support creator royalties include:

1. Nifty Gateway

Renowned as a premier NFT marketplace, Nifty Gateway stands as an ideal platform for art enthusiasts, including artists and established brands. The platform holds the conviction that secondary market fees contribute to the unique value proposition of NFTs. Nifty Gateway ensures enforceable royalties on a platform level, while simultaneously respecting on-chain royalties established by creators.

2. Foundation

Established in 2022, Foundation has risen to become a prominent NFT marketplace. Distinguished by its invitation-only approach for creators, the platform imposes a substantial 5% marketplace fee on all transactions, encompassing both primary and secondary sales. Despite this, creators benefit from a remarkable 10% royalty on all secondary sales.

3. X2Y2

X2Y2, launched in January 2022, initially held a stance against creator royalties. However, the platform reversed its position a few months later, now wholeheartedly endorsing and honoring creator royalties on all collections.

4. Rarible

With its inception dating back to 2019, Rarible is an esteemed NFT marketplace celebrated for its Ethereum-based collectibles. The platform prides itself in adhering to on-chain royalties, empowering users to establish their own royalty parameters.

Balanced Approaches to NFT Creator Royalties

Amid the ongoing debate surrounding NFT royalties, certain platforms have chosen a middle ground, providing alternative mechanisms for compensating creators. These marketplaces present optional royalties with token minimum fees for existing collections or employ alternative compensation methods. Notable platforms in this category include:

1. OpenSea

Debuting in 2017, OpenSea stands as the first and largest NFT marketplace, offering diverse digital art and music options. The platform temporarily reduced its transaction fee in response to market dynamics and now presents a flexible approach to optional royalties. NFT projects lacking on-chain enforcement mandate a modest royalty fee of 0.5%, accommodating varying perceptions of NFT value. OpenSea also introduces enforceable royalty models for new collections, promoting adherence to royalty terms.

2. Blur

Launched in October 2022, Blur has swiftly become a prominent Ethereum-based NFT marketplace due to its speed and innovative features. Blur harmonizes optional creator royalties, incorporating a minimum fee of 0.5% for immutable collections unable to utilize the filter registry.

3. LooksRare

Emerging in January 2022, LooksRare positioned itself as a significant rival to OpenSea. The platform initially embraced standard creator royalties but later opted to allow buyers to determine their royalty preference at checkout. Moreover, LooksRare commits 25% of protocol fees to creators, thus maintaining a symbiotic relationship.

NFT Marketplaces That Don’t Support NFT Creator Royalties

Throughout 2022, several NFT marketplaces discontinued their support for creator-set royalties, spurred by differing perspectives within the NFT ecosystem. While creator royalties benefit creators significantly, the same might not hold true for collectors. Noteworthy platforms not supporting creator royalties include:

1. Magic Eden

Initially introduced on Solana blockchain, Magic Eden expanded its presence to other blockchains. While the platform initially advocated for creator royalties, it backed out later and transitioned to an optional model. Under this new paradigm, buyers determine the percentage of royalties, shifting the dynamic away from creators.

2. Sudoswap

Established in May 2022, Sudoswap is a decentralized NFT marketplace offering a unique trading environment via liquidity pools. Despite its innovative approach, Sudoswap does not incorporate creator royalties within its framework.

3. Solanart

Founded on Solana blockchain in June 2021, Solanart emerged as a popular Solana NFT marketplace. The platform initially embraced a fee-based model with customizable royalties for creators. However, it pivoted to eliminating all fees, subsequently forfeiting support for creator royalties.

4. Yawww

Originally conceived as a peer-to-peer NFT lending platform, Yawww transformed into a community-owned marketplace. By placing the decision-making power of royalty percentages in the hands of buyers, Yawww diverged from the traditional model of supporting creator royalties.

Closing thoughts: Pondering the Path Forward for NFT Creator Royalties

The NFT community grapples with the ongoing debate surrounding the prominence of creator royalties within major marketplaces and collections. NFT creator royalties were a breakthrough that allowed artists to profit from their work. Before NFTs, artists had little control over how their work was distributed or sold. NFTs gave artists the ability to embed royalty payments into their work, so they would receive a cut of the proceeds from any future sales. This was a major breakthrough that helped to level the playing field for artists and gave them a greater share of the profits from their work.

As platforms prioritize creators' interests over collectors', the enduring relevance of royalties in NFT sales prevails.