NFT Royalties – Fair Play or Outdated Tax?

[Jenny]

This one’s spicy. Some creators are fighting hard to keep royalties alive, while traders want them gone so they can flip cheaper.

I get both sides, honestly.

• Artists deserve passive income for their work.
• But traders are like “bro I’ve paid 3 royalties this week already.”

Is there a middle ground here? Optional royalties? Caps?

How do you handle this when buying/selling NFTs?

 

[Alison]

From an economist's perspective, this issue highlights a fundamental tension between incentivizing creators and optimizing market efficiency. The value of royalties lies in their ability to ensure that creators are compensated for the ongoing utility of their work, aligning their financial interests with the long-term success of the NFT. In theory, royalties support sustainable income for artists, encouraging continuous innovation.


However, from the trader's viewpoint, the accumulation of multiple royalty payments can inhibit liquidity and hinder price discovery. As traders are often concerned with short-term profit, the additional transaction costs may deter frequent trading and create friction in market dynamics. This is especially pertinent in a market where liquidity and the ability to flip assets quickly are crucial for traders.

 

[Arizona]

It's definitely a tricky balance, but I think there is a middle ground! Artists absolutely deserve to be rewarded for their creativity and hard work, and royalties are a great way to ensure they continue to benefit from secondary sales. On the other hand, traders don't want to be hit with excessive fees that make flipping more difficult.

Maybe optional royalties or capped royalties, as you mentioned, could be a solution. It allows flexibility for traders while still rewarding artists for their contributions. It's all about finding a system that supports both the creative community and the trading aspect of NFTs without one side feeling left out. Love that we’re having these discussions, as it can lead to a more sustainable NFT ecosystem!

 

[jasper]

Honestly feels like a Netflix family plan fight artists want their share, traders want to kick everyone off the account. Maybe the compromise is like tipping at a restaurant optional, but if you don’t, everyone’s judging you silently from the blockchain.

 

[Harry]

Optional royalties with suggested tips feels like the middle ground. Keeps artists supported without punishing active traders. Personally, I respect good work—if the project delivers, I don’t mind tipping.

 

[James Henry]

This tension shows the NFT space is maturing. Optional royalties or capped models could strike that balance—supporting creators and keeping traders active. Emerging platforms are already testing new royalty logic, and that’s exciting. Long-term, sustainable systems will reward both sides. I lean toward tipping when I see real value—it keeps the ecosystem thriving.

 

[peterjohn]

There is definitely room for a middle ground in the royalty debate. Introducing optional royalties or capped fees could provide a balanced solution, allowing creators to earn passive income while giving traders more flexibility. Platforms that enable creators to set their own royalty structures or allow buyers and sellers to agree on them could be a step in the right direction. Personally, I value supporting creators when the project offers unique value, but I also understand the need for sustainable trading conditions. Finding that balance will be key as the NFT market matures.

 

[Aesthatic girl]

This debate is tough because both sides have valid points. Artists deserve ongoing support, but high royalties can discourage trading. Maybe a hybrid model works—lower, optional royalties or tiered fees based on hold time. Balancing creator incentives with trader flexibility could lead to healthier, more sustainable NFT ecosystems. Thoughts?

 

[SUNSHINE]

It’s a tricky balance. Artists deserve royalties as a way to earn from their creations, but excessive fees can deter trading and hurt liquidity. Perhaps a tiered system or optional royalties based on the buyer's choice could work—ensuring artists are compensated while offering flexibility for traders to flip without excessive fees.

 

[Snowy]

I get the struggle! Artists should definitely earn from their work, but I can see how constant royalties can add up for traders. Maybe a middle ground could be optional royalties, where buyers choose to pay a smaller fee, or a cap on how much royalties are charged per trade.

 

[Ruksh]

Solid take—this debate isn’t going anywhere anytime soon. Creators built the space, and traders keep it liquid. Both need each other, but the current model feels unsustainable. Optional royalties or caps could be a fair compromise, but enforcing them is another battle. Appreciate the balanced view—you actually get both sides instead of just shilling one.

 

[Daruk]

Royalties were supposed to support artists, but let’s be real—most of them just benefit early whales and project founders who already made bank. Traders are the ones keeping the market alive, yet they’re getting taxed at every turn. Paying 5-10% royalties on every flip is just bleeding money. If artists want long-term income, they should build real utility, not rely on forced handouts. No wonder people are pushing for zero-royalty marketplaces.

 

[Munashak]

It's interesting to look at this situation through a historical lens. When we think about royalties in the art world, they've been a cornerstone for artists for decades. In traditional art markets, artists have long benefited from resales through mechanisms like the "artist's resale right." But with NFTs, it's like we're witnessing a modern evolution of this practice, one that's faced with a whole new set of challenges in the digital age.

On the flip side, traders and collectors have always sought the best deal, which is understandable. Just like in the stock market or with collectibles like trading cards, people want to capitalize on price fluctuations without extra costs eating into their profits. In the past, collectors never had to consider resale royalties when flipping assets — they simply bought and sold as they saw fit.

Now, we're in a space where the balance between ensuring creators get their fair share and allowing a fluid, less restrictive market for traders is being redefined. Optional royalties or caps could serve as a compromise. It would be interesting to see the NFT space evolve with flexible royalty structures, similar to how we’ve seen royalty-based systems shift over the years in other industries, adapting to new technologies and market conditions.

Ultimately, finding that balance will require open discussions and experimentation, just like we’ve seen in the past with industries that struggled to adapt to new forms of ownership and profit-sharing.