Everything You Need to Know About NFT Royalties

Everything You Need to Know About NFT Royalties

NFTs changed not just the art, music, collectibles, wearables and gaming industries but also the way artists’ and creators’ work is viewed and even sold. For NFT developers, the world of NFTs is overflowing with great opportunities. One of the most popular features of NFTs for artists worldwide is the potential to claim royalties from secondary market sales. This particularly interesting aspect is called NFT royalties.

Find out more about NFT royalties, how they work, who can benefit from them and some effective strategies to help you set up NFT royalties for your next collections. 

What are NFT Royalties?

NFT royalties provide artists and creators with a percentage of the sale price each time their non-fungible tokens (NFTs) are resold in the marketplace. Unlike the royalty system used for selling traditional artworks and music, where payments are often delayed or completely neglected to be sent to the artist, NFT royalties get automatically forwarded to the creator’s own crypto wallet. Hence, reducing the chances of late payments. 

With NFT royalties, creators can receive passive income which is perpetual. Thus, they continue indefinitely. In most NFT marketplaces such as OpenSea and Rarible, royalty percentages are set by the creator during the minting process.  

Unlike on the sale of traditional artworks or music where artists no longer have a way to track the subsequent transaction of their work once it has been sold, NFTs creators enjoy returns for something they have only produced once on a recurring basis. More so, they can get an increase in returns once they grow in popularity. 

How Do NFT Royalties Work?

NFT royalties are automatic payments to the NFT creator made on secondary sales. These are executed automatically by smart contracts and can be tracked on the blockchain. No need for a third-party intermediary to be trusted to pay for the royalty fee. Each time a secondary sale occurs, the smart contract ensures that the term of the NFT is fulfilled. If specified, NFT royalties provide NFT creators with profits not only on the initial sale but also on subsequent ones. Take note that not all NFTs yield royalties. Smart contracts should be written clearly on the blockchain. 

How to Setup NFT Royalties

Here’s how you can set up NFT royalties on two of the most popular NFT marketplace of today: OpenSea and Rarible.


  1. In the upper right corner, click the Profile icon.
  2. Select My Collections.
  3. Choose the collection you’d like to edit, then click the three-dot menu and select Edit.
  4. Under the Creator Earnings heading, set the Percentage fee. You can set a percentage of up to 10% and you can adjust this percentage at any time.
  5. Enter the payout wallet address where you wish to receive the earnings. Note: OpenSea is unable to split creator earnings to multiple addresses.


Rarible allows users to collect Royalties from sales on the platform even if you have created the collection outside of Rarible. Here’s how:

  1. Go to Rarible and connect a wallet that owns the collection. 
  2. Find your collection on Rarible. You can search by name, abbreviation or collection address.
  3. Click the three dots and choose Claim Ownership.
  4. Click the three dots again and then select Set Royalties.
  5. Enter the wallet address and set the percentage fee. 
  6. Click Update Royalties.

With Rarible, you have the choice to create split royalties, giving you a chance to give team members or collaborators their fair share on a specific collection. 

Effective Strategies to Setting Up NFT Royalties for Your NFT Collection

NFT royalties can be adjusted by the owner based on the guidelines of the secondary marketplace. For instance, both OpenSea and Rarible have a platform fee of 2.5%. The former allows users to set royalty percentage to a maximum of 10% while the latter enables users to set up as high as 50%. 

On average, the standard royalty percentages are between 5%-10%. The good royalty for an NFT may vary depending on who is willing to pay for that certain amount and who is benefiting. For NFTs where the beneficiary is the owner, it’s better to set a percentage that’s relative to the average floor price. On the other hand, NFTs where the beneficiary is the holder, it’s best to set the percentage higher to serve as an incentive and marketing tactic to grow the collection. 

The Future of NFT Royalties

Thanks to blockchain, NFTs and smart contracts, artists and creators are now gaining full control over their works, reducing conflicts and disputes that have surrounded the creative industries for many years. With the increasing number of artists appreciating how great it is to set their own terms when it comes to selling and profiting from their masterpieces, there is a huge chance that NFT royalties will soon gain the confidence of many artists that they will be fairly compensated for the time and effort they have poured in every piece.

Chris Anne

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