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The Importance of Creator Royalties in NFT Projects

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On February 27th, Yat Siu, co-founder of Animoca Brands, said that creator royalties provided NFT projects with a continuous source of income that exceeded the…

The Importance of Creator Royalties in NFT Projects

On February 27th, Yat Siu, co-founder of Animoca Brands, said that creator royalties provided NFT projects with a continuous source of income that exceeded their initial sales (usually 5% to 10% when the tokens were resold). However, in order to seize market share, many companies are being led astray at the expense of creators.

Animoca co-founder Yat Siu: Giving up NFT royalties will “kill” Web3

Analysis based on this information:


The world of NFT (Non-Fungible Token) projects has been growing rapidly in recent times. They are digital assets that represent ownership of unique items like art, music, or collectibles. With each token being unique, it has made it possible for creators to monetize their work in a new way. However, as the market grows, companies are starting to lose sight of the importance of creator royalties.

Creator royalties are an essential aspect of NFT projects as they provide a constant source of income for creators long after they have sold their works. When NFTs are resold or traded, creators earn a percentage of that sale, providing a continuous stream of income. These royalties are usually between 5% to 10%, often enough to encourage creators to continue to create and maintain engagement within the community.

However, some companies are willing to forget about these royalties for the sake of market share. By lowering royalty rates, they are able to offer lower prices to buyers, making them more attractive to the market. This strategy might work in the short term, but in the long run, it will harm NFT projects and creators. The lack of financial incentives harms creators and incentivizes them negatively. This makes it challenging for creators to continue producing quality work and promoting the brand.

It is important to note that Creator Royalties and fair compensation is crucial for the longevity of NFT projects. If creators feel undervalued or robbed of their earnings, they will not want to participate in the development of the particular project. Companies must put in place an appropriate balance between market share and creator royalties that ensures that creators get compensated fairly for their intellectual property.

In conclusion, Creator royalties are an essential component of the growing market of NFT projects as it provides a constant source of income for creators long after they have sold their works. As the market keeps growing, it is vital that companies maintain sensitivity and appreciation towards the creators. The balance between market share and Creator Royalties ensures that creators get compensated fairly for their work, and companies able to maintain credibility and retain confidence from their creators.

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