The rise of digital media and online platforms in recent years has made it easier for artists to earn a living from their work. Royalties paid to creators have traditionally been an important source of income for artists and other creators. This is because they receive ongoing compensation for their work even after it has been produced. NFT Creator Loyalty is a tool artists and projects use to generate passive income from their digital content.
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Recently, there has been a split in the Web3 community as to whether collectors should pay royalties. This article compares various platforms that pay royalties to creators and those that don’t.
A platform that fully supports NFT creator loyalty
Long since its first mintage, NFTs have greatly helped artists and creators by enabling them to monetize their digital content and earn commissions from their work. There are several platforms where you can earn loyalty. Let’s see some!
Premier NFT Marketplace, nifty gateway, ideal for investors interested in digital art, including artists and top brands. The company believes secondary market fees are part of what makes NFTs special. We provide enforceable loyalty at the platform level while also respecting on-chain loyalty set by creators.
Founded in 2022, the Foundation is one of the largest NFT marketplaces currently in operation. This is unique in that creators must be invited to join the community in order to be able to sell their creations. We also charge 5% marketplace interest on all transactions, including primary and secondary sales, which is much higher than other marketplaces. In any case, the platform still supports creators as they receive her 10% royalty from all secondary sales.
X2Y2 launched in January 2022 and was initially one of the first marketplaces to stop honoring creator loyalty. Despite being one of the loudest in the debate against royalties, after a few months all collections began honoring royalties.
rarible is an NFT marketplace founded in 2019 and considered one of the top in the field. It is especially known for its Ethereum-based collectibles, where various types of NFTs are stored. rarible respects loyalty on-chain and allows users to set their own limits.
A Marketplace That Takes the Middle Way with NFT Creator Loyalty
As the NFT loyalty debate deepened, some marketplaces chose to operate in the middle ground, offering an alternative to standard payment mechanisms. This includes offering optional royalties on existing collections with a minimum token fee or otherwise compensating creators. In addition, some provide a means to secure legally enforceable fees on-chain. these are:
This is the first, largest and most popular NFT marketplace. Devin Finzer and Alex Atallah founded him on December 20, 2017. The platform has grown quite extensive over the years and now includes a wide variety of digital art, music and more.
In February 2023, the trading fee was temporarily reduced from 2.5% to 0% due to lower trading volumes. Similarly, the platform has also changed its stance on option royalties. To that end, collectors of NFT projects that lack on-chain enforcement measures will be obliged to pay only a 0.5% royalty fee on both old and new purchases, he said. However, collectors can pay more if they believe the NFTs are worth more.
OpenSea also offers an enforceable royalty model for new collections, preventing NFTs from being listed on unencumbered marketplaces.
Launched on October 19, 2022, Blur is considered one of the fastest growing Ethereum-based NFT marketplaces. The fast nature, zero transaction fees for NFT sales, the ability to sort by price, and the built-in interface set us apart from other marketplaces. Blur recognizes an optional royalty for creators with a minimum fee of 0.5% for immutable collections where a filter registry is not available.
LooksRare was founded on January 10, 2022 and was previously considered OpenSea’s most direct competitor. Nine months later, the marketplace has chosen to retire the standard Creator Loyalty. Buyers can now decide whether to pay royalties at checkout, but the platform also promises to pay creators his 25% of protocol fees.
Platforms that do not support NFT creator loyalty
In 2022, many NFT marketplaces will stop supporting creator-set royalties. This change is due to several reasons, including disagreements within the NFT ecosystem. The main reason is that for creators, creator loyalty, which allows them to earn revenue from collectors each time their work is resold, is very beneficial, but the same cannot be said for collectors. Here are some of the platforms that don’t support creator loyalty:
Magic Eden was originally created on the Solana blockchain and later extended to other blockchains such as Ethereum. Founded in 2021 as a marketplace competitor and as a solution to problems faced by other existing NFT marketplaces. When the debate against creator royalties began, Magic Eden fully supported creator royalties and even introduced a controversial creator loyalty protection tool. However, after a few weeks they withdrew this and made the royalties voluntary. Creator royalties are no longer a priority on platforms these days, with the new model leaving buyers, not sellers, to decide what percentage they want to pay.
Sudoswap is a decentralized NFT marketplace launched in May 2022. A platform that allows users to create liquidity pools (smart contract containers composed of NFTs and ETHs) and trade through them. This is what makes it unique. Sudoswap became popular because it offers an alternative to his traditional NFT marketplace, but does not support creator loyalty.
Similar to Magic Eden, this NFT marketplace was developed with Solana. Founded in June 2021, its purpose was to provide a platform for creators to share their work and allow people to buy and sell their work. This has quickly become a popular choice within the Solana NFT ecosystem. However, Solanart takes a different stance on creator royalties. Initially, the platform introduced his 3% sales commission, allowing creators to customize their loyalty. However, as the debate around the issue gained momentum, Solanat made a major change by eliminating all fees entirely. Therefore, the platform currently does not support creator loyalty.
Yawww was initially launched as a peer-to-peer NFT lending platform. By July 2022, it was making headlines and gradually becoming his community-owned NFT marketplace. Yawww has been dubbed “the first democratized his NFT marketplace” because it puts the power to determine royalty percentages in the hands of buyers rather than sellers. This means that the marketplace does not support creator loyalty.
What does the future hold for NFT creator royalties?
There is a growing debate in the NFT community about removing creator royalties from major NFT marketplaces and collections. Magic Eden and many other platforms no longer require royalty payments and have moved to optional royalty payments.
Creator loyalty was largely seen as one of the true innovations of the NFT space. Artists could earn more as long as their works were sold. But that all changed when NFT platform Sudoswap launched an automated market maker. This removed the royalties on secondary sales, resulting in widespread debate and questioning the notion of creator royalties.
Notably, while many NFT marketplaces have already made their decision, OpenSea has remained silent on the discussion. When he finally addressed the issue, he expressed his desire to take a thoughtful and principled approach to the issue in order to find a solution.
However, NFT royalties are an aspect that cannot be excluded from the market. Doing so means that creators may be forced to work more and not earn unearned royalties. So as long as the platform prioritizes the interests of creators over those of collectors, royalties will continue to be part of NFT sales.
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*All investment/financial opinions expressed by NFT PLAZA are based on the site moderator’s personal research and experience and are for educational material only. Individuals should thoroughly research any product before making any type of investment.
A blockchain maximalist who believes technology is necessary for the future we are heading towards. An avid researcher and author, he informs the landscape of the blockchain field through his writings.