NFT Royalties: Can Creators Really Count on Passive Income Forever?

You’ve probably heard the phrase NFT royalties thrown around like digital confetti, but what does it actually mean? Think of it like this: every time someone resells a piece of digital art, music, or collectible you created, you get a little slice of the pie—automatically. No chasing people down, no paperwork, just sweet, passive income landing in your crypto wallet.

That’s the dream, right? Create something once, and get paid again and again every time it changes hands. For digital creators, this sounds like the holy grail of internet art: work less, earn more.

But here’s the million-dollar (or at least million-satoshi) question: Can NFT royalties really be trusted to keep the cash—or crypto—flowing forever? Or is this all just a digital daydream waiting to fade out with the next bear market?

Let’s dig in.

How NFT Royalties Work

Okay, time to peek behind the curtain: how do NFT royalties actually work? Is there a magical robot accountant keeping tabs on resales and sending out crypto coins? Kinda.

At the heart of it all are smart contracts—basically, bits of code that live on the blockchain and do exactly what they’re told, no questions asked. When you create an NFT and list it for sale, you can embed a rule in the smart contract that says, “Hey, every time this NFT is resold, send me 5% (or whatever percentage I choose).” It’s like setting up a tip jar that automatically refills itself every time someone else gets their hands on your art.

Most creators set royalties between 2.5% and 10%, depending on the platform and how bold they’re feeling. Want to keep it chill? Go low. Feeling spicy? Ask for more. The cool thing is, this cut gets taken out of each secondary sale and sent straight to your wallet—no middlemen, no awkward payment reminders.

Now, not all NFT marketplaces are created equal. Some are super royalty-friendly. Platforms like OpenSea, Rarible, and Foundation let creators bake in their royalties right from the start. These platforms are basically like your chill artist friends who always split the check fairly.

But here’s the twist (you knew there’d be one): just because you set royalties doesn’t mean every platform honors them. Some newer marketplaces have started skipping out on royalty payments to attract sellers and buyers with lower fees—which has sparked quite the drama in NFT town. (More on that tea later.)

So yes, NFT royalties are a pretty neat system—at least in theory. But is it all smooth sailing from here? Not quite.

The Appeal of NFT Royalties for Creators

Let’s talk about why NFT royalties have artists doing virtual backflips.

Beyond the First Sale: Passive Income Goals

Traditionally, when you sold a piece of art, that was it. You got paid once, and if that art resold later for millions? You’d get… nada. NFT royalties flipped that script.

• Every resale can trigger a royalty payment
  
• Artists continue to earn without doing extra work
  
• It’s like your past creations are sending you thank-you notes—with crypto attached

Think of it like Spotify royalties, but without a million middlemen taking a cut.

Power to the Creators

Royalties give creators more than just money—they offer independence. Artists, musicians, photographers, and even meme makers can now:

• Bypass traditional gatekeepers (looking at you, galleries and labels)
  
• Build recurring revenue from their work
  
• Stay connected to their fans through every sale

This is a big deal in the digital economy. For once, the internet is helping creators keep ownership of their art and their income.

Real Success Stories

A few examples of NFT royalty magic in action:

• Fewocious: A teen art prodigy who made millions through NFT drops and continues to earn royalties as their art is resold.
  
• 3LAU (Blau): A DJ who tokenized his music and built a long-term income stream while offering fans perks through NFT ownership.
  
• XCOPY: A well-known crypto artist whose glitchy, dystopian artworks sell for huge sums—and keep generating royalties each time they trade hands.

Sure, not everyone is making millions, but these stories show what’s possible when royalties work as promised. For many creators, it’s less about hitting the jackpot and more about getting paid fairly, consistently, and automatically.

NFT royalties, at their best, turn creativity into a sustainable hustle.

Challenges and Limitations

Okay, so NFT royalties sound like a dream, right? Passive income, creative freedom, and no stuffy gatekeepers telling you what to do. But before you quit your job to become a full-time NFT artist, let’s talk about the not-so-glamorous side.

The Rollercoaster of NFT Resales

Royalties only come in when an NFT is resold. So what happens if nobody’s buying or selling your work anymore? Yup—no resale = no royalty.
And the NFT market? It’s about as stable as your friend’s crypto portfolio during a bear market.

• Market hype goes up, royalties flow in
  
• Market hype crashes, your wallet gets quiet
  
• Passive income becomes passive waiting

In short: NFT royalties depend on ongoing demand, and that can be a wild ride.

The Tech Isn’t Foolproof

Here’s the kicker: NFT royalties aren’t hardcoded into the blockchain itself. They’re usually enforced by platforms like OpenSea, Rarible, or Magic Eden—meaning…

• Some platforms honor royalties, others don’t
  
• If buyers trade NFTs off-platform (like via direct wallets), they might skip the royalty entirely
  
• There’s no legal requirement—just a polite suggestion backed by code

It’s kind of like leaving a tip at a restaurant: expected, but not always enforced. Unless platforms agree to work together (spoiler: they don’t always), creators can get left out.

Royalties That Disappear

Some buyers purposely use NFT marketplaces that ignore royalties to save money—especially on expensive NFTs. This means:

• Creators might miss out on income from big resales
  
• Some NFT projects even offer “royalty-free” trading as a selling point
  
• This creates a race-to-the-bottom where creators lose their revenue stream just to stay competitive

Imagine working for months on an artwork only for it to be sold later without a single cent coming back to you. Ouch.

When Hype Dies Down, So Does the Pay

Let’s be honest: not every NFT project is a forever success. Trends fade, collectors move on, and even the coolest JPEGs can lose their luster. That means:

• NFT royalties dry up as projects lose attention
  
• Creators may have to keep launching new collections just to stay afloat
  
• Long-term income becomes short-term hype-dependent

For most, NFT royalties are not a set-it-and-forget-it retirement plan—they’re a nice bonus while your work is hot.

So yes, NFT royalties can feel like magic, but the spell doesn’t always last. Next up, we’ll talk about what the future could look like—and whether there’s still hope for creators looking to turn pixels into paychecks.

Legal and Ethical Considerations

Alright, now we’re heading into the land of laws, rights, and digital drama—because yes, even in the wild world of NFTs, the boring-but-important stuff like intellectual property and regulations still matter. Especially when we’re talking about NFT royalties.

Who Owns What, Really?

Just because someone buys your NFT doesn’t mean they own the rights to your actual artwork. Confused? Here’s the simple version:

• Buying an NFT = owning a digital receipt that says “Hey, I own this token”
  
• It does not mean owning the copyright unless it’s explicitly included
  
• Creators still control how their work can be used, printed, or remixed—unless they say otherwise

This becomes super important if someone starts selling T-shirts with your art or making spin-offs. Without clear copyright terms in the NFT metadata or contract, things can get messy fast.

Royalty Disputes Aren’t Just Hypothetical

Even with smart contracts, NFT royalties can lead to disagreements:

• Two collaborators mint a project… but only one wallet is set to receive royalties? Uh-oh.
  
• A marketplace changes its rules and stops honoring royalties—what now?
  
• Someone mints a copycat of your art and sells it under a different name?

These things happen more than you’d think. The decentralized nature of the space means enforcement is often left up to platforms or—worse—Twitter drama and community outrage.

Laws Are Catching Up (Slowly)

Right now, the NFT space is kind of like the internet in the ’90s: exciting, chaotic, and mostly unregulated. But that won’t last forever.

Governments and regulators are starting to take notes:

• Copyright offices in some countries are exploring how NFTs fit into existing IP laws
  
• Consumer protection and artist rights are gaining more attention
  
• New policies could make NFT royalty enforcement more consistent—or more complicated

For creators, this could be good news—especially if future laws help lock in royalties as a right, not just a nice-to-have.

Practical Tips for Creators

So you’re ready to ride the NFT wave like a pro surfer, and you’ve got your sights set on those sweet NFT royalties. Awesome! But before you start counting passive income in your sleep, let’s go over a few smart strategies to help you actually get paid—and keep the good vibes going.

1. Set Royalties That Are Fair (Not Scary)

You can set your royalty percentage when minting an NFT—usually between 2.5% and 10% of every resale. But the golden rule?

• Don’t be greedy. A 50% royalty might sound bold, but buyers will run. Fast.
  
• Think long-term. A 5% cut on 100 resales? Way better than a 20% cut on none.
  
• Match the market. Check what others in your niche are doing. Keep it competitive.

Remember: the royalty is a thank-you, not a tollbooth.

2. Choose Platforms That Actually Respect Royalties

Not all marketplaces play by the same rules. Some platforms proudly honor NFT royalties. Others? Not so much.

Here are a few with a rep for respecting creators:

• OpenSea: The OG of NFT marketplaces, still royalty-friendly (though policies have shifted).
  
• Rarible: Known for letting artists set their terms—royalties included.
  
• Foundation and Zora: Popular with indie creators and typically supportive of royalties.

Hot tip: Check the fine print (or community chatter) before committing to any platform. Some newer “zero-fee” platforms are also “zero-royalty,” which isn’t great if you’re counting on long-term income.

3. Don’t Put All Your Eggs in the Royalty Basket

Look, NFT royalties are great when they come in—but they’re not always a steady paycheck. To stay financially healthy in Web3 (or anywhere), it’s smart to diversify.

Here’s how:

• Offer limited-edition drops at premium prices
  
• Sell physical merch tied to your NFTs (hello, hoodie art!)
  
• Host token-gated experiences, like exclusive livestreams or tutorials
  
• Use Patreon or Mirror to build a broader community that supports you, not just the token

Royalties are one piece of the puzzle—but your creativity? That’s the real goldmine.

With these tips in your digital toolkit, you’ll be better equipped to build a royalty strategy that’s fair, future-proof, and financially sane. Next up: let’s peek into what the future holds for NFT royalties. Will they stick around—or are they just a shiny phase in Web3 history?

Royalties, Reality, and a Little Bit of Risk

Let’s bring it home. NFT royalties have opened up an exciting new world where artists and creators can finally earn from their work long after the first sale. The idea of passive income sounds amazing—who wouldn’t want to keep making money every time their art changes hands? But here’s the reality check: while NFT royalties can provide ongoing earnings, they’re not always enforced, the market can be unpredictable, and the legal side is still catching up.

That doesn’t mean creators should ignore them—far from it. Royalties are still a powerful tool in the digital creator’s kit. Just don’t treat them as a guaranteed income stream. Think of them as one ingredient in a bigger recipe. If you’re smart about platforms, fair with your royalty rates, and open to multiple income sources, NFT royalties can absolutely work in your favor—just maybe not forever on their own.

Read More

• Investing in NFTs: Identifying Promising NFT Projects
• Shibarium Builder Spotlight: NFTs2Me Eases NFT Creation
• FTX Sues NFT Firms Over Missing Tokens in $1.3M Asset Dispute

Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.