How do you get royalties from your NFT sales?

Earning Royalties Through NFT Marketplaces

1. When you create an NFT, you can embed royalty terms directly into the smart contract that governs it. This ensures that every time your NFT is resold on a marketplace, you automatically receive a percentage of the sale price. The royalty rate is typically set between 5% and 10%, though creators have the flexibility to choose their preferred amount during minting.

2. Not all marketplaces support royalties equally. Platforms like OpenSea, LooksRare, and Foundation honor creator royalties by default, meaning buyers must pay the royalty fee upon resale. These platforms enforce royalty payments through integrated smart contracts that trigger payouts to the original creator’s wallet.

3. Some newer marketplaces operate under a 'no-royalty' model, where secondary buyers are not required to pay ongoing fees to the original artist. In such cases, even if your NFT was initially listed with a royalty clause, those terms may be ignored unless the platform actively enforces them.

4. It's crucial to research which platforms align with your goals as a creator. Choosing a marketplace that respects and enforces royalties increases the likelihood of consistent passive income from future transactions involving your digital artwork or collectibles.

Smart Contract Implementation for Royalty Collection

1. The foundation of NFT royalties lies in the ERC-721 or ERC-1155 smart contracts used on the Ethereum blockchain. Developers can extend these standards using interfaces like EIP-2981, which standardizes how royalty information is stored and accessed across different platforms.

2. EIP-2981 allows creators to define a royalty recipient address and a fixed percentage that will be paid out each time the NFT changes hands. This data becomes part of the blockchain record, making it transparent and immutable.

3. Once implemented, the smart contract automatically calculates the royalty amount at the point of sale and sends it to the designated wallet. No manual intervention is needed, reducing the risk of non-payment or disputes over compensation.

4. However, enforcement still depends on the buyer and seller cooperating with compliant exchanges. If a transaction occurs off-platform or through a non-compliant exchange, the royalty mechanism may fail to execute, highlighting limitations in current infrastructure.

Tracking and Receiving Royalty Payments

1. After setting up your NFT with royalty terms, you don’t need to manually invoice buyers or track sales. Every qualifying resale triggers an automatic transfer based on the rules encoded in the contract.

2. You can monitor incoming royalty payments using blockchain explorers like Etherscan or specialized analytics tools such as Gem.xyz or Dune Analytics. These services provide dashboards showing transaction history, royalty earnings, and wallet activity related to your NFTs.

3. Payments are usually sent in the same cryptocurrency used for the sale—most commonly ETH on Ethereum-based platforms. Ensure your receiving wallet supports the token type and has sufficient gas to accept incoming transfers without delays.

4. Some platforms also offer aggregated payout reports and tax documentation features, helping creators manage their income more efficiently, especially when dealing with high-volume collections or multiple editions.

Frequently Asked Questions

What happens if someone resells my NFT on a non-royalty-enforcing platform?If a secondary sale occurs on a marketplace that does not respect royalty agreements, the smart contract may not trigger a payment to you. While the terms are written into the NFT, enforcement relies heavily on the platform's policies and technical integration.

Can I change the royalty percentage after minting my NFT?No, once an NFT is minted with a specific royalty rate encoded in its smart contract, that value cannot be altered retroactively. Creators must decide on the royalty structure before deployment, emphasizing the importance of planning ahead.

Are NFT royalties legally binding?Royalties are enforced technically through smart contracts rather than legal agreements. There is currently limited legal precedent supporting mandatory royalty payments in most jurisdictions, so reliance remains on technological compliance rather than judicial enforcement.

Do all blockchains support NFT royalties equally?No, support varies significantly across chains. Ethereum has strong infrastructure due to EIP-2981 adoption, while other networks like Solana or Polygon depend on individual marketplace policies. Some chains prioritize low fees over built-in royalty mechanisms, affecting creator revenue potential.