Crypto Gloss

NFT Royalty Standards

Definition:

NFT royalty standards provide a mechanism for NFT creators to specify the royalty percentage they expect to receive on secondary sales — with EIP-2981 being the accepted Ethereum standard — but because enforcement of royalties is optional for marketplaces rather than enforced at the smart contract or protocol level, the effectiveness of creator royalties has depended entirely on marketplace policy, leading to a market-wide royalty collapse in 2022–2023.

EIP-2981: The On-Chain Royalty Standard

EIP-2981 defines a single standardized interface that NFT contracts implement to communicate royalty information:

“`solidity

function royaltyInfo(uint256 tokenId, uint256 salePrice)

external view returns (address receiver, uint256 royaltyAmount);

“`

Any marketplace or buyer can query this function before completing a sale. The contract returns:

  • The address that should receive the royalty payment
  • The exact royalty amount for a given sale price

What EIP-2981 does NOT do:

  • It does not enforce payment. There is no mechanism at the ERC-721 or ERC-1155 level that prevents a transfer unless a royalty is paid.
  • It does not restrict which marketplaces can list the NFT.
  • It does not penalize royalty circumvention.

Royalty payment is entirely voluntary on the part of the marketplace processing the sale.

History: The Royalty Wars (2022–2023)

Pre-2022: OpenSea was the dominant marketplace and enforced creator royalties by default (typically 5–10%). Creators relied on OpenSea’s goodwill and market position to receive royalties.

Late 2022 — Blur launches: Blur, a marketplace targeting NFT traders, launched in October 2022 with a “choose your own royalties” model — sellers could pay 0% royalties to buy priority placement in Blur’s order book. This began the royalty race to zero.

OpenSea response: OpenSea attempted to enforce royalties through an operator filter — a smart contract registry that blocked sales to marketplaces not honoring royalties. Collection operators could add non-compliant marketplaces to a block list. This worked temporarily but was circumvented.

2023 OpenSea capitulation: After losing significant market share to Blur, OpenSea eliminated mandatory royalties in August 2023, declaring that on-chain operator filters were insufficient and that the market had spoken. Creator royalties became optional across both major marketplaces.

Effect on creators: For collections heavily reliant on royalty income (1/1 art, generative art collections), the royalty collapse represented a significant income reduction. Collections with strong community loyalty maintained royalty payments through social pressure — but enforcement was gone.

Royalty Enforcement Alternatives

Soulbound approach: Some collections (Zora, Foundation) have explored making NFTs non-transferable outside of royalty-enforcing marketplaces by implementing transfer restrictions directly in the token contract. This creates a permissioned trading environment but limits liquidity.

Creator-owned marketplace: Some projects (e.g., ArtBlocks) operate their own primary and secondary marketplaces with full royalty control, reducing dependence on third-party compliant platforms.

Social consensus: High-status collections (BAYC, Azuki, CryptoPunks) rely on community expectation and moral pressure for royalty compliance. Most reputable traders honor these voluntarily.

Key Marketplaces and Royalty Policies

Marketplace Current Royalty Policy
OpenSea Optional (not enforced) — collector decides
Blur Optional — trader sets 0%–full
Coinbase NFT Honors creator royalties
Foundation Enforced on Foundation platform
Zora Creator-configurable
SuperRare Enforced: 10% royalty on secondary sales

Related Terms

Sources

Last updated: 2026-04