Part 1 – Introducing the Problem

The Overlooked Dynamics of NFT Royalties: Reshaping Artists' Earnings in the Decentralized Economy

Why Royalties in NFTs Are Broken—and No One’s Talking About It

In theory, NFT royalties were supposed to revolutionize creator compensation by ensuring artists receive a portion of secondary sales in perpetuity. But the reality today is far more fragmented and opaque. While platform-native royalty enforcement exists in walled-garden marketplaces, it quickly breaks down in open ecosystems. There is no blockchain-level consensus on royalties, and enforcement often relies on centralized mechanisms—defeating the very ethos of Web3.

The reason this problem remains largely under-discussed isn’t due to lack of impact—it’s a matter of optics. The NFT market has been more focused on speculation, floor prices, and flipping than on the long-term sustainability of creator economies. As a result, core issues around royalty enforcement are swept under the rug in favor of liquidity and volume. Until recently, there was little incentive to address this systemic flaw.

Historically, Ethereum-based NFTs popularized the “10% royalty” model, embedded as metadata in the contract. But ERC-721 and ERC-1155 standards never enforced royalties at the protocol level. Marketplaces were left to honor them—or not. Blur, X2Y2, and even OpenSea have since moved toward optional royalties or dynamic mechanisms, igniting fierce debates over creator rights and free-market liquidity.

This gray area has created an exploitable arbitrage: marketplaces that disregard royalties become more appealing to traders seeking lower fees. Meanwhile, artists are left with diluted revenue and token holders question long-term project viability. The lack of royalty standardization is an existential vulnerability to NFT-based economies.

Compounding the issue, smart contract-based enforcement—while promising—is not widely adopted. Protocols that attempt to restrict transfers to only royalty-compliant platforms often get criticized for centralization or censorship. These trade-offs sit awkwardly at the intersection of decentralization and monetization, challenging the viability of “programmable royalties” as a sustainable model.

This silent collapse of royalty reliance has knock-on effects throughout decentralized platforms—from DAOs issuing NFT-based governance credentials to GameFi ecosystems utilizing NFTs for in-game economies. The implications extend beyond artists and traders—impacting protocol treasuries, tokenomics models and community incentives.

Interestingly, similar decentralization trade-offs are being surfaced in other blockchain verticals such as governance models on The Open Network. For an insightful contrast, consider Decentralized Power Governance in The Open Network.

As we delve deeper ahead, questions will emerge: Can royalties be credibly enforced without adding centralization risk? Is there a protocol-level solution that balances sovereign user control and fair creator compensation? Or is the model fundamentally broken—only viable within permissioned walled gardens?

Part 2 – Exploring Potential Solutions

Smart Contract-Enforced Royalties: Can Code Guarantee Compliance?

One of the most discussed technical solutions to the royalty enforcement dilemma in NFTs relies on anchoring royalty logic within the smart contract itself. Platforms like EIP-2981 introduced a standardized royalty interface allowing contracts to signal royalty preferences, but it remains opt-in for marketplaces. Theoretically, royalties could be made non-negotiable by directly embedding them into transfer logic. However, such implementations often come at the cost of composability and liquidity.

“Transfer-blocking” smart contracts—contract designs which refuse to allow permissionless token transfers without a royalty payment—restrict interoperability. Buyers can't move tokens between wallets or list NFTs on marketplaces unless routed through royalty-enforcing mechanisms. This introduces friction and contradicts crypto’s ethos of open, permissionless value flow, prompting resistance from users and protocols alike.

Marketplace-Level Solutions: A Patch or a Framework?

Some markets experiment with royalty whitelists—only allowing trades of NFTs from contracts that enforce royalties on-chain. Blur and OpenSea have skirmished in this arena with varying degrees of success, but such market-level dynamics create fragmentation. This arms race incentivizes creators to limit transferability or partner exclusively, undermining true decentralization and leaving smaller players locked out.

For example, royalty enforcement becomes trivial on closed ecosystems—but leads to centralization. This problem parallels governance models discussed in Decentralized Power Governance in The Open Network, where protocol-level enforcement can skew power.

Zero-Knowledge Royalty Proofs: Theoretical but Promising

Zero-knowledge rollups have unlocked novel use cases ranging from privacy to compliance. A growing area of research explores zk-based royalty proofs wherein royalty compliance (on secondary sales) is proven without revealing buyers or on-chain addresses. This keeps the NFT transferable while ensuring royalties are internally validated and enforced at the protocol or aggregator layer. However, no mainstream implementation exists today, and zk royalty circuits would require significant on-chain complexity and gas considerations.

DAO-Governed Royalty Pools

Another governance-heavy alternative is the pooling of royalties, managed and distributed by a DAO. Artists opt their work into a governing collective where royalties are force-enforced via internal smart contract mechanisms and shared based on usage metrics or votes—modeling revenue sharing closer to streaming platforms. Still, this brings back the same problems of policy centralization, Sybil attacks, and the inefficiencies of on-chain vote-based distribution.

Referral Incentives and User-Layer Solutions

A final category proposes incentivizing users to respect royalties through fee rebates, staking rewards, or whitelist benefits. These operate more like behavioral nudges than technical guarantees. Marketplace referrals through platforms like Binance tie into broader ecosystem dynamics and may help align user interests—but without enforcement, royalties remain optional in essence.

Part 3 – Real-World Implementations

Real-World Deployments of NFT Royalties: Lessons from the Trenches

Platforms and chains have tried implementing NFT royalties with varying degrees of success, often exposing the tension between technical enforcement and protocol-level limitations. Ethereum's ERC-721 and ERC-1155 standards, fundamental to NFT interoperability, notably lack native royalty enforcement. To compensate, marketplaces like OpenSea and Rarible initially depended on off-chain mechanisms like operator filters. However, OpenSea's later shift to optional royalties led to widespread backlash, especially from creators whose revenue drastically declined. This highlighted the fragility of relying on frontend platforms rather than protocol-layer guarantees.

In contrast, solutions like Manifold and Zora experimented with smart contracts that route secondary sales through custom modules embedding royalties. These contract-level enforcements work well when both buyer and seller comply. But they remain vulnerable if transactions occur through non-cooperative platforms or direct peer-to-peer swaps, bypassing logic external to the NFT itself. Fragmented liquidity across marketplaces further undermines royalty integrity, with most Ethereum-based mechanisms relying on centralized points of enforcement—ironically reintroducing elements that decentralization was meant to eliminate.

Some chains aim to solve this at the protocol level. Flow by Dapper Labs introduced Cadence-based NFTs with royalty enforcement embedded into the asset’s function lifecycle. Its closed environment allows for stricter compliance, but at the expense of composability and third-party tooling flexibility. Meanwhile, Tezos’ FA2 standard enables default royalty receivers, yet adoption among larger marketplaces is inconsistent, diluting its impact.

Attempts from Layer 1s like Solana also encountered challenges: projects like Metaplex initially supported immutable royalty fields, but due to chain design choices allowing for bypassing smart contract logic, enforcement was inconsistent. New standards tried to retrofit fixes, but the damage to creator trust was already entrenched.

A noteworthy implementation is The Open Network (TON), which integrates NFTs with adjustable on-chain parameters using its TVM (TON Virtual Machine). This allows for programmable ownership behaviors and potentially natively enforced royalties. For more on TON’s technical foundations that support this, see our article on A Deepdive into The Open Network TON.

Still, none of these solutions are universal. Cross-chain royalty enforcement remains unsolved. If a user bridges NFT assets to another chain, royalty metadata and logic often don’t survive migration. This renders even the best on-chain designs ineffective outside their origin chain.

Innovations like programmable escrow layers and third-party integrations with trading aggregators are emerging, but they're still fragmented.

While optional royalties dominate the current state, the testing grounds built by projects on Flow, TON, and Tezos are revealing technical pathways forward—and equally, their breaking points.

Part 4 – Future Evolution & Long-Term Implications

The Future Trajectory of NFT Royalties: Integration, Interoperability, and Emerging Protocol Standards

As NFT royalty infrastructure matures, a growing focus is being placed on programmable and enforceable standards that solve cross-platform inconsistencies. One significant direction of evolution centers around on-chain royalty enforcement at the protocol layer—rather than depending solely on marketplace goodwill. Solutions like EIP-2981 offered a baseline, but limitations persist when royalties are overridden or manipulated on platforms that lack support or operate via wrapped assets that bypass contractual intents.

Layer-1 and Layer-2 protocols are now exploring native NFT modules with built-in royalty logic. The evolution of such modules, especially when tied to account abstraction or modular execution frameworks, could open the door to NFTs with embedded condition-based royalties. This would allow for dynamic splits that adapt based on secondary sale frequency, geography, or wallet reputation, enhancing royalty logic on-chain without central facilitator oversight.

Another major force shaping NFT royalties is the growing intersection with oracles and real-world data. By feeding external inputs—like streaming metrics or social engagement—into royalty logic, creators could tie earnings to continuous consumption or content virality rather than a sale event alone. This mirrors the approach taken in decentralized data platforms such as Pyth Network, where off-chain data feeds seamlessly integrate with smart contracts, introducing nuanced real-world reference points into decentralized systems.

Scalability remains a challenge. As more NFT projects move to chains with sub-second finality and minimal gas costs, royalty enforcement tech will need to leverage execution-layer innovations like zero-knowledge proofs or optimistic execution. These approaches promise secure enforcement without bloating block sizes or front-running state changes. ZK-rollups in particular, if paired with NFT-native state channels, offer a low-latency and privacy-enabled path for tracking and distributing royalties—even across sharded chains.

There’s also momentum behind cross-chain interoperability projects that preserve royalty metadata during asset bridging—a problem currently neglected in wrapped NFT implementations. For instance, standards are emerging to atomically encode royalty splits into NFT metadata, which can then be validated upon transfer using cross-chain messaging protocols or modular bridges.

Critically, the incentive to innovate is being recalibrated. As more creators actively boycott or fork off from platforms with weak royalty enforcement, the pressure to adopt community-driven standards mounts. Royalty logic may soon move beyond marketplace enforcement into automated treasury contracts, where payments and splits are managed algorithmically via protocol-level staking yields or fee extracts.

A growing number of blockchain ecosystems—like The Open Network (TON)—are actively developing composable NFT infrastructure that folds royalties into broader economic and governance models. This deep dive into TON’s architecture illustrates how native interoperability and VM-level customization are enabling more seamless royalty flows across apps.

These innovations are setting the stage for the next battleground: how royalty standards are governed and modified within decentralized ecosystems. That dynamic—between creator control, DAO oversight, and network-level coordination—will shape the politics of royalty enforcement in decentralized markets going forward.

Part 5 – Governance & Decentralization Challenges

Governance Bloat and Centralization Risks in NFT Royalty Protocols

NFT royalty mechanisms have become a litmus test for decentralization's real-world viability—but their long-term sustainability hinges heavily on how governance is implemented. While the concept of automated royalties through smart contracts is elegant, embedding those rights within decentralized governance models introduces complex design trade-offs, often exposing critical vulnerabilities.

In centralized NFT marketplaces, control over royalty enforcement lies with a single entity or organization. This enables consistent enforcement standards but creates a single point of failure, including susceptibility to regulatory capture. If a regulator, corporate interest, or malicious actor compromises the central administrator, royalty structures can be altered, muted, or dismantled altogether—undermining creators’ autonomy.

However, decentralized alternatives are no panacea. DAOs responsible for governing NFT royalty logic face their own existential risks. One growing concern is governance capture by whales. When voting power is tied to token holdings, governance outcomes can effectively be monopolized, reducing “decentralized” communities to oligarchies. Plutocratic influence is particularly thorny in NFT ecosystems, where token supply is often illiquid, fragmented, and held by a small subset of early adopters. Similar breakdowns have been observed in projects such as Decentralized Governance in SKALE Network Explained, where vote weight distribution significantly hampers democratic input.

A related concern is governance bloat. Many NFT-focused protocols implement layer upon layer of proposals, working groups, subDAOs, or meta governance, diluting transparency and increasing coordination overhead. As decision-making protocols become more intricate, participation decreases—reducing effectiveness and making the protocol vulnerable to “governance attacks” by a small, well-coordinated minority. Attackers can manipulate quorum thresholds, exploit low voter turnout, or overload proposal pipelines to trigger procedural chaos.

Contrast this with hybrid models being quietly explored across networks like TON, where governance is partially automated and partially community-driven to reduce attack surfaces without sacrificing responsiveness. You can read more contextual insights in Decentralized Power Governance in The Open Network.

Moreover, royalty enforcement itself becomes jurisdictionally ambiguous where DAOs are concerned. Without a centralized fallback, protocols might be legally unaccountable, leaving artists without recourse in cases of manipulation or rug-pulls related to royalty logic changes.

These governance tensions highlight the fragile balance between decentralization theory and applied robustness. As NFT royalty protocols evolve, navigating these complexities will be non-negotiable on the path to credible, creator-first infrastructure.

Coming up: how scalability bottlenecks and protocol-level trade-offs affect NFT royalty enforcement in mass-use environments.

Part 6 – Scalability & Engineering Trade-Offs

NFT Royalties at Scale: Critical Trade-Offs in Blockchain Architecture

As NFT royalties move from niche experimentation to foundational infrastructure for creator compensation, scalability concerns surface almost immediately. Ensuring that royalty enforcement mechanisms remain consistent across platforms and marketplaces while retaining trustless execution introduces complex design constraints on protocol architecture.

A primary tension arises between decentralization and throughput. Ethereum's Layer 1 provides robust decentralization and security guarantees, but enforcing royalties via on-chain mechanisms like ERC-2981 at high volumes is impractical due to gas saturation and block space limitations. Platforms resorting to off-chain metadata for royalty data compromise immutability and censorship resistance—core pillars for decentralization maximalists. Even when leveraging Layer 2 solutions, the interoperability between those networks (Arbitrum, Optimism, zkSync Era) and NFT-centric platforms is fragmented, often breaking continuity in royalty tracking.

Alternative chains like Solana and Avalanche offer greater raw throughput and cheaper computation but achieve this via trade-offs in validator decentralization and finality assumptions. This introduces risks to long-term data integrity for royalty contracts and potential reversal of transactions that would otherwise be immutable in a more secure environment.

TON (The Open Network), with its actor-model-based asynchronous architecture and dynamic sharding, presents an interesting middle ground. Its high-frequency messaging model may suit micro-royalty event processing at scale, but royalty logic enforcement still relies on standardization, which remains an unresolved social coordination challenge across marketplaces. For a more comprehensive analysis of TON's architecture, see A Deepdive into The Open Network TON.

Royalties tied to smart contracts also intersect with storage mechanics. On Ethereum, storing detailed royalty schema on-chain is expensive, often pushing projects to use centralized gateways like IPFS or Arweave for configuration details. This impacts upgradeability and transparency. Chains like SKALE offer low-cost execution and gasless transactions, positioning themselves as NFT-friendly, but their elastic sidechains may become silos if composability with external DeFi layers is compromised. A closer look is available in A Deepdive into SKALE Network.

Further complicating engineering feasibility is the lack of royalty enforcement at the protocol level across most blockchains. This results in fragmented support, where some marketplaces bypass royalty payments altogether. On-chain enforcement via hooks or transfer filters increases complexity and can be weaponized, potentially stifling innovation.

As adoption scales, engineers must navigate this trilemma—prioritizing between decentralization, performance, and enforceability. Royalty automation is not just a question of smart contract design, but of deeper architectural alignment with the blockchain's consensus layer itself. This becomes even more critical where programmable royalties intersect with dynamic or tiered models in media NFTs hosted across chains.

In Part 7, the discussion will turn to the legal uncertainties facing NFT royalties—especially as enforcement mechanisms challenge traditional IP frameworks and jurisdictional boundaries.

Part 7 – Regulatory & Compliance Risks

Navigating the Legal Labyrinth: NFT Royalties and the Looming Threat of Regulatory Uncertainty

The integration of NFT royalties into the decentralized economy invites not only technical and economic challenges but also a dense layer of legal ambiguity. At the heart of the issue lies an unresolved tension between jurisdictional fragmentation and the borderless nature of blockchain. Unlike fungible tokens, NFTs often come bundled with intellectual property implications—raising complex enforcement issues across national borders, especially where smart contracts execute royalty payouts without intermediaries.

In the U.S., NFT monetization could fall under multiple legal umbrellas depending on context: copyright law, securities regulations under the SEC’s Howey Test, or even tax codes. Meanwhile, the EU’s MiCA framework avoids NFTs entirely for now, punting the question until “unique” assets are further classified. Such gaps breed regulatory arbitrage: creators or platforms may relocate governance structures or smart contracts to digital havens with minimal oversight. Yet this creates systemic risk. Should royalties become enforceable under one regime and dismissed under another, creators may face clawbacks, legal disputes, or retroactive judgments.

Complicating matters further are precedents from broader crypto enforcement. Just as we saw in enforcement actions following the collapse of centralized platforms like AriseBank (see https://bestdapps.com/blogs/news/what-happened-to-arisebanks-bold-promise), authorities may target platforms for misrepresentation or lack of disclosure—risks that now extend to NFT marketplaces integrating on-chain or off-chain royalty systems without standardized documentation. How royalties are presented in metadata or promoted in marketing may determine legal liability, akin to false advertising or securities misclassification.

On-chain royalty enforcement also poses compliance dilemmas. Code-enforced royalties may violate consumer protection laws in jurisdictions that require opt-out features for automated billing or contract adjustments. Additionally, attempts to restrict NFT transfers unless royalties are paid—often implemented via transfer blocklists—may conflict with principles of digital ownership enshrined in property law.

As regulatory frameworks evolve, platforms and creators increasingly face a bifurcated path: adopt permissioned systems compliant with centralized rules, or continue embracing permissionless protocols that risk eventual legal conflict. To date, few jurisdictions have provided definitive guidance on how royalties should be taxed for creators, collectors, or intermediaries—raising further ambiguity for international platforms dealing in cross-border royalty revenue.

These legal fault lines are not just theoretical—they actively shape the behavior of marketplaces, developers, and artists. In an upcoming exploration, we’ll examine how these regulatory and compliance risks ripple into the broader financial ecosystem surrounding NFTs, influencing liquidity, capital formation strategies, and institutional adoption.

Part 8 – Economic & Financial Implications

How NFT Royalty Systems Could Pressure Legacy Markets and Reshape Financial Incentives

The enforcement of royalties in NFTs introduces a programmable layer of economic logic that legacy art, entertainment, and IP markets cannot easily replicate. At the surface, royalties appear to empower creators—but as enforcement moves from social consensus (e.g., OpenSea’s self-imposed royalty policies) to hardcoded smart contracts, entire business models must recalibrate to this new programmable flow of value.

Institutional stakeholders that have traditionally relied on centralized copyright enforcement—record labels, movie studios, digital galleries—face a potentially destabilizing shift. For example, secondary markets in gaming skins or digital art, previously dominated by intermediaries extracting disproportionate fees, now risk being outpaced by NFT-based ecosystems where royalties are enforced automatically, independent of platform policies.

For financial speculators, NFT royalties complicate traditional models of flipping and holding. Investors now contend with protocols that divert a percentage of every future resale to the creator, diminishing purely extractive arbitrage opportunities. This may optimize for creator-aligned capital but poses difficulties for high-frequency trading desks accustomed to zero-fee asset transfers.

Protocol developers stand at a crossroad. Embedding royalty logic natively risks Balkanization across marketplaces, as we’ve seen with incompatible royalty enforcement in different NFT platforms. If royalties become siloed by protocol (e.g., enforced only on-chain through one canonical marketplace), adoption may concentrate around token standards like EIP-2981, which doesn’t mandate payment but signals expected terms. Developers must then choose: enforce royalties rigidly and risk liquidity fractures, or enable optional royalties and risk undermining creative sustainability.

Moreover, collectors and creators alike are exposed to new financial risks. Smart contract vulnerabilities or manipulations—such as wash trading to exploit royalty payout systems—introduce new attack surfaces. These risks become pronounced in royalty-sharing DAO structures, where intermittent income streams are tokenized and fractionalized, resembling structured financial products with regulatory gray areas.

On the speculative front, revenue-sharing NFTs resemble yield-bearing assets, which raises questions around classification as securities. This is particularly salient when creators sell future royalties tied to an NFT series through private token offerings.

As the architecture of NFT royalties evolves, and marketplaces balance liquidity incentives with creator protection, the broader financial implications will continue to ripple through sectors far beyond digital art. These developments intersect with wider themes of decentralization, community-aligned governance, and tokenized incentives as explored in Unraveling TIAO The Future of Crypto Assets, which examines how tokenized economic rights could reshape stakeholder relationships.

This redefinition of value flow primes the discussion for a deeper question: how do programmable royalties challenge our philosophies of ownership, labor, and value creation in the decentralized age?

Part 9 – Social & Philosophical Implications

Economic and Financial Implications of NFT Royalties: Stakeholder Shifts and Market Ripple Effects

The integration of programmable NFT royalties into decentralized infrastructure reshapes the economic architecture supporting digital assets. At its core, this mechanism disrupts legacy IP monetization models, creating new levers of power for artists—while simultaneously introducing economic friction in secondary markets.

NFT royalty enforcement, especially when hardcoded on-chain rather than reliant on off-chain marketplaces, establishes a recurring yield for original creators. This pseudo-passive income layer attracts investor classes previously absent from the art world: crypto-native VCs, DAOs, and speculative NFT funds now see creators as yield generators rather than one-time beneficiaries. But this “income stream logic” comes at a price—liquidity.

Automated royalties can clash with the trader mentality that thrives on fee arbitrage and volume. Secondary market disincentivization occurs as resale becomes less profitable, dampening overall velocity. High-frequency traders, who rely on minimal friction and thin margins, are often among the first casualties in networks that persistently enforce royalties at the smart contract level.

For institutional investors evaluating NFTs as alternative assets, royalty logic introduces complexities in valuation models. Cashflow projections now must incorporate fluctuating revenue tied to unpredictable market behavior. This abstraction challenges traditional risk assessment tools and invites speculative dynamics similar to early-stage startup investing. Institutions without robust web3 analytics risk overexposure to illiquid positions.

On the protocol layer, developers face a fragmented standards problem. Competing royalty enforcement proposals (e.g., metaverse-native standards versus ERC-2981) can limit cross-platform interoperability. Developers building NFT marketplaces or wallets are forced to choose between user-optional royalty compliance and creator-sovereign mechanisms, each carrying different adoption tradeoffs and governance baggage.

Meanwhile, aggregators and traders who previously thrived on cross-market arbitrage may lose edge as royalty enforcement introduces asymmetries across platforms. This undermines price discovery efficiency and could amplify volatility in NFT floor prices due to fragmented liquidity pools and speculative retrenchment.

Emerging projects like The Open Network (TON) are exploring ways to abstract such royalty logic into base-layer primitives, hinting at a future where protocol-level design dictates economic behavior. For deeper insight into TON’s ambitions in redefining blockchain infrastructure, check out this in-depth overview.

Where artists see economic empowerment, traders identify constraints. Where institutions see recurring yield, developers perceive architectural friction. The dynamics introduced by royalty enforcement represent a multi-front recalibration of stakeholder incentives. But beyond financial implications lie more existential questions—ones of creator dignity, digital autonomy, and the evolving ethos behind value creation. These tensions will be unpacked fully in the upcoming exploration of philosophical and social frameworks surrounding NFT royalties.

Part 10 – Final Conclusions & Future Outlook

Rethinking NFT Royalties: A Fork in the Road for Creator Income and Protocol Integrity

NFT royalties were once hailed as the cornerstone of creator empowerment in Web3—an automated, trustless stream of income that promised to redefine economic relationships between artists and collectors. But over the course of this series, the cracks in that narrative have become hard to ignore. Enforcement remains fragile, even on-chain royalty standards can be circumvented, and marketplaces increasingly shift power away from creators toward volume-driven policies that prioritize liquidity over provenance.

Smart contract architecture does enable royalty enforcement at the protocol level, yet the lack of standardization across chains and marketplaces has exposed fundamental interoperability constraints. Fragmentation persists: an NFT transfer on one platform may respect a royalty contract, while another disregards it entirely. For a self-proclaimed “trustless” economy, the inconsistencies are glaring.

In the best-case scenario, future Layer-1 standards build enforceable, protocol-level royalty mechanisms into NFT minting frameworks. Solutions may emerge from projects embracing modular design and customizable smart contract templates. Networks like The Open Network (TON), which emphasize scalable tokenization infrastructure and interoperability, could become a testing ground for cross-market royalty reconciliation.

In the worst-case scenario, royalty models erode completely into optional “tipping” systems, destabilizing primary income sources for artists and musicians. Centralized intermediaries—marketplaces and custodial wallets—may become the unexpected arbiters of revenue, undermining the decentralization ethos altogether.

Key questions remain unanswered. Who audits royalty compliance? How do DAOs enforce artist rights without a legal framework? Can dynamic royalties—responsive to ownership duration, platform, or event—reimagine incentives without overcomplicating user experience?

For widespread creator adoption, three developments are essential: 1) protocol-native royalty enforcement, 2) clear royalty transparency tools for collectors, and 3) economic alignment between marketplaces and creators. Without these, the incentive layer for sustained creative production in Web3 weakens.

Despite these hurdles, NFT royalties on-chain remain one of blockchain’s most compelling innovations—blending programmable income with digital ownership in a way no legacy system can match. Yet, they may prove too idealistic in their current state. If the infrastructure can’t evolve, this hype cycle might leave royalties as a faded footnote rather than a foundational use case.

Will NFT royalties become the backbone of the new creator economy—or another idealistic protocol vision abandoned for short-term gains?

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