Royalty Description
Last updated
Last updated
NFT royalties are set to ensure that all artists' work are fairly rewarded. This article will walk you through the basics of royalties, and teach you how to earn passive income through NFT royalties.
Let’s assume that you are an artist and you are about to mint your first NFT. There are a lot of things for you to consider, such as price and royalties. This article will focus on "royalties", such as what is the definition of royalties, how do they work, and at what percentage should you set your royalties?
NFTs are an immutable proof of ownership. The fact that every transaction is stored and visible on the blockchain, makes it possible to collect royalties on every sale!
What are royalties?
Each time the intellectual property (IP) is sold or resold, the IP creator shall earn a percentage of the sales revenue as royalties. However,this is difficult to realize outside of the NFT field. Now, thanks to the blockchain and smart contract technology, it is much easier for NFT creators to collect royalties.
When you create NFTs, you can set the royalty percentage from 0 to 10%. Every time your NFT is resold, you can get the royalties from each resale without the need to do anything. Thanks to blockchain and smart contracts, whenever your NFTs are resold, all royalties will automatically be deposited into your wallet. However, once the royalty percentage is set, it can never be changed again, so think it through!
If you are an unknown artist and sell your artwork for $10 each. After a while, you're finally famous! All of your $10 artwork is now resold for $10,000! If you set the royalty percentage to 0%, your royalty income will not change, but if you set it to 10%, you'll get $1,000 for every resale!
How to set your royalty percentage?
There are a number of factors to consider when setting a royalty percentage. In general, there are two scenarios:
High percentage
You can set your royalty percentage high, which will bring you more income once your NFTs are sold. If your NFTs are very popular and are getting a lot of resales, congratulations, it means you can earn a very decent income after a while!
Low percentage
It may be easier for you to sell the NFT with a lower royalty percentage, because the price will be lower for the buyer.
You can try to do some research. If you have many similar NFTs, you can set different royalty percentages for each item and see what happens. Which ones sell easily? Which ones take some time or don't sell at all? This might give you an idea of the percentage you should set your royalties.
After all, it's up to you!
Please be noted that royalties also apply to the first sale by you, and creators can only collect the royalties when the transaction happens on OpenMeta.
For example, if you set the price at 100MDX, and set the royalty percentage at 10%, you will receive 10MDX royalties from wach resale.
1. Upload your artwork to create an NFT.
2. As the NFT creator, you have the right to set a royalty percentage between 0 to 10%.
3. When someone buys your NFT for the first time at OpenMeta, you will get 100% of the sale price.
4. If your NFT is resold later on OpenMeta, you can receive 0-10% of the resale price.
5. You don't need to do anything, and the earnings will be automatically deposited into your wallet.