NFT Marketplace Royalty Policies: How Creators Get Paid After the Sale

When you buy an NFT, you’re not just buying a digital image. You’re buying into a system where the original creator might keep earning every time that NFT changes hands. That’s the promise of NFT royalties. But here’s the catch: just because a royalty is set doesn’t mean it’s paid. Across major NFT marketplaces, the rules are messy, inconsistent, and sometimes ignored entirely.

How NFT Royalties Actually Work (The Tech Behind It)

NFT royalties aren’t built into the blockchain itself. They’re a rule written into the smart contract that created the NFT. The standard that makes this possible is called ERC-2981 a technical standard for NFT royalty payments that defines how marketplaces should query royalty information for any NFT sale. Introduced in 2020, it became the default way creators set royalties by 2024.

Here’s how it works in practice: when you mint an NFT, you specify two things - who gets paid (a wallet address) and how much (in basis points). One basis point equals 0.01%. So if you set 500 basis points, that’s 5% of every resale. This number is stored on-chain, meaning it’s public and unchangeable unless you built in a way to update it.

What’s powerful about ERC-2981 is that it works across all major NFT standards. Whether your NFT is a single image (ERC-721) or a bundle of items like game skins (ERC-1155), the royalty system stays the same. It also doesn’t care if the NFT is on Ethereum, Polygon, or Arbitrum. The data is there, ready for any marketplace to read.

But here’s the key point: ERC-2981 doesn’t enforce payment. It only tells the marketplace what the creator asked for. It’s like leaving a note on your door saying, “Please leave $5 in the jar.” The person walking by can choose to ignore it. That’s where the real problem begins.

Marketplaces Are Split - Some Pay, Some Don’t

In 2025, the NFT marketplace landscape is divided into two camps: those that honor creator royalties and those that don’t.

Platforms like Foundation an NFT marketplace that requires all sales to honor creator-set royalties and Manifold a platform that supports customizable royalty structures and enforces them by default make royalty payments mandatory. If you sell an NFT on Foundation, 5% of the sale goes straight to the original artist. No exceptions.

Then there’s Blur a high-volume NFT marketplace that allows buyers to opt out of paying royalties, prioritizing trader experience over creator compensation. In late 2023, Blur let collectors skip royalty payments entirely. Within months, nearly 40% of all NFT trading volume shifted to platforms like Blur and LooksRare a marketplace that offers zero-royalty trading as a core feature. Why? Because traders wanted to buy and sell without paying extra fees. It made sense from a volume perspective - but not for creators.

Result? Creators saw their income drop. A digital artist who once made $2,000 a month from secondary sales on OpenSea might now make $300 if their work gets listed on a royalty-free platform. That’s not a glitch - it’s a business model.

Why This Matters Beyond Just Money

NFT royalties aren’t just about cash. They’re about trust. When a creator puts months of work into a collection, they’re banking on the idea that their art will keep paying them. That’s what drew musicians, photographers, and illustrators to NFTs in the first place - a chance to earn like traditional artists who get residuals from album sales or prints.

When marketplaces ignore royalties, they break that promise. And creators notice. In 2024, several high-profile artists blacklisted Blur and LooksRare entirely. Some even released new collections only on platforms that guaranteed royalty payments. It became a brand decision - not just a technical one.

Even big companies are paying attention. Luxury brands like Gucci a fashion brand that uses NFTs as digital twins of physical products with 5% perpetual royalties on secondary sales use NFTs to track authenticity and earn ongoing revenue. Their digital sneakers come with a 5% royalty on every resale - generating over $18 million in 2024 from secondary sales alone. For them, royalties aren’t optional. They’re part of the product.

Regulators Are Starting to Step In

Governments are watching. In June 2024, the European Union’s MiCA a comprehensive regulatory framework for crypto-assets that requires transparency in fees but does not mandate NFT royalties came into effect. It forced crypto platforms to be clear about fees - but didn’t say anything about royalties. That left the door open.

By March 2025, the European Securities and Markets Authority (ESMA) announced it would start looking at NFT royalties specifically. Meanwhile, the UK’s Financial Conduct Authority (FCA) a financial regulator that is exploring how intellectual property laws apply to NFTs and secondary sales issued a consultation paper in October 2024 asking whether royalty non-payment should be treated as a breach of creator rights.

This isn’t about banning royalty-free marketplaces. It’s about fairness. If a digital artwork is protected by copyright law, why shouldn’t the creator get paid when it’s resold? The FCA’s stance suggests we’re moving toward treating NFTs more like physical art - where resale royalties are standard in many countries.

What’s Being Done to Fix This?

The industry knows the current system is broken. So people are building fixes.

One idea is the NFT Royalty Protocol a decentralized registry allowing creators to set and update royalty preferences across multiple marketplaces. Think of it like a global directory of royalty rules. If you change your royalty on this registry, every compliant marketplace updates automatically. No more juggling 10 different platforms.

Another approach is the royalty-aware order book. Instead of letting buyers bid blindly, the system shows them the royalty amount upfront. If they don’t want to pay it, they can’t bid. It turns royalties into a market condition - not a suggestion.

On the technical side, developers are using OpenZeppelin a security-focused library for Ethereum smart contracts that provides audited ERC-2981 implementations to build safer royalty contracts. After a $2.3 million theft in August 2024 - where hackers changed royalty receivers in poorly secured contracts - the industry started requiring multi-signature approvals and time delays for any royalty changes.

What Should Creators Do Now?

If you’re a creator, here’s your action plan:

1. Use ERC-2981. Always. If your NFT contract doesn’t support it, it’s not future-proof.
2. Set your royalty between 2.5% and 10%. Anything higher scares off buyers. Anything lower doesn’t pay the bills.
3. Only launch on marketplaces that enforce royalties. Check their terms. Don’t assume.
4. Use a multisig wallet for your royalty payouts. Don’t send royalties to a single private key - it’s too risky.
5. Track where your NFTs are being sold. If you see them on Blur or LooksRare, consider a public statement. Your community will notice.

And if you’re building a marketplace? Don’t treat royalties as optional. They’re your differentiator. In Q1 2025, 68% of all high-value NFT sales (over 1 ETH) happened on platforms that honored royalties. Buyers who care about creators are voting with their wallets.

The Future Is Standardized - But Not Yet

By 2026, Gartner predicts 75% of enterprise NFT projects will include royalties. Music platforms like Royal a music-focused NFT platform that distributes streaming-style royalties from secondary sales to artists are proving it works. Artists are getting paid every time their song NFT changes hands - just like a radio play.

The path forward isn’t about forcing everyone to pay. It’s about making it easy, transparent, and fair. ERC-2981 gave us the tool. Now we need the will.

Right now, the choice is yours: support creators by buying on platforms that pay royalties - or ignore them and fuel a system where art becomes a one-time cash grab. The technology is ready. The question is, who do you want to win?