Mandatory Royalties: What They Are and Why They Matter in Crypto and NFTs
When you buy an NFT, you’re not just buying a digital image—you’re entering a system built on mandatory royalties, automatic payments to creators every time their NFT is resold. Also known as creator royalties, this mechanism was designed to give artists ongoing income from secondary sales, something traditional art markets rarely offer. But in 2025, these royalties are under fire. Major marketplaces like OpenSea and Blur have stopped enforcing them, leaving creators wondering if their earnings are gone for good.
At its core, a mandatory royalty, a percentage of resale value paid to the original creator via smart contract is a rule written into code. It doesn’t rely on trust—it runs automatically. If an artist sets a 10% royalty, every time their NFT changes hands, 10% of the sale price goes straight to their wallet. This is different from traditional licensing, where enforcement depends on legal contracts and courts. In crypto, it’s all handled by smart contract royalties, self-executing agreements on blockchains like Ethereum and Solana. But here’s the catch: these contracts only work if marketplaces choose to honor them. Once a platform decides to ignore them, the royalty disappears—no appeal, no backup.
Why did this happen? Buyers started complaining. They argued that mandatory royalties made NFTs less liquid—why pay extra just because someone else made the art? Some even used tools to bypass royalties entirely, trading NFTs through private deals or cross-chain swaps. Meanwhile, creators saw their income drop overnight. The result? A messy divide: artists fighting to keep their earnings, traders pushing for free resale, and platforms caught in the middle. Some new protocols are trying to fix this by making royalties optional or letting creators choose how they’re paid. Others are building entirely new systems where royalties are baked into tokenomics, not just NFT metadata.
What’s next? If you’re a creator, you need to know which platforms still support royalties—and which ones don’t. If you’re a buyer, you should understand what you’re really paying for. And if you’re just watching, pay attention: this isn’t just about art. It’s about who controls value in digital economies. The fight over mandatory royalties is really a fight over ownership, fairness, and the future of digital work. Below, you’ll find real-world examples of how this plays out—from NFT drops that lost millions in royalties to new projects rebuilding the system from scratch. These aren’t theoretical debates. They’re happening right now, in wallets and marketplaces you might already use.
- By Eva van den Bergh
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- 10 Nov 2025
Optional vs Mandatory NFT Royalties: What Creators Need to Know
NFT royalties can give creators ongoing income, but whether they're paid depends on the marketplace. Learn how optional vs mandatory royalties impact earnings, trading, and creator rights in today's NFT market.