Over $1.8B in Royalties Have Been Paid Out to Ethereum-Based NFT Creators: Galaxy Digital

More than $1.8 billion in royalties have been paid to creators of Ethereum-based non-fungible token (NFT) collections thus far, according to a report published by crypto firm Galaxy Digital on Friday.

The report also highlighted that within the last year average royalties on OpenSea have increased from 3% to 6%. This is notable, considering OpenSea remains the largest NFT marketplace by trading volume, according to DappRadar.

Galaxy Digital also reported that 10 names hold 27% of the total royalty payment market share. Yuga Labs, the creator of the blue chip Bored Ape Yacht Club collection, has earned the most in royalties, with over $147 million in payouts to date.

According to data from Dune Analytics cited in the report, Nike, which acquired digital collectibles startup RTFKT, made $91.6 million in consolidated NFT royalties in comparison. Other real-world brands including Gucci, Adidas, Nickelodeon, McLaren that have successfully integrated NFTs into their business models have made some money off NFT royalties, though the number is far lower when compared with the creator royalties of top Web3-native entities such as Art Blocks, The Sandbox, Doodles, World of Women and more.

Whether platforms should require resale royalties is an ongoing conversation, as some have moved to allow artists to elect their own royalty allocations. In August, NFT marketplace X2Y2 shifted to an optional royalty payment structure for buyers, and last week leading Solana-based NFT platform Magic Eden did the same, leaving the number of royalty payments up to collectors.

“NFT royalties are a relatively new phenomenon when compared to the age of the NFT space itself,” the report said, noting that legacy brands with NFT collections stand to lose the most from loose royalty structures.

“Apart from individual creators, major brands like Nike, Gucci and Adidas also stand to lose tens of millions of dollars in potential revenue if royalties are no longer enforced. We expect these massive legacy institutions and marquee creators to fight hard to preserve their royalty-driven revenue streams from Ethereum-based NFT collections.”