The NFT Royalty Debate Has Reached a Quiet Standoff, and Creators Are Adapting

For a brief period in 2021 and 2022, NFT royalties looked like a genuinely new economic model for digital creators: every time a piece changed hands on the secondary market, the original artist received an automatic on-chain payment, typically 5-10% of the sale price, without negotiating with a label, a publisher, or an intermediary. Then the marketplace competition of 2022-2024 dismantled that model almost entirely. The question now is not whether royalties will return to their 2021 levels, but what the new baseline is and whether creators can build sustainable practices around it.

How the Royalty System Worked, and Why It Broke

On Ethereum, royalty payments are not enforced at the protocol level. The ERC-721 standard defines ownership and transfer, but it does not include a royalty mechanism. Royalties were an application-layer convention: marketplaces agreed to read a creator’s royalty preference from a standard metadata field and remit the corresponding percentage on each sale. This worked while marketplaces competed on user experience rather than on fee structure, because a marketplace that ignored royalties was seen as a bad actor.

Blur, launched in October 2022, changed the competitive dynamic. Blur targeted professional NFT traders, not collectors, and made royalties optional for buyers on its platform. Since buyers pay royalties and buyers choose which marketplace to use, volume rapidly migrated to Blur. According to Etherscan data, Blur captured over 70% of Ethereum NFT trading volume within six months of launch. OpenSea, facing the loss of its dominant market position, followed with its own optional-royalties policy in early 2023, completing the effective collapse of the enforced-royalty era. The full OpenSea policy history is documented in their creator fees announcement.

The Operator Filter: A Technical Attempt That Failed Socially

Creators and their advocates tried a technical solution. The Operator Filter Registry, developed by OpenSea in response to community pressure, allowed a collection’s creator to block sales on marketplaces that did not enforce royalties. Collections that opted in could not be listed on royalty-skipping platforms, which would force buyers to use compliant marketplaces. Several high-profile collections adopted it.

The filter failed for predictable economic reasons: it reduced liquidity for filtered collections, which depressed their floor prices relative to unfiltered competitors. Buyers and holders of filtered collections experienced the royalty enforcement as a tax that hurt their own positions. The social coalition that would have needed to hold the filter in place, primarily buyers and secondary holders, had direct financial incentives to defect. OpenSea deprecated the filter in 2024. The episode demonstrated that application-layer royalty conventions are difficult to sustain against competitive pressure without protocol-level enforcement. The NFT category on TheWeal has tracked the royalty debate from the filter’s launch through its deprecation.

Protocol-Level Royalties: What Exists and What Is Being Built

The ERC-2981 standard, adopted by Ethereum in 2022, provides a standardised way for contracts to declare their royalty preference, but it still relies on marketplace compliance to be paid. What creators have been asking for is enforcement at the token transfer level, making it impossible to complete a sale without remitting the royalty. Several layer-2 networks have implemented or are implementing exactly this: Immutable X, built for gaming NFTs, enforces royalties at the settlement layer, meaning marketplaces cannot bypass them. The trade-off is reduced composability: if royalties are baked into every transfer, it becomes harder to use NFTs as collateral in DeFi protocols or to move them freely between applications. This is one of the reasons the Ethereum mainnet community has not adopted mandatory transfer-level royalties despite creator demand. See our methodology page for how TheWeal evaluates technical protocol changes in its coverage of the NFT ecosystem.

How Creators Are Adapting

The creators who are building sustainable practices in the post-royalty environment have converged on three strategies. usd/" class="twl-coinlink">First, token-gated access: the NFT grants holders something ongoing and exclusive, such as access to a Discord community, early access to new drops, or event attendance, reducing the pressure on secondary royalties as a revenue stream. Second, direct primary sales with higher initial prices: rather than pricing low and hoping for secondary royalties, creators price primary sales to be profitable on their own. Third, chain migration: several creators have moved to networks where royalties are enforced, accepting lower liquidity in exchange for a reliable revenue model. The regulation category on TheWeal tracks legislative developments that might eventually create a legal framework for creator rights in digital goods.

The Regulatory Dimension

The royalty debate has a regulatory shadow. In traditional media, copyright law gives creators the right to reproduce their work, but secondary-market sales of physical goods are generally exempt from copyright under the first-sale doctrine. Digital goods have been contested in courts, with outcomes that vary by jurisdiction. The EU’s digital-resale directive and ongoing discussions in the US about extending artist resale rights to digital work could eventually create a legal basis for enforced NFT royalties that does not depend on marketplace cooperation. Whether that legislation materialises, and how it would interact with the decentralised and cross-jurisdictional nature of NFT trading, remains one of the more interesting open questions at the intersection of crypto and intellectual property law.

Frequently Asked Questions

Do any marketplaces still enforce NFT creator royalties?

Several smaller marketplaces, particularly those serving gaming NFTs and specific chain ecosystems, still enforce royalties. Magic Eden on Solana reinstated optional royalty enforcement after community pressure. The major Ethereum marketplaces, Blur and OpenSea, now treat royalties as optional for buyers. Chains like Immutable X enforce royalties at the protocol level for all transfers.

Is the NFT royalty situation unique to crypto, or does it mirror broader creator-economy debates?

It mirrors them closely. The same tension between platform convenience, buyer economics, and creator revenue plays out in music streaming, digital art resale, and app store commissions. What is different in crypto is the technical possibility of enforcement at the settlement layer, which does not exist in traditional digital goods markets. Whether that technical capability is actually deployed depends on social and economic coordination rather than just technical feasibility.

Can a creator legally require royalties on NFT resales today?

Not in most jurisdictions. Contractual royalty obligations can be written into a collection’s terms of service, but enforcing them against anonymous buyers who transact on non-compliant marketplaces is practically difficult. The legal infrastructure for enforcing digital resale royalties does not currently exist at the scale of the NFT market, which is why technical and social enforcement mechanisms were the primary alternatives until those also broke down.

Sources

• OpenSea Creator Fees Policy — the platform’s own account of its royalty policy changes
• Etherscan: Blur Volume Data — on-chain verification of Blur’s market-share claims