Why royalties are so important in the context of web3?

Should NFT creators expect royalties? It was the question that caused so much debate recently in the NFT space. So let’s try to figure this out.

What are NFT royalties and how do they work?

A royalty is a payment made by someone who purchases goods or services from another person or company.

The payment is made in exchange for the right to use the product or service.

In web3, this opens up a bunch of opportunities. Every time someone sells the artwork as an NFT on a secondary market, the creator would also get a percentage of those sales as royalties.

NFTs can be a solution for digital art ownership. If we compare the digital art market with the traditional art market, we see that in reality there are many problems for both artists and buyers. System of auctions and art dealers, ie. intermediaries between artists and buyers mainly developed in the 18–19 centuries.

The NFT market gives artists the opportunity to sell their artworks without intermediaries, and therefore without paying a commission and receiving income from their art directly. Creators can also receive royalties every time someone sells their artwork on an NFT marketplace. This is a game changer that makes the NFT art market much more honest and democratic.

However, some believe that NFT creators shouldn’t expect royalties. So who has the final say: NFT platforms, collectors, or creators?

Read the full article in Tapx blog.