The Broken Promise of NFT Royalties

By Amir Soleymani • December 16, 2025 • 5 min read

If you ask me what NFTs got most right, I will not point to the art or the prices. I will point to royalties: the idea that an artist could earn a share every time their work changed hands, for as long as it kept selling. It was the best promise this technology ever made. Then the market broke it.

Why royalties mattered so much

In the traditional art world, an artist usually sells a piece once. If it resells years later for a hundred times the price, they see none of it. On-chain royalties were supposed to fix that old injustice — to make ongoing payment to creators automatic and permanent. For a while it worked, and it genuinely changed how artists thought about their futures.

The race to the bottom

The catch is that royalties were never truly guaranteed. They relied entirely on whether marketplaces chose to enforce them. Once those marketplaces started competing for traders, royalties became a cost to cut. Platforms like Blur made them optional to win volume, and OpenSea followed to keep up. What had been sold as a permanent right turned out to be a setting someone else could switch off.

The deeper problem is whose interests the market actually serves. The incentives kept rewarding short-term trading over long-term artist sustainability. Trader-first won. Creator-first lost.

The reality for working artists

Strip away the royalty headlines and the day-to-day for most artists is harder than the dream suggested:

Selling requires constant promotion — many successful NFT artists spend more time marketing than making.
The market is oversaturated, so visibility, not talent, often decides who sells.
A small number of large collectors — whales — quietly shape prices and attention.
Curated platforms restore the very gatekeeping NFTs promised to remove.

None of this means the original idea was wrong. It means a good idea is only as strong as the willingness to protect it. If we want creators to thrive, royalty enforcement cannot be left to whoever is fighting hardest for trading volume.

This essay draws on my book Fools and JPEGs: The NFT Scam That Might Actually Work.