If NFTs are important and present unique opportunities for artists to share their work, should there be a debate between preserving the royalties creators get and abolishing them entirely?
This was part of the discussion at the just concluded Consensus event by Coindesk, where Erick Calderon, the co-founder of Art Blocks, insisted that royalties should never be taken out of the ecosystem entirely.
NFTs are unique digital assets that can be bought, sold, and traded. They are often used to represent digital art, music, videos, and other forms of creative work. NFTs are stored on a blockchain, which makes them secure and transparent. NFT royalties are payments to the original creator of an NFT each time it is sold on the secondary market.
They can be set by the creator when they mint their NFT or by the marketplace. NFT royalties are paid out automatically by the NFT marketplace and can be a valuable source of income for creators.
Towards the end of 2022, the debate around royalties heated up with MagicEden announcing royalties as optional for traders, while Opensea in February 2023 declared royalties as an optional feature of its platform.
Artist deserve royalties
Erick who leads Art Blocks which is one of the first to support NFT royalties for creators, further explained that royalties give artists the encouragement they need to create more art.
Creators are excited because they have the opportunity to not only continuously release artwork in order to make a living, but “to be more thoughtful on your releases and create something that can generate in perpetuity additional income.”
He added that with or without royalties, the idea of NFTs has created an innovative system that reveals how digital ownership can be proven on-chain. Thus, no matter what happens in the market, “the value proposition of being able to prove ownership of a digital asset cannot and will not change.”
Also he believes that this new age of art with NFT has changed how art is created and consumed. “A lot of things in the traditional art world happened behind closed doors,” he said.
“Here, everything is happening in the open. We are all building in the open. We are all innovating in the open. We are all transacting in the open. We know exactly who’s paying royalties and who’s not paying royalties.”
Choice is important
The CEO finally noted that while he is a strong believer in royalties for NFTs, he is aware that there are platforms that give users the liberty to choose what they want, and he also believes it is good.
He compared it with the gun laws in the US, where people have their opinions on what is right. “When you’re talking to a decentralized ecosystem, actually, you have every right to participate in it however you wish.”
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