How NFT Royalties Help Artists Earn Passive Income Forever

For decades, artists have faced a brutal truth: once they sell a piece of art, they rarely see another dollar from it - even if it later sells for ten times more. This was especially true for digital creators. A GIF, a song clip, or a digital painting could go viral, change hands dozens of times, and the original artist? Nothing. No cut. No thanks. Just a screenshot in someone’s phone gallery.

NFT royalties changed that. For the first time, artists can earn money every time their work is resold - automatically, transparently, and without needing a gallery, agent, or lawyer. It’s not magic. It’s code. And it’s working.

How NFT Royalties Actually Work

NFT royalties are built into the smart contract of an NFT when it’s created. Think of a smart contract like a digital vending machine that follows rules written in code. When you mint your artwork as an NFT, you set a royalty percentage - usually between 5% and 10% - that gets paid to you every time someone resells it.

Here’s how it plays out: You sell your digital painting for 2 ETH. Months later, someone buys it from that buyer for 5 ETH. Right then, the smart contract kicks in. It takes 7% (your set royalty) from that 5 ETH - which is 0.35 ETH - and sends it straight to your wallet. No paperwork. No waiting. No middleman taking a cut.

This happens on blockchains like Ethereum, Solana, and Polygon. The whole process is public. Anyone can check the transaction history and see exactly how much you earned from each resale. That’s something traditional art markets can’t do.

Real Money, Real Results

The numbers don’t lie. In 2022 alone, over $1.8 billion in royalties flowed to artists on the Ethereum blockchain. That’s not theoretical. That’s real cash in wallets.

Yuga Labs, the team behind Bored Ape Yacht Club, earned over $147 million in royalties from secondary sales. That’s more than most record labels make in a year. But it’s not just big names. Smaller creators are seeing life-changing results too.

Musician Jacques Greene sold a 6-second audio loop as an NFT. He made $16,000 in royalties from resales - nearly half what he earned from 7 million Spotify streams. Another artist, who sells abstract digital pieces, makes about $8,000 a month just from royalties on a collection of 200 NFTs. She doesn’t post on social media. She doesn’t run ads. The NFTs sell themselves, and she gets paid every time.

This isn’t luck. It’s design. The value of the art grows over time, and now the artist grows with it.

Why This Beats Traditional Art Sales

In the physical art world, if you sell a painting for $5,000 and it later sells for $50,000 at auction, you get nothing. The gallery, the auction house, the collector - they all profit. You? You’re lucky if you get a thank-you note.

NFT royalties flip that model. You’re not just selling a one-time item. You’re building a long-term income stream. Every time your art moves, you get a piece of the action. That’s huge for artists who can’t afford to wait years for a museum to notice them or for a gallery to take a chance.

And it’s not just about money. It’s about control. You decide the royalty rate. You choose where to mint. You don’t need permission. You don’t need approval. You just create, upload, and set the rules.

Where It Falls Short

It’s not perfect. Not all platforms enforce royalties. Magic Eden, for example, lets buyers skip royalty payments. That means if someone buys your NFT on OpenSea and then moves it to Magic Eden to resell, you might not get paid. That’s a big problem.

There’s also something called “NFT wrapping.” Tech-savvy buyers can repackage your NFT into a new token that doesn’t carry the original royalty rules. It’s a loophole. And it’s being used.

Some buyers hate royalties. If you set yours at 15%, they’ll walk away. Most successful creators keep theirs between 5% and 7%. That’s enough to make a difference for you, but not so high that it scares off buyers.

And if you’re not careful, you can end up with royalties on a worthless NFT. If no one wants your art, no one buys it. And if no one buys it, no royalties flow. So the art still needs to be good. The tech just helps you get paid when it does.

How to Start Using NFT Royalties

You don’t need to be a coder. Most major platforms like OpenSea, Blur, and Foundation let you set royalties with a simple slider during the minting process. Just pick your percentage, confirm, and you’re done.

Here’s what to do:

1. Create your digital artwork (image, audio, video, 3D model - it all works).
2. Choose a platform that supports royalties (OpenSea is the safest bet right now).
3. Connect your wallet (MetaMask, Phantom, etc.).
4. Click “Create” or “Mint” and set your royalty rate between 5% and 7%.
5. List it for sale. Wait for buyers.
6. Check your wallet. Royalties will show up automatically when resales happen.

Don’t overthink it. Start small. Mint one piece. See how it goes. You can always adjust later.

What’s Next for NFT Royalties

The industry is slowly fixing the loopholes. More platforms are starting to enforce royalties across the board. Some are even testing multi-creator splits - so if you collaborated with a musician or animator, you can split royalties automatically.

There’s talk of legal frameworks that might require royalty enforcement. That could make it harder for buyers to bypass payments. But until then, stick with platforms that honor the original contract.

The bigger picture? This isn’t just about art. It’s about ownership. It’s about giving creators control over their work - not just when it’s sold, but forever after. That’s why musicians, writers, game developers, and even software coders are starting to use NFT royalties for their creations too.

For artists, this is the first real chance to build a career on digital work without begging for scraps from platforms that profit the most.

Is It Worth It?

If you’re an artist who makes digital work - yes. Even if you only sell one NFT, and it gets resold three times, you’ve already made more than most artists ever do from a single piece in the traditional world.

You don’t need to go viral. You don’t need a million followers. You just need to create something people want to own. And with NFT royalties, you get paid every time it changes hands.

It’s not a get-rich-quick scheme. It’s a get-paid-forever system. And for the first time, that system actually works for the people who made the art.