Blockchain Technology with Inbuilt Royalties: A Solution to NFT Creator Earnings Loss
Summary:
Web3 experts advocate for blockchain technology with inbuilt royalties to protect creator earnings. With NFT creators facing significant royalty loss in 2023, some platforms are developing blockchains with inbuilt royalty enforcement tools. NFT-centric blockchain platform Enjin and RARI Foundation, for instance, have already launched blockchains with royalties coded into the system. This approach offers a high guarantee of respecting creator royalties and can foster a sustainable Web3 creator economy while boosting the NFT sector.
Web3 experts say that blockchain technology with inbuilt royalty features could effectively safeguard creator royalties. The non-fungible token (NFT) space faced a pressing issue in 2023 with content creators losing potential royalty earnings. Optional royalty models resulted in massive earnings losses for creators last year. On 16th July, Ethereum-based NFT royalties slumped to a 2-year low, as per blockchain analytics organization Nansen.
Nevertheless, some platforms are addressing the optional royalty trend differently choosing instead to incorporate royalty enforcement tools directly into their blockchain systems. In June 2023, Enjin, an NFT-oriented blockchain platform launched a blockchain mainnet that has royalty enforcement fundamentally coded into the blockchain.
RARI Foundation, Rarible's non-profit partner, revealed a testing network (testnet) for an Ethereum Virtual Machine (EVM)-compatible blockchain with royalties integrated into its node. The mainnet version of this blockchain was launched on January 24.
Jana Bertram, Rari Foundation's strategy leader, raised to Cointelegraph the necessity of having royalties coded into the blockchain, labeling it as the "highest level guarantee" for the respect of a creator's royalties. She expressed that creator royalties at the node level cannot be altered, and this approach is distinct from app-level enforcement which could eliminate royalties entirely amid a change in business direction.
Bertram also suggested this could aid in forming a sustainable Web3 creator economy, ensuring creators have an income source each time their NFTs are sold. Nadaine Tongco-Edades, Atlas Development's vice president of finance, concurred that this could fuel a return for NFTs. She mentioned that confirming royalties as a steady earnings source can lead to the creation of new business strategies within the NFT domain. Bertram continued, saying that royalties are among several NFT features best enforced on-chain, and chains offering these embedded NFT features can provide the strongest assurances and greatest convenience to users.
Published At
1/24/2024 5:02:46 PM
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