NFT Artist Royalty

Since the beginning of the NFT hype cycle I have look at it and just rolled my eyes. I just don’t see any real value in the whole thing. I think it is interesting use of the blockchain technology that will ultimately find its true value. But the BS that has been going on (in my opinion) is just the typical early hype and the usual suspects of people trying to get in early not really understanding where it will go … if anywhere. They just have the hope that they did something early before everyone else (including themselves) see the real value. Possibly making them rich.

So, I had a random thought and I’m putting it out there for discussion.

(To preempt this discussion, I want to make clear that this is just an idea and I have very limited knowledge of NFT’s or current projects that may already cover this. If this is already being done, fill me in, it will be a short discussion.) Here we go…

Music artists make their money from the sale and use of their works. Every sale, every use. Not just the first sale of the work. Every time the song is sold on a streaming service, every time a physical CD is sold (do they still do that?), every time it is used in a commercial, movie or played on the radio. But the creators of physical artwork only get the money when they sell the work … once, ever. My question is now that NFT’s have the ability to truly tag ownership (and I assume creator) of a work of art, why not add the ability to compensate the creator whenever that ownership is transferred/sold?

Also, since the artwork now has a digital signature, I’m sure it could also be tracked when that work of art is used. In that case the creator could also be compensated. In this second case a discussion would have to be had of creating the mechanism to legitimately apply to use the work. That way the entity using the work would be known and charged accordingly.

There are two effects of this.

  1. The artist’s income model will change. Instead of getting one rather large payment when the work is sold, they will move to a residual income structure. Possibly getting money from one work of art their entire life.

  2. The cost of the art work will decrease to the consumer. Think about the music industry. If you had to pay for actual ownership (only one owner) of a song, the cost of that song would be out of reach for most. But since the artist gets a small piece of every sale, every use, the cost to the public is within reach.


Chia has said that they are baking this functionality into the standard and other NFT platforms do this to one degree or another with off-chain utilities like OpenSea.