- NFT royalties are programmatic payments automatically sent to an original creator every time their NFT is resold on a secondary market — without lawyers, contracts, or middlemen.
- On Ethereum and Solana, royalties are enforced at the marketplace level, not the protocol level — meaning any marketplace can choose to ignore them, and many have.
- Chia’s NFT1 standard enforces royalties at the coin level through Chialisp puzzles, making them structurally impossible to bypass regardless of which marketplace processes the sale.
- Creator royalties typically range from 2.5% to 10% of secondary sale price, and for high-volume collections can represent more lifetime income than the initial mint.
NFT royalties explained: when a musician releases an album, they earn royalties every time it streams or gets licensed. NFT royalties apply the same logic to digital art, collectibles, and in-game items — every time the NFT changes hands on a secondary market, a percentage of the sale price flows automatically back to the original creator. In theory, this is one of the most powerful tools blockchain offers the creator economy. In practice, the enforcement varies dramatically by chain.
The Royalty Enforcement Problem on Ethereum and Solana
On Ethereum, NFT royalties are implemented as a convention — specifically, the EIP-2981 standard — that marketplaces voluntarily agree to honor. When Blur launched in 2022 and made royalties optional to attract traders, many Ethereum NFT royalties collapsed overnight. Solana faced similar issues when marketplaces competed on zero-royalty trading to grow market share. The fundamental problem is that royalties enforced at the application layer (the marketplace) can be bypassed by any application that chooses not to honor them. This is not a bug in any specific marketplace — it is a structural limitation of where enforcement sits.
How Chia Enforces Royalties at the Protocol Level
Chia’s NFT1 standard bakes royalty enforcement directly into the coin puzzle written in Chialisp. When an NFT is created, the royalty address and percentage are encoded in the coin’s puzzle hash. Any spend of that coin — regardless of which wallet, which marketplace, or which interface processes it — must include the royalty payment as a condition of the transaction being valid. No marketplace can opt out because the Chia blockchain itself rejects the transaction if the royalty is missing. This makes Chia one of the only chains where creator royalties are genuinely non-negotiable.
Key Takeaway
NFT royalties are a transformative idea for the creator economy, but their value depends entirely on how and where they are enforced. Ethereum and Solana enforce royalties at the marketplace layer — making them voluntary in practice. Chia enforces them at the blockchain layer — making them mandatory by design. For creators building long-term royalty streams, the enforcement model matters as much as the royalty rate.
NFT Royalties Explained FAQs
What are NFT royalties and how do they work?
NFT royalties are automatic payments sent to an original creator each time their NFT is resold on a secondary market. When the NFT is transferred, a percentage of the sale price — typically 2.5%–10% — is automatically routed to the creator’s wallet as a condition of the transaction.
Why are NFT royalties not always paid on Ethereum?
On Ethereum, NFT royalties are a voluntary convention honored by individual marketplaces — not a blockchain-level requirement. Marketplaces competing for trading volume have made royalties optional or zero, allowing buyers and sellers to transact without paying creators. This is a structural limitation of application-layer enforcement.
Does Chia guarantee NFT royalties to creators?
Yes. Chia’s NFT1 standard encodes royalty payments directly into the coin’s Chialisp puzzle. The Chia blockchain rejects any transaction that attempts to transfer the NFT without including the specified royalty payment — making it impossible for any marketplace or wallet to bypass creator royalties.
