Definition ∞ Creator royalties refer to a percentage of secondary sales that the original creator of a digital asset, such as an NFT, receives each time their asset is resold. This mechanism is typically programmed directly into the smart contract governing the digital asset. It provides a continuous revenue stream for artists and developers beyond the initial sale. This system aligns incentives, allowing creators to benefit from the long-term value appreciation of their work.
Context ∞ The topic of creator royalties is a significant point of discussion in the NFT market, especially regarding platform enforcement and varying fee structures. A key debate involves the optionality of these royalties, with some marketplaces allowing buyers to opt out, impacting creator compensation. Future developments may include standardized on-chain enforcement mechanisms or new protocol designs that ensure consistent royalty collection across all secondary markets. This aims to protect creators’ ongoing financial interests.
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