On-chain royalties are automated payments to creators or rights holders that are programmed directly into the smart contract of a digital asset, typically an NFT. These royalties are automatically executed and distributed each time the asset is resold on a secondary market. This mechanism ensures creators receive a continuous share of future sales.
Context
The implementation and enforcement of on-chain royalties are a significant and often contentious topic in the NFT ecosystem. News articles frequently cover debates between marketplaces and creators regarding the optionality or mandatory nature of these fees. The future of creator compensation in the digital art and collectibles space hinges on the evolution of these protocols.
This strategic IP tokenization converts illiquid media assets into programmable, on-chain collateral, optimizing corporate treasury and automating royalty distribution.
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