Royalty Management

Definition ∞ Royalty management refers to the system for tracking, calculating, and distributing payments to intellectual property rights holders. In the digital asset space, particularly with non-fungible tokens (NFTs), this often involves automated mechanisms embedded in smart contracts. These contracts ensure that creators receive a predetermined percentage of subsequent sales of their digital assets, providing ongoing revenue streams. It streamlines the compensation process, ensuring fair remuneration for original content creators.
Context ∞ The discussion around royalty management in NFTs currently addresses the debate over enforcing on-chain royalties versus off-chain marketplace practices. A key challenge involves ensuring consistent royalty collection across various platforms, as some marketplaces allow creators to opt out or bypass these fees. Future developments will likely include more robust technical standards for royalty enforcement and industry-wide agreements to protect creator rights in secondary markets.