Understanding how NFT royalties work requires seeing real-world examples of project owners earning from setting or adjusting the proper fees. We’ve identified the best NFT royalties examples where creators, flippers, and traders earn perpetual income once set up.
As most know, nft royalties give the artist a percentage of the sale every time sold on the blockchain. However, it will focus on what you need to know when optimizing that percentage to get the most out of it.
Will explain how to find the royalty percentage amount of any nft collection within minutes, the steps it takes to change your percentage fee on OpenSea, and how you should think about NFT royalties in the future.
First, let’s go through some of the basics:
Who Determines the Royalty Fee on an NFT?
Royalty percentages are fees adjusted by the owner of a project and based on guidelines from the secondary marketplace. For example, Open Sea has a platform fee of 2.5% and offers up to 10% in royalty fees.
The project owner determines if they’d like to change the nft royalty fees at any point in the project’s lifetime.
Do You Get Royalties on Opensea?
Royalties are available when selling NFTs on OpenSea and can be changed or adjusted. NFT Project owners such as creators, flippers, or traders can earn royalty percentages up to 10%.
While each marketplace is different, it’s common for earnings to be perpetual and executed automatically via smart contracts.
How to Lookup an NFT Royalty Amount?
Understanding how much you spend on royalties will help when considering your purchase. Let’s go over the steps you can take to determine how much royalties will cost you when buying an nft.
- Go to ICY. Tools and search for any nft that’s available on OpenSea. (https://icy.tools/collections)
- Google searches the current price of ETH by typing ‘how much is one eth worth.’
- Use the formula: ‘Avg. Floor Price in ETH’ x ‘USD Price’ x ‘Royalty Percentage’ = ‘NFT Royalty Amount.’
Disclaimer:
The average floor prices and cryptocurrency change constantly; the examples use data that could have changed, so please use the formula to get a more accurate nft royalty amount.
Best NFT Royalties Examples
Let’s dive into the best NFT royalties examples you can find:
1. Azuki – (https://www.azuki.com/)
5% fee for all secondary sales. 2.5% goes to OpenSea, and 2.5% goes to Azyki’s project owners.
For example, if the average floor price for an Azuki is 13.45 ETH and each ETH is worth 3,020.66 USD, then when sold, it totals USD 40,627. Which 5% royalty results in $2,032 USD.
2. Doodles NFT – (https://doodles.app/)
5% fee for all secondary sales. 2.5% goes to OpenSea, and 7.5% goes to Doodle Labs.
For example, if the average floor price for a Doodles is 13 ETH and each ETH is worth 3,020.66 USD, then when sold, it totals USD 39,268. Which 5% royalty results in USD 1,963.
3. HypeBears – (https://hypebears.io/)
5% fee for all secondary sales. 2.5% goes to OpenSea, and 2.5% goes to HyperBears project owners.
For example, if the average floor price for an HypeBears is 0.89 ETH and each ETH is worth 3,020.66 USD, then when sold, it totals USD 2,688. Which 5% royalty results in USD 134.
4. WonderPals – (https://www.wonderpals.com/)
5% fee for all secondary sales. 2.5% goes to OpenSea and 2.5% to WonderPals NF project owners.
For example, if the average floor price for WonderPals is .35 ETH and each ETH is worth 3,020.66 USD, it totals USD 1,057 when sold. Which 5% royalty results in USD 53.
5. 3Landers – (https://3landersnft.com/)
6.5% fee for all secondary sales. 2.5% goes to OpenSea, and 4% goes to 3Landers NFT project owners.
For example, if the average floor price for a 3Landers 1.9 ETH and each ETH is worth 3,020.66 USD, then when sold, it totals USD 5,739. Which 6.5% royalty results in USD 373.
6. CryptoPunks – (https://www.larvalabs.com/cryptopunks)
Royalties are not available currently; however, Larva Labs (the creators of Crptopunks) anticipate royalty fees on Cryptopunks.
7. Bored Ape Yacht Club (BAYC) – (https://boredapeyachtclub.com)
2.5% fee for all secondary sales and no others royalty amount exists for Bored Ape Yacht.
For example, if the average floor price for a BAYC is 99.42 ETH and each ETH is worth 3,020.66 USD, then when sold, it totals USD 300,314. Which 2.5% royalty results in USD 7,507.
What Is a Good Royalty for NFT?
A reasonable royalty fee for an nft is determined based on who’s willing to pay that amount and who was benefiting. For NFTs where royalties go back to the owner, it’s practical to set relative to the average floor price.
However, NFTs where royalties go to the holder, it’s practical to set a higher amount as an incentive and marketing angle for growing the collection.
What Are Typical or Standard NFT Royalties?
On average, royalty percentages between 5% to 10% are common or considered standard. For example, out of the seven nft projects we’ve analyzed, 4 have a royalty fee of 5%, while the others have either 6.5% or 2.5%.
Understanding how much you should ask for as an nft royalty fee comes down to knowing the overall costs associated with the nft project. More importantly, know your audience and those willing to absorb the cost.
While royalties aren’t an additional fee, they become a built-in cost to the overall cost when purchasing an nft. Included with gas fees becomes a consideration when making the final buy.
For example, if an nft costs USD 40,000, a 2.5% royalty fee comes to $1,000. If an nft costs USD 1,200, 2.5% is only USD 30. Compared to a 6.5% royalty fee, the first nft worth USD 40,000 now has a $2,600, and the USD 1,200 costing nft has a cost of USD 78.
In other words, if an nft costs more (more excellent than $10K), the lower the nft royalty fee will be more favorable since the amount going towards royalties will be far less.
Someone buying a USD 40,000 nft would prefer to only spend $1,000 in royalties compared to $2,600, and someone buying a USD 1,200 nft would still be able to afford a USD 78 cost even though it’s the higher percentage fee.
For this reason, you see a lot of nft projects over 10K dollars use a lower royalty percentage such as 2.5%, and nft projects under 10K dollars can go from 5% to 10% in royalty fees.
How do Royalty Percentages Impact NFT Costs
We’ve analyzed the moving average of 1 ETH (priced in USD) for multiple periods: 5-Day, 20-Day, 50-Day, 100-Day, 200-Day. When looking at a 2.5%, 5%, or 6.5% royalty percentage, you can see how much the purchase goes towards royalties.
Here’s what we’ve found
With the higher price of ETH (in USD), the overall royalty percentage costs increase, even when the royalty percentage is low. Therefore, you’ll want to purchase nfts when the price of ETH is lowest and stick to nfts with lower royalty percentages to get the best value for your purchase.
How Do You Edit Your NFT Royalties Percentage on Opensea?
OpenSea allows users who own the nft project to go into their settings and adjust the nft royalties amount. Its ability to make those changes gives creators the chance to reevaluate if they’ve set their nft royalty percentage fees too high or too low.
Step 1: Go to Open Sea and open the NFT project you plan on adjusting its royalties fees for via your profile.
Step 2: Hit the drop-down three-dot menu section and click on ‘edit.’ Change the royalty percentages using the box and type in a number from 0 to 10.
Step 3: Hit ‘ save once you’ve changed the number within the box to your new desired royalties percentage.
NFT Royalties Help Artists Continue Making Art
For years, artists have looked for a solution where they can sell ownership to a digital asset and collect royalties by setting a royalty percentage. Now OpenSea and other marketplaces allow adjusting the amount you’d like to earn.
Artists can now earn more sustainably since they won’t need to rely upon working for their time. It’ll give them more time to put towards their artwork and free them from some of their financial burdens.
If you’ve enjoyed reading this article on NFT royalties examples, you may also enjoy these:
- How to Start Selling NFTs on the Blockchain
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- How to Flip NFTs Using Profitable Flipping Methods
