A NFT marketplace lets buyers avoid having to pay royalties. The creators are not happy.
Royalty payments have become an important part of the growing non-fungible token (NFT) industry. They allow artists to make money when their work is resold, venues to make money on secondary markets for NFT tickets, and musicians to bypass streaming services in favor of more profitable blockchain-based products.
But there’s a problem: royalties can only be enforced in the marketplace, not on the blockchain. A buyer of an NFT could, for example, send ETH to a designated wallet after agreeing off-chain to buy that NFT. The seller could then send that NFT to the buyer without a marketplace acting as a middleman and without paying any royalty fees.