Nike and BAYC Have Highest NFT Royalties Payout According To Galaxy Research.
Despite the fact that small artists benefit from NFT royalties, a report from Galaxy Digital’s research division, a financial services company that focuses on digital assets, laid out data demonstrating that top NFT projects like Bored Ape Yacht Club (BAYC) and businesses like Nike are the primary beneficiaries.
Yuga Labs has the most NFT royalties earned.
According to the Galaxy Digital report, which was released on Friday, 21 October, 27% of the royalties went to 10 creators, who together received almost $489 million. More than 80% of the royalties paid over the course of the past year came from just 482 NFT collections.
The top 10 creators in terms of royalties earned were Yuga Labs (Bored Ape Yacht Club, Art Blocks, OpenSea Storefront Creator), Chiru Labs (Azuki), PROOF Collective, The Sandbox, Doodles, VeeFriends, NFT Worlds, and World of Women. According to a recent report, Yuga Labs was the top-earning company in the field of blockchain technology, with a revenue of $147.6 million. Art Blocks and OpenSea Storefront came in second and third place, respectively, with earnings of $82 million and $76 million.
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$1.8 billion was earned through royalties on Ethereum-based NFT projects. Of all royalties collected, $489 million was made by the top 10 NFT projects, accounting for 27% of the total.
With nearly $91 million in NFT-based royalties last year, Nike has become a leader among all international brands. Adidas is in third place in terms of sales, with more than $4.7 million in sales and $1.5 million in profits. Gucci is in fourth place with $1.6 million in sales.
Eighty percent of the royalties were collected through 482 NFT collections.
According to Galaxy Digital researchers, OpenSea currently accounts for 80%+ of NFT marketplace volume, and their method for royalty distribution is the most common framework implemented by marketplaces today.
Market Shifting To Have Royalties Optional On NFT Projects
However, not all NFT platforms support loyalty. Due to marketplace-level loyalty enforcement issues, some NFT marketplaces, such as the Solana-based DeGods, have deprecated loyalty, while others, such as Magic Eden, have made it optional.
The report is released as the debate over royalties in the NFT industry becomes more heated. The use of NFT wrapping makes it nearly impossible to have blockchain-based NFT royalties, leaving them to be determined by markets. There is an increasing trend of markets choosing to either make royalties optional or do away with them entirely.
The NFT marketplace X2Y2 is reportedly the first platform to make NFT royalties optional this year.
The recent decision by the marketplace SudoAMM to reduce royalties in order to reduce transaction fees to 0.5% has sparked a discussion about the value of NFT royalties. Some projects assert that NFT proceeds are necessary to support artists, while others assert that they are unnecessary given the pressures placed on these platforms.
Since then, the Solana-based NFT project DeGods has elected to remove their own fees. On October 15, 2022, Solana’s NFT platform Magic Eden decided to make NFT royalty payments optional.
The current situation with NFT royalties may be due to financial pressures to reduce costs. OpenSea is the leading marketplace for NFTs, with a dominant market share in terms of trade volume. They also impose artist royalties of up to 10%. However, since June of this year, the royalty-optional competitor X2Y2 has gained significant market share.
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