Ethereum-based NFT Projects Earned $1.8 Billion From NFT Royalties

According to a research by Galaxy Digital’s research arm, a digital asset-focused financial services organization, while NFT royalties support tiny artists, the biggest winners are top NFT initiatives like Bored Ape Yacht Club and multinationals like Nike.

Revenue from royalties for Ethereum-based NFT projects totaled $1.8 billion. The top ten NFT projects collected $489 million, or 27% of total revenues. Yuga Labs took in $147.6 million in royalties from its Bored Ape, Mutant Ape, and Otherside products, followed by Art Blocks with $82 million.

Nike received more than $91.6 million in NFT royalties, the most significant Web2 brand. Adidas came in second with $4.7 million in royalties, followed by Gucci with $1.6 million. In all, 482 NFT collections generated 80% of the total royalties earned.

The research comes as royalties become a hotly debated topic in the NFT market. NFT wrapping makes blockchain-based NFT royalties nearly difficult, leaving them to markets. And an increasing number of marketplaces are making royalties optional or eliminating them entirely.

This year, the NFT marketplace X2Y2 looks to be the first platform to make NFT royalties optional. However, when the marketplace SudoAMM reduced royalties to reduce transaction fees to 0.5%, it sparked a debate about the utility of NFT royalties, with some projects claiming they’re critical to supporting artists while others claiming they’re unnecessary due to economic pressure on these platforms.

Since then, Solana’s NFT platform Magic Eden has opted to make NFT royalty payments optional from October 15, 2022, while the Solana-based NFT project DeGods has decided to remove their own fees.

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