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 With BAYC Has The Most NFT Royalties Earned
According to the report from Galaxy Digital, which was released on Friday, 21 October, 27% of the royalties went to 10 creators, who together received almost $489 million. 80% of the total royalties paid over the course of the previous year came from just 482 NFT collections.
Yuga Labs, who created the Bored Ape Yacht Club (BAYC), Art Blocks, OpenSea Storefront Creator, Chiru Labs (Azuki), PROOF Collective, The Sandbox, Doodles, VeeFriends, NFT Worlds, and World of Women were the top 10 creators in terms of royalties earned.
Yuga Labs made $147.6 million, followed by Art Blocks ($82 million) and OpenSea Storefront ($76 million) in terms of revenue.
$1.8 billion was made through royalties for NFT projects based on Ethereum. Of all royalties collected, $489 million, or 27%, was made by the top 10 NFT projects.
With nearly $91 million in NFT-based royalties over the past year, Nike led all international brands. Adidas comes in at number three with sales of more than $4.7 million and $1.5 million, followed by Gucci with $1.6 million.
80% of the royalties were collected through 482 NFT collections.
“OpenSea currently accounts for 80%+ of NFT marketplace volume, and their method for royalty distribution is the most common framework implemented by marketplaces today,” Galaxy Digital researchers noted.
Market Shifting To Have Royalties Optional On NFT Projects
However, not all NFT platforms support royalties, as the problem of marketplace-level royalty enforcement has caused some NFT marketplaces, such as Solana based DeGods, to eliminate royalties and others, like Magic Eden, to make them optional.
The report is released as royalties in the NFT industry become a more divisive topic. NFT wrapping makes having blockchain-based NFT royalties nearly unfeasible, leaving them up to markets. And an increasing number of markets are choosing to either make royalties optional or do away with them entirely.
This year’s first platform to reportedly make NFT royalties optional is the NFT marketplace X2Y2.
However, the marketplace SudoAMM’s decision to reduce royalties in order to reduce transaction fees to 0.5% sparked a discussion about the value of NFT royalties. Some projects contend that NFT royalties are essential for sustaining artists, while others contend that they are superfluous given the pressures placed on these platforms.
Since then, the Solana-based NFT project DeGods has elected to remove their own fees, while Solana’s NFT platform Magic Eden decided to make NFT royalty payments optional on October 15, 2022.
The open season on NFT royalties may be caused by financial pressures to reduce costs wherever possible. According to The Block’s Data Dashboard, OpenSea has dominated NFT trade volume and imposes artist royalties up to 10%. However, since June of this year, the royalty-optional competitor X2Y2 has gained significant market share.