NFT royalties for content creators represents a pivotal innovation in the digital economy, addressing several long-standing issues related to the creation, distribution, and monetization of digital content and assets. There are key reasons why this feature is so important:

Sustainable Revenue Model

Built-in NFT royalties, or digital assets, provide a sustainable revenue model for creators by ensuring they earn a share of the proceeds from secondary sales of their work. This is particularly transformative in the digital art world and other creative industries where creators traditionally receive payment only once upon the initial sale.

Built-in royalties for Phantasma digital assets (smartNFTs), created on the cross-chain marketplace Ghostmarket, establishes a more equitable and sustainable economic model for creators across the spectrum.

Acknowledgment of Ongoing Value

This approach not only revolutionizes the traditional economics of creativity but also ensures that artists, musicians, writers, and digital creators receive fair compensation for their ongoing contributions.

By embedding a mechanism that awards creators a portion of earnings from secondary sales, this model introduces a reliable revenue stream that appreciates in tandem with the creator’s growing reputation and the rising demand for their work.

Incentive for High-Quality Work

NFT Royalties for content creators incentivizes high-calibre, original work, knowing their economic wellbeing is intertwined with the lasting impact of their creations. This enriches the digital landscape with engaging, cutting-edge, diverse and innovative content, benefitting both creators and collectors.

Enhanced Creator-Control

Built-in royalties reinforce creators’ control over their work by embedding payment rights directly into the asset, regardless of where it is sold or traded. This is a significant shift from traditional digital content distribution, where creators often lose control over their work after the first sale, leading to unauthorized use or distribution without compensation.

Empowerment of Creators

Empower creators by providing them with direct access to their market without the need for intermediaries like galleries, publishers, or music labels. By bypassing these traditional gatekeepers, creators can retain a larger share of their earnings, set their own terms, pay themselves what they are worth and build closer relationships with their audience.

Promotion of Secondary Markets

Royalties encourage the development of vibrant secondary markets by ensuring that creators support the resale of their work. A healthy secondary market increases the liquidity of digital assets, making them more attractive to collectors and investors, which, in turn, benefits creators by raising the profile and value of their work.

Fair Compensation in the Digital Economy

In an era where digital reproduction and distribution are effortless, traditional copyright and compensation mechanisms often fall short. Built-in royalties offer a forward-thinking solution, leveraging blockchain technology to automatically remunerate creators for the use and circulation of their work.

Adaptability and Futureproofing

Built-in royalties for digital assets provides a flexible and future-proof framework that can adapt to new platforms, markets, and technologies. This adaptability ensures that creators can continue to benefit from their work across emerging digital spaces, including virtual reality, augmented reality, and other yet-to-be-developed digital realms.

This model is inherently suited to the digital age, providing a robust framework for copyright enforcement and creator compensation that aligns with contemporary consumption and distribution patterns. They ensure that creators are paid for the use of their work, addressing a fundamental challenge of the digital economy—how to protect and reward digital creativity and labor.

Sure, there are some challenges. Not every blockchain will support digital asset royalties. We need open dialogue, creative solutions, and clearer laws to navigate these waters and unlock the full potential of digital asset monetization. It’s an exciting journey, and one that requires us to be fully aware of the hurdles as we work towards a fair, sustainable and flourishing digital creative economy.

The benefits of built-in royalties for digital assets is undeniable, and heralds major progress in the creative economy, one where the economic underpinnings of digital arts and innovation are as dynamic and forward-thinking as the creators themselves.