This article explains revenue and royalties in marketplaces where NFT creators are involved in the industry. This is a market that has been rapidly expanding all over the world in recent years. Since this market is rapidly expanding, the reality is that many people still don’t know much about it. For this reason, there is a term called royalty, but many people do not really understand how it works.
What is royalty?
Royalties in NFT resale are a reward that the creator receives as a portion of the revenue when a sale or purchase occurs. It is a system in which it is automatically paid to the creator each time it is secondary distributed. Secondary distribution means that the purchaser of the NFT resells it to someone else. For example, if an NFT with a 10% royalty is resold for 1,000 yen, a royalty of 100 yen will be paid to the NFT creator. Each time an NFT is resold, the creator incurs a “royalty.” This is charged as a fee. Note that there are some places where the operator collects a large amount from users as a function.
What is secondary distribution?
Secondary distribution is a term that refers to the flow of NFT works and collections to other people. Secondary distribution has great benefits for authors, as it provides a continuous income system for creators, and there is a possibility that profits can be expected based on the number of works. When you think of resale, you may think of used books or clothes, but NFTs have their own unique flavor because each time they are distributed, you can pay with crypto assets and earn profits.
What is the royalty rate?
NFTs have suddenly expanded rapidly in recent years, so the market price has not stabilized yet. However, the tendency is for the return rate to increase or decrease between 3% and 10%. The current situation is that it varies greatly depending on the industry and project. Of course, the biggest factor behind this wide range is that the market is still unstable. This market price will continue to fluctuate depending on the number of publications, the number of purchases, etc., so it is a good idea to check the latest news information, the opinions of the community as a whole, and trends.
Loyalty benefits
The benefits of NFT royalties include the following: NFTs can be traded on the web, and Coincheck, Bybit, and Opensea have all started registering and announcing their handling. It is recommended because there is a chance to make money by purchasing high-value tokens using the blockchain. In the era of new digital platforms, users are not only traders, but companies are also starting to enter the market.
low selling price
The existence of royalties makes it easier to set the price of initial NFTs low. Many NFT project creators deliberately sell their first NFTs at a low price, hoping to earn money from royalties afterwards. Nowadays, the key to releasing a new one is to make it low. This makes it easier to decide on the sale, and you can sell the quantity without any problems.
recurring income
Royalties are paid every time a resale occurs. NFT royalties provide a continuous income, so if the project is somewhat successful, the income will continue. The service is constantly developing, and more works will be added in the future, so be careful as it will become more competitive.
Notes on secondary distribution
One thing to note about secondary distribution is that it depends on the NFT marketplace. Whether or not you can list secondary distribution products differs depending on the marketplace, so you need to check in advance if you plan to start a business. When running a business, it is necessary to check the terms and conditions of each operating company’s financial services.
Bybit’s NFT Marketplace
Bybit has an NFT marketplace. Once you open an account, you can actually enter and trade, so let’s give it a try. Since it is a major exchange, wallets are well managed and funds are guaranteed. You can also participate in events such as Launchpad, and there is an NFT marketplace. For your reference, the following page introduces how to start NFT trading.
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