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Programmed Royalties and Creative Experiments in NFTs

  • Web3 gaming company Limit Break outlines NFTs with royalties, and more, programmed on-chain.
  • NFT projects can build on existing projects, as demonstrated by the Mutant Hounds collection.

The NFT space sometimes feels overloaded with copycat projects, and there can be prolonged periods when an overriding theme or aesthetic takes hold. At these moments, multiple new launches will be configured similarly, and originality takes a back seat.

At the same time, though, crypto and NFTs move quickly, and so, despite the constant presence of mimicry and trend-chasing, innovations can unfold seemingly overnight, and the urge to experiment is ever-present. This is all in the nature of an ecosystem where regulation and traditional corporate boundaries have been, up to now at least, more or less non-existent.

With all that in mind, it should be no surprise that NFTs are changing rapidly, and there are some new approaches that are currently grabbing attention.

The Royalties Debate

One of the initial often touted benefits of creating and selling art (and other content) via NFTs was that creators could take a fixed royalties payment every time one of their NFTs was sold. This was on top of being able to profit directly from initial sales, meaning creators could have a strong relationship with buyers, exercise close control over what they released, and then, through royalties, receive ongoing income from secondary sales.

This model attracted artists to work with NFTs, and while profiting from one’s art is still a tough process, it at least provided one more approach to experiment with, while creating an interesting, sometimes artistically inspiring crossover between the worlds of art, crypto and finance. However, a flaw in the model is that royalties are not hard-coded into NFTs. That is, royalties are enforced by NFT marketplaces in a traditional web setup that, in this particular respect, doesn’t make full use of blockchain technology.

While everyone was talking about web3, this arrangement was decidedly web2, and competitor marketplaces have since come along that, to the benefit of traders, but not artists, allow NFTs to be bought and sold without royalties. This bypassing of royalties by newer platforms has generated often heated debate, as artists, not for the first time, felt that they were getting a rough deal: creating the content on which NFT markets thrive, but having a valuable income stream abruptly severed.


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