As the world of non-fungible tokens (NFTs) continues to grow, debates surrounding creator royalties have become increasingly heated. Marketplaces often use creator royalties as a bargaining chip to entice users, and this has become a key issue for many creators. Animoca Brands, a leading player in the NFT space, has taken a definitive stand on this issue by introducing three NFT licenses that prioritize the protection of creator royalties.
Animoca Brands CEO, Yat Siu, has been vocal about his support for creator royalties for some time. In August 2022, he expressed his strong views on the subject, stating that royalties are essential to a decentralized and democratic ecosystem. He emphasized their importance, noting that “they support fair distribution of value to contributors/creators, which in turn supports value creation across all NFT commons. Royalties are a critical part of the web3 ethos.”
In response, Animoca Brands announced that it was working on a framework that would protect creator royalties to the best of its abilities. Now, the company has finalized the framework by introducing three NFT licenses. The first license is for personal use only, while the second is for permitted commercial use, with a predetermined annual monetary limit. The third and final license is for unlimited use, allowing for unlimited personal use and no monetary limit on commercial use.
According to Animoca Brands, supporting creator royalties is crucial to creating a sustainable and efficient decentralized and democratic ecosystem. It incentivizes creators, enables ownership and commercial rights, and benefits the entire commons. Opting not to pay creator royalties goes against the best interests of everyone involved, and it undermines the ethos of web3.
Siu says, “No royalties is retrograde. Traditional game assets continue to depreciate in value because game studios can only make money by creating new assets for inflationary game economies. This results in economies without any actual value to players. Why go backwards?”
By prioritizing creator royalties, Animoca Brands is taking a stand for the future of the NFT ecosystem. It’s not just about supporting creators, but also about ensuring that the value of NFTs is sustainable and stable over time. Royalties are a critical part of this equation, and the company’s new licenses represent an important step forward in ensuring that creators are fairly compensated for their work.
In a world where NFTs are becoming increasingly mainstream, it’s important to remember the social conventions that underpin the technology. Supporting creator royalties isn’t just a business decision, it’s a moral imperative, and Animoca Brands is leading the way. As the NFT space continues to evolve, it’s clear that companies that prioritize creator royalties are best positioned for long-term success.