NFT Royalties Hit Low

According to a report by blockchain analytics firm Nansen, royalties earned by nonfungible token (NFT) initiatives have fallen to their lowest level in two years.

The shared data illustrates the lowest point for NFT royalties before the recent decline in the floor price of Bored Ape Yacht Club (BAYC) NFTs and the controversy surrounding the release of the Azuki Elementals collection.

The apex of NFT royalties occurred in April 2022, when creators earned an estimated $75.7 million in a single week. The creator of BAYC, Yuga Labs, has earned a total of $165 million in royalties from its portfolio of NFT collections, according to data from Nansen.

RTFKT’s collections, which include CloneX, have generated a total of $79.9 million in royalties. Azuki’s Zuki, Beanz, Elemental Beansa, and Elementals collections have earned $58.2 million.

Moonbirds’ studio, Proof, generated $35 million in revenue, while Doodles’ Doodles, Space Doodles, Genesis Box, and Dooplicato collections generated $27.4 million.

The total revenue for Pudgy Penguins’ Pudgy Penguins, Lil Pudgys, and Pudgy Rods drips is $8.3 million. Given their role in generating revenue, Nansen emphasizes the significance of NFT royalties as an indicator of a studio’s financial foundation for ongoing development.

Until 2023, the NFT marketplace OpenSea was in charge of distributing royalty payments to NFT initiatives. This trend changed after rival marketplace Blur implemented a policy requiring a minimum of 0.5% royalties unless projects opted out or enforced complete percentages, according to the report:

“Currently, OpenSea and Blur are on par with each other when it comes to the royalties paid through their respective marketplaces, with more royalties paid on Blur when the trading volume surges.”

OpenSea gave purchasers the option to pay royalties unless projects opted out or imposed a percentage. Nansen’s data also reveals that the top 10 NFT collections have earned over $345 million in royalties.

Total royalties paid to NFT projects. Source: Nansen NFT trends dashboard

The $150 million in royalties earned by Yuga Labs accounts for 44% of the top ten. Only twenty NFT initiatives have earned over $10 million in royalties to date, which is quite interesting.