The NFT space is bleeding. Not from hacks (though those happen too), but from a self-inflicted wound: the near-death of creator royalties. We all felt it – the impending, long erosion, the marketplaces opt-outs, the air of inevitability. What if I told you Ethereum's Pectra upgrade, completed May 7, 2025, might actually be the defibrillator this dying ecosystem needs?

Royalties: A Broken Promise?

Let's be brutally honest. The original promise of NFTs was enough to inspire dreams of real digital ownership and lifelong creator royalties. Today, that vision seems like a painful dream long gone. Marketplaces, incentivized by competition and the siren song of volume, have overwhelmingly moved away from enforcing mandatory royalties. Creators, particularly those who come from marginalized communities, are facing unprecedented pressures. This is not simply an income issue, this is the issue of basic fairness. Imagine a South Asian artist finally breaking through, only to see their work traded without them receiving a dime from secondary sales. But that’s not the decentralized future we were promised. It’s exploitation, plain and simple.

The whole landscape is reminding them a little of the old Wild West days of the music industry, pre-digital rights management (DRM). Then Napster came along and artists were getting their revenue decimated. Will NFTs follow the same path? Are we destined to repeat history?

Pectra's Unexpected Royal Savior?

Pectra represents the largest Ethereum upgrade since The Merge. It includes a whopping 11 EIPs, but the legislation was not intentionally crafted to tackle the issue of royalties. This is where the surprising link becomes clear. Account Abstraction (AA), made possible by Pectra, namely EIP-7702, is the answer. Through this powerful technology, smart contract wallets give creators unprecedented control over where and how their NFTs are traded.

Think of it this way: instead of relying on marketplaces to voluntarily enforce royalties, creators can bake royalty enforcement directly into the NFT's smart contract. As a result, the creator deserves to receive their payment with each and every transaction, no matter what the marketplace is. Want to trade on a royalty-free marketplace? Fine. With an on-chain enforcement solution, the smart contract literally will not allow the transaction to go through unless the royalty is paid.

Here's a breakdown of how Account Abstraction could drastically change the NFT landscape:

  • Enforceable Royalties: Royalties are coded into the NFT itself, making them unavoidable.
  • Creator Empowerment: Artists regain control over their creations and revenue streams.
  • Fairer Ecosystem: Level playing field, especially for creators from underrepresented communities.

It’s as if DRM had been directly engineered into the NFT from the start, with the ancillary benefit of being disinfotmically decentralized and transparent.

Will It Actually Work Though?

Okay, let's pump the brakes a bit. Technical feasibility doesn't guarantee adoption. There are hurdles.

  • User Adoption: Will users embrace smart contract wallets? There's a learning curve. Can we make it seamless enough for mainstream users?
  • Gas Fees: Smart contract transactions can be more expensive. Pectra does aim to reduce gas fees through Layer 2 scaling, doubling data capacity for Layer 2 blobs, but will it be enough?
  • Marketplace Resistance: Royalty-free marketplaces will undoubtedly resist. They'll claim it stifles innovation. They might even try to fork Ethereum to create a royalty-free chain. (Good luck with that.)

We, together, as a profession and community, need to start insisting on more. We still need to align incentives with creators who want to be able to enforce royalties. We need to continue to expose through media those marketplaces that exploit the loopholes of a profit over fairness mentality. It’s about sending a message that we value creators and fostering a culture in which respecting creators is expected—rather than the exception that proves the rule.

Consider this: if Pectra’s Account Abstraction can successfully revitalize NFT royalties, it will not only financially empower artists but inspire a new wave of innovation in digital ownership and creator compensation. It’s an opportunity to create a more equitable and sustainable NFT ecosystem right from the start.

Despite an underwhelming market reaction to Pectra, with ETH still sitting around $1,900. Yet the following 12% jump over the next few days, crossing above $2,000, indicated that the market was beginning to grasp the potential. Analysts are already forecasting additional increases should network usage increase.

Pectra may not be a silver bullet, but it’s the best shot we’ve had in a long time. No more crying over the demise of the royalties — it’s time to get to work on a fix. The future of NFTs, and the fortunes of millions of artists, creators, and other musically inclined entrepreneurs, just might hang in the balance. The real question isn’t whether Pectra can unlock NFT royalties, but whether we, the community, will finally choose to unlock them.