The headlines scream doom. NFT trading volumes are down 93%! Active traders vanished! 98% of projects are dead! Sure, it’s easy to pronounce NFT royalties six feet under. But those obituaries are premature. The real story isn't death, it's metamorphosis. We’re not seeing the death of NFTs, but their chrysalis phase, and royalties are changing with this metamorphosis.

Data Doesn't Tell The Whole Story

Yes, DappRadar's data paints a bleak picture. Figures don’t deceive as they say, but they sure can mislead. It’s unreasonable to judge the entire internet based on Dogecoin’s performance. In the same way, dismissing the NFT market due to the decrease in trading volume of speculative NFTs misses a holistic view. The truth? NFTs are finding real utility.

Think about it: NFT-based membership programs, loyalty rewards, digital identities linked to real-world assets. These aren't just digital trinkets. They’re not bricks—they’re keys—keys to gated communities, walled gardens, individualized media universes, and provably owned content. This shift from speculation to utility is precisely why the old royalty models are faltering, and precisely why we need new ones.

Royalties Need A Purposeful Rethink

The old model – a 70-30 cut in favor of the label on every secondary sale – was effective (to some extent) when speculation was fueling inflated prices. Now, it feels… forced. It’s the equivalent of tipping a barista who is already charging $7 for a latte. Creators deserve to be compensated, absolutely. The royalty structure should reflect the aims of the project and the values of the local community.

  • Dynamic Royalties: Instead of a fixed percentage, royalties could scale based on the sale price or the buyer's level of community involvement.
  • Staking Rewards: A portion of royalties could be automatically distributed to NFT holders who stake their tokens, incentivizing long-term holding and community participation.
  • Utility-Based Royalties: Royalties could be tied to specific in-game or in-application benefits, creating a direct link between creator revenue and user experience.

Remember Napster? The music industry’s spectacular failure to stop it, desperately trying to hold on to business models that were a century old. It failed. Instead, Spotify and Apple Music came along and made it way more convenient, while at the same time creating a sustainable long-term revenue source for artists. NFTs could use a similar, disruptive evolutionary arc.

South Asia Can Lead The Way!

This region, so full of creativity and entrepreneurial spirit, sorely lacks new opportunities for creators to earn a living from their work. Now picture using NFTs and new royalty distributions to uplift the weavers, musicians, and tellers of the oldest stories in Asia over India, Pakistan, Bangladesh…all the way to Turkey.

Financial literacy is crucial. We can’t come in like a techno-savior with a bunch of flashy technology and hope for success. Royalties 101 Creators should learn about the mechanics of royalties payments, best practices in financial management, and ways to avoid common scams and fraud. Our approach has to be about education and empowerment alongside technology.

By addressing these challenges and empowering creators with the knowledge and tools they need, South Asia can become a powerhouse in the NFT space, demonstrating how evolved royalty models can drive economic opportunity and cultural expression.

  • Regulatory Uncertainty: Clear and fair regulations are needed to foster growth and protect creators.
  • Access to Technology: Bridging the digital divide and ensuring access to affordable technology is essential.
  • Cultural Relevance: NFTs need to be adapted to local cultures and traditions to resonate with audiences.

NFT royalties’ future isn’t about holding on to the status quo. It’s about welcoming new ideas, investing in our artists and makers, and creating vibrant, lasting neighborhoods. It’s all about getting past the unnecessary hype and focusing on utility. It's about evolving. And I, for one, can’t wait to see what pops out of that chrysalis.

The future of NFT royalties isn't about clinging to the past. It's about embracing innovation, empowering creators, and building sustainable communities. It's about moving beyond hype and embracing utility. It's about evolving. And I, for one, am excited to see what emerges from the chrysalis.