NFT Royalties Under Attack? The Fan Economy Holds the Key

The fan economy is boosting NFT prices. Great! We see the research confirming what many suspected: more followers, higher prices. But don’t let the shiny numbers distract us. There's a storm brewing beneath the surface, a potential tragedy unfolding for creators, especially those from places you might not immediately think about: South Asia.

NFT Royalties: Creators' Lifeline?

NFT royalties. They're under attack. Critics call them an archaic tax on resale. Others, myself included, view them as an important lifeline, especially for artists coming from developing nations. Imagine having the opportunity to invent the next big game-changer. You pour every ounce of creativity into your digital magnum opus, only to see others bundle profit from it without compensating you in any way.

Now, consider the example of Ahsan, a gifted young digital artist from Lahore, Pakistan. Control over his work and production. He’s not afforded the same opportunities for grants, venture capital or established art markets as creators of the West. Royalties are his first, and sometimes only, form of income. They’re enabling him to continue producing, continue pushing the envelope, and continue introducing new ideas and concepts to a thriving NFT ecosystem. Take that away, and you’ll silence a generation of artists.

This isn't just about Ahsan. Millions of creators across South Asia – from India, Bangladesh, Sri Lanka and Nepal – are bursting with creativity. Yet, very often they fail, often because they lack the organizational resources and infrastructure that we too often take for granted. Is this really the kind of future that we want to see, where only the elite have the means to produce?

Fan Economy vs. Creator Economy?

The study shows how the fan economy makes a positive difference. More Discord followers, more Twitter hype, inflated NFT mint prices. Fantastic. But what does it mean when the very creators who power that burgeoning fan economy are no longer able to create?

Think of it like this: a sports team thrives on fan support, but what happens when the players can't afford to train, to eat, to live? The team collapses. The same applies to the NFT space. A thriving creator economy is the connective tissue across a thriving fan economy. But at this very moment, that creator economy is under attack.

We're so focused on maximizing profits and optimizing trading that we're forgetting the people who make this all possible. The artists who are creating the content that is fueling the new fan economy are the very ones being hurt. This is an example of the unintended consequence. Aiming to reduce fees only ended up creating a race to the bottom that was detrimental to creators.

Are We Building a Fair System?

The debate around royalties is about far more than dollars and cents. It’s about protecting artists, about fairness, about equity and about building a sustainable future for the NFT space.

• Think Long Term: Short-term gains from eliminating royalties might seem appealing, but what about the long-term consequences? Will we see a decline in creativity and innovation? Will the NFT space become dominated by a select few? What happens when all of the South Asian creators leave?
• Consider Alternatives: Are there alternative models that can address concerns about royalties while still supporting creators? Could we explore tiered royalty systems, community-funded grants, or other innovative solutions?
• Listen to the Voices: Most importantly, we need to listen to the voices of creators, especially those from underrepresented regions. They are the ones who will be most affected by these changes.

Let’s not forget that in our pursuit of profit we human lives have a cost. The fan economy is important, yes. But it’s empty without the people who make it come alive—the creators that inspire generation. We cannot allow a future where NFT royalties are ignored and not enforced. They’re not simply an inflammatory red herring; they truly are key to protecting artists and building a fair, equitable, sustainable NFT marketplace. If we don’t address this problem head-on, we’ll end up building a system that benefits the privileged few. This new system will further drown out the voices of those who most need to be heard.

Ultimately, the choice is ours. Will we advocate for a system that puts the interests of creators first, or one where profit comes before everything else? Let's choose wisely. Our future depends on it.