Ok, let’s address the NFT royalty elephant in the room. For too many years, this has allowed writers to claim that royalties are the panacea for creators. They argued that royalties represent the moral center of the NFT ecosystem. Yet June 2025’s data tells a much more alarming story. Given this reality, it is past time to recognize that the royalty model is, quite frankly, not working.

Is Royalty Enforcement Killing NFTs?

Think about it. We're constantly bombarded with news about market uncertainty. Even a cryptic tweet known as the "Kekalf Effect" can send shivers down traders' spines. People are anxious. They’ve become fixated on the ubiquitous floor price fluctuations and trade volumes. Are we truly getting to the heart of what’s choking our market to death?

In my opinion, the single-minded focus on the enforcement of royalties is straining to increase this uncertainty. How? By making a confusing, inconvenient, cumbersome, fragmented, and inefficient market that is unappealing to both creators and collectors. The data doesn't lie: projects clinging desperately to royalty enforcement are losing ground to those embracing a more open, royalty-free model. It’s a Darwinian struggle unfolding in real-time, and the “royalty maximalists” are turning into digital dinosaurs.

You notice marketplaces as they’re coming up on the left and right that are not enforcing royalties. Why? Because they, too, know their time is up and they can read the writing on the wall. They know that putting the onus on purchasers to pay a premium on secondary sales is pushing volume off market. Consumers have an insatiable appetite for value. They’re tired of feeling nickel-and-dimed every time they trade an NFT. It's like going to a casino where the house always wins, and the odds are stacked so high you're bound to lose. Many would prefer to just buy Bitcoin — which to many is the ultimate safe haven.

South Asia's Artists Suffer Most

This isn’t solely an issue of a good return on investment, it’s a fairness issue. And this is where the “unexpected connection” comes in. This royalty-obsession has a particularly devastating impact on artists and creators from developing countries, and specifically from South Asia. And I know firsthand how the current system harms them.

  • Limited Access: Many South Asian artists lack the resources and connections to launch projects on platforms that strictly enforce royalties.
  • High Transaction Fees: Even if they manage to list their work, the added royalty fees make their NFTs less competitive on the secondary market, especially when competing with established Western artists.
  • Lack of Legal Recourse: Enforcing royalty payments across borders is a legal nightmare, leaving South Asian artists vulnerable to exploitation.

NFTs were meant to revolutionize the control that creators everywhere had over their work. Now, under the current royalty system, new barriers are being put up for them. It's ironic, isn't it? We talk about the need to decentralize and democratize, but we’re designing a system that’s going to cement in our current unfairness. This makes me angry.

DeFi is the Future, Not Royalties

So, what's the alternative? It’s time to change our paradigm away from enforcement and more towards innovation. The solution, I believe, is in seeking broader, more sustainable, and more equitable funding models. Imagine community-driven grants, patronage systems, and most importantly DeFi integrations.

Now picture a world where NFT creators can earn passive income from their NFTs through staking them, yield farming, or other DeFi mechanisms. Instead of relying on a percentage of secondary sales, they can build sustainable revenue streams tied to the underlying value of their artwork. This is where things get interesting. This is where we can really start to democratize creation and help foster a more diverse and dynamic NFT space.

To be blunt, waiting on a centralized, closed-source marketplace to eventually enforce royalties is a Web2 mindset. It’s antithetical to the very principles of Web3 that they claim to support. To truly achieve the magic of decentralization, we have to build systems that are truly permissionless and trustless.

The data is clear. The royalty model is failing. We all know it’s time to move beyond the play-it-safe Left-Right paradigm and imagine what could be. Together, we can create a more equitable NFT ecosystem that lifts up all the players—not just the privileged few. Let’s retire the royalty fiction once and for all and move into a new future of creativity and promise. And make sure you are diversifying your portfolio to reduce your exposure.