Animoca Brands has introduced three nonfungible token (NFT) licenses to defend creator royalties.
It has been reported that the set of three licenses “require the payment of creator royalties as a condition for receiving licenses to that NFTs art and utility.” Royalties are payments made to the creators of NFTs every time the token is sold or exchanged.
However, this is an essential part of a decentralized and democratic ecosystem that ensures fair distribution of value to creators and contributors, and supports value creation across all NFT commons.
The report said that Animoca Brands announced late last year that they would be setting a framework to protect creator royalties as much as they can. And in a move to cement this decision, they have recently introduced three NFT licenses to the world.
Likewise, royalties for NFT creators are crucial for a sustainable and efficient decentralized and democratic ecosystem. They support long-term success, incentivize creators, enable ownership and commercial rights, and benefit the entire commons. Royalties are a social convention that defends the ethos of web3, and not paying them is against the best interests of everyone involved.
In the middle of 2022, Animoca Brands and CEO Yat Siu showed crucial support towards enforcing creator royalties. Yat Siu also wrote a long-winded Twitter thread explaining the core importance of royalties. According to Siu, royalties are a critical part of the web3 ethos, and not paying them is ‘free-riding.’ This occurs when someone benefits from shared services or commons without paying for them.
Thus, he further explains that without NFT royalties, creators lack an important incentive to provide long-term sustainable benefits that support the commons. The success of the commons is to everyone’s benefit. And hence, NFTs with royalties are better equipped as vehicles for distribution rights and commercial rights.
Source: NFT Evening