When you buy an NFT, you’re not just owning a digital image - you’re entering a contract that says, "Every time this NFT is sold again, the original creator gets paid." That’s the promise. But for many artists and developers, that promise is broken - over and over again.
How Royalty Circumvention Works
NFT royalties were supposed to be automatic. A creator sets a 10% royalty when they mint their artwork. Later, someone resells it for $10,000. The system should send $1,000 straight to the artist. But it often doesn’t. Why? The problem starts with the ERC-721 is the most common NFT token standard on Ethereum, finalized in 2018, that handles ownership transfers but has no built-in royalty enforcement. It lets anyone move an NFT from one wallet to another, sell it on any marketplace, and no one checks if royalties were supposed to be paid. It’s like handing someone a house key and saying, "Every time you rent this out, pay the original owner 10%" - but there’s no law, no camera, no way to track it. The ERC-2981 is a royalty standard introduced in July 2021 that allows NFTs to declare royalty percentages and recipients in their metadata, but it’s optional and ignored by many platforms was created to fix this. It lets creators embed royalty info directly into the token. But here’s the catch: marketplaces don’t have to follow it. If a platform like Blur decides to ignore ERC-2981, the royalty simply vanishes. The most common trick? Wrapping. A trader takes an NFT with a 5% royalty and puts it inside another smart contract - like putting a document in a sealed envelope labeled "This doesn’t count." The new wrapper uses the basic ERC-721 standard, which has no royalty rules. When the wrapped NFT is sold, the marketplace sees only the wrapper and thinks, "No royalties here." The original creator gets nothing. Even when buyers use platforms that claim to honor royalties, they can bypass them. Some buyers and sellers arrange private deals: the buyer lists the NFT for $0.01 on the marketplace (to make the transaction look valid), then pays the seller $10,000 in ETH through a separate wallet or peer-to-peer channel. The marketplace records a sale, but the royalty system never triggers.Marketplaces Are the Weak Link
OpenSea used to be the main place where royalties were enforced. In 2022, creators earned about $1 billion in royalties across OpenSea and other platforms. But that number is misleading. Experts estimate that less than half of all secondary sales actually paid royalties. The rest? Gone. Platforms like Blur changed their rules entirely. In late 2022, Blur announced it would not enforce any creator royalties. Why? Because traders - often large investors and bots - flocked to Blur because they could buy and sell without paying creators. Suddenly, Blur became the largest NFT marketplace by volume. The message was clear: if you don’t pay the artist, you get more volume. And volume means profit. Other platforms followed suit. Some quietly lowered royalty rates. Others made it a user option: "Do you want to pay the creator?" - turning a supposed obligation into a voluntary donation. This isn’t just about greed. It’s about market power. When a single marketplace controls 70% of trading volume, it can rewrite the rules. Creators have no leverage. They can’t force buyers to use a different platform. And if they lock their NFTs to one marketplace, they lose liquidity - which kills value.Blocklists vs. Allowlists: The Two Failed Solutions
Creators tried to fight back. Two main strategies emerged: blocklists and allowlists. A blocklist is a blacklist of marketplaces that don’t pay royalties. If a creator adds Blur to their blocklist, any attempt to transfer their NFT through Blur fails. Sounds smart - until you realize there are hundreds of new marketplaces popping up every month. Each one has a unique smart contract address. Keeping up? Impossible. By the time a creator adds a new rogue platform to the blocklist, it’s already stolen millions in unpaid royalties. An allowlist is the opposite. Only pre-approved marketplaces can trade the NFT. If you want to sell, you must use one of the five platforms the creator approved. This works - but it breaks the whole point of NFTs. One of the biggest selling points of blockchain is openness. You should be able to sell your NFT anywhere. An allowlist turns NFTs into locked assets, like a physical painting that can only be sold at one auction house. Both methods reduce composability - the ability for NFTs to interact with other apps, games, wallets, and tools. If your NFT can’t move freely, it’s less valuable. A digital collectible that can’t be used in a game, displayed in a virtual gallery, or traded on a new platform isn’t a NFT - it’s a static image.
ERC721-C: A New Way Forward
The most promising solution so far is ERC721-C is a customizable royalty standard developed by Limit Break that lets creators programmatically control where their NFTs can be traded, blocking zero-fee marketplaces at the contract level. Unlike ERC-721 or ERC-2981, ERC721-C gives creators full control. They can write code into the NFT itself that says: "Only allow sales on Rarible, Foundation, and SuperRare. Block any transaction from Blur, LooksRare, or any unknown marketplace." This isn’t a workaround. It’s enforcement built into the token. If someone tries to sell your NFT on a banned marketplace, the blockchain rejects the transaction outright. No exceptions. No loopholes. The downside? Adoption. ERC721-C requires everyone - buyers, sellers, wallets, marketplaces - to support it. Right now, most wallets and platforms still only recognize ERC-721. If you mint your art with ERC721-C, you might be locking yourself out of the largest markets. It’s a trade-off: total control, but limited reach. Hedera, a blockchain network, took a different route. Instead of relying on smart contracts, it built royalty enforcement into the network itself. When you mint an NFT on Hedera, you set a royalty rate. Every time that NFT changes hands - no matter which app or wallet is used - the royalty is automatically deducted and sent to the creator. Even if the NFT is transferred for free (like a gift), a small fallback fee is charged to ensure creators still get something. This is a game-changer. It removes the need for marketplaces to cooperate. It doesn’t depend on creators to maintain blocklists. It just works.The Bigger Problem: Trust Is Broken
The real issue isn’t technical. It’s cultural. When NFTs first exploded, creators believed in the system. They thought blockchain would finally give them fair, lasting income. But now, after years of royalty theft, many artists feel betrayed. Why should they mint on Ethereum if the marketplaces they rely on are actively stealing from them? Some have left entirely. Others are refusing to mint new collections until enforceable standards become mainstream. A growing number are turning to Hedera, Solana, or other chains that offer built-in royalty protection. The irony? The same technology that promised freedom - permissionless, open, decentralized - is now the tool that lets buyers and platforms strip creators of their rights. The system designed to protect creators is being weaponized against them.
What Creators Can Do Today
If you’re an artist or developer:- Use ERC721-C if you’re minting on a compatible chain. It’s the strongest protection available.
- Check which marketplaces your NFTs are being traded on. If Blur or LooksRare show up, you’re likely losing royalties.
- Don’t rely on OpenSea or other legacy platforms to enforce payments. Assume they won’t.
- Consider minting on Hedera or other networks with native royalty enforcement.
- Communicate clearly with your buyers: "I depend on royalties to keep creating. Please support them."
Future Outlook
The fight over NFT royalties isn’t over. It’s just getting started. More standards will emerge. More chains will build enforcement into their core. Some marketplaces will die off. Others will adapt. But until creators regain control over their own work - until royalties are no longer optional - the promise of Web3 remains unfulfilled. The technology exists. The question is: who will use it?Can NFT royalties be legally enforced?
No, not legally. Royalty payments in NFTs are not backed by contracts or laws - they’re based on social norms and technical implementation. Courts don’t recognize smart contract royalty rules as binding agreements. Enforcement is entirely technical, not legal.
Why don’t all marketplaces enforce royalties?
Marketplaces prioritize trading volume over creator compensation. Platforms like Blur and LooksRare attract more traders by allowing zero-fee sales. Higher volume means more fees from listing, bidding, and other services - so they sacrifice royalties to grow faster.
Is ERC-2981 useless?
Not useless - but unreliable. ERC-2981 provides the data for royalties, but it’s up to each marketplace to read and honor it. Since many don’t, ERC-2981 alone can’t protect creators. It’s a signal, not a rule.
Can I still sell my ERC721-C NFT on OpenSea?
Only if OpenSea supports ERC721-C. As of 2026, most major marketplaces do not. ERC721-C NFTs are often restricted to platforms that explicitly support programmable restrictions. You may need to use specialized marketplaces or wallets to trade them.
What happens if I don’t use any royalty enforcement?
You’ll likely lose 90% or more of your potential secondary income. Without enforcement, buyers can easily bypass royalties using wrapping, private deals, or non-compliant marketplaces. Your NFT becomes a one-time sale, not a long-term revenue stream.
Paul Reinhart
February 28, 2026 AT 14:53It’s wild how we built this whole ecosystem on trust and then watched it get dismantled by greed. I remember when NFTs felt like a revolution - artists finally getting paid for their work, no middlemen, no gatekeepers. Now? It’s a free-for-all where the only thing being preserved is the profit margin of the largest marketplaces. The irony is thick enough to choke on. We wanted decentralization, but we ended up with a new kind of monopoly - one that doesn’t need a CEO, just a smart contract loophole.
And don’t even get me started on wrapping. It’s not just cheating - it’s a philosophical betrayal. You’re not just avoiding payment; you’re rejecting the entire premise of the medium. If you buy an NFT to own something, you’re also agreeing to uphold its cultural contract. That’s not a legal thing - it’s a moral one. And right now, the moral fabric is fraying at the seams.
ERC721-C feels like the first real hope I’ve seen in years. Not because it’s perfect, but because it refuses to pretend that tech can exist in a vacuum. It says: if you want to build something that lasts, you have to build boundaries. You have to say no. And maybe, just maybe, that’s the real innovation here - not the code, but the courage to enforce it.
Samantha Stultz
March 1, 2026 AT 08:57Let’s cut through the noise - ERC-2981 isn’t ‘unreliable,’ it’s irrelevant without enforcement mechanisms. The real issue is that Ethereum’s architecture was never designed for persistent value flows. It’s a ledger, not a governance layer. You can’t expect a token standard to enforce royalties when the underlying protocol has no concept of ‘fairness.’
ERC721-C is the only viable path forward because it shifts the paradigm: royalties aren’t metadata - they’re executable logic. This isn’t a ‘standard,’ it’s a protocol-level upgrade. And Hedera? Genius. By embedding enforcement into the consensus layer, they’ve solved the coordination problem that Ethereum can’t. No more marketplaces playing whack-a-mole. The chain itself becomes the enforcer.
But here’s the kicker: this isn’t a technical problem. It’s a sociological one. The buyers who bypass royalties aren’t ‘bad people’ - they’re rational actors in a system that rewards extraction. If you want to fix this, you need to redesign incentives, not just smart contracts. And that requires political will. Which we don’t have.
Robert Conmy
March 3, 2026 AT 04:40Stop pretending this is about ethics. This is about power. The artists who cried about royalties were the same ones who sold their work for $100K on a whim, then acted shocked when someone flipped it for $1M. You don’t get to have your cake and eat it too.
Marketplaces aren’t ‘stealing’ - they’re responding to demand. Traders want frictionless, low-cost trading. That’s what capitalism looks like. If you want to be paid every time your NFT changes hands, then mint on a chain that forces it - like Hedera. Or better yet, stop minting and get a real job.
Stop whining about ‘trust.’ No one owed you a royalty. You were never promised a pension from a JPEG. This isn’t a betrayal - it’s a market correction. And if you can’t handle that, maybe digital art isn’t for you.
Lilly Markou
March 4, 2026 AT 03:43The emotional toll on creators is being entirely disregarded in this discourse. I’ve spoken with artists who have poured years of their lives into their work - who have sacrificed stability, relationships, even mental health - to bring something beautiful into the world. And now, the very technology that promised them dignity is being used to erase their livelihood.
It’s not about economics. It’s about reverence. When we reduce art to a speculative asset with no respect for its origin, we become complicit in a quiet violence. The silence of the marketplaces is deafening. The lack of accountability is not an oversight - it is a choice.
I do not understand how anyone can look at a child’s drawing, a poem encoded in code, a symphony rendered as a pixel - and not feel the weight of what is being lost. This is not a technical failure. It is a spiritual one.
McKenna Becker
March 5, 2026 AT 05:37precious Ncube
March 5, 2026 AT 13:40Let’s be honest - if you’re still minting on Ethereum without ERC721-C, you’re either naive or complicit. This isn’t rocket science. The tools exist. The knowledge is public. If you’re losing royalties, it’s because you chose not to protect yourself. No one’s coming to save you. The blockchain doesn’t care about your feelings.
And don’t get me started on ‘trust.’ Trust is for bank tellers and used car salesmen. In Web3, you verify. You audit. You enforce. Or you lose. Simple.
Amita Pandey
March 7, 2026 AT 12:13It is imperative to recognize that the foundational architecture of Ethereum, being a permissionless and stateless system, inherently lacks the capacity to enforce post-transfer obligations. The absence of royalty enforcement is not a flaw in implementation but an ontological limitation of the protocol itself.
ERC-721-C, while innovative, introduces centralization through programmable restrictions - a paradoxical solution to a decentralized ideal. The Hedera model, by contrast, represents a form of institutionalized enforcement that undermines the very ethos of open access upon which blockchain was predicated.
Thus, the true dilemma lies not in technical implementation, but in the epistemological conflict between idealism and pragmatism. We must ask: is the preservation of creator royalties worth the erosion of composability? Or is this merely a rebranding of feudalism under the banner of decentralization?
Tracy Peterson
March 9, 2026 AT 00:53I’ve been watching this whole thing unfold since 2021. The real tragedy isn’t that royalties are being bypassed - it’s that creators keep building on systems that don’t protect them. You don’t build a house on sand and then blame the ocean for washing it away.
ERC721-C isn’t perfect, but it’s the first thing that actually gives artists control. Not permission. Not hope. Control. And Hedera? That’s the future. Why wait for someone else to fix it? Build on it. Move. Adapt. The tech is here. The choice is yours.
Stop waiting for a savior. Be the upgrade.
George Suggs
March 9, 2026 AT 07:57Elana Vorspan
March 11, 2026 AT 06:05I just want to say… I see you, artists. 🫂
I know how much you pour into every piece. The late nights, the self-doubt, the fear that no one will care. And then… the system that was supposed to lift you up… just… lets you fall.
I’m not here to fix it. But I’m here to say: your work matters. Even if the market forgets, I won’t. I’ll keep buying directly from creators. I’ll keep sharing your work. I’ll keep saying: pay them. Please.
One small act at a time. We can still change this.
Tanvi Atal
March 11, 2026 AT 18:14Megan Lavery
March 13, 2026 AT 12:00Mae Young
March 13, 2026 AT 14:09Oh, so now we’re pretending that blockchain is a moral police force? How quaint. You want royalties? Fine. Then stop calling it ‘decentralized.’ You’re not building a revolution - you’re building a union. And unions need lawyers, not smart contracts.
Let me guess: next you’ll demand that every JPEG comes with a ‘creator’s dignity guarantee.’ Maybe we can add a ‘no-evil-buyers’ clause? Oh wait - that’s what copyright law is for. In the real world. Where people have accountability.
Maybe the problem isn’t the tech. Maybe it’s that you wanted to be both an artist and a CEO… without doing the work.
Trenton White
March 15, 2026 AT 07:46As someone from a culture where art has always been tied to lineage and community, I find this debate deeply unsettling. In many traditions, an artist’s work carries the weight of ancestors - not just as property, but as legacy.
When royalties vanish, it’s not just money lost. It’s a severing of that thread. The NFT, in theory, was meant to be a new kind of heirloom - a digital lineage. But now, it’s treated like a commodity to be stripped bare.
I don’t know if the solution is code or law. But I know this: we cannot afford to lose the meaning behind the art. Not again.
Cheryl Fenner Brown
March 16, 2026 AT 09:47