In the middle of the NFT marketplace wars and the omnipresent debate of royalties as an essential component in web3, Animoca Brands take a stand and introduce three NFT licenses that defend creator royalties. The set of three licenses “require the payment of creator royalties as a condition for receiving licenses to that NFTs art and utility.” Let’s take a look at how founder Yat Siu and Animoca Brands approach (and changes) the conversations around NFT royalties.
Animoca Brands Introduce New NFT Licenses
NFTs are now a popular way to authenticate digital art, music, and other forms of creative content. However, there is an important aspect of NFTs that is often overlooked: royalties. Royalties are payments made to the creators of NFTs every time the token is sold or exchanged. 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.
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. The three licenses are as follows:
- Personal use only license: This license only allows for personal use.
- Permitted commercial use license: This license allows for commercial use up to a predetermined annual monetary limit.
- Unlimited use license: This license allows for unlimited personal use and no monetary limit on commercial use.
Additionally, these NFT licenses are accessible to all under a creative commons license.
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.
Yat Siu’s Unwavering Support for NFT Royalties
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.
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. Which, ultimately, is a win for the entire commons.
“No royalties is retrograde. (Traditional) game assets continue to depreciate in value because game studios can only money by creating new assets for inflationary game economies. This results in economies without any actual value to players. Why go backwards?” Yat Siu further explains in his tweet thread. Moreover, he quotes @Punk6529, Bored Ape Yacht Club, and The Sandbox to further clarify his argument. He then explains that not paying royalties hurts artistic creation and true ownership. Artists and creators would have no incentive to provide IP rights as part of NFTs, choosing instead to retain copyright in order to better monetize their creations.
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