Royalties Redistribution System: Empowering Creators in The Sandbox Marketplace and Other Secondary Markets

The world of Non-Fungible Tokens (NFTs) has witnessed explosive growth, with creators and artists seeking ways to benefit from the work they put into these digital assets. One crucial aspect of this ecosystem is the concept of NFT royalties, allowing artists to continue earning from their work, even after the initial sale. In this update, we would like to inform you ofThe Sandbox’s innovative approach to NFT royalties redistribution and how it empowers creators on our platform’s marketplace and beyond.

Context

NFT royalties are designed to provide artists and content creators with a means of earning passive income from their digital creations. When an NFT is created, a royalty percentage is set, which represents the share of proceeds they receive from each subsequent resale of the NFT. This mechanism not only safeguards the creator’s intellectual property but also ensures they are fairly compensated over time.

State of the Market

Since last year and the arrival of Blur in the industry, royalties have been widely discussed and implemented within the NFT ecosystem. Many NFT marketplaces and platforms had mechanisms in place to automatically enforce royalties on secondary sales. These royalties typically ranged from around 5% to 10% of the resale price and they were paid to the original owner of the smart contract.

However, it’s important to note that the implementation and enforcement of royalties can vary from one platform to another. Some platforms have fully integrated royalty systems, while others require participants in the secondary market to manually send royalties to the original creator. Others don’t enforce royalties, which leads to creators never receiving any secondary market royalties.

The Sandbox Philosophy

At The Sandbox, we want to redistribute a part of the secondary market royalties to the original NFT creator in order to build a real global creator economy that supports the monetization of their work in the long term.

What We Have Developed

The Sandbox team has developed an in-house solution to redistribute part of the ASSET’s secondary market royalties to the original NFT creator. This new feature is set to go live on December 14, 2023. This solution will allow our marketplace to send these royalties directly into the original NFT creator’s wallet.

Additionally, this mechanism will be compatible with all the marketplaces that implement the ERC-2981 standard. Royalties distributed by external marketplaces will be accessible later in 2024.

Royalties Enforcement in The Sandbox Marketplace

Until now, only The Sandbox has received 5% royalties from secondary ASSET sales, as it is the contract owner. With the launch of our new royalty redistribution features, royalties from ASSETs sold on The Sandbox marketplace will automatically be split 50/50, with 2.5% going to The Sandbox and 2.5% going to the original NFT creator.

By using The Sandbox Marketplace, creators can ensure that secondary market royalties are enforced and redistributed directly to their wallets.

Stay tuned for more updates on the status of other marketplaces supporting this new royalty distribution system.

In the meantime, trading on The Sandbox Marketplace will ensure fair secondary market royalty rewards for all creators building in The Sandbox.

Check out our marketplace here.