- Deranzxc’s research unveils surprising trends in NFT royalties and market performance.
- NFT volume doesn’t necessarily correspond to high royalties; factors like creator fee percentage and launch date influence earnings.
- Yuga Labs leads with 9.4% of all lifetime royalties; the effective fee rate for NFT royalties dropped from 2.5% in 2022 to 0.6% in July 2023.
In a comprehensive study by @deranzxc, an on-chain analysis entity, an in-depth analysis of NFT royalties and broader trends within the NFT market has shed some unexpected insights. This research is being hailed as essential reading for anyone interested in Non-Fungible Tokens (NFTs).
An in-depth look at NFT royalties and wider trends in the NFT market
— Nansen 🧭 (@nansen_ai) July 24, 2023
This is the first piece of research done by @deranzxc, and we think it's essential reading for anyone interested in NFTs
Here's the summary: pic.twitter.com/MpRG2RBEUR
One of the study’s key findings suggests that the volume of an NFT Collection does not necessarily correlate with high royalties. Instead, several variables, such as the creator fee percentage and launch date, significantly determine royalty earnings.
Among the prominent players in the NFT arena, Yuga Labs has emerged as a clear frontrunner regarding lifetime royalties. Having collectively earned a remarkable 9.4% of all royalties to date, Yuga Labs holds an enviable position in the market.
The research also indicated a noteworthy shift in the effective fee rate for NFT royalties. While the average rate stood at 2.5% in 2022, it has plummeted to a mere 0.6% as of July 2023. This decline signifies a considerable change in how royalties are structured and distributed within the NFT ecosystem.
Despite a surge in NFT volume this year, approaching nearly half of the levels witnessed in 2022, the royalties earned by NFT projects have experienced a drastic reduction. Year-to-date volumes constitute 50.6% of the 2022 figures, whereas royalties hover at a significantly lower 14.7%.
The study further elucidated that the total value of royalties translates to approximately $1.3 billion based on current prices. However, it’s essential to acknowledge that when the cost of ETH at the time of NFT sale is considered, the lifetime royalties surge to an impressive USD 1.8 billion.
Digging deeper into the data, the research revealed that NFT projects on the Ethereum network have paid 699,816 ETH as royalties. Of this, 25.9% of royalties were paid in 2021, 64.1% in 2022, and 9.4% in the first half of 2023.
