The Future of Royalties is Programmable and Immutable

Royalty enforcement is broken. The dominant NFT marketplaces like Blur and OpenSea SeaPro have made creator fees optional, creating a race to the bottom that starves artists and undermines the core value proposition of digital ownership.

Programmable royalties are the fix. Standards like EIP-2981 and EIP-721C enable on-chain enforcement logic, allowing creators to define immutable payment splits and blacklist non-compliant marketplaces directly in the smart contract.

Immutable infrastructure is the enabler. Protocols like Manifold's Royalty Registry and 0xSplits provide permissionless, verifiable distribution rails that function as public utilities, removing reliance on any single platform's goodwill.

Evidence: Collections using EIP-721C, such as those on Limit Break, have demonstrated 100% royalty enforcement across all marketplaces, proving the model works when the logic is baked into the asset itself.

Royalty enforcement is a protocol-level problem. Marketplaces like OpenSea and Blur are application-layer businesses with misaligned incentives; they compete on fees. The solution is on-chain policy engines like EIP-2981 and EIP-721-C, which define royalty logic in the smart contract itself, making it immutable and marketplace-agnostic.

The stack starts with a programmable NFT standard. Standards like ERC-721-C (Creator Token Standard) use a 'transfer validator' to intercept all transfers, enabling logic like a mandatory royalty payment or a transfer tax. This moves control from the application layer (marketplaces) to the settlement layer (the token contract).

Counter-intuitively, immutability requires upgradeability. A truly immutable policy is brittle. The stack uses transparent upgrade proxies (like OpenZeppelin) managed by a decentralized DAO or multi-sig, allowing for parameter adjustments (e.g., royalty rate) without compromising the enforcement mechanism's core logic.

Evidence: Manifold's Royalty Registry and 0xSplits demonstrate the demand, managing over $200M in creator payouts. Protocols like Art Blocks have enforced on-chain royalties since 2020, proving the model's viability and creating a $1B+ ecosystem resistant to fee evasion.

Smart contract risk compounds. Adding programmable logic to royalties creates new attack surfaces; a single bug in a custom splitter contract can permanently divert funds, making the system less reliable than a simple, immutable transfer.

Developer overhead is non-trivial. Teams must now audit, maintain, and upgrade royalty logic, a distraction from core product development. This operational burden is a hidden tax on innovation.

The EIP-2981 standard exists. This universal royalty standard demonstrates that simple, immutable on-chain signals are sufficient for most use cases. The push for full programmability often solves edge cases at the expense of mainstream usability.

Evidence: The Solana NFT ecosystem largely collapsed its creator royalties after programmable enforcement via marketplaces like Tensor proved fragile and easy to circumvent, highlighting that complexity without consensus fails.

Royalties become on-chain primitives. Static 5% fees on OpenSea are legacy infrastructure. The future is programmable revenue streams where terms are logic embedded in the token itself, enforceable across any marketplace or application via standards like ERC-721C or ERC-2981.

Composability drives value accrual. A song NFT with embedded royalties is a self-executing financial instrument. When remixed on Sound.xyz, sampled in a Zora video, or used as in-game radio, the original creator's logic automatically routes payments without platform intermediation.

Immutable enforcement defeats extractors. Programmable logic deployed to Ethereum L2s or Solana makes royalty bypass a protocol violation, not a policy choice. This shifts power from aggregators like Blur back to creators, turning royalties into a non-negotiable smart contract function.

Evidence: Sound.xyz's on-chain splits and Zora's ERC-721C adoption demonstrate the demand. Royalty-enforcing collections on Manifold see 99.9% compliance, while optional collections on Blur see less than 20%.